16 | North America and Europe (NAE) Report

permarkets, such as by providing food that is organic, has local distinctiveness, has high standards of animal welfare or has been locally processed and packaged. Markets for food with local provenance, traditional varieties and breeds are increasing in both Europe and North America. Europe has seen a rapid growth in organic agriculture since the early 1990s. Latest figures suggest around 3.4% of EU agricul­tural land area is now organic, compared with around 0.3% in North America (Willer and Yussefi, 2006).

Globalized, integrated value chains, responsive to multifunc­tional signals. Most agricultural input industries and food processing, distribution and retail are becoming highly con­centrated, with resultant shifts in power dynamics in food systems (ETC Group, 2005; MacMillan, 2005; Ollinger et al., 2005; Arda, 2006; Murphy, 2006). Interlinked net­works of powerful TNCs have expanded their reach up­wards and downwards in the chain of production through strategic mergers with input companies such as seed sup­pliers and biotechnology firms involved in seed production and through financial arrangements with global retailers. The outcome has been global value chains or networks that exert increasing control over what is to be produced, how and by whom (Gereffi et al., 2001).

     Integrated agrifood chains are also adapting to changing regulations and customer demands. All levels of the industry are increasingly seeking to demonstrate their commitment to high quality, responsible production and retailing through accreditation, auditing, traceability and labeling. To help assure these new standards, companies such as Sainsbury's (UK) are establishing direct contracts with farmers around the world, bypassing systems of wholesalers. Such vertical integration of the agricultural system not only allows a more proactive approach to retailing, it allows control and au­diting. The Environmental and Social Report of Unilever (Unilever, 2005), the environmental plans for Wal-Mart and the commitments to Fair Trade by Sainsbury's (Sainsbury's, 2006) are but a few of a rapidly increasing examples of in­dustry efforts to implement and demonstrate to the public efforts to achieve greater sustainability and help meet devel­opment goals. Equally, some supermarkets are encouraging local production, exploiting the new markets in local food systems. In the UK, some ASDA stores (a Wal-Mart com­pany) devote shelf space to local producers, while Waitrose and Booth's stores stress to customers their use of named local suppliers. In this way, agribusinesses are seeking to integrate local sensitivity within global strategies. There is competition from new companies, such as Whole Foods Markets, which preferentially sells organic and "natural" produce through a rapidly expanding network of outlets in the US, Canada and the UK, each with considerable local autonomy. The development of policy

Inevitably, public policy addresses all of the issues raised by changing agrifood systems. In response to the food surplus­es of the 1980s, the CAP moved away from simply increas­ing production to transfer wealth from urban to rural ar­eas, and transformed several million peasants into relatively prosperous farmers (Davies, 1996). Subsequently, the circle between the political requirements to stop subsidizing food


production and to continue to support farming communi­ties has been squared by changing the emphasis of the CAP to support rural development and environmental goals.

     Sustainable development is a major policy goal across most of the region, encompassing agriculture, forestry and fisheries. It is monitored using a wide range of social, eco­nomic and environmental indicators. The policy trend in Europe is to promote more proactive agricultural systems, both global and fragmented, with a much greater empha­sis on the provision of ecosystem services such as pollution management, carbon storage and diverse habitats, and the management of natural resources such as soil, water, air and landscape quality (Miliband, 2006). Regulations such as the EU Water Framework Directive and support mechanisms such as agri-environmental schemes are helping to raise the environmental standards of agriculture. The appropriate balance between open trade and the use of barriers, tariffs and subsidies remains highly contentious, as can be seen in the Doha Round of the world trade talks. The roles of inter­national trading blocs, such as the EU and North America, consolidated commercially through the North American Free Trade Agreement (NAFTA), have increased.

     Recently, issues of energy security (National Economic Council, 2006) and climate change (Stern, 2007) have in­creased greatly in priority. Policies and practices are being developed to use agricultural land to mitigate climate change by carbon sequestration (Lal, 2004) and to replace some fossil fuel use by the production of biorenewables (Brown, 2003). Increasing biofuel production is already leading to rising prices for cereals, and is likely to increase competition for land, with potentially dramatic changes to farming sys­tems, landscapes and rural economies (e.g., Firbank, 2005). Potential markets in production and management of energy, pharmaceuticals and water add to the uncertainties about the future of agriculture.

1.5 Challenges for AKST

NAE agrifood systems are now facing new challenges that involve simultaneously enhancing social, environmental and economic elements. The responses to these challenges within NAE will affect development and sustainability goals, both within the region and globally.

     The importance of agrifood systems to human health and social change may become more pronounced. AKST is required to improve standards of nutrition; to reduce ex­posure to foodborne contaminants and diseases, including those transmitted from animals; and to increase the avail­ability of and equitable access to food and other agricultural products. AKST also has a role in promoting markets with fair access and compensation to participants, improving equity across gender and social divides; and creating and sustaining urban and rural livelihoods. These goals must be met while maintaining the stability and resilience of agro-ecosystems, particularly as they are threatened by global environmental change.

     AKST will be required if agrifood systems are to mitigate and successfully adapt to global climate change. Agriculture may need to cope with very different economic and envi­ronmental conditions, with new patterns of trade, climate, pests and diseases, while facing more stringent requirements to mitigate greenhouse gas emissions. Climate change may