26 May 2004WTO Agricultural Negotiations1 "WTO Agricultural Negotiations: Addressing farmers' needs" Whereby the agriculture differs from the other sectors? Dr. Heidi Bravo – Swiss Farmers Union

26 May 2004WTO Agricultural Negotiations2 Economic specificities of agriculture Agricultural products are most essential commodities high emotional component Humanitarian Aspect Food security is an normative issue Long agricultural production process short-term supply of agricultural products are price inelastic Large price fluctuations

26 May 2004WTO Agricultural Negotiations3 Economic specificities of agriculture Natural conditions as determinants for the competitiveness of the agriculture Not influenceable characteristics Production of exchangeable raw materials No possibility of product-differentiations without a system for declaration and identification of origin

26 May 2004WTO Agricultural Negotiations4 Economic specificities of agriculture Supply of public goods, multifunctional agriculture non-market related goods, which must be produced at location Joint production of public and private goods No isolated treatment of public an private goods possible Different weighting of the multiple functions of agriculture Different goal systems for agriculture

26 May 2004WTO Agricultural Negotiations5 Multifunctionality: Joint production Production Process INPUT: land, labour,... market-related goods [milk, wheat, meat,...] Non-market- related goods species and eco- system diversity animal welfare land conservation rural viability food security cultural heritage … OUTPUT

26 May 2004WTO Agricultural Negotiations6 Multifunctionality: Joint production x2x2 non-market-related goods Market-related goods x1x1 Wheat, Milk, …: satisfy the consumers demand for the market- related-goods Food security, animal welfare …: satisfy the societies demand for the non-market-related-goods economies of scope

26 May 2004WTO Agricultural Negotiations7 Different goal-systems Each country must be allowed to pursue its specific goals

26 May 2004WTO Agricultural Negotiations8 The case of Switzerland Weighting of the prime objectives of agriculture on the level of constitution (1996) A. Secure provision of food B. Preservation of the natural necessities for life C. Caring for the cultivated landscape D. Decentralised land settlement Market-related Good non-market-related Goods

26 May 2004WTO Agricultural Negotiations9 The case of Switzerland Environmentally friendly farming Organic farming Index environmentally friendly farming (1993 = 100) Index organic farming (1993 = 100) Example A: Environmentally friendly farming:

26 May 2004WTO Agricultural Negotiations10 The case of Switzerland extra animal friendly stable regular outdoor access for livestock Example B: Livestock programmes: participation

26 May 2004WTO Agricultural Negotiations11 Conclusions Economic specificities of agricultural sector need to be recognised in agricultural negotiations. In a number of countries the function of agriculture is much more than to make a contribution to the GDP. A widely national flexibility is necessary, so that every country can pursue its specific goals. It must be possible that every agriculture is able to satisfy simultaneous the consumers demand for market-related goods and the societies demand for public goods.