OECD Observer No 306 Q2 2016 by OECD

No 306 Q2 2016

Agriculture

www.oecdobserver.org

Agriculture spotlight: A new policy paradigm for better lives Towards a productive, sustainable and resilient global food system OECD Observer Roundtable A rural trip through time Innovating agriculture: Growing small ideas into game-changers Water: Itâ&#x20AC;&#x2122;s all or nothing Financing democracy Nano worries Why top earners make so much

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CONTENTS No 306 Q2 2016

18 19

READERS’ VIEWS 2

Gig economy; Silicon shocks; Modern slavery; Twitterings

EDITORIAL 3

OECD.ORG

Agriculture: A new policy paradigm for better lives Angel Gurría, Secretary-General of the OECD

20 21

NEWS BRIEF 4-5 Health workers surge; Development aid rises; Stringent environmental laws work; Soundbites; Economy; Country roundup; Silvana Koch-Mehrin; Other stories; Plus ça change

ECONOMY AND SOCIETY

25 26 27

9 9 10 11

Top earners: Why did the 1% get so rich? Brian Keeley, Author, OECD Insights Financing democracy Nano bodies Helping struggling students to succeed BlogServer

SPOTLIGHT ON AGRICULTURE

30 32

Towards a productive, sustainable and resilient global food system Stephane Le Foll, French Minister of Agriculture, Agrifood and Forestry, and Thomas J Vilsack, US Secretary of Agriculture, and Co-Chairs of the 2016 OECD Agriculture Ministerial Meeting Roundtable on agriculture, with: Alexander Brewster, Farmer and Nuﬃeld Scholar 2016; Carmel Cahill, Deputy Director, OECD Trade and Agriculture Directorate; Ashok Gulati, Infosys Chair Professor for Agriculture at the Indian Council for Research on International Economic Relations (ICREIR); Handewi Purwati Saliem, Director, Indonesian Center for Agriculture Socio Economic and Policy Studies (ICASEP); Phil Hogan, European Commissioner for Agriculture and Rural Development; Thomas Kirchberg, Member of the Executive Board, Südzucker AG, and Vice-Chair of the BIAC Food & Agriculture Committee

ISSN 0029-7054 Tel.: +33 (0) 1 45 24 9112 Fax: +33 (0) 1 45 24 82 10 sales@oecd.org Founded in 1962. The magazine of the Organisation for Economic Co-operation and Development OECD Publications 2 rue André Pascal 75775 Paris cedex 16, France observer@oecd.org www.oecd.org

Why top earners make so much, page 7

Reviews: A rural trip through time; Water: It’s all or nothing Most popular Special Focus: Agriculture Review: Innovating agriculture: Growing small ideas into game-changers; Crossword

DATABANK

www.oecdobserver.org ©OECD April 2016

Better policies for agriculture: Ministerial chairs’ summary Japan tragedy: Five years later; March on gender–as new portal is unveiled; Malene Rydahl Recent speeches by Angel Gurría; List of OECD Ambassadors Calendar

BOOKS

Other stories; Multimedia Inclusive business can help solve the sustainability equation Noah Beckwith, Development Finance Practitioner

Agricultural production grows strongly–as support trends downwards Main economic indicators Asia’s riskier outlook

Nano bodies, page 9

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Published in English and French by the OECD EDITOR-IN-CHIEF: Rory J. Clarke PLANNING AND DEVELOPMENT EDITOR: Diana Klein EDITORIAL ASSISTANT, WRITER: Neïla Bachene LAYOUT: Design Factory, Ireland ILLUSTRATIONS: Charlotte Moreau, Stik, David Rooney, André Faber PHOTO RESEARCH: Rory J. Clarke ADVERTISING MANAGER: Aleksandra Sawicka PRINTERS: SIEP, France; Chain of Custody certiﬁed. Applications for permission to reproduce or translate all or parts of articles from the OECD Observer, should be addressed to: The Editor, OECD Observer, 2 rue André Pascal, 75775 Paris, cedex 16, France.

