Policy Response to Challenges in Agriculture and Rural Development in the Europe and Central Asia Region: Sharing Experience and Enhancing Cooperation in the Region William H. Meyers Professor of Agricultural Economics and Co-Director, FAPRI University of Missouri Twenty-Seventh FAO Regional Conference for Europe Yerevan, Armenia 13 May 20

Outline Food price surge and (partial) retreat Macroeconomic crisis and (slow) recovery Diverse impacts of and response to the crises How is food security jeopardized? Major uncertainties, challenges and opportunities Policy priorities for discussion  Short term  Medium to Long term

Comparison of real GDP growth rates in selected regions

Diverse impacts on real GDP growth rates in Europe and Central Asia, 2009 to 2011

Diverse response: share of stimulus in GDP and importance of social protection in the stimulus

Diverse structure: share of rural population in the total, 1992 compared with 2008

Success in growth of net exports from the region

How is food security jeopardized? Reduction in the quantity and/or quality of food purchases  High food prices  Loss of employment or reduction of wages and income  Market disruption or policy reaction that impairs availability

How is food security jeopardized? Reduction in food production  High prices of feed and other inputs  Lack of credit access Reduction in the quantity and/or quality of food aid  High food prices  Decline of government/international donor financial resources  Macro instability, market disruption or policy reaction that impairs availability

A more uncertain future 1. Road to economic recovery? 2. Timing and size of oil price volatility? 3. Will biofuel policies change? 4. Will other policies be unstable? 5. Will DDA be completed in near term? 6. Climate change and policy impacts? 7. Wider range of possible outcomes 8. Complicated decision making and planning 9. Larger impacts on low income consumers

Challenge and Opportunity 1. Challenge – devise strategies that are sustainable in very uncertain conditions 2. Opportunity – focus on policies that contribute to long-term policy goals 3. National and international policy actions needed  Short run  Long run

Policy priorities Short run  Prudent use of limited budget resources  Avoid short-term policies that conflict with long- term goals  Food assistance and early warning  Twin track approach – food aid and production aid  Continue economic and structural reforms  Complete the Doha Round of trade negotiations, Restore trust in the international trading system and advance new member accession 

Policy priorities Long run (but start yesterday)  Increasing economic growth is best strategy  Investment (not land grabs) in agric. development AND R&D for production and post harvest  Improve market functioning to facilitate price transmission and integration with global markets  Risk management tools for farmers-men and women  Enhance rural development and rural infrastructure investments  Invest in social protection or safety net measures to protect vulnerable populations

Conclusions Not simple formulas or quick remedies  Conditions in the region are diverse  Situation is very volatile and persistent Engage policy dialogue among experts in the region exchanging successes and failures  Food and agricultural policies and reforms  Climate change adaptation and mitigation Dialogue begins here at high level but can continue among expert groups

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