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On Ethics and Economics of Changing Behavior in Food and Agricultural Production, Consumption and Trade-Some Reflections on What to do.

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Cornell University, November 17-19 , 2004 …

Cornell University, November 17-19 , 2004

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  • 1. On Ethics and Economics of Changing Behavior in Food and Agricultural Production, Consumption and Trade- Some Reflections on What to Do Joachim von Braun Director General International Food Policy Research Institute H.E. Babcock Workshop: Ethics, Globalization and Hunger: In Search of Appropriate Policies Cornell University, November 17-19 , 2004
  • 2. Outline 1. Ethical issues in food and agriculture 2. Ethical principles in economics and the medical field  Whose ethics?  Ethical perspectives in modern economics  Lessons from the medical field 3. The food system  Trends in consumer behavior  Trends in producer behavior  The role of the information industry  Trends in Trade 4. Reflections on what to do
  • 3. Ethical Issues in food and agriculture  Hunger and malnutrition  Consumer trust in food safety  Information asymmetries between consumers and producers  Externalities from consumer and producer behavior
  • 4. Ethical issues in food and agriculture: Hunger in the Developing World Developing World Developing World, w ithout China Number of Undernourished 1000 People, millions 900 800 700 600 500 1980 1990 2000 Year
  • 5. Some causes of hunger and malnutrition Limited access to production technologies Inadequate land and intellectual property rights Limited access to markets
  • 6. Ethical issues in food and agriculture: Consumer trust in food safety Increased use of pesticides and Genetically Modified Foods unknown effects on human health Externalities of production processes on animal welfare and the environment
  • 7. Ethical issues in food and agriculture: Information asymmetries between producers and consumers Growing concentration of Producers  Food industry may transmit information to consumers in a selective manner Infringement of consumer sovereignty  Agricultural research increasingly conducted by private corporations Research outcomes may be geared towards profit maximization rather than enhancing consumer interests
  • 8. Ethical issues in food and agriculture: Externalities from Consumer and Producer behavior  Intergenerational transmition of unhealthy consumer behavior  Ethically founded production and trade regulations may adversely impact the poor through price and income effects
  • 9. Outline 1. Ethical issues in food and agriculture 2. Ethical principles in economics and the medical field  Whose ethics?  Ethical perspectives in modern economics  Lessons from the medical field 3. The food system  Trends in consumer behavior  Trends in producer behavior  The role of the information industry  Trends in Trade 4. Reflections on what to do
  • 10. Whose ethics? Two conflicting approaches Consequentialist approach: Ethical value of a deed should be based on the consequences it brings about with the goal of maximizing welfare for all stakeholders (Neo) -Kantian approach: An ethical action is valuable in itself – emphasis on “obligation,” “duty” and “rules” Other approach Virtue ethics: individuals make ethical decisions based on pursuit of “excellence”- emphasis on values such as “courage, wisdom, temperance, fairness, integrity, and consistency”
  • 11. Ethical perspectives in modern economics  Evolution of modern economics: 1. Concentration on the “engineering” approach  Narrow definition of human behavior Assumption that all humans act in rationally, guided only by self-interest  Exclusion of other explanatory factors such as social institutions (e.g. community, culture and religion etc.)  Exclusion of environmental and social limitations of humans 2. Concentration on “positive” economic analysis  Difference between “positive” and “normative” is not clear cut  Welfare economics; impossible to make a strictly positive analysis because ultimately involves value judgment from the economist  Welfare economics based on the Pareto principle
  • 12. Ethical perspectives in modern economics  Results of narrow perspective in economic theory  Neglect of human motivations such as “duty” and “altruism”  Neglect of social institutions that have a significant impact on human behavior (e.g. religious institutions)
  • 13. Some lessons from the medical field  Institutionalization of ethics  Existence of medical associations at every level with the purpose of promoting ethical behavior  Stimulation of high ethical moral aspirations  Existence of a code of ethics based on the Hippocratic Oath  Existence of restrictive requirements to further strengthen trust and confidence between patients and physicians.
  • 14. Outline 1. Ethical issues in food and agriculture 2. Ethical principles in economics and the medical field  Whose ethics?  Ethical perspectives in modern economics  Lessons from the medical field 3. The food system  Trends in consumer behavior  Trends in producer behavior  The role of the information industry  Trends in Trade 4. Reflections on what to do
