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Thank you Greg, and good afternoon everybody.
It's a pleasure to be here again.
And I mean that genuinely.
It's a pleasure to be here after the length of time
it took on the way to here.
It's nice it's nice to arrive.
I have a story that I'll tell you later
if you're really interested.
What I'm going to do in the next few minutes
is share with you some of our current thinking.
It represents work in progress.
I'm not going to-- and it's not because I don't want to.
I don't have profound, deep, new results to share.
But I do want to just bring you up to date
and to listen to your views on current thinking,
with respect to and the role of policy incentives,
but also policy disincentives with respect
to generating more agricultural productivity, growth,
and getting it done in a more sustainable way.
I guess two brief background context
points I'd like to make at the outset,
we all understand, you all understand that the market
environment in which agriculture operates
is changing very rapidly.
Policies are not.
The natural resource environment in which
we're all trying to do business is changing.
Policies are not responding as quickly as they might.
So one of the key messages I think
where we have reached the conclusion
is that there's a need for much more urgency
to get on and begin to align policies, in many countries
today, more with the market and the natural resource
realities that exist.
I think it's now common wisdom that we all
need to do more in our own different capacities
to encourage, increase the productivity
growth in the sector.
Let's just review very quickly why that is.
I'm not going to talk a lot about the growing
demand for food, for feed, for fuel.
You've heard about that this morning.
And you'll continue to hear about it.
I think we all understand that with additional investment,
we could bring a little bit at least-- if not more
than a little bit-- of land into production, new land.
We could reduce unnecessary food loss and waste.
And we could adopt available technologies a little more
effectively and a little more widely.
But one of the things that we don't talk about, perhaps,
quite enough is how we're going to manage limited water
supplies going forward.
Now, today-- and this is a global picture,
and don't worry about the numbers.
But agriculture accounts for more than half our estimates,
or about 60% of global use of water.
That's going to have to decrease,
both in terms of its share and in terms of the absolute volume
over the next 20 or 30 years.
So in other words, agriculture is
going to have to produce more.
And it's going to have to do it with less water.
That's not an automatic equation.
The answer on how to do that is not immediately obvious.
And it's made a little bit more complicated but the reality
of climate change and the uncertainty
that that introduces as well.
If we look at the sources of global agricultural output
for just a moment, now there's a lot more variability
both within year and year over year than, of course,
this graph, which simply shows the decade averages.
And there's also a lot of variability between countries.
But the simple point I want to make
is that we're not going to increase output of agriculture
globally simply by bringing in more land, simply
by applying more irrigation, simply
by more intensive use of fertilisers and pesticides.
We're going to have to do more to generate what's
referred to here as total factor productivity.
But bringing all of our means of applying land and labour,
and capital, and technology to the sector.
So it requires a change from past practises
and from past policy orientations.
Now, none of this is new to any of you.
It's not new to your ministers, whichever country you're from.
Greg mentioned the work that we've had underway at the OECD,
but with a large number of other international organisations--
the FAO, the World Bank, and others--
to try and give good advice to ministers on what they can do
to do a better job of providing a constructive and a useful
policy environment for the sector.
Ministers agree.
There's widespread agreement on the need
to improve agricultural productivity growth.
There's not much agreement on how to do that.
And thus far, there's been relatively little action
viewed globally.
Again, from an OECD perspective, if you look just
in high-income countries, they represent a little over half
of public spending on agricultural R&D
and higher education.
And we see no growth in the past number of decades, in fact.
The exception where we do see some growth
in spending on R&D and higher education is China.
And that's the exception.
As well, again, to come back to OECD countries,
the proportion of spending on farm support that's
dedicated to research and development education
extension and advisory services is very, very small.
It's a single digit proportion of what's spent on farm support
more generally.
And I'll talk a little bit more about that in just a moment.
This should work.
Let me turn and addresses the issue of policies
just for a couple of moments.
One of the things that's a little bit
different-- in the last couple of years at least,
in the way the OECD has approached
the challenge of giving advice on how to improve
agricultural productivity and sustainable resource use--
relates to our focus on economy wide policies.
They matter.
So do agricultural policies.
But taken together, both the more
general economic policies-- and in some cases,
social policies like countries have in place, as well as
agricultural policies-- combine to create both incentives
and disincentives for improving productivity
and for improving sustainable resource
use through a number of drivers in particular.
The first, the pace of structural change.
Secondly, the way natural resources are used.
And finally, whether investments in agriculture innovation
are even pursued.
So again, just to underscore the importance
of economy-wide policies, they matter.
And here, I'm referring to a wide range,
from macroeconomic and governance regulatory
structural policies, property rights, rule of law,
all of those basic things that many of our economies
take for granted, but not every economy has in place.
But these economy-wide policies determine, more
than anything else, the environment for investment.
