Ulrich Koester

External demand constraints for agricultural exports: An impediment to structural adjustment policies in sub-Saharan African countries?

Abstract Structural adjustment programmes are being promoted throughout the developing countries. The recommended policy package, including price as well as non-price policies, is geared towards export growth and a long-term sustainable balance of payments. There is considerable scepticism, however, whether developing countries can indeed benefit from an export-oriented growth strategy. First, rigidities in domestic output supply responses could preclude significant export growth. Second, external demand-side constraints could impede export revenue growth if a jointly promoted export-led strategy resulted in world market price deterioration. Analysis reveals that in the case of sub-Saharan Africa neither of the above factors should cause a failure of structural adjustment policies. However, the outcome of adjustment policies could be improved if commodity and country-specific factors were taken into consideration.

Huge Potential, Huge Losses — The Search for Ways Out of the Dilemma of Ukrainian Agriculture

Agriculture in Ukraine has performed worse than in most other transition countries, whether compared to Hungary’s large-scale or Poland’s small-scale sector. Indeed, a huge potential is not being tapped. Roughly 80% of all public-sector farms operate at a loss. It is repeatedly claimed by most government officials that `disparity’ of prices and the lack of capital is responsible for the decline of the agricultural sector. Here, instead, it will be argued that along with other reasons the organisational structure of farms matters in particular. The first step in the privatisation process has gone in the wrong direction and made manageability of the farms in the public sector even worse than before. Hence, the comparative advantage the country is supposed to have remains unused.

International trade and agricultural development in developing countries: Significance of the Uruguay Round of GATT negotiations

Liberalization of world trade in agricultural products ranks high on the agenda of the Uruguay Round. After a period of more than six years, however, the negotiations have not been concluded. Nevertheless, an outcome seems to be in sight. The agreement will most likely not result in a move to freer trade. It seems that domestic policies will become even more regulative than in the past in an attempt to cut exportable surpluses and to ease trade tensions among the main exporting nations. This paper explores possible impacts of the GATT Round on agricultural development in developing countries. Agricultural development is more than only growth in agricultural production or productivity. However, it is argued in the paper that other variables which also indicate agricultural development are often closely correlated with growth in production and productivity. Trade in agricultural products is not always an engine for agricultural development. If internal divergences are not accounted for by appropriate domestic policies, trade may be even harmful to agricultural development. Hence, empirical research based on cross-country analysis does not provide a clear answer about the role of trade for development. Past policies in industrialized countries have most likely had a negative effect on developing countries as a group; however, the effects differ widely across countries. Liberalization policies in industrialized countries would not just reverse these negative effects for developing countries. Price reduction in industrialized countries may not result in the often-cited production decline in the short term. Present X-inefficiency in agriculture will be reduced by liberalization, leading to an outward shift of the supply curve. Hence, liberalization may not lead to higher world market prices for temperate-zone products in the short and medium term. Apart from this, empirical models differ widely in the price effects they predict. The expected outcome of the Uruguay Round - increased regulation of domestic policies - is likely both more negative for developing countries than past protectionist policies and worse than an overall liberalization. World market prices will increase, uncertainty and instability can be expected to grow, and food aid may become less available. There will be a need to react to these challenges with measures on the international and national level. Initiatives to deal with food crises in developing countries and to stimulate liberalization in developing countries should be considered. Finally, developing countries should be made aware that their own domestic policies have a much greater economic impact than policies in other countries, even if the latter are as protectionist as current agricultural policies in the industrialized world.

