Download HLEF 13 October Panel 5 Support, trade, aid and investment policies

HLEF 13 October
Panel 5
The Policy challenge: support,
trade, aid and investment policies
Introduction by
Gérard Viatte
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Foreword…
• Before drawing attention to the five key
discussion points at the end of the Issues Paper
(IP), I will try to put them in a slightly wider
context. I will highlight briefly five “challenges”
which seem essential for the long-term
orientation of policies, and which are particularly
relevant in the fields of support, markets and
trade. This approach will cover the issues
mentioned in the IP (explicitly quoted), but
sometimes in a different order.
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1. Policies and markets
• Government interventions will remain necessary
to support agricultural development and
adjustment even in the context of increasing
market orientation. Markets often need to be
“created” and “regulated”.
• Need to promote “non-distorting policies” and
“decoupling”. Progress has been made but is
still insufficient. Decoupling is uneven. Barriers
to market access, tariff escalation and export
subsidies remain major sources of distorsions,
with a negative impact on developing countries.
Innovative proposals on decoupling in the IP.
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2. Towards “new policy mixes”
• A wider range of policies will impact on
agriculture in addition to traditional agricultural
policies. Policies for agricultural markets and
trade cannot be isolated from other policies. Two
examples from the IP: land set aside and
production reserve – environmental policy;
safety nets for smallholders - social policy.
Search for possible synergies.
• Hence need for new “policy mixes”, adapted to
the specific level of development (beyond the
simple distinction between “developed” and
“developing” countries).
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3. Targeted support
• Support should be not only “decoupled” but also
targeted towards well defined objectives.
• They should reflect the key role of food and
agriculture and of the elimination of hunger for
development and for the society at large. Two
specific examples of targeting from the IP: - the
emphasis on pro-poor policies (smallholders) the payments for public goods.
• Targeting helps to give a higher priority to food
and agriculture at the domestic level, and in
international assistance including through new
financing mechanisms as proposed in the IP.
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4. An agro-food perspective
• Higher priority should be given to financial and
technical support (“non-distorting”) for creating
efficient upstream and downstream markets,
including for strengthening the position of
farmers. Examples from the IP:
• Improving delivery system and accessibility of
inputs (more useful than input subsidies).
• Improving processing and marketing systems
as a contribution to increase farmers’ incomes
and to reduce malnutrition.
• Improving market information for all actors.
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5. Institutions and participation
• The process of elaboration and
implementation of policies deserves more
attention. There is often a need for adjustment of
institutions at all levels, for stable legal
framework (IP) and for efficient governance. This
is particularly true in the sensitive field of
allocation of support, and of markets and trade.
• The private sector has a major role to play
(example from IP: insurance), including through
public/private partnership. Capacity building of
all actors on the markets is a good example of
“non-distorting support”…
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The five discussion points
The remarks above lead to the five specific discussion points of the IP:
1. What forms of non-distorting support ?
2. Extension of decoupling and possible
agricultural production “reserve” ?
3. Increased assistance to developing countries
agriculture, including through compensatory
financing by OECD countries ?
4. Respective roles of public/private insurance in
OECD countries ?
5. Safety mechanism against food crisis
emanating from economic shocks (“early
reaction fund”) ?
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