Roundtable on agriculture, page 15

All signed articles in the OECD Observer express the opinions of the authors and do not necessarily represent the oﬃcial views of the OECD or its member countries. Reprinted and translated articles should carry the credit line “Reprinted from the OECD Observer”, plus date of issue. Signed articles reprinted must bear the author’s name. Two voucher copies should be sent to the Editor. All correspondence should be addressed to the Editor. The Organisation cannot be responsible for returning unsolicited manuscripts. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

Readers’ views members of the #EU? Hardly #impartial

We welcome your feedback. Send your letters to observer@oecd.org or post your comments at www.oecdobserver.org or www.oecdinsights.org

observer then? #tainted Soﬁa Falk @soﬁafalk When the general secretary of @OECD left the room, most of the male audience did as well...#IWD2016 Ƃ #OECD Judith bogner @judithbogner I resonate with @OECD’s #BetterLifeIndex. It makes so much more sense than #GDP as measure of a country’s wellbeing http://wef.ch/1nNDqdG John Devlin @jvdevlin

initiatives by themselves are not enough

“But will they be good jobs?” I suppose it

to make fundamental changes (not for the

depends on how each individual deﬁnes

ﬁrst time). The linkage with subsidies and

James Murray @James_BG

what a good job is. That’s the thing about

credit schemes, arbitration procedures and

Fascinating @OECD report dismisses

work–whether you’re talking about the gig

campaigns transparency obligations etc.

argument environmental policies harm an

economy, freelancing, full-time, part-time,

makes these codes of conduct meaningful.

economy overall http://www.businessgreen.

It would be worth it to spend more time to

com/bg/analysis/2450614/has-the-oecd-just-

develop a strategy for those companies and

rubbished-the-carbon-leakage-argument

or whatever else. The individuals who choose the work are the sole arbiters of what they determine to be a “good job”. That’s the beauty of the world we live in today. We can all determine for ourselves what we consider to be the trappings of a “good job”. For some, it is location independence. For others, it’s ﬂexible hours or the ability to work the midnight shift (or the day shift, or shifts that span multiple days, etc.). Some people prefer the opportunity to work alone, while others like to function as a member of a collaborative team. There are those who prefer pounding keyboards over pounding nails. Bottom line: What constitutes a “good job” is in the eye of the beholder.

Guy, commenting on “It’s a gig, but is it a job?”, from OECD Observer No 305, posted on www.medium.com, March 2016

Silicon shocks

regions that are lagging behind. At some point, the companies that are at the front of these debates are as far as they can go in today’s competitive market. Maritime treaties have adopted the principle “no more favourable treatment for non-parties” and this

modern slavery. It shows that voluntary

laws do not hurt export competitiveness @OECD study http://www.oecd.org/economy/ tougher-environmental-laws-do-not-hurtexport-competitiveness.htm Malene Rydahl @MaleneRydahl The full transcript of my conference

schemes, especially those companies that

@OECD on #happiness inspired by the

have no direct relationship with consumers.

Danes ! Thank you @OECDObserver

All the supply chain initiatives in the world

#bigday https://twitter.com/oecdobserver/

will hardly make a difference if producers do

status/705756795449577472

not receive a good price for their products and if workers are not paid a living wage.

Sander van Bennekom, commenting on “Tackling modern slavery in global supply chains”, http://oecdinsights.org March 2015

Global Irish @GlobalIrish Great article by @OECDObserver on Dublin’s Silicon Docks and the thriving tech scene in Ireland - well worth a read http://www.oecdobserver.org/news/fullstory. php/aid/5442/Banking_on_Silicon_Docks.html

initiatives taken in recent years to prevent

Good to hear that tougher #environmental

bonus for not participating in the proposed

Twitterings

Interesting and up to date overview of all the

WWFEU @WWFEU

social responsibility debate. There still is a

companies with ofﬁces in Ireland.

Modern slavery

go green for #StPatricksDay

principle could also be useful in the corporate

I had no idea that there were so many tech

Chace Oldmixon, commenting on “Banking on Silicon Docks”, from OECD Observer No 305, posted on www. medium.com, February 2016

Great to be there tonight to see the @OECD

Gig economy

Phillip Jones @chesterwriter Just a coincidence that of the #OECD’s 34 #member states, 20 of them are also

an unpaid act @anunpaidact @OECDObserver “underpaying or overpaying interns loses sight” of purpose of an internship. What about when they’re not paid at all like @UN?

Follow us on Twitter @OECDObserver Comments and letters may be edited for publishing. Send your letters to observer@oecd.org or post your comments at these portals: www.oecdobserver.org, www.oecdinsights.org, or at the other OECD portals on this page.

Agriculture: A new policy paradigm for better lives All countries share a common aim: to feed a growing population while assuring decent livelihoods and safeguarding our planet Angel Gurría Secretary-General of the OECD

