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12 March 2003
International agricultural policy reform, in the form of reducing trade
tariffs and export subsidies, can only be beneficial and should happen now.
That's the view of the visiting Director of the Agricultural Directorate of
the Organisation for Economic Co-operation and Development (OECD), Professor
Professor Tangermann is a German national and a renowned expert in
agricultural economics and trade policy. His academic work, which spans 25
years, has concentrated particularly on the need and options for reforming
agricultural policies in OECD countries and on strengthening the rules for
He is currently on a week-long visit to New Zealand, talking to politicians
and agricultural and trade leaders, and promoting agricultural policy reform. He
is also visiting universities and farms.
Neil Fraser from the Ministry of Agriculture and Forestry's International
Policy Directorate says it is extremely useful for New Zealand that Professor
Tangermann has a full understanding of our agriculture - its setting and
"That understanding is important for the analytical work that the OECD
undertakes in agriculture and agricultural trade," Mr Fraser says.
Professor Tangermann says there is a commonly-held belief that agricultural
policy reform puts pressure on farm incomes, threatens non-trade concerns,
involves large political costs and serves other countries' interests.
He argues that on the contrary, reform is in the interests of farmers, helps
non-trade concerns, improves the sustainability of policies, is beneficial
domestically and reduces trade distortions.
To this end, the OECD has a positive reform agenda and corresponding work
Professor Tangermann says the first priority with reform is to reduce tariffs
and export subsidies. While saying this would be of widespread benefit, he
concedes not everyone will gain in the short run. "To facilitate adjustment
there may be a need for transitional assistance aimed at those who may be
Increased access to OECD markets would be of great benefit to non-OECD
developing countries and Stefan Tangermann says help may also be required in a
range of areas including export capacity building and special and differential
This can be done effectively through targeted payments decoupled from
production while dismantling trade distorting border measures and product price
Professor Tangermann asserts that along with the significant gains from
market orientation and open trade, it is possible for OECD countries to, at the
same time, address a wide range of domestic objectives such as farm household
incomes, the environment, food security, food safety and the viability of rural
Domestic agricultural polices generally fall into two categories: those
concerned with correcting market failures and those focused on the incomes of
Professor Tangermann says to a greater extent than is currently the case,
market failures could be tackled more efficiently at source, for example by
charging for social costs (such as pollution) and by paying for social benefits
that the market alone may under-provide (such as a cleaner environment or
"On the income side, policies not linked to production and consumption
decisions can deliver targeted support to households much more efficiently than
sectoral solutions such as price support.
"Policies to correct market failure will affect farmers' incomes, so it
makes sense to address any income concerns in the light of these measures. In
this context, shocks to income arising from policy reform might warrant
transitory decoupled payments, while cases of structurally depressed incomes
could be addressed through support along the lines of economy-wide tax and
Professor Tangermann is presenting a seminar in Wellington today entitled
"Agricultural Policy Reform - Why Wait?" He concludes his address with
the statement - "Agricultural Policy Reform - No Reason to Wait!"
"Agricultural policy reform will improve overall economic well-being and
open the door for new policy approaches which can underpin a more sustainable
global food and agricultural system," Professor Tangermann concludes.
Professor Tangermann's seminar is being held today (Wednesday 12 March) in
the Featherston Room, Hotel Intercontinental, corner of Featherston and Grey
Streets, Wellington. It begins at 5.15pm. Media are most welcome to attend.
For further information, please contact: Neil Fraser, MAF International
Policy, Phone 04 498-9860 Email: firstname.lastname@example.org
Lesley Patston, Corporate Communications, Phone 04 474-4246 or 025 205-1418 Email: email@example.com