Download - EastAgri

ORGANISATION DE COOPÉRATION ET DE DEVELOPMENT ÉCONOMIQUES
OECD
OCDE
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
AGRICULTURAL SECTOR TRENDS IN
CEECs
Loek Boonekamp
Head of the Trade and Markets Division
OECD, Directorate for Agriculture
EastAgri conference
Rome, 28 February, 2005
Directorate for Food, Agriculture and Fisheries
1
Outline of the Presentation
• Macro-economic trends
• The context of agricultural world markets
• A focus on Ukraine
Directorate for Food, Agriculture and Fisheries
2
Macro-economic Trends
• Robust GDP growth
Directorate for Food, Agriculture and Fisheries
3
Per cent change from previous year
Robust GDP Growth
14
12
10
8
CEE
Ukraine
Belarus
EU
6
4
2
0
-2
-4
1997
Directorate for Food, Agriculture and Fisheries
1999
2001
2003
2005
4
Macro Economic Trends
• Robust GDP growth
• Inflation slowly controled
Directorate for Food, Agriculture and Fisheries
5
Inflation slowly under control
70
60
Per cent
50
CEE
Ukraine
Belarus
Euro zone
40
30
20
10
0
2001
Directorate for Food, Agriculture and Fisheries
2002
2003
2004
2005
6
Macro Economic Trends
• Robust GDP growth
• Inflation slowly under control
• External debt remains heavy….
Directorate for Food, Agriculture and Fisheries
7
External debt remains heavy…
external debt servicing as a per cent of exports
30
Emerging and
developing
economies
CEE
per cent
25
20
15
Developing Asia
10
5
0
1997
Directorate for Food, Agriculture and Fisheries
1999
2001
2003
2005
8
Macro Economic Trends
•
•
•
•
Robust GDP growth
Inflation slowly under control
External debt remains heavy….
….Weighing down on investments
Directorate for Food, Agriculture and Fisheries
9
….Weighing down on investments
investments as a per cent of G DP
40
35
per cent
30
CEE
Developing Asia
25
20
15
10
5
0
1999
Directorate for Food, Agriculture and Fisheries
2001
2003
2005
10
Agricultural World Market Context:
The Evolving Economic Environment
• Increasing competition in world markets
– Cereals from OECD
– Renewed export subsidy use in EU (weak USD)
– Meat, sugar, cotton, oilseeds from South America
Directorate for Food, Agriculture and Fisheries
11
Growing Competition in Meat and
Oilseed Export Markets
2013 compared to 1998-2003 average
160
Percent change
140
0.5
OECD
exports
120
2.1
100
46
80
46
60
40
20
4.3
6.1
1.4
4.6
Exports from
Brazil and
Argenina
11
35
0
Beef
Directorate for Food, Agriculture and Fisheries
Pigmeat
Poultry
Oilseeds
Oilmeal
12
Agricultural World Market Context:
The Evolving Economic Environment
• Increasing competition in world markets
– Cereals from OECD
– Meat, sugar, cotton, oilseeds from South America
– Renewed export subsidy use in EU (weak USD)
• Continued productivity growth in agriculture
– Downward pressure continues on real commodity
prices
Directorate for Food, Agriculture and Fisheries
13
World Prices Remain Low in
Real Terms
600
500
500
USD/100 kg
600
USD/t
400
300
200
100
0
1971
400
300
200
100
1985
Wheat
Oilseeds
Directorate for Food, Agriculture and Fisheries
1999
2013
Coarse grains
0
1971
1985
Beef
1999
Pork
2013
Butter
14
Agricultural World Market Context:
The Evolving Economic Environment
•
•
•
•
•
•
Changing consumer demand
Growing civil society voice
Changing market structures
Increasing globalisation
Shifting competition focus
Growing role of standards
Directorate for Food, Agriculture and Fisheries
15
A Focus on Ukraine
• The policy situation
– Low support levels
Directorate for Food, Agriculture and Fisheries
16
Support in Ukraine Generally Low…
% of farm receipts
Producer support estimate
100
80
60
40
20
0
-20
-40
-60
-80
-100
Total PSE
PSE Crops
PSE Livestock
PSE OECD
1987
Directorate for Food, Agriculture and Fisheries
1991
1995
1999
2003
17
…Also Compared to Other CEECs
Per cent PSE in 2001
45
Per cent
40
Bulgaria
Ukraine
35
Poland
30
25
Slovak Republic
Hungary
20
Czech Republic
15
Romania
10
Slovenia
5
0
Directorate for Food, Agriculture and Fisheries
EU
OECD
18
A Focus on Ukraine
• The policy situation
– Low support levels
– With big differences between commodities
Directorate for Food, Agriculture and Fisheries
19
Big Differences in Levels of Support
PSE by commodity - 2001 to 2003 average
50
Poultry
Sugar
Pig meat
Wheat
Beef and veal
Maize
Oilseeds
Eggs
Milk
40
Per cent
30
20
10
0
-10
-20
-30
2001-2003 average
Directorate for Food, Agriculture and Fisheries
20
A Focus on Ukraine
• The policy situation
– Low support levels
– With big differences between commodities
– Most as budgetary support
Directorate for Food, Agriculture and Fisheries
21
Most Support Given as Direct Payments
Composition of support over time
4000
Million USD
2000
Budgetary
support
0
-2000
Market price
support
-4000
-6000
1993
Directorate for Food, Agriculture and Fisheries
1995
1997
1999
2001
2003
22
A Focus on Ukraine
• The policy situation
– Low support levels
– With big differences between commodities
– Most as budgetary support
• High tariffs despite low price support
Directorate for Food, Agriculture and Fisheries
23
High Tariffs Despite Low MPS
300
Per cent
250
200
Current AVT
150
2002 AVE
100
Offered AVT
50
0
W
at
e
h
M
ze
ai
n
Su
Directorate for Food, Agriculture and Fisheries
ed
e
s
B
f
ee
gm
i
P
t
ea
Po
y
tr
l
u
B
r
te
t
u
s
a
g
g
g
E
Su
r
24
Lowering MFN Tariffs Does Not
Affect Domestic Prices
300
Per cent
250
MFN Tariff (AVE)
200
Price differential
150
Binding tariff
100
50
0
Price differential=(domestic
price-border price)/border price
W
he
a
M t
ai
z
B e
Su arl
n f ey
lo
w
er
B
Pi eef
gm
e
Po at
ul
tr
y
Eg
gs
Su
ga
r
-50
Directorate for Food, Agriculture and Fisheries
25
Some Concluding Remarks
•
•
•
•
Aggregate support levels are moderate
Substantial distortion for some commodities
No need for severe border measures
Substantial scope for Ukrainian tariff cuts under
WTO accession
• WTO membership would lay stronger
foundations for ‘good’ agricultural policies…
• ..and facilitate access to the global food value
chain by Ukrainian farmers and food producers
Directorate for Food, Agriculture and Fisheries
26