The following Topics encompass the full range of work undertaken recently by the OECD, while the Background Notes were prepared by the Secretariat, based on previous OECD work, and released under the responsibility of the Secretary General.
Taking Stock: OECD Work in Agriculture since 2010
Agriculture is one of OECD’s founding policy committees, in existence since 1961. It has continuously sought to provide the evidence base and analysis to support governments in improving policy performance and creating the enabling environment for the sector to thrive and for citizens and consumers to enjoy ample supplies of food and, increasingly, non-food products.
Agriculture Ministers last met at OECD in February 2010. Ministers from OECD and partner countries reached a large degree of consensus about the opportunities and challenges they would face in ensuring that an adequate supply of safe and nutritious food would be available to feed – in a sustainable way – a growing world population. The meeting took place in the aftermath of the 2007/08 food price crisis which had increased the numbers of undernourished in the world and had sparked fears that a period of increasing pressure on the global food system had begun. Against this background, Ministers tasked the OECD to deepen and broaden its work in a number of key market and policy areas, and placed particular emphasis on the need to do so in ever closer co-operation with partner countries and organisations beyond its own membership. This note summarises the ways in which the OECD’s Committee for Agriculture has responded to that Ministerial mandate.
Since 2010, OECD membership has grown from 30 to 34, and a further five countries are currently undergoing an accession process. The OECD has been forging ever closer ties with Key Partners (Brazil, India, Indonesia, the People’s Republic of China [hereafter “China”], and South Africa) as well as with the G20. Outreach to the Southeast Asia region has become a key pillar of the organisation’s global relations strategy, and stronger links are also being created with Latin America, the Middle East-North Africa (MENA) region and Sub-Saharan Africa.
Mirroring these developments, the Committee for Agriculture has become increasingly more global in its efforts. G20 members are invited systematically to dedicated meeting sessions and to the Global Forum of the Committee, where food and agriculture issues of global significance are discussed. Argentina, Brazil, South Africa and Romania are full participants in the Committee’s work. The Committee collaborates closely with successive G20 presidencies. Close links are also being developed with countries in the Southeast Asia region and with the Association of Southeast Asian Nations (ASEAN) and Asia-Pacific Economic Cooperation (APEC), with a focus on food security issues. In recent years, the Secretariat has hosted visiting experts from Brazil, China, India and South Africa.
Partnerships and collaboration with other international organisations active in agricultural and food policy are crucial to the work of the Committee. The FAO is a key partner institution, co-producing the long-established medium-term Outlook. Co-operation is also strong in key policy areas such as policy monitoring and food issues. OECD partners with an ever-growing range of other international organisations including the World Bank, International Fund for Agricultural Development (IFAD), the United Nations World Food Program (WFP), International Food Policy Research Institute (IFPRI), and the regional development banks. It supports the World Trade Organization (WTO) by promoting domestic policy reforms that are non-production and non-trade distorting, and by providing data and analysis relevant to ongoing multilateral trade negotiations. Multi-disciplinary work on human and animal health issues is being carried out in collaboration with the World Health Organization (WHO) and the World Organisation for Animal Health (OIE).
New methods and approaches
Recent years have seen not just widening geographical reach, but also new work methods, inter-disciplinary approaches and focus on issues beyond the farm gate and throughout the food chain. Since 2010, the Committee has redoubled its efforts to incorporate knowledge and insights from other policy areas and disciplines. It has been working intensively with the OECD Trade Committee, the OECD Environmental Policy Committee, and with innovation, health and development experts across the organisation. Work on climate change and on animal health issues is increasingly carried out in collaboration with scientists, agronomists, veterinarians and epidemiologists. While maintaining its valued development of comparable cross-country analysis, policy advice has become more concrete and operational and increasingly tailored to the needs and circumstances of individual countries. In pursuit of deeper insights and value for money, networks have been created to leverage national knowledge and capacity, notably to better use micro-data and in examining food chain issues. The Committee has been developing “foresight” capacity and innovative ways of characterising an unknown future, and has contributed to OECD’s ground-breaking New Approaches to Economic Challenges (NAEC) initiative. Agriculture and food policy advice is increasingly placed within broad, integrated policy frameworks that recognise that the challenges facing the sector are economy- and society-wide. The Committee has increasingly sought to define an alternative, positive reform agenda that is long term in its vision and that adopts a holistic approach encompassing the entire policy set, in order to contribute to the development of a thriving, competitive sector that can deliver sustainable productivity growth.
