Speech by Director-General of FAO at the
World Agricultural Forum, St Louis, Missouri,
USA
St Louis, United States of America, 20 May
2001
The Contract between Society and
Agriculture: Achievements and Failures
Mr. Chairman, Excellencies, ladies and
gentlemen,
It is a privilege for me to be among you here, at the
heartland of a dynamic and changing agricultural system,
to address the essential question of the contract between
society and agriculture. By "contract" I mean the social
pact or understanding between agriculture and the rest of
the society, which includes the whole set of expectations
and obligations of each party. The most basic, but by no
means the only element of the contract concerns the
production and provision of food. Society expects
agriculture to provide safe and nutritious food to meet
its needs. In return, agriculture expects incentives,
resources and technology to combine them in order to meet
society's expectations.
The society fulfils its obligations under the contract
through the institutions it has chosen to act on its
behalf. The United States provides a major example of a
contract between society and agriculture: the
Agricultural Adjustment Act, signed in 1933, and the
related programmes in support of agriculture and rural
areas. Similarly, the Common Agricultural Policy of the
European Union is another instrument through which the
contract between a number of nations and agriculture is
implemented.
There is a closer link, between societies and
agriculture, than in any other productive sector. This
goes beyond the economic importance of the sector or the
share of the population working in it, and it is deeply
rooted in history. Even in the most economically advanced
societies with very little dependence on their own
agriculture for overall economic prosperity, the
preservation of agricultural activities, the rural space
and rural life constitute high priorities. The
preservation of agriculture is among the set of guiding
values in the society.
Anthropologists, sociologists and psychologists may
have a lot to say but we don't need to go very far to
discover the fundamental social and economic roots of
this phenomenon. Less than 200 years ago today's
industrial societies were basically agricultural. Few
countries (if any) have ever embarked on a path to steady
and successful economic prosperity without having first
developed their agriculture and their rural areas. Before
the drastic socio-economic changes which resulted from
the industrial revolution, agriculture and the rural
sector were the backbone of the economy. The surplus
produced by agriculture through technological innovations
and creation of adaptive rural institutions was the basis
for investment in industry and services which are the
backbone of today's industrial economies. St Louis and
its large and dynamic industry are a result of the vast
agricultural resources of this region. For many countries
in the developing world and among transition economies,
agriculture is vital for economic development and
wellbeing. For those countries, development of
agriculture is essential for the transition to an
industrial phase.
Seen from a global perspective and considering mainly
the production of food, it can be said that agriculture
has delivered its part. The growth of global agricultural
production has so far been more than sufficient to meet
the growth of effective demand for food coming from a
fast growing population with rising incomes. The
declining trend in world commodity prices supports this
assertion.
It is also encouraging to observe that production
growth during the last three decades was higher in
developing countries than the world average, both in
aggregate and per capita terms. Moreover, in spite of a
near doubling of their population during this period,
average per capita food consumption in developing
countries witnessed an increase of 28% to 2630
Calories/capita/day in 1995/97, bringing it closer to the
world average.
In the last three decades the world population has
increased by 70%. And yet, if all food produced in the
world were to be divided equally among its inhabitants,
every man, woman and child would consume 2760 Calories
each day, 17% more than 30 years ago.
To what extent has society met its terms of the
contract? An idea can be obtained by looking at the
components of this success. The global society certainly
gave agriculture more cropland, close to 12% worldwide
and to 25% in developing countries in the last 30 years.
At global level, the society also made available to
agriculture more research, extension, better seeds,
irrigation, production technology, infrastructure,
safeguards to farmers to face risk and the uncertainties
inherent in agricultural production and those associated
with market instability.
This made it possible to increase the yields at an
unprecedented pace. In fact, the bulk of the increases in
global crop production came from increases in yields
which contributed 77% to the growth in crop production in
the last three decades. The collaboration between
industrial and developing countries produced the green
revolution and changed the face of agriculture as we know
it.
However, while it can be safely concluded that the
contract between society and agriculture has been
fulfilled in overall terms, this reality is more elusive
when it comes to the satisfaction of the basic needs for
food of everyone. Unfortunately, producing enough food
for everyone and at lower prices does not mean that
everyone has access to enough food. Under this second
perspective, the implementation of the contract appears
far less encouraging.
