A paper has been published entitled ‘Agriculture and climate change’, in the volume ‘2020 European agriculture: Challenges and policies’, co-published by the German Marshall Foundation and Sciences-Po’s Groupe d’économie mondiale (GEM), arguing that sophisticated modelling suggests that ‘the world appears to be able to continue to feed the increasing human population during the 21st century despite climate change’, but that there will be ‘substantial differences between regions, with some benefiting and other adversely affected.’ It is noted that ‘developing countries, especially the poorest ones, are the most likely to face negative effects.’
In this context it is argued that ‘an important means of adapting to these challenges is to facilitate trade among countries and/or regions’. This conclusion, it is argued, has important policy implications, since it requires ‘creating more open trade in agriculture’, with tariff cuts and subsidy elimination becoming an important means of combating the adverse effects of climate change on food availability. It is argued that moves towards greater free trade must be combined with a series of proactive policy measures such as:
- taxes or cap-and-trade regimes to address the most damaging effects of climate change;
- pro-poor and pro-development policies capable of helping the world’s poor, who face the most severe consequences of climate change;
- investment policies for agriculture and rural infrastructure, and research and development, designed to ‘mitigate and adapt to the effects of climate change’.
Given the paramount issue of water availability, the study highlights the importance of improving the efficiency of water use and restructuring agricultural production patterns in the light of water constraints. A companion paper entitled ‘Agriculture and virtual water’ explores the concept of ‘virtual water’. Within this concept, ‘trade of farm and food products represents virtual water flows between water-rich and water-poor countries, and between water-efficient and water-inefficient countries.’ This concept reinforces the need for more open agricultural trade as a means of enhancing the global reliance of agricultural production.
Sub-Saharan Africa, significantly, is seen of one of the regions which will be most adversely affected by the process of climate change. This affects some 95% of the population of the ACP. With the 2008 price surge leading many African governments to place growing emphasis on expanding domestic agricultural production, this is leading to a re-evaluation of the role of trade policy tools in support of this process. Indeed, in some ACP countries (e.g. Fiji – see ‘Agricultural dimensions of Fiji’s WTO trade policy review’), it is leading to a creeping increase of applied tariffs.
There are a number of important questions raised by the paper:
* What are the implications of this current policy trend, if an important means of mitigating the impact of climate change is to facilitate trade in food and agricultural products among countries and regions?
* How can national efforts to support domestic agricultural production be reconciled with regional efforts to promote expanded regional trade in food and agricultural products, given the often large-scale inequalities in the distribution of power along supply chains and consequent imperfect functioning of markets?
* How can these national efforts be accommodated and reconciled with inter-regional trade agreements aimed at liberalising trade in food and agricultural products?
Clearly, a nuanced, balanced and integrated approach is needed, which while supporting such efforts to promote production will ensure that this is done through the use of minimally trade-distorting tools. This requires empirical analysis of what practices are most effective in reconciling national, regional and inter-regional objectives in the existing specific market contexts.