Agro-Food Industry as Engine for Growth and Wealth - EMRC

Editorial
Philippe van Maldeghem
Editor-in-Chief
The 21st century’s dilemma:
Food Security vs. Energy Needs
Upcoming projects this year:
- DIALOGUES - EMRC
■ Economic Mission Africa-Israel, Tel-Aviv: 19-23 October 2008
■ Economic Mission to Bié, Angola: October 2008
■ Next issue of Dialogues, with special focus on a few Angolan provinces: Autumn 2008
■ European Development Days, Strasbourg, France: 15-17 November 2008
■ Economic Mission to Chad: November 2008
■ Africa Finance and Investment Forum 2008 (AFIF), Paris, France: 7-9 December 2008
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In theory, food security is a human rights issue, but in practice, it is rather a question of economics. This
dichotomy applies harshly to developing countries, since their leaders are continuously facing a dilemma
between economic growth and their people’s welfare. Oil prices have never been so high in the past
fourty years, thus some governments choose rightly to diversify their energy sources, and venture into
the “Biofuels leitmotiv”. But unfortunately, some countries refuse to admit it is too soon for them to do
so. Encouraging biofuels crops in regions where people suffer from hunger can be disastrous in the long
run, since this incentive will drive farmers to use their land for that purpose only, in search for higher
returns. One should be careful with this new opportunity, as food and energy are interlinked: an increase
in fuel and transport costs, devaluation of currencies or market speculation lead inevitably to a rise in
food prices, ultimately borne by the final customers. Supplies will then decrease accordingly, although
the demand still remains…
These critical debates on the world food crisis were addressed last June at the FAO headquarters in Rome,
which hosted two major events: the first one from FAO’s initiative, a high-level political conference
linking food scarcity and climate change, and the second one organised by EMRC, the renowned
“Agribusiness Forum”, gathering businessmen from four different continents.
In this summer edition, Dialogues will focus on Angola, one of the fastest growing economies in Africa.
After a long civil war, the country is finally entering a peaceful period and will hold legislative elections in
September. The Provincial Governments have played a key role in the peace process and in the economic
development of the country. In this edition we present some of the projects and opportunities in the
provinces of Cabinda, Benguela and Bié.
The magazine also presents the outcome of the Agribusiness Forum, where we give the floor to
personalities presenting their projects, visions and success stories. This is precisely the mission of the
EMRC network: to give the opportunity for every entrepreneur to show their abilities and opportunities,
in order to create direct partnerships. To paraphrase the UN Secretary General, Ban Ki-Moon, during
the political meeting at FAO, people should leave the conference “with a sense of purpose and mission,
knowing that we are allied in our determination to make a difference. Hundreds of millions of the world’s
people expect no less”...
Publisher: Idit Miller
Editor-in-Chief:
Philippe van Maldeghem
Main contributors:
Jeanne McCaul,
Pierre Coetzer
Designer: Bird
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The views expressed in this issue of Dialogues are the private views of individuals and are not necessarily those of EMRC International, its executive committee, or members of its business
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I nterview
Franz Fischler
Former European Commissioner (1995-2004)
successively for Agriculture and Fisheries
“EMRC’s forum is precisely a way to stimulate
the entrepreneurial behaviour in Africa.”
■ Dialogues: Given your expertise, what
is your assessment of the subsidies given to
EU farmers, which are perceived by African
farmers as preventing them from competing
at a fair price?
Franz Fischler: Firstly, a lot depends on the
type of subsidies and the way they are given to
the farmers. The problem is that the European
Union has been used to giving, in the past, exports
subsidies, which means that the prices
on exports get reduced, in order to become
more competitive. Today it is a huge problem,
and these practices must be discontinued. I
personally cannot see this practice go further,
and I notified all the WTO members,
together with Pascal Lamy, current Director
General of the World Trade Organization
(WTO), saying that Europe is prepared
to phase out all the subsidies on export. We
expect others to follow our initiative.