Food is a basic requirement of life and fundamental to our well-being. Nevertheless, as humanity becomes more urbanised, agriculture and farming tend to be neglected. This is dangerous. The OECD Agriculture Ministerial meeting taking place on 7-8 April aims precisely at preventing this by helping deﬁne a new policy paradigm for a more productive, competitive and sustainable food system for all. It is often said that civilisation sprang from farming. Thus, our future depends on getting it right in agriculture. The global population is expected to reach some 9 billion by 2050. Diets are also likely to change in favour of more animal protein, such as meat and dairy products. Some studies predict that average meat consumption will increase from 32 kg per capita today to 52 kg in 2050. This will have implications for producers and consumers, as well as for land use, transport, health, and more. Meanwhile, undernourishment must be vanquished through improvements in the access, availability and use of food. There are environmental challenges, too. Agriculture already uses 70% of the world’s fresh water, but will have to cope with less in the future because of scarcity and competing demands from urbanisation, the energy sector and industry. Some major farming regions–in Australia and the US, or in China and India, for example– already face severe water stress. Biodiversity is also under threat as farmland and cities expand, while soil degradation is a widespread concern. Then there is climate change, which will force production patterns and farming communities everywhere to adjust as droughts, ﬂoods and exceptional temperatures become more frequent, chaotic and disruptive. It also compels agriculture to reduce its greenhouse gas emissions, which account for a quarter of the total when emissions from land use changes are included.

agriculture averaged 1.7% per annum over the decade to 2012. Moreover, the sector’s environmental impact per tonne produced has fallen among OECD countries, with data showing falls in both nitrogen and phosphorus balances and pesticide sales, for example. Moreover, in developing regions, there is wide scope to apply already known technologies and methods, such as precision farming and drip irrigation, while emerging innovations in approaches and equipment hold potential for productivity growth and sustainability in advanced and less advanced economies alike. How can governments harness the strengths of the agricultural sector while addressing its barriers and weaknesses, so that it can fulfil future needs? At their meeting in April, agriculture ministers from around the world will try to find solutions to these challenges and identify emerging opportunities. Governments need to reform policies, particularly subsidies promoting specific products or fertilisers, that induce farmers to produce the wrong crops in the wrong place, with the wrong inputs. These include planting water-intensive crops in dry areas or supplying staple foods to already saturated markets, as well as transforming fragile land, such as forests, into crop production or grazing. The focus should be on strengthening innovation systems and making sure that farmers have the knowledge, training and skills they need to adopt appropriate and sustainable production methods. Policy makers should also step up efforts to make domestic and global markets more effective and accessible, so that produce can be delivered where it is needed and competitive farmers can be properly rewarded. This means investing in transport and communications, as well as in clear and effective legal and administrative frameworks. It means agreeing to safeguards on standards and quality to bolster trust and confidence in markets. It means adopting broad and inclusive rural development strategies that enhance farming as a livelihood, while enabling people to quit the land to take up opportunities in other sectors, should they wish to do so. It means more collaboration with public and private entities, as well as regions and countries, working together towards better outcomes. Change is not easy, particularly in agriculture, where habits and practices are formed over generations, and where small and large farmers defend hard-won interests. Only a concerted, evidencebased dialogue, which highlights the costs and benefits of new approaches and is clear about the impacts on all sides, will convince people to change. With such engagement, policy makers can then set the directions, monitor progress and stay the course.

In short, agriculture must change, and while the nature and magnitude of that change may vary by location and level of development, all countries share a common aim: to feed a growing population while assuring decent livelihoods and safeguarding our planet.

If we are to continue feeding ourselves sustainably, eradicate undernourishment and mitigate the environmental impact of farming, we need a long term vision for agriculture. The OECD will contribute to that vision and, with facts, expertise and co-operation, help sow the seeds of better agricultural policies for better lives.

Fortunately, the sector shows encouraging potential globally. Agricultural productivity growth is relatively robust compared with other sectors; total factor productivity (TFP) growth in global

www.oecdobserver.org/angelgurria www.oecd.org/about/secretary-general @A_Gurria

OECD Observer No 306 Q2 2016

News brief The number of doctors and nurses has reached an all-time high in the OECD area, according to a new report entitled Health Workforce Policies in OECD countries: Right Jobs, Right Skills, Right Places, issued in March. Some 3.6 million doctors and 10.8 million nurses were working in OECD countries in 2013, up from 2.9 and 8.3 respectively in 2000. Jobs in the health and social sector now account for more than 10% of total employment in many OECD countries. The surge in the number of doctors has been particularly sharp in Korea, Mexico and Turkey, from relatively low levels in 2000. As for nurses, their number has increased in nearly all OECD countries. Yet, most health workers report a mismatch between their skills and their job requirements. Reforming health

Development aid rises Development aid totalled US$131.6 billion in 2015, representing a rise of 6.9% from 2014 in real terms as aid spent on refugees in host countries more than doubled to US$12 billion. Indeed, OECD Development Assistance Committee (DAC) rules allow member countries to count certain refugee-related expenses as official development assistance (ODA) for the first year after their arrival. “Countries have had to find large sums to cover the costs of an historic refugee crisis in Europe, and most have so far avoided diverting money

Economy Composite leading indicators point to signs of easing growth in the OECD area. These anticipate trends and turning points in upcoming trends, based on the likes of order books, building permits and longterm interest rates. The leading indicators point to easing growth in Canada, Japan, the UK and the US. Stable growth momentum is anticipated in Italy and in the Euro area. The outlook for China is still pointing to tentative signs of stabilisation, but to a loss of steam in Russia and Brazil.

workers’ training , as well as using ﬁnancial incentives to promote a more even distribution of health workers and services, would help better respond to people’s changing health needs.

