Chantal Le Mouël

Impact of the 1996 US FAIR Act on the Common Agricultural Policy in the World Trade Organisation context: the decoupling issue

Abstract The United States (US) Federal Agriculture Improvement and Reform (FAIR) Act of 1996 represents a watershed, not only from a domestic point of view but also from the perspective of the next round of international agricultural negotiations. In particular, it will force the European Union (EU) to reform its agricultural policy so that compensatory payments for support price cuts are included in the green box or, at least, are much more decoupled than at present. US exports of several agricultural products, including maize, pork and poultry meat, barring a prolonged global economic downturn, should increase substantially over the 7-year period of the Act and beyond. Accordingly, the US will certainly attempt to ensure that trade barriers with the EU and subsidised competition from the EU in third markets are kept to a minimum. Though the 1999 EU proposals for a new reform of the Common Agricultural Policy (CAP) represent a courageous step in the right direction, they are likely to be insufficient to comply with future World Trade Organisation (WTO) commitments, in particular with regard to the decoupling of direct aid payments. We have made a number of proposals for an internal support policy which explicitly recognises that European farmers have several functions that require specific forms of public intervention and which should comply with future WTO requirements.

Tariff protection elimination and Common Agricultural Policy reform: implications of changes in methods of import demand modelling

The study proposes a way for accommodating the traditional Armington assumption to capture the possibility for a country to import imperfect substitutes as well as perfect substitutes for domestically produced goods. When this possibility is incorporated into a modelling framework, then a Common Agricultural Policy elimination scenario, including the setting to zero of import tariffs, would have starker implications than many studies suggest. To illustrate this point, a Computable General Equilibrium (CGE) model of the French economy is used, highlighting agricultural and food sectors. The study analyses the consequences for the French economy of a complete liberalization scenario in the European sector of cereals.

Brakes and Levers to Reduce the Dependence on Imports in the Middle East-North Africa Region

The two reference scenarios and the results analysed previously rely on mere extensions of past trends and do not take into account possible breaks or ruptures other than those of accentuated climate change. Naturally, then, they are ‘scenarios of inaction’ which typically illustrate what might happen in the Middle East-North Africa region if ‘nothing is done’. We should first note that many of our hypotheses could be challenged by more marked changes, upwards or downwards, of certain contextual elements. Thus our demographic hypotheses, based on the UN’s median projection, do not take into account their inherent high levels of uncertainty. For this world region, the UN’s high and low projections reveal a potential variability of about +/−15% around the median projection. Similarly, changes in diets could be more marked. The Middle East has been falling behind in dietary terms over the past few decades and it could catch up. Or there could be an accentuation of Western characteristics in diets due to eating behaviour among the fringes of the region’s youngest population. In light of these further changes in various components of the agricultural and food system of the region, we must also consider the levers that regional governments could use to try to reduce the extreme dependence on agricultural imports towards which most countries in the Middle East-North Africa region are moving.

Determinants of the Growing Food Dependence (1961–2011)

Taking into account the evolution of the various components of the food and agricultural system in the Middle East-North Africa region since early 1960, we will seek to chart the trajectory of the increasing dependence on agricultural imports and to understand the current situation in the region and its sub-regions. To do this, we will focus successively on developments from 1961 to 2011, of the components of both food demand (volume and characteristics of the diet) and regional agricultural supply, before examining the supply chains the region has used to meet its food needs.

By 2050, a Possible Strengthening of the Regional Dependence on Agricultural Imports

As we highlighted in the previous chapter, the large increase in agricultural imports in the Middle East-North Africa region between 1961 and 2011 is the result of a combination of several factors. A population explosion has combined with dietary changes and has led to a strong growth in demand for food and feed. Growth in regional agricultural production, although significant, could not meet this demand, in particular because of insufficient improvements in yields, and the limited availability of cultivable land and access to water for irrigation. The extension of these past trends for each component of the regional agricultural and food system, which we will now examine in terms of the effects on the balance between food needs and agricultural resources in 2050, is likely to result in a strengthening of the dependence on imports.

Le système agricole et alimentaire de la région Afrique du Nord – Moyen-Orient : une analyse rétrospective (1961-2012)

En s’appuyant sur les bilans emplois-ressources de la Fao entre 1961 et 2011, on montre que la forte croissance de la dependance alimentaire de la region Afrique du Nord – Moyen-Orient sur la periode, s’explique d’abord par la croissance demographique, l’evolution des regimes alimentaires et l’evolution concomitante des rations animales vers des produits vegetaux importes (cereales et tourteaux). Ces evolutions se traduisent par une multiplication par six de la demande regionale en cinquante ans. La progression de la production vegetale (multipliee par quatre) ne suffit pas a couvrir ces besoins, surtout en cereales. Les faibles performances des agricultures regionales sont liees aux contraintes naturelles (rarete des terres cultivables et de l’eau) auxquelles s’ajoutent les defaillances des politiques agraires et agricoles. Ce desequilibre offre-demande est comble par un recours croissant au marche international, facteur important de la vulnerabilite du systeme agricole et alimentaire de la region.