Secondly, the direct support given to the
farmers depends on the way it is done by
the EU. Following the EU’s reform, support
is given directly to the farmers, and there is
no link anymore to the product or the production
process. Therefore, this type of support
is not distorted by trade or competition. This
is different from the way the US are supporting
their farmers. Thus, by non-discriminating,
we are ahead of the Americans’ practices.
Then, what the EU has also done is to give its
support only under certain conditions; among
the main ones, the farmers must fulfil higher
environmental standards, higher animal welfare
standards and higher nutritional standards
compared to other parts of the world. This is
the real justification.
■ Dialogues: In your opinion, what
measures can the European Commission put
together to fight against import barriers from
African countries?
FF: Truly, international trade requires the use
of certain minimal standards, as we cannot
take the risk of importing diseases. If they are
not fulfilled, neither will you be allowed to
export, nor will you find any market for your
product. In my view, this is the area where the
concept of “Aid for Trade” should take place,
Rome, June 2008
which was propagated by Jozef Stiggitz. In
other words, I think that the industrialized
world must help the African countries, companies
and farmers so that they become able to
fulfil these minimal standards. Therefore our
standards must be improved, but we must help
African farmers to implement them.
Regarding trade barriers, it is a matter of
fact that in the past, the EU standards were
seen as a kind of “hidden” trade barrier, and
we must adapt them. The standards must
be objective and the same for everybody.
EMRC’s network forums
help public and private actors to
think differently, and take action
for themselves locally.
In addition to that, African countries must reflect
upon the ways that they implement their
own rules: very often, there is a blockage in
trade between African countries. We have
only been recently aware of the fact that when
countries introduce “export taxes” or “restrictions
for imports”, at the end, these measures
could become counter-productive since the
purpose of offering a sustainable supply of
food might not be met.
■ Dialogues: The supply of food is currently
a worldwide problem. EMRC’s AgriBusiness
Forum in the FAO headquarters comes in
line with the FAO Food Crisis summit held at
the beginning of June in the same premises.
Since EMRC’s forum puts businessmen and
thinkers together, what should be achieved
in order to diminish the impact of this food
crisis?
FF: There is a difference between the way we
handle the present food crisis and what should
be done in order to reduce the risk of a new
crisis in the future. On the one hand, about the
present crisis, the immediate reaction should
be to increase the amount of money supplied
by industrialized countries to the UN food
programmes, since they directly fight against
the increasing number of malnutrition
cases. On the other hand, the prospects
for the future are much more complex. Concepts
such as “one feeds all” don’t work in
practice and cannot be adapted to any given
situation. Tools are often not adapted to their
specific weather conditions, and we should
invest in the sectors of research and development.
People should realize that Agriculture
has become a “know-how intensive” business.
Another tool to prevent the crisis should be
to increase networking co-operation; in other
words, develop partnerships between private
actors in the food supply chain, between
both continents, so they can learn from each
other. EMRC’s forum is precisely a way to
stimulate the entrepreneurial behaviour in
Africa. Besides, a new type of co-operation
between private and public sectors must be
found, following the example of the EU
“twinning projects” developed towards its
new member states.
But in general, we should think about ways
to increase our financial aid, and we could
consider three approaches: First, the industrialized
countries should fulfil their promise
of allowing 0,7% of their GDP to aid and development.
Second, we should try to reduce
the risk of a bursting bubble created by the
speculation on commodities, by introducing a
“capital transition tax” on these operations.
Third, we should establish an international
trading system for CO 2
certificates.
Developing countries, which pollute less,
could sell their rights on CO 2
emissions to
industrialized countries, allowing them to use
such money for their own development. This
is an innovative way to meet two objectives
at once.
In conclusion, we should stop all discussions
about charity to the developing world, and
start talking about justice. We have to develop
a new mentality, and EMRC’s network forums
are positive in the sense that they help public
and private actors to think differently, and
take action for themselves locally. We must
contribute to help the developing countries get
the opportunity to speak out and participate in
the international market economy. ■
Quarterly - Summer 2008 -