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Mariann Fischer Boel

Member of the European Commission responsible for Agriculture and Rural Development

Who will feed the World?
The answers from the EU

Conference: "Who will feed the World?"
Brussels, 3 July 2008

Introductory session (1st intervention):

[Appropriate address],

First of all, I must say: What an impressive crowd we have here today! Even if debates in the Parliament are always interesting, it is not often that I discuss agricultural policy in a Plenary hall as full as today. That fact alone shows what a well-timed event this is.

850 million people in the world are under-nourished, a number which has hardly changed since 1990-92. To bring this terrifying figure down is the real millennium development goal. I would like to warmly thank the French presidency and in particular my good friend Michel Barnier for taking the initiative on this conference, which puts the focus on the key role of agriculture and rural development in overcoming this challenge. My thanks go also to the European Parliament for being our host.

As we are witnessing, higher prices can have an immediate and dramatic impact on the world's poorest populations, putting years of development progress at risk. But in the longer term, rising prices could be an opportunity to help rural communities in developing countries out of poverty.

In my view, the coin therefore has two sides. Both should be at the centre of today's discussion: how do we address the crisis here and now while avoiding wrong policy choices that could jeopardize development in the longer term. After all, higher prices also provide a window of opportunity to stimulate agricultural production in many developing countries which have great potential, but where structural bottlenecks and low prices have left the potential untapped.

I'm very grateful to Michel Griffon for his analysis – because it recognises that a number of complex causes lie behind the evolution of commodity prices. As the European Commission set out in a recent communication, it is a mix of short-term and long-term factors that have seriously disturbed the balance between supply and demand.

Since the underlying causes are complex, the European Union is responding on several fronts.

In the first instance, we need to mitigate the immediate effects of the food price shock. The EU is therefore scaling up its contribution to relieving the impact of high food prices on poor people around the world.

In parallel, we need to boost agricultural supply in developing countries in the short term – and we need to act now to increase the harvests over the next seasons. I have proposed to use some of the money saved on our traditional CAP market instruments to meet this challenge. If European farmers effectively give a helping hand to developing countries' farmers to get access to seed and fertilizer, this would be a clear sign of international solidarity and would - in the interest of us all – increase production and help to stabilise the markets. I am confident that the Commission can this month present an ambitious proposal to this end, which can make a real difference.

This immediate response should go hand in hand with long-term policies to strengthen agricultural production in developing countries. More research in agriculture and knowledge-building will enhance productivity growth. New crop varieties, improved cropping systems, more efficient use of water, and greater resistance to diseases and environmental stress are amongst the ways forward to put global agriculture on a sustainable footing.

Moreover, we work hard to get a deal in the Doha Round. The next few weeks will be critical. I might not make myself popular today by saying it, but Doha remains a Development Agenda and there are significant potential gains for developing countries. New market opportunities would help generate additional export income and would help to stimulate agricultural production. More trade would facilitate access to cheaper foodstuffs, thereby alleviating the current food price hikes. In fact, let me say this clearly right at the beginning of today's conference: in the 21st century it is not possible to ensure food security by limiting agricultural trade. The attempt to return to self-sufficiency is a blind alley and would be a disaster both in terms of development and in terms of food security.

And back at home in Europe, we're improving agricultural policy to help our own farmers make a robust response to growing global demand. The Common Agricultural Policy is part of the solution to ease the global pressure on food prices – not part of the problem.

Overall, we have to act quickly but also with good judgment – addressing symptoms of the problem in the short term, and tackling root causes in the medium and long term. This is what the European Union is doing.

Introductory session (2nd intervention)

[Ladies and gentlemen],

I'm already very encouraged by the fact that so many of today's speakers have expressed their views with real passion.

Everyone attending this conference will return home this evening knowing that some excellent minds are deeply committed to the issues in question.

In broad terms, I can agree with many of the ideas which have been put forward.

We certainly need to be quick out of the starting-blocks in our efforts to soften the impact of high food prices on the world's poor.

And we need to help stimulate an energetic supply response in developing countries – partly with the help of unspent money in the Common Agricultural Policy budget as I mentioned earlier. At this juncture, I think we need to give international support for the purchase of seeds and fertilizer as a crucial element to quickly increase food production, in particular in some of the low-income food deficit countries.

