The importance of agriculture

José Gómez Cerda

jose.gomezc@claro.net.do

General Secretary Adjunt FELTRA

In 2002, world farm labor force was estimated in 1.2 billion people, approximately 45% of the economically active population of the world. Asia’s share of the agricultural labor force in the world reaches 80%, while Africa has 14%. China and India gather more than 60%.

 Agricultural labor force increases more rapidly in the sub – Saharan Africa (1.9% per year), followed by Southern Asia (1.5%), along with the Middle East and Northern Africa (0.8%). In the rest of the world, growth is either insignificant (0.1% in Latin America) or negative (-3% in North America and Western Europe). Within the next 15 to 20 years, the share of the economically active population in agriculture will remain over 47% in the sub – Saharan Africa, South Asia, and the Far East. In the Middle East and Northern Africa, it will decline to 23%; in Latin America and the Caribbean, to 17%; and in Europe, to less than 10%. In North America, it will barely exceed 1%.

In terms of the global distribution of the economically active population in the agricultural sector, Asia’s share is the most significant one, reaching 80% of the world total, followed by Africa (14.3%), Latin America (3.6%), and the rest of the world (3.7%).

 Two countries – China and India – hold the major concentration of agricultural labor force in the world, attaining 60% of the world share, and 78% of Asia’s total.  Nigeria has the largest number of farm workers in Africa, with 17.5% of the region’s total, and 2.5% of the world’s total.

 Besides receiving low wages, agricultural workers are usually underemployed, for they work only an average of 175 days a year. The remainder of the year, they have to survive on a very low income. When they are employed, they have to endure long working days, adding up to 45 or more hours a week.

 Europe: The common agricultural policy (CAP)

Europe adapted its common agricultural policy (CAP) in April 1999. The reform will benefit farmers, consumers, the farm industry, the environment and the economy of the European Union in general.

 With the reform of the CAP, it is the goal of the European Commission to ensure competitiveness of European agriculture within both Member State and international markets, to develop a more environmental–friendly farm industry and to protect farmers’ means of support.

 The CAP reform can be considered as a step towards an aid system that places people over products, and that compensates farm workers not only in proportion to their outputs, but also to their contribution to society as guardians of the countryside.

According to historical tendencies, It is evident that rural areas will not be capable of sustaining themselves on a permanent basis, neither financially nor demographically.

 This new reform will actually reinforce privileges for the European community. Therefore,  90% of the agricultural output of the European Union will still have a privileged access to the most lucrative consumer market in the world. At the same time, farmers will be able to expand and diversify their production, while taking advantage of new opportunities outside the European market.

 Rural development regulation

This new policy of rural development will foster the establishment of a coherent and sustainable framework for the future of European rural zones.

Its approach will be integrative and will focus on various levels. On the one hand, it recognizes that farming plays an important role in the conservation of rural heritage. On the other hand, it emphasizes that the creation of alternative sources of income should be part of a rural development regulation.

One of the main innovations is the combination of various rural development measures into one coherent framework that should work in three ways:

 By enhancing and improving forestry and agriculture. The most important measures deal with the modernization of the production, transformation and marketing of quality products. Production will also improve thanks to the training of young farmers and the amelioration of conditions that will promote an early retirement of farm workers. For the first time, forestry is recognized as a key element in the development of rural areas.

 By promoting competitiveness within rural areas. The aim is to maintain the living standards of rural communities and to promote the adoption of new activities, thus creating alternative sources of income and employment for farmers, their families and the rural community in general.

 By fostering the conservation of the environment and Europe’s rural heritage. These mandatory measures form part of a new generation of rural development programs that will promote the use of more environment-friendly agricultural exploitation methods.

 One additional action that will corroborate the PAC’s environmental approach will consist of the granting of compensations, which traditionally were giving to farmers living in the least favored areas, to those living in regions in which agriculture is limited due to specific environmental limitations.

 The principles that govern this new rural development regulation are decentralization of activities and flexibility. Member States have to make proposals according to geographical circumstances. Depending on their priorities and specific needs, Member States can implement a series of rural development measures present in only one regulation.  This represents a significant step towards the simplification of European standards, for this text replaces a whole group of nine regulations.   

Agriculture in Eastern Europe

In terms of surface, economically active population and its contribution to gross domestic product, agriculture is still relatively more important in the PECO than it is in the European Union. Only in the Czech Republic, Slovakia, and Slovenia agriculture has an output comparable to that of the European Union.

  Agricultural output

After a significant decline in farm production during the first years of transition, there seems to be a stabilization in most of the PECO.

Agriculture and trading of food products

Besides Hungary and Bulgaria, most PECO countries have imported, during the last few years, all of the food products required by their populations. The leading exporters in terms of value are Poland, Hungary, and the Czech Republic. The latter along with Poland are also significant importers. The European Union plays a significant role as exporting destiny, specially for countries like Hungary, Poland, the Czech Republic and Bulgaria, which export from 30% to 40% of their agricultural production to the Union. Exports have been diversifying since 1995.

Rural development

In various PECO countries, people began migrating to the countryside when the economy declined. Agriculture served as a buffer because it allowed people to live from the land without leaving their native towns and adding up to other sources of income, such as retirement benefits. Underemployment, and undercover unemployment will remain as important obstacles to the development of rural economies.

