Mailing: 16 January 2012

Power in Agriculture report

This report was commissioned by the Oxford Farming Conference and undertaken by the Scottish Agricultural College’s Rural Policy Centre. The study examines where the economic, political and natural resource power currently lies in world agriculture, how that might change in future and what it means to British farmers.

As regards economic power, it finds that power is still concentrated in North America and Europe. However, certain countries such as Brazil and New Zealand are currently the largest exporters of some commodities (e.g. beef and dairy products) in the world. While there is little evidence to suggest that this current power situation is likely to be changed markedly in the next 10 years, it is also apparent that the EU as a whole has retreated from world markets as policies have changed and that the export capabilities of the EU-27 in some key commodity sectors are predicted to decline further in the next 10 years, unless policy measures change markedly.

Although the emerging economies, in particular, China and Brazil, have clear advantages in certain commodity markets, their corporate power in agriculture is still not on a par with that of North American (US and Canada) and European countries, especially the UK, France and Germany. These major North American and EU economies therefore are in a strong position to consolidate their economic power through their transnational agribusiness corporations. However, a major challenge for them is to balance corporate power with consumer and farmer power domestically, whilemaintaining global power.

The political power relevant to global agriculture is still concentrated in the hands of the USA, major EU countries and some other economically powerful countries within the G-8 coalition. However, recently there have been indications that this situation is changing and some emerging economies in the developing world are increasingly appearing to be powerful players at the world stage. This has important implications for European and UK agriculture, in particular, in terms of transnational agricultural trades. In the coming decades, EU countries may have to confront increased pressure to allow greater access to their markets. These competitions are likely to come from emerging economies – like China, India and Brazil and will have implications for domestic producers. The report’s analysis also confirms the political influence of transnational corporations (TNCs) in global agriculture.  However it finds evidence that their power is not limitless and, that ultimately it is nation states who can control agriculture – for example as shown in 2008 when a number of countries implemented export bans to try to ameliorate the impacts of a food crisis. This finding does not corroborate the suggestions made by some that, in this age of corporate globalisation, the state is powerless to resist corporate activities. Evidence is also found that in some cases civil society organisations and farmer groups have had a significant impact in countervailing or balancing corporate influences.

In terms of control over natural resources it finds that  European countries, including the United Kingdom, appear to be relatively poorly endowed in global terms with the critical natural resources used in agriculture – such as land, water, potassium, phosphate, oil and natural gas. This situation, especially the availability of water and energy, is likely to become worse because of the impacts of climate change. Although many of the emerging economies, like Brazil, China and Russia are better-placed in terms of water and energy endowments, some of these countries appear to be vulnerable in terms of their possession of agricultural lands (more specifically, arable lands) and critical minerals relative to their population size. This partly explains the much reported phenomenon of ‘land-grabbing’ in Africa, in which some major EU countries have also taken part.

  • The  implications for the EU (and UK) are:
  • EU countries are likely to face competition for land from countries like China.
  • In the shorter term, further improvements in resource use efficiency (water, fertiliser and energy) are needed to sustain current levels of production.
  • As traditional resources become more scarce, alternative practices will need to be developed and adopted.

Finally the report attempts to present all these types (economic, political, resource related) of power as an index. The index ranks each country/region on a scale of 1 to 5 (five is high) for the individual components of power discussed. For example the US and the EU top the power index by some margin. However, the index also highlights their potential vulnerability in terms of natural resources (key agricultural minerals and oil). The emerging countries at the moment have lower political and corporate power but seem better placed in terms of natural and mineral resources. It finds that the UK ‘punches above its weight’ in terms of trade, corporate and political power. However, in a global sense it is a small country, and it is lowly rated in terms of natural resources on the power index and this puts it behind Russia and China on the overall index.

Regional power index for agriculture

The report is attached below and online here - if you scroll down this page you will also find a powerpoint by one of the authors, Alan Renwick, summarising the findings.  The other presentations and papers from the Oxford Farming Conference are also available and may be of interest.