Such programmes for access to inputs, for example via the FAO Initiative on Soaring Food Prices, can bridge the gap between very short-term humanitarian assistance and longer-term development assistance.

However, they cannot be a lasting solution. We should therefore aim at a temporary facility - and the objective of a positive supply response in the short-to-medium term should be part of a sustainable development policy in each country in question.

I'm pleased to see a recognition that export restrictions do more harm than good. They may bring short-term pain relief in one particular country, but they make the underlying problem worse – both in that country and elsewhere – by adding to nervousness on the world market and by cutting incentives for farmers to raise production.

If you want proof of the damage caused, just look at the rice sector.

Therefore, we need to discuss export restrictions more intensively in the WTO and in other relevant international fora. They are an international issue!

Another idea with which no-one will hear me disagree is that stepping up long-term investment in agriculture is essential.

With regard to the use of grain stocks at regional or international level, I think there are pros and cons.

There is possibly a case to be made in favour since the fall in stocks has reduced the buffer against changes in production or demand.

On the other hand, current stock levels compare with those of the early 1980s - so it is not that stocks are particularly low, but more that the situation of very abundant stocks has come to an end.

Also, experience shows that stocks can be expensive and difficult to manage – even when the political responsibility for doing so is clearly established and defined. Nobody knows this better than the European Commission!

Certainly, at this stage I would not rule out the possibility of using "virtual stocks", as the G8 is discussing. In general, market transparency can be helpful to stabilise expectations – just as we are discussing for the oil market. But I would like to see more detailed analysis of how we could use such tools in practice.

In any case, what we must rule out is a return to the days in the European Union when intervention stocks sucked up billions of euros of public money. This would damage our farmers' long-term interests and the public would not be prepared to pay the bill.

With regard to biofuels: I don't agree that the European Union's biofuels policy should perform a U-turn.

We currently use less than 1 per cent of our cereal production to make bioethanol. We use two-thirds of our rapeseed crop to make biodiesel, but in fact European rapeseed production accounts for about 2 per cent of global oilseed demand. So this is not something to shake the markets, and freeing this up for the food market will make little difference to prices.

Moreover, with high market prices for food and feed crops, the interest of European farmers in producing first-generation biofuels is now certainly highest in the case of marginal land not suitable for food and feed crops

A central element of the European Commission's proposals for the biofuel sector is a sustainability scheme. This would involve close monitoring of the economic, social and environmental results of our biofuel policy – in the European Union and outside.

And let's make no mistake: Europe needs a good biofuel policy – for reasons of climate change and fuel security. Some of the related policy decisions are difficult, but we can't duck them, just as we can't change our policies according to the latest turn in the public debate.

Finally, let me return briefly to the issue of trade.

I can't emphasise it enough: trade is not the enemy of development. It can be a close friend.

Certainly, many agricultural producers in developing countries regard trade as a friend – given that the European Union is a huge importer of farm goods from the developing world.

And it's widely accepted by experts that a well-balanced result in the Doha Round would provide valuable export openings for developing countries and make a healthy addition to their income.

Of course, I'm not pushing for a global commercial environment in which "anything goes". The European Union is fully signed up to all the development principles which lie at the heart of the Doha Round.

This means that we support:

  • lower import duty reductions for developing countries;
  • measures to soften the impact of preference erosion;
  • a good final deal on tropical products;
  • the designation of "special products" for developing countries; and
  • a Special Safeguard Mechanism, which would allow developing countries to protect themselves against import surges.

It is not often that I quote other people, but when reading Joachim Von Braun's policy paper I got very encouraged by the clear statement that "A world short in supply and facing regional and country-specific fluctuations needs more options to trade, not less".

Let's not see global trade as a tide that we must try to hold back. With the right policy environment, we can harness the power of trade to the benefit of development.

Thank you.

Round table discussion

[Ladies and gentlemen],

What we've heard already today gives us a great deal on which to reflect, and so I'm very glad to have the chance to take part in this round-table discussion – in which we're continuing to think ahead to the future.

I want to thank Mrs. Partanen and Mr. Restrepo for their presentations, which so clearly show that the role of farming and farmers is constantly changing, whether in Latin America, in Europe or on any other continent.

In the introductory session, we showed a video clip with two main messages – both of which are full of hope.