Agricultural and rural policies

In the PECO, farmers receive various incentives, such as support of market prices, direct payments and subsidies to buy tools, investment aids and tax concessions. Changes in prices, the evolution of international markets, and a recovery in the domestic demand have made possible an improvement of farmers’ income more relevant to vegetable products than to animal products. Eventually, the production cost gap in relation to the European Union will narrow.

Conclusions and perspectives

In general, several actions are being taken in order to protect the agricultural sector, such as the imposition of import levies, and market intervention. Vegetable producers sell their output at higher prices; and the differences in the price of cereals, pork, and fowl between the PECO and the European Union has become narrower and should disappear when the PAC reforms present in the Agenda 2000 of the European Union are implemented.

According to estimates, the PECO are likely to increase their earned surplus of cereal, oil-seeds and pork until 2003. The export of this surplus will have to be done at world market prices. The traditional surplus of dairy products may decline slightly, and the region will remain more or less self-sufficient concerning the production of fowl and beef.

                                      Agriculture in Africa

Africa is an agricultural continent. Most of its countries depend on this activity for domestic consumption, while others rely on the export of various articles, specially to Europe.

In 1992, a group of African countries created the African Common Agricultural Program (ACAP) as a means to promote cooperation and agricultural integration as it was established by Article 46 of the treaty by which the African Economic Community (AEC) was originated.

According to the Treaty, the ACAP will encourage the development of agriculture, forestry, cattle breeding, and fishery, in order to ensure food security, output increase and productivity enhancement in agriculture, cattle breeding, fishery, and forestry, as well as to improve working conditions and create more jobs in rural areas. 

However, the effectiveness of the ACAP has been hampered by civil wars and prolonged droughts.

Moreover, population grows at a much faster pace than food production. Birth rate is 3% per year, and the creation of new jobs in agriculture is insufficient. We must also take into account the fact that in Africa agricultural output is low.

Other issues to be dealt with are the state of malnutrition of millions of people, and the devaluation of national currencies, particularly that of the CAF franc. These problems are relevant to several countries that cannot import staple foods.

Despite its conflicts, Africa is trying to solve its farm problems, which are critical to the development of countries and their populations.

In many African countries, the best farmlands belong to former colonizers. There have been no agrarian reforms to distribute the land to those who labor it.

                             Agriculture in Asia

The nine countries of the Association of South-East Nations (ASEAN), i.e. Burma, Brunei, Philippines, Indonesia, Laos, Malaysia, Singapore and Vietnam, have done their best to reinforce their financial co-operation in order to stabilise the exchange rate of their currencies.

Agriculture in Latin America

Latin America’s relationship with agriculture dates from long ago. 25% of the population work in farmlands or in the agricultural industry. Food products represent an important share of the region’s exports, and the sector has demonstrated to be a trustworthy dynamic force for development.

Latin America’s goal of attaining sustainable economic growth and higher standards of living rely mainly on its capacity of exporting more agricultural products to the international markets and increasing productivity among farmers. But the region’s capacity of incrementing its exports faces serious obstacles abroad, more specifically, the barriers of free trade erected by industrialized countries.

Obstruction within the exchange of these goods is significant: importing levies, subsidizes, storage and marketing by governments,  complex customs formalities, permits, tariffs, quotas, political prices, discriminatory exchange rates, and sanitary restrictions without any scientific support.

In contrast, in the middle of the past decade, most Latin American countries unilaterally reduced their tariffs and other commercial barriers. They reduced their import levies and set aside the role played by official entities.

Latin America is in an ideal position to benefit from these changes, and it is rediscovering its trade–offs in agriculture: huge extensions of farmland, a moderate population growth and a significant potential to increase production. New investments along with the application of modern technology is helping in the development of agricultural production in this region.

If these goals are achieved: creation of new jobs, respect for workers’ rights and the improvement of farmers’ living and working conditions, agriculture in this region will be a force for development well into the 21^st century.

On the other hand, natural catastrophes, such as “El Niño”, windstorms, and hurricanes (particularly Mitch), have caused widespread damage in many rural areas of Latin America. 

              Genetically Modified Organisms ( GMOs)

Nowadays, agriculture has suffered an invasion of genetically–modified organisms (GMOs), in other words, animals or plants whose genetic structure has been manipulated by artificial means.

Plants can be “fabricated” to resist pesticides, insects, and to live longer. On the other hand, animals are created to grow and develop more rapidly than natural species.

Genetically–modified corn and soy are banned in some countries, but allowed in others. Multinational corporations blend their products with natural ones so that consumers cannot distinguish them.

 Although It cannot be affirmed that GMOs cause serious diseases, due to their recent marketing, it is a known fact that they can provoke very serious allergies.

From April 10 2000, in many countries it will be mandatory to label products containing more than 1% of GMOs. However, many articles and food products will escape this regulation because they are already present in seasonings, sauces, and other food ingredients.

 The fast development of biotechnology has posed many problems relevant to the marketing of GMOs. Other cases, such as the mad cow disease and the presence of dioxin in the food chain has generated concern in various sectors including trade unions. 

    José Gómez Cerda

jose.gomezc@claro.net.do