- Improving policy performance: Measuring and monitoring policy
- Markets, prices and trade
- Trade policy issues in food and agriculture
- Structural issues along the food chain
- Sector performance: Productivity, sustainability and green growth
- Environmental performance of agriculture, natural resources, climate change adaptation and mitigation
- Innovation for sustainable productivity growth
- Risk and risk management
- Poverty, development, food security
- Use of antimicrobials in livestock production; Food loss and waste in the agro-food chain
The global food system will face both new opportunities and a formidable array of challenges over the coming decades. Policy decisions taken today will send important signals to farmers and the broader food sector. Scenario analysis provides an approach to address an inherently uncertain future which model projections alone cannot completely assess.
The situation of world agricultural markets is currently very different from when agriculture ministers last met in 2010. Over the next ten years, the biggest market changes will occur in developing countries. Farmers have demonstrated that they can and do respond to market incentives. Nevertheless, government actions in a number of areas can improve the functioning of those markets and thereby support farmers’ efforts.
The 49 countries analysed by the OECD in its annual Agricultural Policy Monitoring and Evaluation report share a set of common goals: the economic viability of the agricultural sector and rural areas, the production of sufficient and nutritious food for a growing and more affluent global population, and the long-term environmental sustainability of food production.
Climate change has created challenges for the agricultural sector – and will continue to do so. Policy reforms are needed within and beyond the agricultural sector to strengthen farmer incentives to achieve sustainable productivity growth without sacrificing climate change mitigation and adaptation.
Agricultural regions in the OECD have been subject to extensive and increasing water constraints in recent years. The challenges that lie ahead are both extremely complex and locally diverse. It will be important to focus on policies that increase the overall efficiency of water use by the agricultural sector, reduce the sector’s impact on freshwater resources, and improve its resilience to water risks.
Productivity improvements have driven considerable growth in agricultural production in recent decades, enabling farmers to produce affordable food, feed, fuel and fibre for a rapidly-growing global population. However, a significant policy shift is required to enable sustainable productivity growth to continue in the face of an array of challenges.
Innovation is a key driver of sustainable productivity growth and increased resilience. Nevertheless, many countries spend less on research and development (R&D) relative to value-added in agriculture today than they did in 1990. However, private investment has generally increased.
Food security worldwide has improved significantly over time. Progress has been uneven across countries and regions, however, and a significant number of people remain food insecure. Policy makers need to address the immediate needs of the vulnerable, while at the same time building the long-term resilience of those afflicted by chronic hunger and food insecurity.
There is a need to better understand the drivers of structural change along the food chain. There are often broad pressures on the incomes of less competitive farmers, and farm level prices are inherently more volatile than consumer prices. These structural issues and adjustment pressures need to be addressed and not be conflated with a lack of competition in the agro-food system.
Trade-distorting farm policies are gradually being rolled back in some major producing countries but increasing in others. Agriculture and food tariffs generally remain high, and there are concerns that Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) measures are sometimes used with protectionist intent.
Analysis of farm structures worldwide reveals two particularly striking features: the vast majority of those active in agriculture live in developing or emerging economies, and most farms are even too small to ensure food and nutrition security for the farm household. Policy makers need to continue to assist a move towards farm structures which allow for adequate livelihoods.
OECD analysis of risk management in agriculture has identified three layers of risks which require different responses: Normal variations in production, prices and weather do not require any specific policy response; At the other extreme, infrequent but catastrophic events that affect many or all farmers over a wide area will usually be beyond farmers’ or markets’ capacity to cope. In between the normal and the catastrophic risk layers lies a marketable risk layer that can be handled through market tools.
This dual policy note covers the topics of Use of Antimicrobials in Livestock Production and Food Loss and Waste in the Agro-Food Chain.