|News & Views - A 2020 Vision for Food, Agriculture, and the Environment - March 1999: Are We Ready for a Meat Revolution? (IFPRI, 1999, 8 p.)|
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|Agricultural Aid to the Developing World Can Reap Big Harvests in the United States|
|The Myths, Risks, and Benefits of Globalization|
As the impacts of the Asian crisis reverberate around the globe, it is becoming increasingly clear that developing countries can have major effects on U.S. exports. On December 16, 1998, a panel of experts at a 2020 Policy Seminar at IFPRI pressed home the need for the United States to increase its investment in agriculture in the developing world. August Schumacher, Jr., undersecretary for farm and foreign agricultural services at the U.S. Department of Agriculture; Jack Eberspacher, chief executive officer of the National Association of Wheat Growers; and Per Pinstrup-Andersen, IFPRI's director general, discussed the current under investment before some 120 attendees.
In recent years, the United States typically has sent half of its agricultural exports to developing countries, but exports to Asia have fallen precipitously since the crisis broke. In fact, U.S. farm exports to Asia were expected to fall by about 15 percent in 1998. "Washington state growers sold more apples to Indonesia than to all of Europe, but now that market has virtually collapsed," noted Undersecretary Schumacher. The effects on the American farmer - not to mention the overall U.S. trade balance - could be severe. "Wheat growers are really feeling the pinch," said Eberspacher, "and that is combined with a twenty-year low for wheat prices."
Largely because of this crisis, President Clinton announced a US$6 billion aid package to farmers in 1998, but while the aid is welcome, many of the root causes of the crisis remain. Schumacher warned that, in addition to the Asian crisis, the collapse in Russia combined with an expected softening in Latin American markets could make 1999 "a very tough year." Projections show that by 1999 global trade in agricultural commodities will have declined by nearly US$50 billion, or 15 percent, from its high-water mark in 1996, he added.
Growth in U.S. exports is inextricably linked with rapid recovery from the Asian crisis and faster growth in the rest of the developing world. As Pinstrup-Andersen pointed out, "We are forgoing an important opportunity by not assisting agriculture in developing countries, because effective aid in this area can lead to greater exports from developed countries, including agricultural exports."
An IFPRI study has shown that on average, for each dollar increase in their farm output, developing countries spend 73 cents on new imports, including 17 cents on agriculture, of which 7 cents goes to cereal imports. Yet investments in developing-country agriculture still receive little attention from donor countries. "All ships rise when we stimulate appropriate targeted research in developing-country agriculture," said Schumacher.
The panelists agreed on the importance of rekindling awareness in the global nature of this critical situation, particularly in the developed world, where some people live under the illusion that the Asian effects are local, not global. They also acknowledged that developing countries offer the greatest opportunities for growth in U.S. agricultural trade: "Aid to developing-country agriculture, combined with sound policies in the developing countries themselves, can be a win-win proposition," concluded Pinstrup-Andersen.
2020 Vision Committee Member Elected President of Nigeria
Olusegun Obasanjo, a member of IFPRI's 2020 Vision International Advisory Committee, was elected president of Nigeria on February 27. In 1990 Obasanjo won the Africa Prize for Leadership for the Sustainable End of Hunger from The Hunger Project. Obasanjo, who served as president of Nigeria from 1976 to 1979, will assume office on May 29.