The experience with liberalization policies: The case of the agricultural sector

Abstract Agriculture is one of the most protected sectors in most industrialized countries. The economic costs of protecting agriculture have increased over the last 20 years and there is certainly a growing need to liberalize, at least from an economists point of view. However, policy makers have rejected liberalization policies so far in most countries. Farmers have fought for protection more successfully than other interest groups because of sectoral factors which bias the political market in their favor. Protection rates are widely used to measure protectionism. However, protection rates are not always meaningful indicators of the results of liberalization policies if world market prices change over time. A decline in protection rates does not necessarily reflect a governments decision to support farm income less. Hence, a reasonable indicator of a liberalization policy should inform whether a government has accepted a decline in agricultural income and an increase in pressure to adjust. Determinants of liberalization policies are discussed and some cross-country empirical evidence is provided. Actual liberalization of agricultural policies in industrialized countries has only been instituted in exceptional cases (New Zealand, and most recently Sweden). The experience gained in New Zealand is compared with expectations based on economic models. The Common Agricultural Policy of the EC has undergone some liberalization over the last 5 years. Effects are discussed in the paper. The paper ends with a section on ‘unilateral versus multilateral liberalization policies’.

EU enlargement and governance of the Common Agricultural Policy

The requirements for the implementation, administration and control of the application of the current CAP are much higher than they were 15 years ago. The governance problems caused in the present EU by today’s higher regulation density are already severe. The new member countries are even less well equipped than the present ones to deal with these problems. What political consequences should be drawn?

Reform of the CAP : Impact on the Third World

Abstract The European Community is under pressure to reform the CAP, mainly due to internal financial reasons. Proposals have been put forward by the EC Commission that reform the CAP with respect to milk, oils and fats, and corngluten and citrus pellets. The authors look at the impact of these proposals on developing countries. They conclude that the effect will be to increase non-tariff barriers to trade and increase the cost of food production both in and outside the EC.

Decision-making problems of the council of agriculture ministers

Joint decisions each year on agricultural prices by the Council of Ministers of Agriculture are a requisite of the European Community’s Common Agricultural Policy. It is however more and more difficult to reach joint decisions on these prices. Divergencies of national aims and economic starting positions (in regard to growth, inflation, unemployment, balance of payments position) are often held responsible for this fact in the public discussion. While not questioning the relevance of these factors the present contribution focuses on the importance of institutional rules for the divergence of national interests.

Policies for promoting regional agricultural trade

Abstract This paper deals with the political issues of trade liberalization after giving a brief account of the potential and barriers to intraregional trade in Southern Africa. The position in Malawi, Zambia and Zimbabwe supports the view that there is a significant potential for trade; barriers to trade are due to the external trading regime, internal policies and external factors, notably food aid. The liberalization of the internal food economy is expected to give rise to additional trade flows among the countries. Regional integration schemes may further contribute to trade expansion, however, only if they are used as a step to worldwide integration and if an effective institutional framework is secured.

Requisites and possibilities of a controlled nationalization of agricultural policy

The recent announcement of the French Government’s decision to support the French agriculture this spring by direct income transfers to the tune of ffr 4.6 bn brings home the fact that some national governments need national autonomy in agricultural policy. Regrettably it seems to foreshadow an increasingly uncontrolled trend towards nationalization in this field. Our contributor therefore takes up the question whether the problems of the Common Agricultural Policy could not be defused by dividing the competences differently.

Reduction of Food Loss and Waste: An Exaggerated Agitation

Summary There is increasing public concern about the present state of food loss and waste (FLW). Numerous studies convey the message that there is a high potential to save food in order to improve food security, efficiency of resource use and to generate positive environmental effects. However, the evidence has not been well investigated. The widely accepted definition of FLW and the collected data do not inform equally well on the potential contributions of FLW reductions. This article focuses on the potential for FLW reductions to improve food security. It is argued that the underlying definition exaggerates the actual amount of FLW that could be used to feed humans. Most studies use volume measures to aggregate FLW along the supply chain and across food items, which is highly questionable; we cannot reasonably add together tonnes of meat and potatoes. Likewise, meat products at different stages along the supply chain are different economic goods and can hardly be aggregated meaningfully in volume terms. Moreover, present research often neglects the economic costs incurred in reducing FLW. Moving the product from the field or stable to households requires additional complementary resources to store, trade, process and prepare the final food.