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World Ag Congress : World Ag Congress
12 World Agricultural Forum 2009 Congress CAPTURING GAINS FOR ALL IN AN OPEN GLOBAL TRADING ENVIRONMENT Devry S. Boughner, Director, of Policy and Research, Oxfam America; Gawain Kripke, Director of Policy and Research, Oxfam America; Joel Velasco, Sugar Cane Industry Association, Brazil; Tjada McKenna, Program Director, The Gates Foundation; and Robert Modarelli, Executive Vice President, National Center for APEC Q: What does your company look at when it looks at the whole food and agriculture sector around the world? What kinds of things beckon your company in? A (Boughner): For Cargill, trade is very much part of that future of agriculture. Our model is to invest in local economies for a global food system. We take an expansive view on trade. It's about trade of goods, but also trade of services such as technical consulting and capacity building; trade in capital. It's trade in people, whether it's moving our experts across borders or labor that can move across borders as well. It's about trade in technology and innovation, about really creating opportunities for growth and development and capturing the gains for all. Our business model is a rural development model, about getting farmers to markets and how they can organize themselves, taking themselves from price-takers to capturing some of the opportunities for getting greater margins in pricing power, and also about investing further down the processing chain and creating opportunities. Q: We heard a lot about multilateral investment in agriculture and that private capital is needed. Surprisingly, in African governments where the vast majority of their economies are agriculture, they only put 5% of their investment into agriculture. How do we help these countries best capture the gains in the market? A (Kripke): A lot of the constraints really are in the countries them- selves. There actually is already a lot of opportunity for export, and it's not being captured and not being maximized. There are a whole spectrum of interventions that are needed. A key one is national governance, national investment, priority placed by the countries themselves in this sector and using agriculture as a means for poverty reduction and development. You can invest in agriculture but have relatively less poverty impact, and you can invest in agriculture and have more. It depends on how you do it, who you focus on, what kinds of investments you make. We need to look at the opportunities in trade, but we also need to recognize risks in trade and try to develop measures to address those risks. A rule-based system is a form of risk management because you have recourse if the rules are broken. One thing is to enhance and strengthen the rules and the systems under which trade now goes, but beyond that, we see supply and price volatility as risks that need to be addressed for developing countries, for producers, and very importantly, for consumers. We really need to think about and hold ourselves accountable to what looks like a billion people around the world who don't have enough food to eat. Q: Brazil faces a lot of hurdles, and yet it is immensely successful. I assume it's not just because of being blessed with great resources, but it is more complex than that. A (Velasco): Brazil is the number one developing country agricultural exporter with over $70 billion in exports last year. Why has Brazil been successful? We've figured out a way to use tropical agriculture in a way to not just supply our own needs, but the needs of the world. As a lesson here, it is not just do exactly what the Brazilians do, but it's to figure out that tropical agriculture has a meaningful place in world markets. If you look at Brazil's experience, it is not an export-oriented one. Brazil does have a unique perspec- tive in this opportunity because it is a large domestic market, but it needs to supply its own needs at the same Panelists include (l to r) Devry Boughner, Director, International Business Relations, Cargill; Joel Velasco, Sugar Cane Industry Association; Gary Blumenthal, CEO, World Perspectives; Gawain Kripke, Director of Policy and Research, Oxfam America; Tjada McKenna, Program Director, The Gates Foundation, and Robert Modarelli, Executive Vice President, National Center for APEC. Q & A SESSION WITH GARY BLUMENTHAL, CEO, WORLD PERSPECTIVES, MODERATOR