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09.05.2000 · Research Group on the Global Future

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Research Group on the Global Future
Center for Applied Policy Research (CAP)
Munich, Germany

The illusion that times that were are better than those that are,
has probably pervaded all ages
-- Horace Greeley

(1) New Items
(2) Local Agriculture in the Global Future
(3) Web Rules
(4) Noted in Passing



Adding to our Reports from the Future, Eckard Polzer replies to Ronnie Chan in "Europe's Contribution to Globalization."

Polzer, former CEO of Dornier Medical Systems (Dornier Medizintechnik GmbH), examines the role of history, increasing speed, and the future challenges for a globalizing Europe.

For German-speakers, we have added an interview with Manfred Wegner, a fomer general director of economics and finance at the EU in Brussels and founding president of the Institute for Economic Research in Halle. Dr. Wegner gives his views on the pace of change, on the opportunities and dangers of globalization, the impact of advancing technologies and the necessary political consequences of these develoments.



Local farming in the Global future

Over the last decades the structure of agriculture has changed fundamentally. Productivity has increased enormously, e.g. grain yields increased about 300 percent in the last 50 years and the annual milk quantity per cow has almost doubled. Farming has become a more and more capital-intensive and size-dependant business. The dynamic of "grow or die" has led to a continous reduction of small and medium sized farmsteads. In the European Union a farm goes out of business every three minutes.

As a result of these developments, food supply today is bigger than ever and prices are low. Investigations of the World Bank show that food production per capita was never higher than today. This makes clear that world hunger is more a distribution problem than a question of food production. Nevertheless it is also clear that a growing world population - the UN estimates that we will be around nine billion people in 2050 - requires further increases of productivity in agriculture.

Modern biotechnology will once again alter the profile of agribusiness fundamentally. Soil, natural resources and labour as the characteristic limiting factors of agriculture are rapidly losing importance. Agriculture is increasingly becoming a hi-tech producer - capital intensive and supported by laboratory research. The agrarian structure of the future will be heavily influenced by corporations which integrate the various different parts of the production process, e.g., the development and production of fodder, seeds, pesticides or fertilisers, into their product palette. The borders between farmers, seed developers, fertiliser firms or food processing factories will then begin to blur.

Even though further increases of productivity are necessary, current overproduction in many OECD states mixed with strong political influence of national agrolobbies is one of the main reasons for persistent protectionism in the field of agricultural products. And in fact, the efforts toward liberalising world trade are periodically overshadowed by conflicts about the right way and timetable to liberalize food marktets.

Because of expanded production capacity and the continuing weak international demand as a result of the economic crisis in Asia, Russia and Latin America, world prices of a number of agricultural products are currently at historical lows. Many countries, especially the United States and the European Union, have thus been increasing their subsidies for domestic agriculture production or introduced new instruments of protectionism.

As the OECD admonished in its Agricultural Outlook 2000-2005, published on 26 April, "a number of OECD countries have resorted to additional measures and protection that have not always been consistent with the longer term direction of reform and which risk delaying needed adjustments" (the study, which gives detailed projections up to the year 2005, and examines the factors that will shape markets for agricultural products is available at http://www.oecd.org).

New challenges are also appearing, not only from growing consumer concerns about the applications of modern biotechnology but also from diverging regulations of these applications, which has led to new disruptions in the global market for agricultural products. Different requirements for labeling genetic modified food are only one example. All of these developments hinder efforts to bring the ongoing negotiations in the framework of the WTO to a good end.

The Uruguay Round had included for the first time a significant reduction of agricultural subsidies in the world trading regime. The built-in agenda for further free trade negotiations, agreed to at the end of the Uruguay round, oblige the GATT/WTO members to begin negotiations about further liberalisation steps and realize the long-announced but never-achieved free market access for developing countries.

Many farmers in the Third World have difficulty competing even in their domestic markets with commodities of the developed countries whose prices are reduced through subsidies. The European Union e.g. still pays their exporters 1.70 Euro for every kilo of butter they sell abroad.

In their first meeting on 23-24 March, WTO agriculture negotiators reached an agreement on the timetable for the first phase of negotiations, but all in all the different interest groups largely repeated what they had said before Seattle.

The so called Cairns group, an alliance of food exporting countries, and the United States stressed, that they consider the agriculture negotiations "stand alone" because they obtained the commitment to resume negotiations in return for the moderate reforms agreed in the Uruguay Round.

Meanwhile the European Union and some other countries like to link further liberalisation with other issues like social and environmental standards. (a background paper prepared for the Ministerial Conference in Seattle last November is under http://www.wto.org/wto/seattle/english/about_e
). Equally, there was no agreement about the deadline for concluding the talks.

Critics of trade liberalisation state that agriculture is not only a market, that farmers play a crucial role in the maintanance of rural areas and that agricultural policies are always also a sort of social policy ? equivalent to the social security systems for industrial workers. But if this is true, OECD countries need a agricultural policy that is personalized and not price oriented, creating niches for small and medium sized farmsteads and environmental targets, not financing cheap commodities from big exporters.

This has to be discussed when leaders of national farmers' organisations and policy makers come together at the end of this month to the annual conference of the International Federation of Agricultural Producers (IFAP), which has this year the motto "local farming for global future". More information about this conference is under http://www.ifap.org/about/congress.html.



From the magazine Fast Company, six ways to tell if your company is not ready for the new economy:

"You know you're in trouble when...

Your Chief Executive Officer has an assistant print out emails.

One of your executives can name only three online businesses.

Two of those businesses are Yahoo! and amazon.com.

Only 10% of your executives know how to open an email attachment.

Your Chief Executive Officer assumes that your Chief Technology Officer isn't getting calls from venture capitalists and headhunters.

Your Chief Technology Officer *isn't* getting calls from venture capitalists and headhunters."



1. Global Teenagers, USA

The generation born in the 1980s is coming of age in a time of increasing global openness and dramatic change. The American magazine Newsweek takes a look at the perspectives of the Millenial generation in the US. Key features include racial diversity (and a fivefold increase in multiracial individuals since 1960), spiritual interest and commitment beyond institutional dogmas, active sexuality, and less drug use than their parents fear.


2. Terrorism

The US State Department (http://www.state.gov) notes that the locus of terrorism moved in 1999 from the Middle East to South Asia. The Department's annual report on terrorism attributed the change to increased counterterrorism efforts in the Middle East. The report describes Afghanistan as the primary safe haven for terrorists and notes that Pakistan sends mixed messages, cooperating significantly in some areas while tolerating terrorists in others.

This analysis points to a trend of terror thriving in failed or failing states, a distinct change from the late 80s and early 90s when strong (and strongly anti-Western) states were the main sources of terrorism.

According to the report, terrorists now depend less on the support of states and operate as loosely organized international networks. This shows that, for better and for worse, terrorists are affected by the trends changing organizations around the world.



global_futures also offers an interactive forum. Recommendations,letters, and tips are welcomed by the editors, particularly on the topics of the digital future, biotechnology, sustainability and the new economy. Send all feedback to mailto:fgz@lrz.uni-muenchen.de.



Sascha Meinert, Douglas Merrill, Patrick Meyer, Juergen Turek

Research Group on the Global Future
Center for Applied Policy Research
Geschwister Scholl Institute
Ludwig-Maximilian University of Munich
Maria-Theresia-Strasse 21
D-81675 Munich, Germany