"WTO Agricultural Negotiations:
Addressing farmers' needs"
 Whereby the agriculture differs from the
other sectors?
Dr. Heidi Bravo – Swiss Farmers Union
26 May 2004
WTO Agricultural Negotiations
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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 2004
WTO Agricultural Negotiations
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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 2004
WTO Agricultural Negotiations
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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 2004
WTO Agricultural Negotiations
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Multifunctionality: Joint production
market-related goods
[milk, wheat, meat, ...]
Production
Process
INPUT: land, labour, ...
26 May 2004
WTO Agricultural Negotiations
OUTPUT
Non-marketrelated goods
• species and ecosystem diversity
• animal welfare
• land conservation
• rural viability
• food security
• cultural heritage
•…
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Multifunctionality: Joint production
x2
Wheat, Milk, …:
satisfy the consumers
demand for the marketrelated-goods
x1
non-market-related goods
Food security, animal welfare …:
satisfy the societies demand for the
non-market-related-goods
26 May 2004
WTO Agricultural Negotiations
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Different goal-systems
Dimension Function of
agriculture
Economic
Ecological
Social
DC
Export
competitive
Not
oriented
competitive
IC
Multifunct.
Cheap Foodstuffs
Production for
Export
Preservation of the
natural resources
maintenance of the
countryside
Food security
rural viability
Decentralized
settlement
Highest priority
important
 Each country must be allowed to pursue its specific goals
26 May 2004
WTO Agricultural Negotiations
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The case of Switzerland
Weighting of the prime objectives of agriculture on
the level of constitution (1996)
A. Secure provision of food
 Market-related Good
B. Preservation of the natural
necessities for life
C. Caring for the cultivated
landscape
 non-market-related
Goods
D. Decentralised land settlement
26 May 2004
WTO Agricultural Negotiations
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The case of Switzerland
Example A: Environmentally friendly farming:
Environmentally
friendly farming
Organic farming
26 May 2004
Index environmentally friendly
farming (1993 = 100)
Index organic farming (1993 =
100)
WTO Agricultural Negotiations
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The case of Switzerland
Example B: Livestock programmes: participation
extra animal friendly stable
regular outdoor access for livestock
26 May 2004
WTO Agricultural Negotiations
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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.
26 May 2004
WTO Agricultural Negotiations
11