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World Ag Congress : World Ag Congress
World Agricultural Forum 2009 Congress 13 time it is growing and trying to play a role in the international market. Other than building a domestic market, it has been its productivity. If you look back in the last decade, the volumes of food produced in basi- cally the same amount of land in Brazil have doubled. Q: Monsanto, McKinsey and Company, Disney, and American Express --- you had this whole Fortune 500 track running, and now, the Gates Foundation. You can bridge this corporate development concept very well. You've heard the problems, and you guys are attacking it. What can you tell us? A (McKenna): As markets increasingly become more global and more open, they are consolidating around certain standards and practices, and the gap between these new global markets and the smallholder farmer is getting increasingly wider. We work across the value chain --- on science and technology, crop improvement, linking farmers to markets. Our two major goals are reducing constraints of participation and enhancing the benefits of participation markets for smallholders. We are increasing transparency, making investments in data to help policymakers make better decisions and also to highlight some of the cost of current practices, looking at ways to leverage information systems, trying to increase access to finance through various methods. One of the basic tools in almost all of our grants is aggregation of smallholder farmer goods. One grant that we do is called Structured Demand --- using public demand to spur market develop- ment. The World Food Programme, the largest buyer of staple grains in sub-Saharan Africa, developed a Purchase for Progress Initiative. We have put in about $66 million into it. It is working across 19 countries. We are funding the ones in sub-Saharan Africa, and trying to bring markets closer to smallholder farmers. They are experimenting with different ways to engage small- holder farmers and purchase from them. While they are doing that, they are going more into the rural areas, buying directly from farmers, setting up infrastructure, more storage facilities and warehouse. They are also bringing small- holder farmers more in touch with what the market's requiring, so they are introducing grades and standards for the first time, talking about quality and talking about food handling methods. They are also trying to build local systems to help smallholders, like looking at purchasing through warehouse receipt systems or commodity exchanges and other things that help spur smallholder production. Q: I think that you can help us appreciate the regional approaches that are occurring. I don't think we see things in Latin America or Africa working quite as well as Asian Pacific Countries (APEC) does in bridging some of these problems. Howdoyoudoit,andhowdowegetthat effort going elsewhere? A (Modarelli): APEC is a very unique region and a very unique forum. It is a nonbinding, consensus-driven forum. It's transpacific in nature. It includes five countries in the Ameri- cas, as well as, all of the major Pacific Rim countries in Asia. It represents over 50% of world GDP, over 40% of the global population, has a big spectrum of both producers and consumers, and many of the largest multinational food companies in the world. So it's a very good area to examine a regional approach to trying to solve these issues. The foundations of the APEC Food System were basically three- fold. One was liberalization of trade in food and food products. The sec- ond was development and dissemi- nation of technological advances in food and food processing. The third was addressing issues of real devel- opment through capacity building. The long-term strategic goal which the food system created was the idea of an open regional market for food and food products throughout APEC. In the last year, the ABAC asked leaders to initiate this reinvigoration of the system with a public renuncia- tion of the use of embargos or export controls as a means of addressing food security challenges. ABAC is calling again for that to be a cornerstone of what the leaders bring out of APEC, hopefully this November, when they meet in Singapore. ABAC is also going to call, this year, for the creation of a food dialogue. Creating a dedicated forum that will focus on those food issues will go a long way to helping capture some of the gains that the APEC Food System is trying to accomplish. From ABAC's perspective and within APEC, the private sector message to government is, essen- tially, that formal trade barriers in the traditional sense are not really the problem. The challenges companies have are what are increasingly called in APEC "behind- the-border" issues. These are nontariff barriers, things like regulatory reform, stan- dards, harmonization, labeling, certi- fication, infrastructure, moving goods and customs procedures. APEC is well suited to addressing those issues because of its consensus-driven nature and because there is a very accessible structure for proposing ideas and building initiatives WAF TAKE-AWAY INSIGHTS FROM ROUNDTABLE DISCUSSION "If you accept that food is a right, not a privilege, how can that be enforced? How can you implement that while still respecting the sovereignty of countries?" "Food aid has ... evolved into much more of a humanitarian response. It is a needed tool, but it is ideally a short-term palliative. We really need to rebalance a bit. (That's) not to say that we don't need to provide food aid, but we might be able to provide less of it, and certainly provide it more efficiently than we currently do and shift resources toward long- term investments in agriculture." "When we are talking about trade liberalization, you work on the capacity building as you are bringing down those barriers so that there is some balance to the system. That is the whole notion of transitioning toward free trade in trade agreements."