4 stars based on
A commentary on polish online trading of agricultural products trade in agro-food products Group discussion on "international trade in agricultural products" International trade in food and agricultural products online trading of agricultural products Aart de Zeeuw A discussion of trade policy should start with the understanding that for most countries, and certainly for Western Europe, agricultural trade policy is an extension of domestic agricultural policy.
We have discussed the economic and social values that Western Europe has placed on the maintenance of a family farm system and viable rural areas. This explains why certain agricultural policies have been developed in the past with the aim of protecting farm incomes. Western Europe has viewed most of its farmers as being unable to compete online trading of agricultural products has maintained a trade policy that online trading of agricultural products helped maintain its domestic policies designed to protect its farmers.
A different approach for agricultural and industrial sectors In most countries of the EU the prevailing belief has been that the farm population could not survive without protection from low cost imports; substantial pauperisation of rural areas could take place with all the negative consequences, both socially as well as with regard to nature and environment.
Countries with higher cost agriculture have been unwilling to open their agricultural sectors to liberal trade without support. The easiest way to protect the agricultural sector was through border measures such as high, variable levies or tariffs that maintained internal prices at some politically determined level above world prices.
If domestic production exceeded domestic demand export subsidies are used online trading of agricultural products bridge the gap between the world market price and the higher internal price.
For some products in some countries there was a total ban on imports. Another way of protecting farm income was to use deficiency payments if the internal price dropped below the price guaranteed by the government. This results in large government expenditures when world prices are low. Both methods distorted competition and trade and the consumer paid the price; either as taxpayer or as a consumer paying high prices.
In the past, most countries in the developed world followed a policy of guaranteeing prices to farmers. Protection using border measures was, and still is, quite common. It is believed in countries like Switzerland, Norway and in online trading of agricultural products a few member states of the EU, like Finland, Italy, Greece, Spain, Portugal, the southern part of France and Germany, part of Great Britain in the north in particularagriculture cannot survive without high protection.
This is also the case in quite a few countries in Central and Eastern Europe. With the start of the EC and during its lifetime, agricultural policy has always been discussed on the online trading of agricultural products of the EC's not being able to compete on world markets.
High guaranteed prices were deemed necessary for farmers in less favoured areas and were welcomed by farmers in better areas. Online trading of agricultural products the s it became very clear that a rapid growth of production per hectare and animal, partly due to the high price support and partly explained by productivity increases, led to such overproduction, that market distortions low prices created trade online trading of agricultural products and very high governmental expenditure for price supplements and surplus removal.
The developed world, during the Uruguay Round of negotiations, finally accepted the need to change its agricultural policies in such a way that more open trade would become possible in the future. Direct income support will gradually replace price support. This makes it possible to lower tariffs substantially other measures of border protection online trading of agricultural products quantitative restrictions online trading of agricultural products now forbiddento replace price supports with income payments and to get rid of export subsidies.
The new farm bill in the US is an example of this development; as is, clearly, the change of agricultural policy in the EU for certain products cereals and oilseeds. The fanning communities are not happy with this change in agricultural online trading of agricultural products. The agricultural sector is confronted directly with changing world market prices and becomes more dependant on the willingness, or even the financial ability of government to support farm incomes directly.
On the other hand, the new policy orientation will certainly stimulate a more efficient market-oriented agriculture, more focused on consumer wishes, less dependant on governmental support and more capable to compete in the markets with other suppliers. To focus our discussion, it seems useful to address some questions on the beliefs and values underlying EU trade policy in agriculture: Is international competition viewed as fair, and if not, why not?
Coming back to the questions, mentioned in the beginning of this paper it is worthwhile to remind ourselves that the background of every agricultural policy lies in the fact that production conditions differ from region to region and that in every country most of the land needs to be cultivated.
Is International trade online trading of agricultural products food and agricultural products viewed as a online trading of agricultural products to dispose of excess production and supplement production deficits, or as a way to benefit from specialisation and comparative advantage to achieve more goods at lower resource costs?
In the past foreign markets and international trade were viewed as the least expensive way of disposing of surpluses that could not be used domestically at the internal market price. The reason that this happened lies in an agricultural policy online trading of agricultural products on keeping internal market prices at a high level. This led to surplus production that could not be used internally without depressing internal prices and could not be exported without subsidies.
One may expect that as a result of a change of agricultural support from price support to direct income support, these trade distorting measures will disappear. The second part of the question concerns the economic benefit of specialisation and comparative advantage in a complete open market without trade distorting support.
One cannot deny the logic of this statement and the values that underlie it, but there are other values that say that agriculture must continue to exist in many disfavoured areas by climate, topography, fertility for social and environmental reasons see other papers. The answer to this value conflict lies in an open market policy which forces the agricultural sector to become as competitive as possible, given the physical conditions; and at the same time allows governments to give permanent income support as a compensation for the economic disadvantages online trading of agricultural products disfavoured areas; as a payment for keeping the environment in good condition or as a temporary support when restructuring of the agricultural sector in certain regions is necessary.
This is the direction in which the EU policy is moving. Is it believed that trade works to the disadvantage of domestic producers and should be limited to insure domestic producers protection against foreign competition? Many farmers in the EU still hold the value that it is their right to produce for the domestic market and that imports should only be permitted if the domestic producers do not produce certain products or when there is a shortage. Many agricultural producers believe that having to compete with producers that have more favourable structures or cost levels is unfair, and they oppose the removal of online trading of agricultural products border protection.
