Finding Synergies between Agricultural Export-Led Growth and Sustainable Environmental Policies

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THE NECESSITY OF INCREASED AGRICULTURAL PRODUCTION

My remarks explore what role international trade roles can and should play in ensuring that agricultural-export-led growth is consistent with sustainable environmental policies. This question is critical, first, because agricultural production has the potential to negatively affect the physical environment; and, second, because there is a growing global demand for food, which means that agricultural production has increased in recent times and is projected to continue to increase. The growing demand for food arises primarily from economic growth, which means more people can afford to buy food, and from population growth. This demand must be met--the world cannot simply achieve environmental sustainability by halting agricultural production.

With this in mind, I make four key points. First, trade is critical to meeting the demand for food by contributing to food security globally. (1) Research suggests that the largest absolute population increase is projected to be in Asia (2); while the greatest potential for increased food production is in Latin America and parts of Africa. (3) Second, environmental effects of increased agricultural production vary across countries, and there are many different variables at play, from nature to trade policies. Third, to ensure environmental sustainability, it is necessary to strengthen synergies between trade and the environment. Liberalized trade--together with rules that are enforced--can help minimize the negative effects of increased agricultural production by enabling agricultural production to take place in regions that are most efficient in terms of being able to absorb or minimize environmental effects (as well as being economically sustainable). Fourth, the international legal framework plays an important role in promoting synergies. It should support policies that lead to export growth from the more environmentally sustainable productive regions, and to reduced incentives for unsustainable production in other regions.

I will focus on the second, third, and fourth points. My comments are from the perspective of New Zealand, a country that pursues an active agricultural export strategy. Agricultural products make up over half of New Zealand's merchandise exports, (4) and agricultural sectors are extremely reliant on trade--95% of dairy production is exported. (5) The sector makes up around 16% of annual gross domestic product, and employs around 15% of the workforce. (6) Since the 1980s, New Zealand has developed a real competitive advantage in agricultural production, particularly in the dairy and meat industries. This has been made possible by innovative farming practices and availability of natural capital. It has been achieved in the absence of government subsidies or other protection for the agricultural sector. (7) New Zealand takes environmental sustainability seriously and firmly maintains that agricultural trade liberalization and environmental sustainability are not mutually exclusive.

AGRICULTURE AND THE ENVIRONMENT--A COMPLEX PICTURE

Negative Impacts of Agricultural Production on the Environment

Agriculture may be the leading human influence on the global environment and on the depletion of, and harm to, natural capital. It has been estimated that agricultural production uses 36% of the earth's land surface, excluding Antarctica. It is the largest consumer of freshwater resources, and it can lead to loss of biodiversity, as well as depletion of soil and other resources. It is also a massive contributor to air, water, and soil pollution. (8)

Pollution in the agricultural sector has many causes, including the use of chemical inputs, entry into the soil and groundwater of animal manure and animal feeds, and irrigation. Like all agricultural-producing countries, New Zealand must deal with pollution problems. Growth in production over the past 20 years has raised questions about the future sustainability of the sector. …