programs. Regional authorities bring independent policy interventions together in one region so as to have the greatest impact on the regional economy; nature is planned.
Agricultural trade and markets
Globalization means changes in the world economy that tend to create a world market for work, capital, goods and services. It is not a new phenomenon but has increased over the last thirty years, largely because of lower transportation and communications costs. Globalization has changed production areas, markets, trade and travel with concomitant effects on food consumption. In many countries, global imports mean that seasonal agricultural products can be eaten all year-round.
Globalization has also increased competition. Some crops, such as cotton, are produced in both industrial and developing countries, but American cotton producers receive much higher subsidies than cotton producers elsewhere in the world. Competition is strong, and countries try to develop policies that favor their growers.
The share of agricultural products (including processed products) in world merchandise exports has decreased steadily over the last six decades, from over 40% in the early 1950s to 10% in the late 1990s, as both volume and price trends have been less favorable than for other merchandise products. Among manufactured goods, it is estimated that the largest value increases were for iron and steel products and for chemicals (WTO, 2006). There are three explanations for this trend: the increase of manufactured products in trade coming from developing countries, the decrease of agricultural prices and the late opening of the agricultural sector to world markets (IFRI, 2002).
Nevertheless in 2005 agricultural products represented an important share of exports of primary products for North America and Europe, less for CIS (Table 5-8). It represented an important share of imports of primary products for Europe and CIS. Significant market changes would have important implications for agriculture and AKST in these regions.
Exports of agricultural products and agroindustrial products are extremely concentrated in North America and Europe (IFRI, 2002). Over the last few years, new actors have entered the game and changed the rules. For example, in the wheat market, there is increasing competition between traditional world leaders (USA, Canada, EU, Australia) and the Black Sea region countries (Ukraine and Kazakhstan). Volumes of world wheat imports are expected to increase further due to ever-growing demand for wheat in Third World countries (Egypt and Nigeria), Brazil and Mexico (Garnier, 2004; FAO, 2006).
5.4.2.2 Uncertainties of the future
A number of uncertainties and questions for the future can be raised relating to trade and policies:
• What will be the impact of the increase of commodity prices on the rural poor and developing countries' farmers, and how will it affect their capacity to take advantage of AKST?
• If there is further liberalization of agriculture, how can the effects of subsidies in NAE be offset for the small producers of the rest of the world? |
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• What role will some NAE countries play to improve the governance of trade and markets, to make negotiations more transparent and participatory, to strengthen the negotiating capacity of developing countries, to promote regional integration and negotiation from shared platforms?
• What will be the consequence of the new use of agricultural products on agricultural trade?
• How much will the countries of the Black Sea region change NAE's agricultural market?
• How will the EU develop? Will it continue to expand with new member states (EU-30, EU-40) or will it divide? What will be the consequences of changed development policies and stronger collaboration with the Southern Mediterranean countries and Russia on policies, trade and agricultural systems of NAE? What political and economic coalitions will develop outside NAE, and how will that affect agricultural markets and trade?
• How will increased international coordination in areas such as trade, commercial and consumer protection law, and defense and security develop and affect policies and trade?
• What effects will demographic trends have on future policies? Will current trends of stagnating and declining populations in large parts of NAE continue? Can out-migration from more remote rural areas to urban centers be halted? Will there be sufficient incentives to attract investments in rural areas? In which sub-regions within NAE will agriculture vanish?
• Will migration of skilled labor within NAE be permitted? Where will the main migrations take place, and will they help to increase the economic viability of rural areas? To what extent will urban commuters and new well-to-do residents be able to contribute to sustainable rural development?
• Will agriculture and rural areas in NAE develop sufficient adaptive capacity to overcome threats and risks imposed by future environmental change (including climate change)? Will more stringent environmental regulations be agreed upon, together with stronger in-ternalization of externalities? How will that affect agricultural production and production orientation in NAE? How will the impacts of climate change in other world regions affect changes in NAE policies and trade?
• How will a WTO extension of the scope for the exchange of goods, services, labor and capital between countries affect agricultural systems? What will happen if almost all trade barriers for agricultural products and subventions are eliminated? To what extent will that increase environmental risks?
• To what extent will producer subsidies further decline— and how fast? And, how will the money saved in that manner be spent? Will it be invested to alleviate poverty and (thereby) reduce environmental degradation, or for other challenges?
• How will the demand for the major agricultural products of the region evolve?
• How will the share of agricultural products (food and raw materials) in the NAE region develop—will it drop further? How will intra- and inter-regional trade evolve? |