Lamy Sets Agricultural Tone

In a speech before the International Food and Agricultural Trade Policy Council in Salzburg, Austria, WTO Director-General Pascal Lamy said - food and agricultural trade policy does not operate in a vacuum. In other words, he said, - no matter how sophisticated our trade policies may be, if domestic policies do not themselves incentivise agriculture, and internalize negative social and environmental externalities, then we will always have a problem.

To explain his point, Lamy pointed to the issue of farm size. In many parts of the world, in particular in the world's poorest corners, land is getting divided through inheritance amongst a growing population, and farm sizes are dwindling. For example, Lamy said, - in India, the average landholding fell from 2.6 hectares in 1960 to 1.4 in 2000, and is still declining. According to Lamy, - some of the world's poorest countries have taxed agriculture the most, and that reinvestment of tax revenue into agriculture has been low.

Lamy told the gathering, - trade policy — no doubt — has its place in this landscape. But it cannot and does not, by itself, answer each and every challenge in agriculture. Land management, natural resource management, water availability, property rights, enforcement, storage, transportation and distribution infrastructure, credit systems, and science and technology, are all key elements of the agriculture and food security puzzle.