Journal paper on species diversity and multifunctionality

A paper in Science reports on a study which finds a correlation betweeen species diversity and multifunctionality – ie the number of ecosystem services it performs.  The study focuses on drylands on all continents except Antarctica. It concludes that plant biodiversity is crucial to buffering the negative effects of climate change and desertification in drylands.
Reference and abstract as follows:
F. T. Maestre, J. L. Quero, N. J. Gotelli, A. Escudero, V. Ochoa, M. Delgado-Baquerizo, M. Garcia-Gomez, M. A. Bowker, S. Soliveres, C. Escolar, P. Garcia-Palacios, M. Berdugo, E. Valencia, B. Gozalo, A. Gallardo, L. Aguilera, T. Arredondo, J. Blones, B. Boeken, D. Bran, A. A. Conceicao, O. Cabrera, M. Chaieb, M. Derak, D. J. Eldridge, C. I. Espinosa, A. Florentino, J. Gaitan, M. G. Gatica, W. Ghiloufi, S. Gomez-Gonzalez, J. R. Gutierrez, R. M. Hernandez, X. Huang, E. Huber-Sannwald, M. Jankju, M. Miriti, J. Monerris, R. L. Mau, E. Morici, K. Naseri, A. Ospina, V. Polo, A. Prina, E. Pucheta, D. A. Ramirez-Collantes, R. Romao, M. Tighe, C. Torres-Diaz, J. Val, J. P. Veiga, D. Wang, E. Zaady. Plant Species Richness and Ecosystem Multifunctionality in Global Drylands. Science, 2012; 335 (6065): 214 DOI: 10.1126/science.1215442
Experiments suggest that biodiversity enhances the ability of ecosystems to maintain multiple functions, such as carbon storage, productivity, and the buildup of nutrient pools (multifunctionality). However, the relationship between biodiversity and multifunctionality has never been assessed globally in natural ecosystems. We report here on a global empirical study relating plant species richness and abiotic factors to multifunctionality in drylands, which collectively cover 41% of Earth’s land surface and support over 38% of the human population. Multifunctionality was positively and significantly related to species richness. The best-fitting models accounted for over 55% of the variation in multifunctionality and always included species richness as a predictor variable. Our results suggest that the preservation of plant biodiversity is crucial to buffer negative effects of climate change and desertification in drylands.
You can download the paper here (subscription access only) and read Science Daily’s coverage here.

Smartphone apps and ecolabels

An article in Foodnavigator suggests that smart barcodes will replace eco labels, as they have the potential to provide shoppers with a far greater amount of information than a pack label can.

The article highlights the GoodGuide smartphone app – you can find out more about how it works here. I think it just covers US products and I don’t have a smartphone anyway, but if any FCRN member has used this app and has feedback on how useful it is, please do send it through - you can post to this page.

Environmental Tax Reform: EEA study

The European Environment Agency has published a study on environmental tax reform (ETR).  ETR is defined as 'reform of the national tax system where there is a shift of the burden of taxes, for example on labour, to environmentally damaging activities, such as resource use or pollution'. ETR comprises two elements. First, it deters environmentally damaging activities by making them more costly. Second, it involves recycling the revenues gained from increased environmental taxes and using them to create positive economic and social outcomes, such as increasing employment and boosting incentives to work. The recycling of revenues is especially important for the acceptability and equity of the tax reforms.

The study points out that ETR can produce (at least) four different types of impacts, each of which may be distributed unequally across society. These comprise the direct consequences of increasing taxes (e.g. higher prices for certain goods); the consequences of recycling (e.g. direct transfers or alleviation of taxes); the broader economic impacts of ETR (e.g. job creation or inflation); and the environmental effects of ETR (e.g. a cleaner environment).