The first message is that we all need agriculture and that agriculture is much more central to many aspects of our way of life than we may realise.

The second message is that agriculture comes in all shapes and sizes. In my view, this is a crucial quality. The vocation of agriculture in the 21st century is certainly to produce food, but it has many other roles. The multi-functionality of agriculture is already a central feature of the CAP, and I think it will become even more important over the coming decades.

I’m an outdoor sort of person. When you’re walking outdoors, it’s a good idea not to spend all your time looking at your feet. People tell me that, when I’m walking, I stride ahead very confidently, and I give the impression that I have a very clear idea of where I want to go!

To some extent, I believe we should do the same when thinking about the future. We need honest analysis of the challenges that we face, but we should also hold up our heads and look forwards with confidence to where we want to go.

With this in mind, when I look ahead, what future do I want to see for agriculture, in the European Union and outside it?

First, I want to see a productive agriculture – that feeds us, clothes us and gives energy.

Secondly, I want to see a responsible agriculture – that plays its part in taking care of the natural world.

Thirdly, I want to see an agriculture embedded in living, developing rural economies and societies.

Within the European Union, policy can and must continue to help make that vision a reality in a number of ways.

If we want our farmers to produce the products that we want – and in the volumes that we want - they must be free to respond to market signals. But they must also have a certain level of security to see them through times of crisis.

This is very much the direction that the Common Agriculture Policy is taking, with its emphasis on direct payments decoupled from production, and on market instruments operating at a safety net level. We are developing these aspects further through the CAP Health Check, which is currently underway.

Keeping a healthy level of production is also about technology. New techniques and varieties helped us to triple maize yields in the 27 Member States of the European Union between 1963 and 2006. Over the same period, wheat yields rose by 164 per cent.

We should always be looking for ways to sustain progress in yields – even if we may not quite be able to match the gains of the past. In Europe, we have a limited potential for expanding land use. Therefore, the development of agricultural supply will essentially rely on the strengthening of productivity growth in many sectors along the food chain.

But it is unfortunately a fact that at global level as well as in Europe, agricultural productivity growth has slowed down significantly for some key food grains. In Europe, we have to try to reverse that trend, while being respectful of the environment.

Continuing to improve yields means using existing technologies more widely; it also means developing and harnessing new technologies. So we must give research the resources it needs. By the way, any serious discussion about technology and agriculture can’t afford to sweep genetically modified organisms under the carpet! I mention that briefly here!

The CAP is also doing its part to realise the second part of my vision – an agriculture that occupies a sustainable place in the natural world.

We achieve this partly by linking direct payments for farmers to high standards of environmental care. We also give a large slice of our budget for rural development to environmental projects, and this must continue. In particular, we must raise our spending on combating and adapting to climate change.

Finally, with regard to the economic and social health of rural areas as a whole, we must recognise that the farm sector is continuously restructuring, and that sometimes agricultural jobs are lost as labour productivity improves.

The right response is not to wring our hands and curse the global economy, but to help rural economies to diversify. Creating new jobs is as essential in the countryside as it is in our towns and cities.

Again, this is a strong theme of the European Union's rural development policy, and it must remain so.

To what extent can I apply these observations to developing countries?

Of course, the situation in many developing countries is not identical to that in the European Union. Nevertheless, in many cases we see quite similar needs.

Wider use of technology could help agriculture in some developing countries to make significant strides forwards. In Africa in 2006, average yields were around 2.5 tonnes per hectare for wheat and around 1.8 tonnes per hectare for maize. There is enormous room for improvement here.

To release this potential, public and private investment in agriculture, rural development and knowledge-building are crucial. We need to give agriculture a higher priority, and developing countries need to show more foresight and set out strategies which give a sustainable boost to productivity.

In many parts of the developing world, adapting to climate change will be even more essential than in the European Union. If we fail to do this, agricultural production will be severely harmed in some areas, and could be wiped out altogether. In this context also, technology will be very important.

There’s also a need to encourage the development of non-agricultural sectors of the economy in rural areas. In some cases, this will require significant investments in rural infrastructure.

Overall, taking farming and rural areas forwards in developing countries will need good policy, money and determination. I believe we can do it!

An essential step in that journey is to raise general awareness of the scale and importance of the challenges involved. We have made that step! Let's make a few more!

Thank you.

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