Agricultural policy
Agricultural policy describes a set of laws relating to domestic agriculture and imports of foreign agricultural products. Governments usually implement agricultural policies with the goal of achieving a specific outcome in the domestic agricultural product markets.
Agricultural policies use predetermined goals, objectives and pathway set by an individual or government for the purpose of achieving a specified outcome, for the benefit of the individual, society and the nations’ economy at large. Agricultural policies take into consideration the primary, secondary and tertiary processes in agricultural production. Outcomes can involve, for example, a guaranteed supply level, price stability, product quality, product selection, land use or employment.
Agriculture has large impacts on climate change, estimated to be contributing 20–25% of global annual emissions as of 2010. Moreover, agriculture is highly vulnerable to the negative impacts of climate change, such as decreases in water access, geophysical processes such as ocean level rise and changing weather, and socioeconomic processes that effect farmer, many of whom are in subsistence economic conditions. In order for global climate change mitigation and adaptation to be effective a wide range of policies need to be implemented to reduce risk of negative climate change impacts on agriculture and greenhouse gas emissions from the agriculture sector.
Agriculture policy concerns
An example of the breadth and types of agriculture policy concerns can be found in the Australian Bureau of Agricultural and Resource Economics article "Agricultural Economies of Australia and New Zealand" which says that the major challenges and issues faced by their industrial agriculture industry are:- marketing challenges and consumer tastes
- international trading environment
- biosecurity
- infrastructure
- management skills and labor supply
- coordination
- technology
- water
- resource access issues
Poverty reduction
Biosecurity
The biosecurity concerns facing industrial agriculture can be illustrated by:- the threat to poultry and humans from H5N1; possibly caused by use of animal vaccines
- the threat to cattle and humans from bovine spongiform encephalopathy ; possibly caused by the unnatural feeding of cattle to cattle to minimize costs
- the threat to industry profits from diseases like foot-and-mouth disease and citrus canker which increasing globalization makes harder to contain
Avian influenza
In response to the same concerns, Reuters reports Hong Kong infectious disease expert Lo Wing-lok indicating that vaccines have to take top priority. Julie Hall, who is in charge of the WHO's outbreak response in China, claimed that China's vaccinations might be masking the virus. The BBC reported that Dr Wendy Barclay, a virologist at the University of Reading, UK said: "The Chinese have made a vaccine based on reverse genetics made with H5N1 antigens, and they have been using it. There has been a lot of criticism of what they have done, because they have protected their chickens against death from this virus but the chickens still get infected; and then you get drift - the virus mutates in response to the antibodies - and now we have a situation where we have five or six 'flavours' of H5N1 out there."
Bovine spongiform encephalopathy
Bovine spongiform encephalopathy, commonly known as "mad cow disease", is a fatal, neurodegenerative disease of cattle, which infects by a mechanism that surprised biologists upon its discovery in the late 20th century. In the UK, the country worst affected, 179,000 cattle were infected and 4.4 million killed as a precaution. The disease can be transmitted to human beings who eat or inhale material from infected carcasses. In humans, it is known as new variant Creutzfeldt–Jakob disease, and by June 2007, it had killed 165 people in Britain, and six elsewhere with the number expected to rise because of the disease's long incubation period. Between 460,000 and 482,000 BSE-infected animals had entered the human food chain before controls on high-risk offal were introduced in 1989.A British inquiry into BSE concluded that the epidemic was caused by feeding cattle, who are normally herbivores, the remains of other cattle in the form of meat and bone meal, which caused the infectious agent to spread., Department for Environment, Food, and Rural Affairs, March 2007. The origin of the disease itself remains unknown. The current scientific view is that infectious proteins called prions developed through spontaneous mutation, probably in the 1970s, and there is a possibility that the use of organophosphorus pesticides increased the susceptibility of cattle to the disease. The infectious agent is distinctive for the high temperatures it is able to survive; this contributed to the spread of the disease in Britain, which had reduced the temperatures used during its rendering process. Another contributory factor was the feeding of infected protein supplements to very young calves instead of milk from their mothers.
