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Appendix 4



Nadia Scialabba
Environment Officer
Environment and Natural Resources Service
Sustainable Development Department
Food and Agriculture Organization of the United Nations



Ladies and gentlemen, good morning. It is a great honour for me, Mr. Chairman, to be here with you today. I am an Environment Officer, working in the Sustainable Development Department of FAO in Rome. This is my first visit to Samoa, and in the past week, I have had the opportunity to appreciate this beautiful country and its people.

Talking about agricultural policies is not an easy task, because to be sustainable, agriculture can no longer be pursued in isolation from other sectors. How could decisions be made without, for example, considering the nutritional needs and health of people? As the Honourable Misa Telefoni has just recalled, one cannot ask people to protect their environment if their livelihoods, as well as their education and sanitary needs, are not secured. In addition, farmers' non-agricultural activities, infrastructure, human settlements and transportation need to be accounted for. Labour competitiveness between sectors should also be conceded. The conflict for labour between agriculture and tourism is an example of this issue. Moreover, institutional adjustments, in a context of "smallness", involves conflicting demands on limited human resources.

Agriculture (and forestry and fisheries) is managed by people and by their institutions, using a common natural resource base, and interacting with the overall economic forces. More than looking at the sector per se, there is need to focus more efforts on the interface of these various dimensions and the externalities which each economic activity generates.

I will highlight some of the major economic and legislative policy issues for sustainable agricultural development. Issues specific to natural resource management and sustainable primary production will be covered by the next speakers.

The background document prepared for this Consultation on Policies for Sustaining Food and Agriculture in the South Pacific is divided into three sections:

- An introduction which acknowledges the Pacific islands' ecological diversity and commonalities, as well as the challenge facing them in securing, in a sustainable manner, their food needs in the post-Uruguay Round era.

- An overview of present and future issues and constraints regarding the economic growth, agricultural trade, human and institutional conditions, and related changes in nutritional regimes.

- A final section including proposals and discussion points addressing the factors which can contribute to the establishment of a socio-political environment conducive to sustainable development in the Pacific.

1. Despite their ecological diversity, Pacific islands share many common features

- Constrained human capital, due to scarcity of skilled manpower and high population growth, which leads to a limited capacity to efficiently manage resources, and results in a growing demand for goods and services, as well as employment opportunities.

- Frail institutional capital due to high staff turnover in public administrations, poorly developed private sector, tendency towards migration and thus loss of skills, destruction of indigenous knowledge by new political and legal systems, and high dependence on external expertise and exogenous knowledge.

- Confined and disaster-prone natural capital and therefore limited opportunities for agricultural, forest and inland fisheries development, but with high potential for fisheries if the water area is considered.

- Fragile economic capital due to remoteness from markets, undiversified and micro-economies of scale, dependence on global market fluctuations, and other transnational phenomena such as remittances and other financial flows.

2. What is at stake?

Technological advances in communications, coupled with colonial influences, have drastically changed the development pattern in the South Pacific leading to increasing movement of goods and finance and hence, dependence on world trade imperatives; decreasing efficiency in the use of natural resources; and deterioration of dietary patterns which in turn causes diet-related diseases. Although the South Pacific countries benefit from a high level of aid and remittances, the economic performance in most Pacific islands remains weak and unstable. Public bureaucracies' consumption, unproductive investments, and high population growth are among the main reasons for this inefficiency.

The impact of the Uruguay Round on national agricultural policies (in terms of complying with the principle of minimum production distortion), as well as the erosion of preferential trade agreements, non-tariff trade barriers, increasing import prices for goods and services, and vulnerability to external shocks present the countries with several challenges. How can one shield national producers from international competition? How can one boost domestic output while protecting natural resources? How can one pay for necessary imports when the range of island commodities is narrow? How can the current economic development trend be managed in a way that also sustains social and cultural identities of island people?

3. Need for caution in defining policies

Food procurement options, social welfare, and sustainable management of natural resources call for policy reforms which will vary according to national objectives and natural resource endowments: large volcanic islands, for example, will have more potential to intensify and diversify their agricultural base than atoll nations.

Choices facing governments in the pursuit of sustainable development will involve decisions on the degree of trade-offs to be allowed between the human, social, natural and economic capitals available.

Because of the variety of situations that exist in the Pacific, there is no generic recipe. Each country must utilize the resources that are available in an economically, environmentally, and socially optimized manner. Resources (be it natural, human, institutional or economic) should be carefully assessed and options analyzed, bearing in mind the variety stakeholders (and thus of their differentiated needs) within each nation.

