The Outlook for Agriculture and Rural Development in the Americas 2011 -2012

Since late 2010 and continuing into 2011, price volatility, in relation to basic agricultural commodities, has occupied center stage on the agendas of decision makers. An additional concern has been uncertainty about a new global economic crisis in the wake of the macroeconomic difficulties experienced in the economies of several European countries and the United States. In recent months, this situation has been compounded by the food crisis in the Horn of Africa --a reminder of the extremely vulnerable conditions under which broad segments of the world population continue to live. This third edition of Outlook for Agriculture and Rural Development in the Americas: a Perspective on Latin America and the Caribbean is an informational and analytical tool that is intended to promote a better understanding of these phenomena and their effects for purposes of regional public policy-making. The document was prepared jointly by the Economic Commission for Latin America and the Caribbean (ECLAC), the Regional Oice for Latin America and the Caribbean of the United Nations Food and Agriculture Organization (FAO) and the Inter-American Institute for Cooperation on Agriculture (IICA). The report underscores the need for the countries to adopt differentiated policy instruments to mitigate the effects of severe price volatility (including exchange rates) on society, production and the macro-economic context. It also suggests the need to institute comprehensive policies to address the effects of acute climate variability in agriculture, since in a context of climate change, it becomes an additional contributing factor in escalating agricultural price volatility. The long-term trend of higher agricultural commodity prices affords Latin America and the Caribbean an opportunity for its agriculture, given the region’s availability of land, which can be incorporated into production, and its relative abundance of water, biodiversity and human resources on which it could capitalize. The report recommends exploiting this potential through productive development policies aimed at promoting food production, increasing the role of family agriculture in the process and fostering the sustainable use of natural resources. he objective must be to improve the contribution made by agriculture and its related activities to income generation and job creation. It further recommends promoting ranching, aquaculture, and community forest development in the context of family agriculture by designing alternative schemes that guarantee sustainable food production and contribute to food and nutritional security. T he report emphasizes that countries benefiting from rising agricultural commodity prices should seize the moment to promote structural change as a means of diversifying the productive structure of the economies. It further recognizes that bridging the technological gaps that persist in the region in the agricultural arena will release the significant potential it has to enhance productive performance and, thereby, food production. Additional resource allocation for research, development and innovation and an improved investment climate for agriculture and related activities are therefore considered to be of the essence. We consider the reduction of price volatility and the prevention of recurring food crises to be an issue that engages global responsibility. Certain decisions must be taken in international fora. Examples are the proposed establishment of a world emergency reserve and a virtual reserve, which have not been addressed up to now. Similarly, the response to the proposal to regulate the basic commodities market and cushion the effect of speculation on food price increases has been slow. The World Trade Organization (WTO) has recommended a Special Safeguard Mechanism for developing countries to enable them to address situations where there are sudden downturns in agricultural prices or substantial rises in imports, which have a negative impact on rural development. Discussion of this mechanism is, however, at a standstill. It is extremely important to avoid punishing food importing countries by aggravating their vulnerability or introducing major distortions on world food markets. he countries of the region should ensure more coordinated participation in international fora and act in unison with respect to initiatives that integrate policy tools for regional benefit. As in the two previous editions, the document includes a special report. he special report in this edition covers the use of information and communication technologies in agriculture. To enhance their impact, the countries should increase rural connectivity and promote access to these technologies and their use in their national institutional framework (e-government, digital agenda, etc.). These measures are essential in bringing down the costs of the technologies and attenuating the resistance of rural agents to introducing them in agribusiness management and production. The document maintains that enhancing the potential of information and communication technologies to narrow the technological gap and improve operating working conditions, production and market access in the rural milieu must also be an imperative in public policies aimed at shoring up the development of agriculture and furthering its contribution to the development of the countries of the region.