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Dear Subscribers, Some comments on the commodities questions from the Royal Society for the Protection of Birds (RSPB). Is the role of public policy merely to 'manage the decline' in commodities by smoothing price volatility, providing cheap credit and enhanced debt relief for commodity-dependent countries and encouraging diversification into a wider range of crops and labour intensive industry? No. Amongst other things, public policy has an essential role in supporting environmentally sustainable production - both of commodities that are currently grown and of new crops chosen as part of diversification strategies. Action towards this should include: Supporting CDDC capacity to adopt and implement the national commodity strategies that are most appropriate for long-term sustainable development. In part, this will be through policy measures in other areas that impinge on CDDC policy choices. Some priorities here are an end to OECD subsidies that undermine CDDC agriculture, reform of trade rules to allow flexibility in CDDC policy-making, and debt relief. Support for sustainable strategies should also be through pro-active provision of appropriate resources and capacity building. DFID should work with other agencies to establish an international fund for more sustainable commodities production. This would help to recognise the responsibility of developed countries for funding biodiversity conservation and support up the commitments made at Rio in 1992 and reaffirmed at the WSSD in 2002. The Fund could be used to support the activities noted below Supporting research and extension directed towards low external input sustainable agriculture. As noted elsewhere in the forum, such systems are sidelined in current agricultural research. Greater public support and investment in participatory research on low external input systems that are appropriate for poorer farmers is essential. There are many positive examples of such research, often linked to the work of NGOs, that DFID can build on. It is also important for research and extension to consider the sustainability and security of livelihoods as well as crop production per se. This includes supporting more diverse production systems that provide farmers with crops for local markets and subsistence needs as well as goods for export, and so reduce their vulnerability to market fluctuations. Importantly, research and extension can only lead to change in farming practices if farmers have the resources and incentives to adopt new methods. This will demand changes in the wider policy and trade environment, as well as provision of adequate access to credit. Tackling corporate responsibility and competition In stark contrast to the plight of growers, commodities still provide lucrative returns to large transnational exporters, processors and retailers further down the supply chain. Public policy needs to recognise this and address the increasing power of transnational corporations in the commodity sector. In part, this should be through action to strengthen corporate social responsibility and accountability. Here, policy should look beyond encouragement and voluntary measures. Much research has shown that reliance on voluntary measures and self-regulation is inadequate (e.g. OECD 2003 Voluntary Approaches for Environmental Policy: Effectiveness, Efficiency and Usage in Policy Mixes). Instead, we need a framework of mandatory international environmental and social standards for corporate behaviour, backed by national legislation, independent monitoring, and scope for prosecution and legal action. Action is also needed on competition to tackle the increasing concentration of market power among TNCs, a key factor in the low prices paid to farmers. Multilateral action on competition policy could help to make trading relations more equitable. Suggestions for appropriate mechanisms that support small farmers and developing countries have been made by several organisations (e.g Action Aid, Competition Policy and the WTO. 2003, A. Singh & R. Dhumale, 1999 Competition Policy, Development and Developing Countries. South Centre.), and DFID needs to consider these and support action within the international community. Supporting consumer education and eco-labelling Consumer concern about the environmental and social impacts of their consumption decisions can be a powerful force for change. Eco-labelling can help realise this potential, and DFID should facilitate wider adoption of such schemes. Action here should include support for a clarification of WTO rules to allow labels based on PPMs, so that labelling can take a life-cycle approach. It is essential that eco-labelling supports small farmers and does not unfairly restrict market access. To ensure that labelling initiatives are pro-poor, they must be designed in a participatory manner in collaboration with small farmers, and accompanied by financial and technical assistance to support environmentally and socially sound production. What kinds of diversification offer credible options to commodity dependence on the scale required? Diversification to reduce dependence on one or two export commodities is important for reducing vulnerability to world price movements. For success, new alternative income sources must be environmentally sustainable. Diversification strategies that rely on unsustainable use of natural resources cannot provide a long-term support for the national economy, and often have immediate negative impacts for the poor. To illustrate, consider the impacts of water pollution from horticulture in East Africa. Strategies for diversification must be based on joined-up thinking that considers the upstream and downstream social/economic/environmental impacts of proposed policies. Policy making for diversification must also take full account of the environmental and social value of some existing commodity production systems, e.g. shade grown coffee and cocoa. There is a risk that agricultural systems of importance for biodiversity will be lost in a drive to concentrate on sectors considered more economically efficient. Policy analysis and donor support for diversification must recognise multifunctionality. What, if anything, can be salvaged from past failures in international supply management exercises such as the International Commodity Boards? The description of past efforts at supply management as a failure overlooks the considerable success of these schemes in stabilising prices for many years, and the drastic situation of price collapse and poverty since their demise. The free market approach doesn't seem to be a huge success; certainly it is not delivering sustainable commodities production on its own, and some form of government or intergovernmental intervention is an absolute necessity if the market is to work for public benefit. As Peter Robbins notes, many bodies have suggested supply management over the last year. International agreements could help ensure viable and more stable returns to growers, and redress the imbalance of power between small farmers and transnational buyers, and DFID should give serious attention to the scope for this. Commodity production is too important a sector for poverty reduction and environmental sustainability to leave its development to market forces. Kate Gooding Research Officer, Trade Policy and Development RSPB tel: +44 (0)1767 680551 fax: +44 (0)1767 692365 www.rspb.org.uk The RSPB is the UK charity working to secure a healthy environment for birds and wildlife, helping to create a better world for us all. ... ============================================================= To send a reply to this message that goes to all list members, make sure that you send your reply to <address removed> To unsubscribe from this list, send an email to "<address removed>", with the message body: unsubscribe global-trade <your-email-address>
Please visit dfid-agriculture-consultation.nri.org.