Despite the abundance of food suggested by worldwide
figures and trends, hundreds of millions of people
continue to go to bed hungry every night. Although the
share of the world population in a chronic state of
undernourishment has declined from 37 to 18 percent in
the last 30 years, the actual number of undernourished
people declined only from 960 million to 790 million in
developing countries. In other words, the progress made
by developing countries, in increasing the food and
calorie intake of their populations, was not shared
equally by all of them and not by everybody within the
same country.
What went wrong? In what respects has the contract
been violated? While the reasons are many and vary among
regions and countries, some general patterns can be
observed.
For a long period of time, development theorists and
practitioners thought that the "agricultural stage " of
development which I have highlighted earlier could be
"skipped" or shortened. They believed that countries
could take a "fast track" to industrialisation. This
perception was further fostered by low food prices in
world markets, the flow of food aid, and the glitter of
industrialisation of more advanced countries. On the
basis of this paradigm, a nexus of policies and sectoral
resource allocations was put in place by many developing
countries, which resulted in a shift in the balance of
incentives away from agriculture.
As a result of this anti-agricultural bias, critical
investments necessary for the growth of agriculture were
not made; institutions to facilitate the generation of
new knowledge and technology and the adaptation of the
existing one were left to decline. Many developing
countries were caught in a low technology trap by which
technological change adopted by higher income countries
led to increased global production capacity and brought
about lower world prices and reduced incentives for
technology adoption in the countries which lagged
behind.
By failing to properly enable their agriculture,
societies in many developing countries broke the social
contract with agriculture and the mutual expectations
were not fulfilled.
On the other hand, countries which made a commitment
to agriculture through investments and incentives
achieved substantial progress not only in agricultural
growth but also in overall growth, poverty alleviation
and food security. In Asia, for example, countries which
were threatened by hunger and mass starvation in the
1950s and 1960s made impressive steps in feeding their
people, even though their populations have more than
doubled. Similar success stories can be found in all
parts of the developing world.
Analyses made by FAO have shown clearly that
agricultural growth was an essential component in the
policies and strategies of those countries in Africa
which have managed to reduce substantially the incidence
of hunger and food insecurity. Along with agricultural
growth, strong overall growth, peace and political
stability and the existence of formal safety nets for the
poorest of the poor also contributed to success. All
these success stories are evidence that, by and large,
the societies concerned kept their terms of the contract
and agriculture reciprocated.
At the same time, agricultural and trade policies of
industrialised countries have not always provided a
conducive environment for the development of developing
country agriculture. In a number of OECD countries,
political pressures of agricultural lobbies and the
sensitivity of voters and politicians to agricultural and
rural issues have resulted in excessive protection of the
agricultural sector through domestic support and
trade-related policies. Such protection has contributed
to increased surpluses which were channelled in the world
markets using export subsidies or in the form of food
aid. And although there has been recently a shift to less
distorting policies, in line with the Uruguay Round of
Multilateral Trade Negotiations of the WTO, in 1999 alone
the total support to agriculture by OECD countries was
estimated at US$361.5 billion, or 1.4% in their total
GDP. Support, as measured by the Producer Support
Estimate, was US$282.8 billion, amounting to about 46% of
total value of production (at farm gate) in the OECD
countries as a whole. Of these, market based support
accounted for about US$192 billion, while the remaining
US$ 90 billion was in the form of direct payments to
producers.
Certainly this support is in accord with the WTO
agreements, but there is little doubt that it gives a
competitive edge which poorer countries cannot match and
raises the question of a level playing field under the
Marrakech Accord. It is also interesting to compare this
support with the total flow of official development
assistance to agriculture, which reached US$ 7.4 billion
in 1998. And although I recognise the beneficial effects
of lower world prices for poor consumers, particularly in
importing developing countries, I cannot help noticing
that, excessive zeal in some countries in fulfilling the
terms of the contract with their agriculture, has been
translated into policies which result in difficulties for
low income countries in meeting their obligations to
their agricultural sectors.
It follows that the plight of the world's 800 million
undernourished has to do with under-performance of
agriculture in the countries in which they are located
and that the responsibility for this problem transcends
national borders and becomes a collective one.
To what extent will agriculture be able to continue
supplying food to the world at stable or declining real
prices as it has largely been able to do in the past? The
answer depends on the level of analysis.
The slowdown in demographic growth and the
deceleration in the demand for food from those already at
high consumption levels, point to a deceleration of world
aggregate demand for food. Despite this slowdown, we
expect that per capita food consumption
(Calories/person/day) will grow significantly. The world
average will be approaching 3000 Calories/capita/day in
2015 and will exceed this figure by 2030. These changes
in the world averages will reflect, above all, the rising
consumption of the developing countries, whose average
will have risen from the 2630 Calories in 1995/97 to 2900
Calories in 2015 and to 3000 in 2030. In perspective it
seems that, at a global level, agriculture will be on
track to keep its part of the contract.
