Masthead graphic based on a painting by Gudrun Thriemer.

Tuesday, July 04, 2006

OECD Notes: "Third World demand to fuel global farm trade - study," Mining Weekly Online, July 4, 2006.

World agricultural production will expand slowly but steadly over the next decade, fuelled by rising Third World consumption and imports while developed countries focus more on quality, a major study said on Tuesday.

The study, co-written by the Organisation for Economic Cooperation and Development (OECD) and the United Nations' Food and Agriculture Organisation (FAO), said farm production was shifting away from developed nations, especially for bulk items....

"With their increasing affluence and faster population growth ... the countries in the non-OECD region are expected to continue to experience a more rapid increase in consumption of agricultural products than countries in the OECD area," the OECD-FAO study said....

"Developing countries, and particularly Brazil, India and China, are becoming the new epicentre of forces shaping world agricultural production and trade, a tendency which is expected to accelerate over the outlook period," the OECD-FAO study said.

Rises in agricultural exports were a key factor driving economic growth in both Argentina and Brazil, which was expected to exceed that of most OECD countries, the study said.

"Developing countries shaping future of world agriculture trade, says joint OECD-FAO report," OECD, 04-Jul-2006.

Production and consumption of farm products are expanding faster in developing countries than in developed economies. But a new, joint report by the OECD and the UN’s Food and Agriculture Organisation says productivity growth in the poorest nations is not keeping pace with the food needs of their rising populations.

"OECD governments gave € 225 billion in support to farmers in 2005," OECD, 21-Jun-2006.

Government support to farmers in OECD countries totalled € 225 billion in 2005, representing 29% of farm receipts. The proportion is unchanged from the previous year and only marginally lower than the 30% reported in 2003, according to a new OECD study, Agricultural Policies in OECD Countries - at a Glance.

The study says that 59% of government support last year was in the form of measures to boost the prices of farm products. These include import tariffs, export subsidies and domestic output subsidies which, says the OECD, badly distort production, markets and trade.

Ken Ash, the OECD’s deputy director of food, agriculture and fisheries said, “If governments break the link between support and production and establish better links between support and what they are trying to accomplish – for instance, environmental sustainability or rural community well-being, they will improve the performance of domestic policies and avoid negative impacts on world markets.”

"FDI into OECD countries jumps 27% in 2005," OECD, 28-Jun-2006.

Foreign direct investment (FDI) into OECD countries jumped 27% to reach USD 622 billion in 2005, up from USD 491 billion in 2004 and USD 465 billion in 2003, according to the latest estimates from the OECD.

Outside the OECD area, China continues to hit new records. In 2005 its total FDI inflows reached USD 72 billion – their highest level ever, and world wide exceeded only by the United Kingdom and United States.

"Economic survey of Poland," OECD, 28-Jun-2006.

Poland’s growth performance since 2004 suggests that the process of catch-up with higher-income countries has been renewed. But an improved balance of macroeconomic policies and further efforts to improve structural policies are needed to sustain and accelerate convergence.

Poland's "labour market performance is the worst in the OECD, with both low participation and high unemployment." public expenditure is not well controlled. the still-important role of the public sector in the economy and education.GDP growth has been below potential for several years.

"Economic survey of Canada," OECD, 26-Jun-2006.

The Canadian economy has performed well in recent years, but improving productivity performance will be crucial to achieving durable prosperity gains. In addition, it will be important to ensure that the federal and provincial fiscal arrangements, as well as social policies, are on a sustainable path.

The Economic Survey of Canada recommends eliminating tax breaks to Labour-Sponsored Venture Capital corporations, lifting general literacy and life skill levels, and lowering the marginal effective tax rate on capital. The METR is a summary measure of the tax that would be paid on new investment. Canada has the highest METR of all OECD countries. The report notes that "taxes on total capital assets of firms above a certain threshold are still a feature in Canada....These taxes were originally motivated by a desire to ensure that all corporations do pay tax, even those managing their finances so as to shift profits to another jurisdiction. But they bear no relationship to the profitability of the business and discourage expansion" (OECD Canada). There is no mention of tax havens, which was a serious issue for the Conservatives when they were in opposition. Getting rid of the tax on total capital assets would entail "some loss of government revenue," but OECD reckons that the shortfall could be made up in the long run by heavier taxes on consumers.

"OECD Work on G8 Priorities for 2006 Summit," OECD, from 15-Jul-2006 to 17-Jul-2006.

This year's G8 Summit takes place in Saint Petersburg, Russia. The top priorities laid down by President Vladimir Putin are global energy security, education and fighting infectious diseases. Lots of links to OECD work on these and other issues to be discussed at the 2006 Summit.

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