  • 15. Food systems: Consumer driven systems CONSUMERS RETAILERS PRODUCERS AGRI- INDUSTRIES RESEARCH
  • 16. Food Systems Trends in consumer behavior  Dominant trend: Globalization and growing retail food system (Supermarkets) Developed countries:  Decline in the percentage of total household expenditure on food + Greater variety and choice of foods Increased concern and dissatisfaction with food safety and impacts of current food production processes on biodiversity and the environment = Increased demand in alternative foods (e.g. organic foods) Developing Countries: Urbanization Increased demand in processed foods Large portions of the population (esp. in rural areas) lack access to healthy diets and remain outside the globalized food system
  • 17. Food Systems Trends in producer behavior  Bifurcation of world agricultural sector  85% of world farms are smaller than 2 hectares (in low-income countries)  Large farms in OECD expanding  Concentration of agricultural sector through vertical integration of producers and marketers  Alignment of small scale farmers in developing countries with large producers esp. in alternative agricultural production  Increased concentration = more power for large producers in food related information provision  Increased responsibility of producers in insuring food safety  Longer and more complex food chains + limited government resources for safety assurance  High quality standards may limit opportunities for partnership between corporations in the North and small farmers in the South
  • 18. Food Systems Role of the information industry  Recent consumer behavior changes due in part to better access to food related information  Biases in the food information industry  Consumers may choose to be imperfectly informed if the price of the news story is higher than the marginal benefit it brings  The biggest source of information, the popular media has inbuilt biases: • General tendency to cover more widely bad news because of demand • Many media organizations adhere to a certain ideology and promote that ideology in their stories  Producer marketing and advertising campaigns are the second biggest source of information –potential for selective provision of information  Consumer and public interest groups • Small budgets for advertising and marketing • However, they have been effective in insisting on the right to information and inducing producer behavior change
  • 19. Food Systems Trends in Trade  Current WTO round of negotiations (“Development Round”) driven by ethical concerns and need for efficient use of global agricultural resources  Increased trade liberalization • Need for universal quality standards = Joint FAO/WHO initiative- CODEX ALIMENTARIUS COMMISSION • In Europe: public‟s sense of loss of control in cultural patrimony because of increased imports of food products
  • 20. Outline 1. Ethical issues in food and agriculture 2. Ethical principles in economics and the medical field  Whose ethics?  Ethical perspectives in modern economics  Lessons from the medical field 3. The food system  Trends in consumer behavior  Trends in producer behavior  The role of the information industry  Trends in Trade 4. Reflections on what to do
  • 21. Reflections on what to do  Establishing „Food Ethics Commissions‟:  Diversity of positions on what is ethical + variety of actors = Need for discussion platforms  Aim: provide transparent arena for discussion on what is ethical behavior in the context of a country’s culture, general environment and specific needs  Incentives for behavior change  Remove harmful incentives  Provide better information to consumers through restrictions on false advertising, introduction of labeling requirements, and increased support to consumer groups  Establish industry Codes of Conduct: Stress individual responsibility to corporate professionals  Establish better business ethics: Consumers in the North usually willing to pay high prices for products that do not violate their ethical principles (e.g. success of “Fair Trade” and “eco-labeling”)
  • 22. Reflections on What to Do  Ethics of governance and rights  Promote a rights-based approach to food security  Encourage consumer activism by ensuring civil rights and freedoms are protected  Where a basic framework does not exist, the government has to promote discourse on ethics issues by ensuring the right to information and education
  • 23. Reflections on what to do  Roles of actors in providing an ethical environment:  Consumers: Responsibility for their individual diets + responsibility to exercise their rights and freedom in expressing their concern about food production  Producers: Responsibility in supplying accurate information to current consumers + responsibility to future consumers in ensuring that current production processes do not affect future food security  Media: Responsibility in providing accurate information- restrict “false reporting”  Government: Responsibility of initiating and developing a national strategy to promote ethical behavior  International organizations: Responsibility of providing an ethical framework for global action to end hunger