But not everybody will participate equally in the
general increase in food consumption. Despite the fact
the percentage of undernourished people, in the
developing countries as a whole, is expected to decline
from 185 in 1995/97 to 10% in 2015, the same does not
hold true for the number of undernourished people, which
is projected to decline only modestly: from about 800
million in 1995/97 to 580 million in 2015 if no
corrective action is taken.
The provision of food is not the only part in the
contract between society and agriculture. Societies are
increasingly expressing additional demands on
agriculture. They expect agriculture to meet its needs
while not compromising the possibilities of future
generations to meet theirs; and with minimal impact on
other environmental amenities, as well as with increased
attention to the quality and safety of what is
produced.
Social preferences change in the course of
development. As society's needs for food are being met,
those "other" demands become more pronounced and the
support for them more vocal.
Citizens, especially in industrialised countries, have
grown more and more sensitive to issues related to
resource sustainability, the integrity of the natural
environment and to food quality and safety. There is an
increasing flurry of activity, especially by
organisations of the civil society, which translates
those concerns into demands for concrete policy action at
all levels -- global, national, local. In perspective,
the challenge must be met under conditions of
increasingly limited availability of high quality land
and in particular of water.
For developing countries, it is estimated that the
area of cultivated land will increase by 12% until 2030,
mostly in the 'land-abundant' regions of South America
and sub-Saharan Africa. An unknown, but probably
considerable part of this expansion will require the
conversion of forested land to cultivated area. Some will
most likely occur by converting highly erodable hill
slopes and wetlands to arable land, thus threatening some
ecosystems and ecological equilibria.
The intensification of agriculture through the
expansion of irrigation will play a major role in meeting
the future demands placed on the agricultural sector in
developing countries. At present, agriculture accounts
for 70% of total water withdrawals worldwide. Irrigated
production is estimated to account for 20% of the arable
land and contribute some 40% of total crop production.
This share is expected to increase to 47% by 2030, as the
opportunities for extending the agricultural frontier
diminish.
Even assuming a significant increase in efficiency of
water use from around 40 to 50% on average, expansion of
irrigated area is expected to lead to a 12% increase in
water withdrawals for agriculture. In many cases this
could result in a lowering of water tables, salinisation
and waterlogging.
In developing countries, the intensification of crop
production is expected to account for 80% of additional
agricultural output. But such intensification is not
likely to be without costs. Ironically, excessive use of
pesticides in many countries co-exists with inadequate
pest control, nutrient mining and soil compaction.
The impact of increasing agricultural production on
the biological diversity of both domestic and wild plant
and animal species is of increasing concern. Loss of
biodiversity will continue to occur through land
clearance and area expansion, though at a slower rate
than in the past. Agricultural intensification may result
in a general decline in agricultural bio-diversity
through the adoption of modern crop varieties and
improved livestock breeds.
We have there a summary picture of the challenges
facing agriculture in meeting the basic needs of society,
while at the same time addressing its many demands
regarding health, natural resources and the environment.
Increasing resource scarcity requires intensification of
production, the latter coming under more and more
scrutiny especially with regard to its environmental and
health effects.
As demands on agriculture change, the obligations of
the society under the contract change as well: Attaining
an environmentally sustainable increase of safe and high
quality agricultural production will be very dependent on
the policy choices made in the present. The need for
sound judgements is greater than ever before, as we are
now closer to critical thresholds which could limit
production, e.g. yield ceilings imposed by plant
physiology, or availability of water resources for
irrigation and the consequences of new technologies to
overcome such constraints.
What does this critical assessment mean for the
obligations which societies have to fulfil?
Societies have to provide the mechanisms for practical
adoption by farmers of existing technologies, followed by
substantial agricultural research to make the needed
shift economically attractive and environmentally
friendly. The tools needed to achieve sustainable
intensification will change. The green revolution
technologies, which have been successful in Asia, will
need to be applied again but with less use of external
inputs, especially fertilizer and pesticides.
New technologies include: integrated pest management
and plant nutrient system; effective water use,
conservation and recycling; and safe biotechnology, all
of which reduce dependence on external inputs while
improving biological adaptability of plants and animals
to harsh environmental conditions. Protecting the natural
resource base, including biological diversity may mean
higher cost to agricultural producers in many cases. In
others, measures may be taken to establish more protected
areas and compensate producers for adopting more
sustainable production methods.