The study is divided into three main parts: first, a review of relevant literature on ETR's theoretical and empirical distribution impacts in Europe; second, a model-based analysis of ETR at the EU‑27 level and third a combining of these two approaches — literature review and modelling — to provide a more detailed analysis of the distribution of an ETR's impacts in Germany.

The modelling exercise analysed the effects of applying ETR to meet the EU target of reducing greenhouse gases by 20 % by 2020. This scenario looked at the effect of taxing emissions, with the revenues used to support innovation and reduce income tax and social security costs. The model showed that the policies would increase employment by more than 1 million jobs, with a small (0.04 %) cost to GDP to achieve the 20% GHG reduction target at EU level.

  • At the European level, the model indicated that fiscal reform would result in financial benefits for almost all socio-economic groups. However, in a few countries the poorest people could see negative effects, as these people spend a higher proportion of their income on energy.
  • The German-focused study finds that increasing the cost of emitting carbon could also have a negative effect on the poorest groups,. However, the the worst-hit parts of society could lose just 1 % of their disposable income in 2020, so, it argues, it would be relatively simple and affordable to compensate the affected groups via targeted benefit transfers.
  • The reduction in social security payments also means labour costs decrease, boosting employment – the model suggests that increasing the price of emitting one tonne of carbon dioxide to €68 by 2020 could create 152 000 additional jobs in Germany.

Overall, the report concludes that:

  • Although ETRs tend to improve incomes across society, they can have mild regressive impacts in that richer households gain more than poorer ones.
  • Care is needed to design ETRs in ways that ensure that certain groups are able to benefit equally.
  • ETR's overall benefits for the economy, environment and society are potentially significant.
  • ETR should therefore be regarded as a key element in the policymaking toolkit for shifting to a green economy.

You can download the study below or read the press release here.

French soda tax comes into force

France’s Constitutional Council has approved a tax on sugary drinks. The tax, which works out to one euro cent per can of drink, is expected to bring in 120 million euros ($156 million) in state revenues. The tax has been slammed by beverage firms including Coca-Cola France which initially suspended a planned 17-million-euro investment at a plant in the south of France in protest, before the decision was overturned by Coca Cola’s HQ.

For coverage see here.  For the overturning of Coca Cola’s initial decision see here.

Both Hungary and Denmark have recently imposed taxes on saturated fat.

Waste Watch Annual Conference 2012 – Creating Social Change

22 March 2012 from 10am - 5pm at the Human Rights Action Centre, 17-25 New Inn Yard, London, EC2A 3EA.

Creating Social Change will bring together individuals and organisations to discuss why a new, integrated approach is needed to achieve meaningful change for social and environmental sustainability.

The key issues questions to be explored include:

  • If approaches such as nudges, voluntary deals or giving to charity only appear to be making small progress, is something more profound required?
  • How could an approach based on values and citizenship create a collective movement and demand for change?
  • What can civil society do collectively to bring well-being, equality and the environment from the sidelines to the forefront of our own and governmental objectives?

Confirmed speakers include: Tom Crompton (Change Strategist at WWF), Sally Inman, (Professor of  Education Development at South Bank University), Ray Georgeson (Resource Association), Andrew Darnton (Independent Researcher), Ian Williams (University of Southampton) and Morgan Phillips (Our Common Place).

See here for more information and here to book a place.

Seminar: Sustainable Lifestyles Research Group - Overview and Work in Progress

Thursday 26th January 2012 at 13.00 hours, Room 45A AZ 04, Centre for Environmental Strategy, University of Surrey

Speaker: Ian Christie, SLRG Research Fellow, Centre for Environmental Strategy, University of Surrey

The DEFRA-funded research programme SLRG (2010-2013), directed by Professor. Tim Jackson of CES, has just completed its first full year, and initial results are coming in from fieldwork. In this seminar Ian Christie, a Fellow of CES and coordinator of the SLRG, presents an overview of the programme and discusses emerging findings and the policy and research context for the work.

For more information contact: Barbara Millington (01483 686675) or Gemma Birkett (01483 686689)