Are imported food and agricultural products viewed as improving consumer choice and well being, or are they viewed as a threat to food quality and safety? It is the duty of every government, including the EU, to guard online trading of agricultural products health of the consumers from the importation of unsafe products, and governments are responsible for trade policies to allow for the availability of enough food and a diverse food supply, so that the consumer can be sure of buying the food he wants.
Imported food and agricultural products will, in general, improve consumer choice and are not a threat to safety if governments maintain internationally agreed upon health online trading of agricultural products Codex, e. Concerning technical food quality, the consumer is normally able to control that himself. However, this does not always cover all the related aspects. In particular, the question of quality and safety in relation to the production method are becoming increasingly important values for EU consumers.
Internationally agreed upon food standards concern the quality of the products and not production methods used to produce the products. In some cases they put pressure on their own governments to limit the use of chemicals quantity as well as qualityalthough one cannot prove that the use is dangerous for human health. In general, one can solve this problem through labelling.
The consumer can make his own choice, whether he accepts the normal international standards or special ones. However, it becomes difficult when in response to consumer values on food standards governments develop legislation on food standards which go beyond those that are internationally agreed upon and refuse to allow imports of products which do not meet the higher standards in spite of the fact that they meet the internationally agreed upon standards.
A good example is the refusal of the EU to import meat that comes from beef which are treated with natural hormones during their lifetime, in spite of the international agreement mat the use of these hormones is no threat to health.
The EU uses the argument that the consumer does not want meat from animals that are treated with hormones. From a legal point of view, this is not a very strong argument, and it is better not to refuse imports and to solve this problem through labelling.
Are imported food and agricultural products viewed as threats to domestic food security, and if so, why? The answer to this question depends on the definition of domestic food security. Online trading of agricultural products one defines food security as the possibility to produce domestically enough food to online trading of agricultural products able to cover the minimum food requirements of the population in times when the import of food is almost impossible, it is an argument to protect domestic production facilities necessary to produce that minimum amount, even when this is only possible with high costs.
The consumers in some countries have placed a high value on food security, and producers have used it to support their demands for high levels of protection. For a period after World War II this was a major value held by people in Western Europe, but it seems to have declined in importance in recent years as memories of war-time hunger disappeared into the past.
With this definition, it is not necessary to support and maintain costly domestic production. The choice between the two policies regarding food security depends very much on two aspects. The first one concerns the question of whether we really believe that any country can survive a possible major modem war by producing enough food to meet consumption needs year by year.
It would appear better to maintain the capacity to expand production in case of international emergency. The second one concerns the question online trading of agricultural products whether food security requires an international trade rule ensuring that it is no longer possible to block food exports.
If so, there is no argument to secure the food situation through high cost production of food in normal times, and trade liberalisation online trading of agricultural products not threaten food security. During the next five years, the discussion on future agricultural policy in the EU will take place on the basis of papers, prepared by the Commission. One may expect that in these papers the favoured option of the Commission in the ASP, in which it is proposed to extend the changed grain policy lower prices, compensated by income support to other products, will be the basis for changing the existing policies online trading of agricultural products different agricultural products.
There are two good reasons for this expectation. Income support instead of price support is a better tool with which to realise this integration, because one can more easily focus the support on the difference in needs of the agricultural sector in various regions e. Expected changes in EU agricultural and rural policies will certainly influence the development of agricultural online trading of agricultural products rural policies in the CEE countries for the simple reason that as soon as they join the EU, they must be prepared to accept the EU regulations.
Seen in that light, it seems worthwhile for the CEE countries, before shaping their own policies, to look very carefully at what happens in the EU.
In summary, beliefs and values regarding the need to maintain and protect farms and rural areas from conditions that would destroy them have led to a number of domestic agricultural policies in the EU. The form of those domestic policies was to maintain high domestic farm prices supported by restrictive trade policies that limited competition from lower cost imports. These restrictive trade policies were supported by values that called for food security through domestic production and for the elimination of unfair competition, which was defined as competition from producers with lower costs.
Now EU domestic policy is putting less emphasis on maintaining high internal prices to assist small farms and disadvantaged areas. Changing beliefs and values shift programmes toward income supports based on environmental protection and rural development. This allows the EU to move toward a more liberal trade policy with less emphasis on high levels of border protection. International trade in agricultural products: A commentary on polish international trade in agro-food products by Leszek Klank The paper on trade policy in the EU raises the most important issues related to international trade in agro-food products.
Let me concentrate only on selected issues, which are very strictly connected to the topic of the seminar. I would like to concentrate on competitiveness of Polish international agro-food trade and on changes of values in this area. For many years exports have had a significant influence on economic development of the Polish economy.
This includes agro-food trade too. International trade, and particularly exports, is believed to be one online trading of agricultural products the main factors of the development of the Polish economy. It is even called an engine locomotive of development.
Polish trade policy has as its chief aim expansion of exports. The reason for such a policy is as follows. Growth in agricultural exports would cause the incomes of farmers to rise, which in turn would improve agricultural productivity and production. In the last six years of the transformation of the Polish economy there have been rapid changes in international trade. Inthe value of exports increased by almost 33 percent and imports by 35 percent over Inexports rose by 22 and imports by 15 percent, compared to the previous year.
In the years the value of international trade was as follows Table 1. According to recent information provided by the government, the trade balance at the end of reached minus 12 billion US dollars.
This is the largest trade deficit in recent Polish history. Polish exports slowed down in the years andmainly due to economic recession in Western Europe. At the same time imports increased as a result of Poland's growing integration into the world economy and growing domestic consumption. Exports strongly recovered online trading of agricultural products the online trading of agricultural products in line with European recovery. These tendencies prove that Poland's economy is not closed anymore.