The development of regional strategies could be the key to improving agriculture’s competitiveness in international markets.
IICA experts have produced an analysis that explains the implications for Latin America and the Caribbean of the most recent reform of the European Union’s Common Agricultural Policy.
San Jose, 24 November 2015 (IICA). An innovative and inter-American vision, based on stronger agricultural institutions and national and regional policies, could be the key to the efforts of the Latin American and Caribbean (LAC) countries to meet the challenges posed by the latest reform of the Common Agricultural Policy (CAP) of the European Union (EU), approved in 2013.
While much of Europe’s traditional policy remains unchanged, the reform includes a series of new mechanisms designed to promote food production, the sustainable management of natural resources, and the inclusive development of rural areas, all of which could impact the rest of the world’s agriculture, depending on other countries’ relationships with the EU and their degree of dependence on the European market.
That is the conclusion reached by a group experts of the Inter-American Institute for Cooperation on Agriculture (IICA) led by the organization’s Director General, Víctor M. Villalobos, in their most recent technical analysis of the situation.
“The new vision for agriculture should be based on the region’s comparative and competitive advantages. We need an innovative medium- and long-term vision; it is not enough simply to implement measures in response to specific events, as that only provides temporary solutions,” Villalobos observed.
The document states that, as a result of the reforms to the EU policy, LAC may face stiffer competition in local and international markets, and wider gaps in productivity between countries in the region and the EU.
“The deepening of measures aimed at integrated management of natural resources and climate change mitigation could also lead to the introduction of production standards with stricter environmental requirements that would make it more difficult to export agricultural products to European markets,” remarked IICA’s delegate to the United States and manager of the Institute’s Center for Strategic Analysis for Agriculture (CAESPA), Miguel García.
The impact of the CAP reforms on producers and consumers are likely to vary from country to country. For example, countries that produce the same foodstuffs as those they import from the EU, and those that also depend heavily on that region for food imports may face increased competition, which would push down the incomes of local producers.
Villalobos suggested that the countries needed to focus on five key actions if they wish to reduce the possible impact of the CAP:
• Develop and strengthen policies aimed at enabling producers to take decisions based on market information
• Bridge the gaps in development between rural and urban areas
• Consolidate agricultural innovation systems
• Strengthen trade ties between LAC and the EU
• Draw up an inter-American agenda focused on the interests of the inhabitants of LAC
While much remains to be done, there are initiatives in LAC aimed at constructing more productive agricultural sectors, improving living conditions in the countryside, reducing agriculture’s impact on the environment, and adapting to the climate conditions that affect the region.
In addition to Villalobos and García, other IICA specialists assigned to CAESPA and the Directorate of Technical Cooperation were involved in the preparation of the analysis, along with the Institute’s delegations in the United States and Spain.
A key partner
Agricultural trade between the two regions has experienced constant growth in recent years. “Between 2011 and 2013, the EU was the second most important importer of LAC agrifood exports, and this region’s food imports from Europe grew by an average of 7.8% per year, surpassing the growth of the region’s main trading partners,” explained Hugo Chavarría, an IICA specialist in quantitative and sectoral analysis and co-author of the document. He also pointed out that, when intraregional trade within the EU is excluded, LAC is one of the chief sources of food for Europe, accounting for nine percent of all agrifood imports during the 2011-2013 period.
The EU and LAC are important players in agricultural trade and investment across the globe. Europe accounts for 37% and 36% of the world’s agrifood exports and imports, respectively. The figures for LAC are 14% and 5%, with an average annual increase of 1.9% during the period 2011-2013.
More information: miguel.garcía@iica.int hugo.chavarría@iica.int
Complete document (Spanish only)