4. Options and alternatives for consideration

4.1. Promoting domestic production and markets

Despite efforts to specialize in one or two agricultural commodities for export growth, subsistence agriculture still predominates in most countries, although it is increasingly eroded by unsustainable practices. The lower prices of imported food is a major disincentive for domestic production. It is worth mentioning, however, that fluctuations of export commodity prices (e.g. copra) push farmers to continue subsistence agriculture. Boosting local production would decrease reliance on imports (and hence, save on foreign reserves), contribute to healthier diets and less social expenditures, and promote household food security. Actions towards this objectives could include:

- identification of economic incentives for increased production of traditional food crops;

- protection of domestic markets through, for example, sliding scale of tariffs on imports;

- stabilization of domestic food markets through the establishment of food security stocks;

- development of technical innovations for the rational exploitation of the natural resource base, including alternative sources of agricultural inputs and energy, and improved management skills for cost-efficient and disease/pest-free production systems.

4.2. Targeting export-oriented agriculture

Export growth is an attractive option, providing that there are diversification possibilities. The range of commodities available to Pacific nations needs to be carefully assessed as well as their comparative advantage, by considering vulnerability to weather vagaries and competition of neighbouring countries. Where there is potential for export growth, the following actions may be considered:

- Control of conformity to internationally accepted guidelines on market mechanisms: integrity of certification procedures for sanitary and phytosanitary regulations for horticultural exports; application of the "Rules of Origin" of the Lome Convention for tuna; compliance with the Convention for International Trade in Endangered Species of Wild Flora and Fauna to avoid export interruptions, for example of clams and crocodile skin.

- Development of market intelligence for particular fruit and vegetables, as well as biologically-produced agricultural commodities. Coordination and collaboration would ensure regular delivery and avoid market gluts in specific niche-markets. Procedures for centralizing and sharing information on markets could be organized.

- Development of regional cooperation in processing and marketing of fishery products could be beneficial. A regional promotion and export market agency may be considered to be established.

- Establishment of a regional finance institution aimed at stimulating private sector investments.

- Setting up of a trade group and economic union: various regional institutions already exist, such as the Pacific Economic Cooperation Council and the Asia Pacific Economic Cooperation, to which island countries might consider useful to be associated with.

- Obtaining membership to the World Trade Organization (WTO): advantages include increased negotiating power, access to information and technical assistance in trade matters, and settlement of disputes through the WTO mechanisms. Disadvantages include loss of autonomy to determine policies regarding agriculture and food, and environmental protection. States with fragile economies and resources may have great difficulty in facing up to international competition, but WTO rules provide for special measures for smaller and poorer countries.

4.3. Creating a conducive environment

Whatever choice is made to promote agricultural development, policy reforms should create an enabling environment for economic, social and ecological sustainability, more specifically:

A. For both domestic and export markets, privatization could be encouraged to benefit from the availability of financial and technical opportunities of the private sector and devolve functions which are not efficiently accomplished by the public sector. To this end, there is need for:

- Macro-economic reforms, including fiscal system reforms, which can ensure economic stability, remove economic distortions, and attract investors.

- Revision of public sector wage setting mechanisms in order to avoid deterring the private sector, and ensuring efficiency and competitiveness. Ultimately, the level of domestic prices for basic necessities will determine the level of a living wage.

- Labour market reforms which would involve strengthening the link between wages and labour productivity, improved access to qualified manpower and more realistic exchange rates and relative inflation rates.

B. Efficient use of human and institutional resources may include the following actions:

- Inter-sectoral planning and integration of agriculture into national development plans.

- Political commitment for effective governance and management, including encouraging privatization, devolving decision making to the local level and supporting participation of communities and people's organizations in development planning and implementation.

- Protection of the communalism aspect which characterizes South Pacific societies. Community management promotes economical and technical efficiency, adaptiveness and responsiveness to variation in local social and environmental conditions, as well as stability and commitment.

- Provision of extension and training, in particular to equip administration staff with knowledge necessary to undertake multiple tasks. Particular attention needs to be given to gender equality for access to training and employment as well as to on-the-job training.

- Provision of equal access to productive resources such as land and credit.

- As part of job reforms, promotion of micro-enterprise development in order to provide rural employment.

C. Environmental sustainability and social welfare, which are characterized by long returns on investment and ethic values will need a clear definition of national policy goals (and related regulatory functions) and maintenance of certain publicly-run services. In particular, the following actions could be considered:

- Establishing the legal basis for managing infrastructure development and land use.

- Stimulating sustainable agricultural production through measures such as land taxes on estimated productive potential based on soil fertility, access to markets and ecological vulnerability. Charging consumers for water use and waste is another option.

- Promoting collective management of natural resources. A successful example is the adoption, through the South Pacific Forum Fisheries Agency, of the Minimum Terms and Conditions of access for tuna fishery fleets.

- Adopting an integrated approach to natural resource management, through intra- and inter-ministerial coordination, and regional collaboration.

- Understanding the national and socio-economic resource use system, which is of key importance to an integrated planning approach.

Policies for agriculture will indeed be developed in the light of the respective costs of domestic and imported produce, the constraints imposed by international trade regulations, but also in the light of environmental and social aspirations. Partnerships and regional grouping of efforts offer great possibilities of economizing resources, sharing knowledge, and strengthening small islands' trade negotiations and political agreements.

Thank you for your attention.

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