Foot-and-mouth disease
Foot-and-mouth disease is a highly contagious and sometimes fatal viral disease of cattle and pigs. It can also infect deer, goats, sheep, and other bovids with cloven hooves, as well as elephants, rats, and hedgehogs. Humans are affected only very rarely. FMD occurs throughout much of the world, and while some countries have been free of FMD for some time, its wide host range and rapid spread represent cause for international concern. In 1996, endemic areas included Asia, Africa, and parts of South America. North America, Australia, New Zealand and Japan have been free of FMD for many years. Most European countries have been recognized as free, and countries belonging to the European Union have stopped FMD vaccination.Infection with foot-and-mouth disease tends to occur locally, that is, the virus is passed on to susceptible animals through direct contact with infected animals or with contaminated pens or vehicles used to transport livestock. The clothes and skin of animal handlers such as farmers, standing water, and uncooked food scraps and feed supplements containing infected animal products can harbor the virus as well. Cows can also catch FMD from the semen of infected bulls. Control measures include quarantine and destruction of infected livestock, and export bans for meat and other animal products to countries not infected with the disease.
Because FMD rarely infects humans but spreads rapidly among animals, it is a much greater threat to the agriculture industry than to human health. Farmers around the world can lose huge amounts of money during a foot-and-mouth epidemic, when large numbers of animals are destroyed and revenues from milk and meat production go down. One of the difficulties in vaccinating against FMD is the huge variation between and even within serotypes. There is no cross-protection between serotypes and in addition, two strains within a given serotype may have nucleotide sequences that differ by as much as 30% for a given gene. This means that FMD vaccines must be highly specific to the strain involved. Vaccination only provides temporary immunity that lasts from months to years. Therefore, rich countries maintain a policy of banning import from all countries, not proven FMD-free by US or EU standards. This is a point of contention.
Although this disease is not dangerous to humans and rarely fatal to otherwise healthy animals, it reduces milk and meat production. Outbreaks can be stopped quickly if farmers and transporters are forced to abide by existing rules. Therefore,, any outbreak in the rich world should not be much more as a localized, cyclical economic problem. For countries with free roaming wildlife it is nearly impossible to prove that they are entirely free of this disease. If they try they are forced to erect nationwide fences, which destroys wildlife migration. Because detecting and reporting of FMD have enormously improved and sped up, almost all poor countries could now safely create FMD-free export zones. But rich countries refuse to change the rules. In effect, many poor tropical countries have no chance to meet current rules, so they are still today banned from exporting meat, even if many of them are FMD-free.
The result is that if drought hits, the poor try to cope by selling their few animals. This quickly saturates regional demand. The export ban then destroys the value of these animals, in effect destroying the most important coping mechanism of several hundreds of millions extremely poor households. The rules around meat exports have been changed many times, always to accommodate changing circumstances in rich countries, usually further reducing meat export chances for poor countries. For that reason Kanya and many other countries find the rules very unjust. They are however discouraged to file a formal complaint with WTO by diplomats from rich countries.
Citrus canker
Citrus canker is a disease affecting citrus species that is caused by the bacterium Xanthomonas axonopodis. Infection causes lesions on the leaves, stems, and fruit of citrus trees, including lime, oranges, and grapefruit. While not harmful to humans, canker significantly affects the vitality of citrus trees, causing leaves and fruit to drop prematurely; a fruit infected with canker is safe to eat but too unsightly to be sold. The disease, which is believed to have originated in South East Asia, is extremely persistent when it becomes established in an area, making it necessary for all citrus orchards to be destroyed for successful eradication of the disease. Australia, Brazil and the United States are currently suffering from canker outbreaks.The disease can be detected in orchards and on fruit by the appearance of lesions. Early detection is critical in quarantine situations. Bacteria are tested for pathogenicity by inoculating multiple citrus species with the bacterium. Simultaneously, other diagnostic tests are conducted to identify the particular canker strain. Citrus canker outbreaks are prevented and managed in a number of ways. In countries that do not have canker, the disease is prevented from entering the country by quarantine measures. In countries with new outbreaks, eradication programs that are started soon after the disease has been discovered have been successful; such programs rely on destruction of affected orchards. When eradication has been unsuccessful and the disease has become established, management options include replacing susceptible citrus cultivars with resistant cultivars, applying preventive sprays of copper-based bactericides, and destroying infected trees and all surrounding trees within an appropriate radius.