And I'm thinking particularly of private investment.
The economy-wide policies with the agricultural policies
will make it more or less likely for the private sector
to invest in agriculture and contribute
to the kind of innovation that we're after.
And again, I want to emphasise that in some countries,
our analysis-- very preliminary analysis-- would suggest
that these policies are more important than policies
at the sector level in attracting private money.
But of course, these policies are not always
paid very much attention to by agricultural folks who
look, first and foremost, maybe not exclusively,
at farm policies, which I'm going
to do now for a moment or two.
Most farm policies as I've mentioned already--
in particular, in the OECD area, but not exclusively--
remain linked to production, remain
linked to the use of inputs, or remain
linked to border measures, trade policies.
An awful lot of agriculture policy
today is essentially very large income transfers
that have the impact, unintended,
in of impeding structural change.
And quite often of the impact of encouraging a more intensive
use of resources, sometimes on more fragile land.
Very little of the existing policy effort
is directly targeted to either product or sustainability
outcomes.
Stored on agricultural innovation systems
in particular, where, again, to go
beyond a lot of the traditional commodity-based approaches
to agriculture and look at paying more attention to what
we refer to as agricultural innovation systems,
all the way from the research lab,
the university extension services, down to the farm.
We think an awful lot more could be done perhaps
to invest more, but in particular, to invest better,
in improving both national and international collaboration
across the whole innovation system.
At a national level, we would argue
that there's a great deal more could
be done to make R&D more demand-drive so it responds
to actual needs of farmers, of processing businesses.
We think there's a greater role, and there's
a great deal of work that's been done on this inside
and outside the OECD with respect to public/private
partnerships, but as well, international collaboration.
Again, there are some examples, the Global Research Alliance,
that was established, I think, originally by New Zealand,
but it has quite a number of countries that participate now
trying to encourage collaboration across borders
with respect to research associated with climate change.
There's a number of other initiatives as well.
But this is an activity that doesn't cost money.
This is an activity that requires people
to talk to each other and to listen to each other,
and to pool intellectual as well as financial resources
and focus them on needs that are common,
and many needs with respect to pushing out the technology
frontier are common.
As well, of course, there's an important opportunity
to close the productivity gap in many developing countries,
so the gap between current productivity performance
and what is potential.
This doesn't require a great deal of new investment
in the science and technology.
Its about technology transfer.
It's about having in place good extension
services and good advisory systems that help farmers adopt
technology in ways that are more efficient.
But for some other countries-- including, perhaps,
the one that we're in now, it's about a pushing out
the technology frontier.
It's about investing more and investing better
in research and development.
There's a great deal of research that's available,
not by the OECD, but Julian Alston and others
have done a lot of work that makes
very clear the returns on investment in agricultural R&D
are absolutely enormous.
There's relatively long time lags,
but the returns are very, very impressive.
Yet we've not seen significant growth in public R&D spending,
while we see a significant improvement in global markets,
and we see the widespread expectation
that global demand is going to remain very, very strong.
Let me just wrap up before we hear
from people who've done some research that's
more close to your home.
And then we'll look forward to questions later.
I want to emphasise, yet again, I
think there's a case for improving
agricultural productivity, growth, and more sustainable,
more efficient use of land, water, biodiversities, has
been very, very well made.
What has not happened to the same degree
has been a clear identification of what
are the actions that both the public and private sector might
need to take.
I don't think there's been adequate attention to the role
of policy disincentives, nor the role of policies
beyond the farm gate-- again, to come
back to the enabling environment and macrostructrual policies
and so on.
Final point I wanted to conclude on,
it's not very difficult to give this kind of presentation
at an aggregate level and to talk about the productivity
challenge in very, very broad terms.
To go from that, though, to actions is very difficult.
But it requires us to look at the specific situation,
the realities in countries and inside
of countries, countries that are at very different stages
of development, and countries that
have very different resource endowments.
And this is about where we are right now in the OECD.
Greg again mentioned the work with the G20.
We've had a great deal of support from Australia--
intellectual support, that is, moral support-- to work
on this issue to use, in fact, Australia, as well as
Brazil and Canada, as pilot countries to test
one way that we have developed for examining,
again, policy incentives and disincentives,
and together to try and come up with a modus operandi
to look at individual countries to help identify
for and with those individual countries, the kinds of actions
that they can take.
Now, this can be done on a bilateral basis.
We're quite anxious to do that.
But we're even more anxious to move
into the multilateral forum-- and in particular, via the G20.
Countries can learn an awful lot from each other in the same way
collaborating on R&D makes a lot of sense,
collaborating on analytics and sharing ideas about what works
and what doesn't work makes a great deal of sense to us
as well.
So I look forward to any questions that you have,
and to continuing to work with your government
during its G20 presidency year, and hopefully beyond.
Again, thank you very much.