Choice in the use of rural resources

Agricultural policy in developed economies will be completely transformed

Jim Riddell

Explaining human behavior

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Genetics and biology Human nature will likely be seen from quite

a different angle from that of the philosophers

Social sciences will have a new responsibility for how we make choices

Deciding the use of rural resources will be source of conflict in the 21st century

The two lessons from ecology:1. Earth resources are finite2. Everything is linked to everything else

Land Water Minerals Air quality Atmospheric change Bio diversity And everything else

Change in the use of rural resources is inevitable: The dominant social processes are

Demography Globalization of the world’s food commodity

markets Deteriorating economic returns to family farm

agriculture Solutions must be compatible with democratic

principles

DemographyUrbanization

•There more people living in cities today than the entire world’s population when Taiwan had its land reform

•Rural areas are no longer the engine of economic growth for a nation – it is now the city

Age of farmers as % of all farmers

Source: Eurostat Yearbook 98/99. A statistical eye on Europe 1987 - 1997. Brussels, Luxembourg, 1999. (European Communities), p. 345

Farm size

Deteriorating economic returns to family farm agriculture

Off farm income essential Non-competitive for capital attraction

Financial Physical Human Social/cultural

Large-scale farming is also not competitive without subsidies, protection and other distortions.

Vertical integration Impossible in any case in most Developed economies from

a social, political and cultural point of view

Economic non-viability: In the world’s wealthy countries, agriculture has been a steadily declining sector in the economy for the past century. As stated above, rural communities of very small farmers must be provided with the means to keep local culture both alive and dynamic. This has required a number of interventions that transfer capital from the urban and industrial centers to the rural sector. Farm-gate prices have been subsidized and farmers protected from cheaper food imports by almost every rich country outside the Cairns group. The European Union devotes over 50% of its budget to keep 5% of its economy from going bankrupt. Japan with less than 2.5 million hectares of agricultural land, spends over $26 billion each year so that 3.8% of its labor force can stay in business. Even with farms that would seem immense in Europe, Africa or Asia, the US has to spend somewhere between $19 and $40 billion a year to ensure that around 2% of the population has some chance to “stay on the farm”[2].

Off-farm income in Japan

US Farm Income

Equals earnings of the operator household from farming activities 3,477 7,884 14,201 12,930 6,666

Plus earnings of the operator household from off-farm sources 62,284 60,713 67,279 70,531 73,678

Equals average farm operator household income comparable U.S. average household income, as measured by the CPS  65,761  68,597   81,480   83,461  80,344

     Dollars per U.S. household  U.S. average household income 57,852 59,067 60,528 na  na 

2002 2003 2004 2005 2006

Source:http://www.ers.usda.gov/briefing/farmincome/data/Hh_t5.htm

Global food trade

Global food production

versus

Picture source: Freelancer.com

Solutions must be compatible with democratic principles

For the first time there is near global acceptance of what constitutes good governance.

Democracy and development Policy implications

Not because it is “good” but because it is necessary Rural populations have been voting with their feet

Governments have tried many approaches:

some examples

Norway: guaranteed income for degree holding farm families

Sweden: larger farms Denmark, Finland and Holland: Continuous local

planning Germany: Village reorganization: Wismar cluster

England: Producers Associations: Orkney Marketing Scheme

France: SAFER and Chambres d’agriculture

Age of farmers as % of all farmers

Source: Eurostat Yearbook 98/99. A statistical eye on Europe 1987 - 1997. Brussels, Luxembourg, 1999. (European Communities), p. 345

Critical elements

1. Access to Information and research

2. Public environment that encourages entrepreneurial activities

3. Existence of a critical mass of SMEs

4. Networks for the exchange of experience and know-how

5. Infrastructure and geographical isolation, real or perceived.

New approaches There might be a way forward

Inclusive economies The more users, the more valuable Capital savings administration

Rural resource users: Value adding activities Density of management

Inclusive economic models

Inclusive Model Internet: more users

the more valuable Information Maps (e.g. interactive)

Goods Services

Cell phone Credit cards Smart cards

Exclusive model Value from exclusive

ownership Information Maps (limited no.) Stores Companies

Owner of the lines Checks, drafts, etc Independent

operators

Capital savings administration

The more users the better the administration Sales receipts and

tax collection Land registry (on

line) Open records Property owner

can confirm

The more users the more staff, etc. needed Fiscal police. An

army of auditors Restricted access to

maps, plans and records.

Expensive to verify

Uniform-Invoice

Example: Conceptual Mapping

Conceptual map link to data = information

Source: NASA

The long tail: niche instead of “hits”

From Chris Anderson: The Long Tail, Wired Magazine

Topoclimate: application in southern New Zealand

1. Measurements of accumulated heat (GDD),

2. Calculation of chilling periods,

3. Calculation of growing season lengths and patterns,

4. Identifying critical points for plant growth and production,

5. Growing-Degree-Days 6. Land use options 7. Sustainability 8. Soil vulnerability 9. Specific analyses and

indices

Farmgate Research Model

T r a c e a b I l I t y

Education Tools

RFID based systems

On Farm Productivity Veterinary systems

Monitoring systems

Location based data

Farmer ‘Flight Deck’

BroadbandVideo

conferenceWeb based programs

Software & content

Farmer ‘Flight Deck’

2004 2009Full

trace back

system

Multiple data

sets

Broadband

Conclusions:

1. Farms will stay small2. Rural economy will become increasingly diversified and tied to

urban institutions New uses of rural space Agriculture will become ever more specialized

Organic foods, Specialized fruits and vegetables, etc. Non-food: Bio-energy, Cellulose products, etc.

3. Competition for rural resources will become intense and require major governmental policy intervention and institution building.

Water registries, etc. Administrative capital savings

4. Inclusive economic models and marketing in the long tail