The citrus industry is the largest fresh-fruit exporting industry in Australia. Australia has had three outbreaks of citrus canker; all three were successfully eradicated. The disease was found twice during the 1900s in the Northern Territory and was eradicated each time. During the first outbreak in 1912, every citrus tree north of latitude 19° south was destroyed, taking 11 years to eradicate the disease. In 2004, Asiatic citrus canker was detected in an orchard in Emerald, Queensland, and was thought to have occurred from the illegal import of infected citrus plants. The state and federal governments have ordered that all commercial orchards, all non-commercial citrus trees, and all native lime trees in the vicinity of Emerald be destroyed rather than trying to isolate infected trees.
Food security
The United Nations Food and Agriculture Organization defines food security as existing when "all people, at all times, have physical and economic access to sufficient safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life". The four qualifications that must be met for a food secure system include physical availability, economic and physical access, appropriate utilization, and stability of the prior three elements over time.Of the 6.7 billion people on the planet, about 2 billion are food insecure. As the global population grows to 9 billion by 2050, and as diets shift to emphasize higher energy products and greater overall consumption, food systems will be subjected to even greater pressure. Climate change presents additional threats to food security, affecting crop yields, distribution of pests and diseases, weather patterns, and growing seasons around the world.
Food security has thus become an increasingly important topic in agricultural policy as decision makers attempt to reduce poverty and malnutrition while augmenting adaptive capacity to climate change. The Commission on Sustainable Agriculture and Climate Change listed high-priority policy actions to address food security, including integrating food security and sustainable agriculture into global and national policies, significantly raising the level of global investment in food systems, and developing specific programs and policies to support the most vulnerable populations.
Food sovereignty
'Food sovereignty', a term coined by members of Via Campesina in 1996, is about the right of peoples to define their own food systems. Advocates of food sovereignty put the people who produce, distribute, and consume food at the centre of decisions on food systems and policies, rather than the demands of markets and corporations that they believe have come to dominate the global food system. This movement is advocated by a number of farmers, peasants, pastoralists, fisherfolk, indigenous peoples, women, rural youth, and environmental organizations.Policy tools
An agricultural subsidy is a governmental subsidy paid to farmers and agribusinesses to manage the agricultural industry as one part of the various methods a government uses in a mixed economy. The conditions for payment and the reasons for the individual specific subsidies varies with farm product, size of farm, nature of ownership, and country among other factors. Enriching peanut farmers for political purposes, keeping the price of a staple low to keep the poor from rebelling, stabilizing the production of a crop to avoid famine years, encouraging diversification and many other purposes have been suggested as the reason for specific subsidies.Price floors or price ceilings set a minimum or maximum price for a product. Price controls encourage more production by a price floor or less production by a price ceiling.
A government can erect trade barriers to limit the quantity of goods imported or enact tariffs to raise the domestic price of imported products. These barriers give preference to domestic producers.
