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The political economy of the agricultural negotiations: What to expect? How to move forward?

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Presented by Eugenio Díaz-Bonilla, senior research fellow, IFPRI. Read more: http://www.ifpri.org/event/options-global-agricultural-trade-after-nairobi

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The political economy of the agricultural negotiations: What to expect? How to move forward?

  1. 1. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE IFPRI The Political Economy of the Agricultural Negotiations: What to Expect? How to Move Forward? Eugenio Díaz-Bonilla “Options for global agricultural trade after Nairobi Highlights of the 10th World Trade Organization ministerial conference and next steps.” February 23, 2016
  2. 2. IFPRI General Context  Heterogeneity across countries/interests  Economic cycles and trends  Different interests, visions, and roles • Traditional dilemma of agricultural policies: high prices (helping producers, supply); low prices (helping consumers, demand)  Economic, political, and legal issues Page 2
  3. 3. IFPRI Land Structure Page 3 Land structure: Average size of holdings and concentration Region/country Average size Gini index Africa 2.9 0.53 Asia Developing 2.2 0.57 LAC 87.1 0.82 USA 187.0 0.64 EU 27.3 0.59 Japan/Korea 1.1 0.47 Canada 349.1 0.74 Source: FAO.
  4. 4. IFPRI Page 4 Share of World Agricultural Production Source: Author from FAOSTAT
  5. 5. IFPRI PSEs OECD Page 5 1995–1999 2000–2004 2005–2009 2010–2014 Developed countries a Total USD billion 218.4 206.5 218.0 217.8 without EU USD billion 103.9 104.9 91.4 107.6 EU % total 52.4 49.2 58.0 50.6 Japan % total 25.1 23.0 19.1 25.5 US % total 16.1 21.1 15.0 15.4 Developing countries b Total USD billion 15.6 46.5 101.2 282.9 w/o China 13.9 27.3 50.3 78.1 China % total 11.2 41.2 50.3 72.4 a/ The developed countries included are Australia, Canada, European Union, Japan, New Zealand, Norway, Switzerland, and the United States. b/ The developing countries included are Chile, Mexico, Turkey, Brazil, China, Indonesia, Kazakhstan, Russian Federation, South Africa, and Ukraine. Source: OECD
  6. 6. IFPRI Page 6 3 developed 17 developing USA EU, Japan, Korea, Switzerland, Norway Several groups of developing countries: LDCs G-33 NorthSouth “Farmers Not Competitive” Agriculture is special “Farmers Competitive” Agriculture treated as other sectors G-20 Cairns Group Trade Groups
  7. 7. IFPRI Other Actors  Negotiators/diplomats • Expand own policy space; restrict others. • Producers’ view; partial equilibrium • Legal approach  Economists • Coordination problems: international rules as “public good” • Welfare measured by consumption; general equilibrium • Full employment, smooth adjustment vs unemployment, transition costs  Politicians • Shorter term problems of producers AND consumers  Civil society • Preference for protectionism (even though is tax on food) • Developing countries as societies of small farmers with food surpluses • Market concentration; world economy more volatile Page 7
  8. 8. IFPRI Conclusions  Two broad narratives in negotiations • AoA as SDT for industrialized countries • Developing countries very different; they have a lot of policy space.  Green Box • Separate public goods from income support; within the latter identify social safety net for the poor  Developed countries • Environmental payments. Truly decoupled income support. Reduce market protection.  Better categories for SDT? • Typology food security (Diaz-Bonilla et al 2000; Diaz-Bonilla and Thomas, 2015, 2016) • Systemically important countries?  Export restrictions disciplines Page 8
  9. 9. IFPRI Conclusions  Acknowledge problems of small and marginal farmers in developing countries, particularly SSA and Asia (“specific factors of production,” unemployment, transition costs) • Balance poor consumers and poor producers. • International income safety net focused on poverty in low income developing countries? It would also help with SDG1 and SDG2.  Analysis of implications of COP21 and SDGs for international trading system. Avoid fragmentation of multilateral trade system (SDG17). Page 9
  10. 10. IFPRI Conclusions  Acknowledge problems of small and marginal farmers in developing countries, particularly SSA and Asia (“specific factors of production,” unemployment, transition costs) • Balance poor consumers and poor producers. • International income safety net focused on poverty in low income developing countries? It would also help with SDG1 and SDG2.  Analysis of implications of COP21 and SDGs for international trading system. Avoid fragmentation of multilateral trade system (SDG17). Page 9

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