However, for this "new green revolution" science is
not enough. If agriculture is expected to provide for the
people's basic needs in a sustainable and safe manner, it
demands responsible science from the society. Ethics has
a fundamental role to play in guiding the use and
direction of science in the development of technologies
so that the basic needs of mankind receive their due
priority. This requires "science with a conscience",
transparency and honesty with regard to its potential
benefits and consequences both for present and future
generations. This need is especially apparent where the
results of science cannot be foreseen with absolute
certainty.
I am aware that we are far from a consensus amongst
parties, both within countries and internationally, on
the modalities for evaluation of the results of science.
I am also aware that there is an ongoing debate on the
legitimacy of using justifications, other than those
based on sound science, for placing limitations on the
trade in new food products and raw materials for these
products. I would only plead that the debate be conducted
while keeping in mind that our common actions must bring
us closer to a situation in which all people have regular
access to safe and nutritious food.
There is an ongoing debate, especially among
industrialised countries on the merits and justifications
of possible policies to protect a declining agriculture
and rural sector. The contract between agriculture and
the rest of the society is in constant evolution. I
believe that dialogue on such issues is important, but I
also hope that any policy instruments chosen by
high-income countries in pursuit of these objectives
would be used in ways which do not cause harm to others,
especially low-income countries.
For the developing countries, there is no need to go
very far in looking for the roles of agriculture: Data
for 1999 show that 60% of the total population in
developing countries live in rural areas while the share
of agricultural to total labour force is also close to
60%. In many countries with high level of
undernourishment, agriculture accounts for more than 50%
of the total gross national product. For 70% of the poor
and the food insecure, agriculture is the livelihood,
either directly or from sectors and activities linked to
it. For those countries, development of agriculture is a
prerequisite for economic growth.
Yet, work carried out by FAO shows that, for the
developing countries as a whole, the shortfall in gross
agricultural investment necessary to achieve the World
Food Summit goals is 12%per year. Moreover, the share of
external resources in the form of aid or lending going to
the agricultural sector of developing countries shows a
declining trend.
I would now like to summarize a few conclusions from
this analysis:
First of all, the contract between agriculture and the
rest of the society is different according to nations and
communities and evolves over time.
Second, alleviating hunger in the world is not only a
moral imperative for the global society, but is also
beneficial for the economic and security interests of all
societies. Hunger is often not just a result but also a
cause or a fuelling component of conflict and civil
strife, and has direct influence on uncontrolled
immigration and urbanization.
Third, a fundamental prerequisite for solving the
problem of hunger is that the global society perceives
hunger, no matter where it exists, as part of its
contract with agriculture and takes the necessary steps
in fulfilling its obligations under this contract. A
first step was achieved at World
Food Summit in 1996. In practice, however, a lot more
needs to be done to meet the needs of those who are
hungry and depend on agriculture to satisfy their need
for food.
Fourth, agriculture has been good to the society
whenever the society made and kept a firm commitment to
agriculture. With years of plenty in international
markets it is too easy to forget our commitment to those
left out of this abundance. And it is too easy to forget
that future abundance cannot be assured unless
investments in research, development and infrastructure
continue to be a high priority.
Mr. Chairman, Excellencies, ladies and
gentlemen,
In 1996, 186 countries from all over the world, 112 of
which represented by their Heads of State or Government
or their immediate deputies, made a solemn pledge to
reduce the number of undernourished by half by the year
2015, from about 800 to about 400 million people. To
achieve this target reduction in the number of
undernourished of 20 million per year is necessary, but
the current rate of reduction is only 8 million per
year.
For this reason, and with the aim of strengthening the
political will expressed in 1996 and defining and making
available the necessary resources, both at international
and national levels, the Governing Bodies of FAO have
decided to invite again the Heads of State and Government
to a "World
Food Summit: five years later" which will be held
from 5 to 9 November this year in Rome.
Unless efforts are stepped up by national governments,
international bodies and organisations of the civil
society, widespread hunger, a stain in the world's
conscience and a constraint to security, stability and
economic growth, will remain with us in the decades to
come.
The basic technical tools for achieving the objective
of the World Food Summit are in place. The success of the
new meeting in November this year would represent an
important and necessary amendment to the fundamental
contract between society and agriculture.
Thank you very much.