Objectives of market intervention
National security
Some argue that nations have an interest in assuring there is sufficient domestic production capability to meet domestic needs in the event of a global supply disruption. Significant dependence on foreign food producers makes a country strategically vulnerable in the event of war, blockade or embargo. Maintaining adequate domestic capability allows for food self-sufficiency that lessens the risk of supply shocks due to geopolitical events. Agricultural policies may be used to support domestic producers as they gain domestic and international market share. This may be a short term way of encouraging an industry until it is large enough to thrive without aid. Or it may be an ongoing subsidy designed to allow a product to compete with or undercut foreign competition. This may produce a net gain for a government despite the cost of interventions because it allows a country to build up an export industry or reduce imports. It also helps to form the nations supply and demand market.Environmental protection and land management
Farm or undeveloped land composes the majority of land in most countries. Policies may encourage some land uses rather than others in the interest of protecting the environment. For instance, subsidies may be given for particular farming methods, forestation, land clearance, or pollution abatement.Rural poverty and poverty relief
Subsidising farming may encourage people to remain on the land and obtain some income. This might be relevant to a third world country with many peasant farmers, but it may also be a consideration to more developed countries such as Poland. It has a very high unemployment rate, much farmland and retain a large rural population growing food for their own use.Price controls may also be used to assist poor citizens. Many countries have used this method of welfare support as it delivers cheap food to the poorest in urban areas without the need to assess people to give them financial aid. This often goes at the cost of the rural poor, who then earn less from what is often their only realistic or potential source of income: agriculture. Because in almost all countries the rural poor are poorer than the urban poor, cheap food policies through price controls often increase overall poverty.
The same often counts for poverty relief in the form of food aid, which drives small producers in poor countries out of production. It tends to benefit lower middle class groups at the expense of the poorest 20 percent, who as a result remain deprived of customers.
Organic farming assistance
theory holds that sometimes private activities can impose social costs upon others. Industrial agriculture is widely considered to impose social costs through pesticide pollution and nitrate pollution. Further, agriculture uses large amounts of water, a scarce resource. Some economists argue that taxes should be levied on agriculture, or that organic agriculture, which uses little pesticides and experiences relatively little nitrate runoff, should be encouraged with subsidies. In the United States, 65% of the approximately $16.5 billion in annual subsidies went to the top 10% of farmers in 2002 because subsidies are linked to certain commodities. On the other hand, organic farming received $5 million for help in certification and $15 million for research over a 5-year time period.Fair trade
Some advocate Fair Trade rules to ensure that poor farmers in developing nations that produce crops primarily for export are not exploited or negatively impacted by trade policies, practices, tariffs, and agreements which benefit one competitor at the expense of another - which advocates consider a dangerous "race to the bottom" in agricultural labor and safety standards. Opponents point out that most agriculture in developed nations is produced by industrial corporations which are hardly deserving of sympathy, and that the alternative to exploitation is poverty.Fair trade steak? Much of what developing countries export to the rich world, also comes from industrial corporations. The reason for that is, that rich countries have put up elaborate quality demands, most of whom make no factual health contribution. Small farmers often in effect meet these demands, but are rarely able to prove that in western standards. Therefore, the biggest impediment to growth of small farming and therefore of fare trade in sectors beyond coffee and bananas, is these quality demands from the rich world.
Arguments against market intervention
Dumping of agricultural surpluses
In international trade parlance, when a company from country A sells a commodity below the cost of production into country B, this is called "dumping". A number of countries that are signatories to multilateral trade agreements have provisions that prohibit this practice.When rich countries subsidize domestic production, excess output is often given to the developing world as foreign aid. This process eliminates the domestic market for agricultural products in the developing world, because the products can be obtained for free from western aid agencies. In developing nations where these effects are most severe, small farmers could no longer afford basic inputs and were forced to sell their land.
"Consider a farmer in Ghana who used to be able to make a living growing rice. Several years ago, Ghana was able to feed and export their surplus. Now, it imports rice. From where? Developed countries. Why? Because it's cheaper. Even if it costs the rice producer in the developed world much more to produce the rice, he doesn't have to make a profit from his crop. The government pays him to grow it, so he can sell it more cheaply to Ghana than the farmer in Ghana can. And that farmer in Ghana? He can't feed his family anymore."
According to the Institute for Agriculture and Trade Policy, corn, soybeans, cotton, wheat and rice are sold below the cost of production, or dumped. Dumping rates are approximately forty percent for wheat, between twenty-five and thirty percent for corn, approximately thirty percent for soybeans, fifty-seven percent for cotton, and approximately twenty percent for rice. For example, wheat is sold for forty percent below cost.
