Doha: Pascal Lamy’s Theses and Figures Questioned by the Conclusions of a Group of International Economists

PARIS - While Some States Envisage a “New Approach” to Resume the Doha Round, the Theses and Figures Put Forward by Pascal Lamy were Contested at the end of the International Workshop Organized at the Sorbonne on June 4th and 5th by momagri’s Head Economist

Bertrand Munier, University Professor and Chief Economist at momagri, stated at the end of this workshop: “agricultural price volatility, the impact of speculation and the progress made in understanding agricultural markets, questions the WTO’s liberalization strategy on agricultural markets.”

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Thus, the thirty economists present from the IMF, FAO, World Bank, OECD, American universities, think tanks, and different government departments, have reached a general consensus on two main points:

- the international community’s long sidestepping of the issue of the volatile prices of staple agricultural products, could exacerbate food insecurity, - the current economic models that guide international decisions are unable to make sense of this reality.

Hence the importance of building a new international economic model, according to Shyama Ramani, Professor at the University of Maastricht. This model must faithfully include current agricultural issues: price volatility, the financialization of the markets and their consequences on food security. The momagri model meets these demands for improved realism. This is why Peter Timmer, Professor at Harvard University and Economist at the Bill Gates Foundation, labeled it as “the first of its kind, that we cannot ignore” in assessing the impact of a liberalization policy on agricultural markets .

How then, can Pascal Lamy so arbitrarily justify the figure of 150 billion dollars in profit (or 7 cents per person, per day) if an agreement is reached in Doha? For he is referring to current models, which do not consider the impact of risks, price volatility, or speculation on financialized markets, which are essential to the agricultural economic analysis.

Lets us not forget that what is at stake behind these negotiations, is the survival of close to a billion people who suffer from hunger, as well as the survival of more than 40% of the world population that live from agriculture. As Edi Karni, Professor at Johns Hopkins University recalled, it is urgent to return to negotiations that finally take full measures for the risks facing agricultural markets.

Results of the latest simulations of the momagri model

In this respect, the latest simulations by the momagri model have shaken the belief that a conclusion of the Doha Round would benefit all farmers, in particular, those in developing countries. Worse, they show that complete unregulated liberalization of international agricultural trade could lead to:

- a significant reduction in the revenues of farmers from the poorest countries, (in some scenarios the reduction could be more than half, and therefore, likely to ruin many farmers in these countries) - a lesser underlying reduction, but very significant for emerging importing countries such as India - a significant erosion of the revenues of farmers from developed countries. Consequently, instead of encouraging the optimization of factors of production, it would jeopardize worldwide food security, as well as the development of many countries.

Only emerging exporting countries, such as Brazil, will be able to come out unscathed, but without compensating for the general reduction in production.

About momagri

momagri is a Paris-based think tank that promotes a new vision for agriculture. Founded and chaired by Pierre Pagesse, Chairman of the French Groupe Limagrain, the organization includes representatives of agricultural enterprises and officials from the healthcare, economic development, strategy and defense fields. It aims to support the regulation of agricultural markets by way of new evaluation tools (such as economic models and indicators) and new proposals for an international agriculture and food governance based on free-trade principles.

www.momagri.org

Source: momagri

Contact : Dominique Lasserre, +33-1-43-06-42-70, dominique.lasserre at momagri.org