Cornell University, November 17-19 , 2004

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
500
600
700
800
900
1000
1980 1990 2000
Year
NumberofUndernourished
People,millions
Developing World
Developing World, without China

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
RESEARCH
RETAILERSCONSUMERS
AGRI-
INDUSTRIES
PRODUCERS

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