According to Oxfam, "If developed nations eliminated subsidy programs, the export value of agriculture in lesser developed nations would increase by 24 %, plus a further 5.5 % from tariff equilibrium. ... exporters can offer US surpluses for sale at prices around half the cost of production; destroying local agriculture and creating a captive market in the process." Free trade advocates desire the elimination of all market distorting mechanisms and argue that, as with free trade in all areas, this will result in aggregate benefit for all. This position is particularly popular in competitive agricultural exporting nations in both the developed and developing world, some of whom have banded together in the Cairns Group lobby. Canada's Department of Agriculture estimates that developing nations would benefit by about $4 billion annually if subsidies in the developed world were halved.
Agricultural independence
Many developing countries do not grow enough food to feed their own populations. These nations must buy food from other countries. Lower prices and free food save the lives of millions of starving people, despite the drop in food sales of the local farmers. A developing nation could use new improved farming methods to grow more food, with the ultimate goal of feeding their nation without outside help. New greenhouse methods, hydroponics, fertilizers, R/O water processors, hybrid crops, fast-growing hybrid trees for quick shade, interior temperature control, greenhouse or tent insulation, autonomous building gardens, sun lamps, mylar, fans, and other cheap tech can be used to grow crops on previously unarable land, such as rocky, mountainous, desert, and even Arctic lands. More food can be grown, reducing dependency on other countries for food.Replacement crops can also make nations agriculturally independent. Sugar, for example, comes from sugar cane imported from Polynesia. Instead of buying the sugar from Polynesia, a nation can make sugar from sugar beets, maple sap, or sweetener from stevia plant, keeping the profits circulating within the nation's economy. Paper and clothes can be made of hemp instead of trees and cotton. Tropical foods won't grow in many places in Europe, but they will grow in insulated greenhouses or tents in Europe. Soybean plant cellulose can replace plastic. Ethanol from farm waste or hempseed oil can replace gasoline. Rainforest medicine plants grown locally can replace many imported medicines. Alternates of cash crops, like sugar and oil replacements, can reduce farmers' dependency on subsidies in both developed and developing nations.
Market interventions may increase the cost to consumers for agricultural products, either via hidden wealth-transfers via the government, or increased prices at the consumer level, such as for sugar and peanuts in the US. This has led to market distortions, such as food processors using high fructose corn syrup as a replacement for sugar. High fructose corn syrup may be an unhealthy food additive, and, were sugar prices not inflated by government fiat, sugar might be preferred over high fructose corn syrup in the marketplace.
Developed world cases
Overview: Europe and America
The farmer population is approximately five percent of the total population in the E.U. and 1.7% in the U.S. The total value of agricultural production in the E.U. amounted to 128 billion euros. About forty-nine percent of this amount was accounted for by political measures: 37 billion euros due to direct payments and 43 billion euros from consumers due to the artificially high price. Eighty percent of European farmers receive a direct payment of 5,000 euros or less, while 2.2% receive a direct payment above 50,000 euros, totaling forty percent of all direct subsidies.The average U.S. farmer receives $16,000 in annual subsidies. Two-thirds of farmers receive no direct payments. Of those that do, the average amount amongst the lowest paid eighty percent was $7000 from 1995-2003. Subsidies are a mix of tax reductions, direct cash payments and below-market prices on water and other inputs. Some claim that these aggregate figures are misleading because large agribusinesses, rather than individual farmers, receive a significant share of total subsidy spending. The Federal Agriculture Improvement and Reform Act of 1996 reduced farm subsidies, providing fixed payments over a period and replacing price supports and subsidies. The Farm Security and Rural Investment Act of 2002 contains direct and countercyclical payments designed to limit the effects of low prices and yields.
In the EU, €54 billion of subsidies are paid every year. An increasing share of the subsidies is being decoupled from production and lumped into the Single Farm Payment. While this has diminished the distortions created by the Common Agricultural Policy, many critics argue that a greater focus on the provision of public goods, such as biodiversity and clean water, is needed. The next major reform is expected for 2014, when a new long-term EU budget is coming into effect.