Soundbites Gross domestic product (GDP) is increasingly a poor measure of prosperity. It is not even a reliable gauge of production.

See www.oecd.org/health/

The Economist, 29 April

Let’s relax and learn to live with low productivity. Headline, The Sunday Times, 6 March

Climate is a challenge for civilisation. We will not achieve an energy transition without businesses, though we will have to do so against the interests of some of them, particularly those tied to fossil fuels that must generally stay in the ground. ©Jessica Rinaldi/Reuters

Health workers surge

from development programmes”, OECD Secretary-General Angel Gurría said. Only six of the 28 DAC countries (Denmark, Luxembourg, The Netherlands, Norway, Sweden and the UK) met a United Nations target to keep ODA at or above 0.7% of GNI. See www.oecd.org/dac/

Stringent environmental laws work Countries that implement tough environmental policies do not lose export competitiveness when compared against

Real GDP growth in the OECD area slowed markedly to 0.2% in the fourth quarter of 2015, down from 0.5% and 0.6% in the previous quarters. Economic growth slowed to 0.2% in the US and decelerated marginally in France and Italy to 0.2% and 0.1% respectively. GDP growth was stable at 0.3% in Germany and picked up marginally to 0.5% in the UK, while contracting by 0.4% in Japan. OECD-area inﬂation rose to 1.2% in January 2016, compared with 0.9% in December 2015. Energy prices fell slightly by 5.4% in

Pascal Canﬁn, CEO, WWF France, Les Inrocks, 29 February (our translation)

The outcome of individual economic freedom can be great inequality, which hollows out realistic notions of democracy. Martin Wolf, Financial Times, 9 February

countries with more moderate regulations, according to a new OECD study. The ﬁndings suggest that emerging economies with strong manufacturing sectors like China could strengthen environmental laws without denting their overall share in export markets. Highpollution or energy-intensive industries like plastics and steel making would suffer a small disadvantage from a further tightening of regulations, but this would be compensated by growth in exports from less-polluting activities. See www.oecd.org/economy/greeneco/

the same period. Excluding food and energy, the OECD annual inﬂation rate remained stable at 1.9% in January. The unemployment rate in the OECD area fell by 0.1 percentage point to 6.5% in January 2016, 1.6 percentage points below the January 2013 peak. Some 39.9 million people were out of work, 9 million less than in January 2013, but still 7.4 more than in April 2008. In the euro area, the unemployment rate declined by 0.1 percentage point, to 10.3%, continuing its downward trend. As for trade, total (seasonally adjusted)

NEWS BRIEF

more from share dividends and capital

was made up of executives in non-

especially in English-speaking countries,

market gains.

ﬁnancial businesses, like Apple and

a growing slice of their income has come

Walmart. Around 18% were employees–

not in the form of a monthly salary

Changing pay norms: Societies differ in

and not necessarily executives–in banks

payment but as valuable stock options.

the extent to which they accept large

and ﬁnance houses. In the UK, the

The idea of paying managers in stock

income differentials. Implicit in these

ﬁnance crowd accounted for about 21%

options arose as a response to “the

social norms is a trade-off: Stick to

of top earners and in France about 15%.

agency problem”–when you hire someone

society’s expectations and you preserve

to run your business, how can you ensure

your reputation; breach the expectations

they act in your interests and not their

and you’ll earn more but hurt your image.

own? Most shareholders have a tenuous

But these norms can change over time

relationship, at best, with the ﬁrms in

and their inﬂuence can vary markedly.

which they hold shares, so it can be

In much of the post-war period, there was

The fact that so many of the top earners

almost impossible for them to oversee

an expectation that income differentials

work for a living is striking. Back in the

management and ensure it’s working in

would be–by today’s standards–relatively

early 20th century, when income

their interest. Giving managers a stake in

narrow. But in the 1980s these norms

inequality last reached the levels we’re

a rising share price, it’s argued, helps

began fading, especially in English-

seeing today, much of the income of top

align their interests with those of

speaking countries. By contrast, they

earners came from rents on land and

shareholders. Since the ﬁnancial crisis,

still remain relatively strong in much

property as well as income from

this line of thinking has come under

of continental Europe, which has

investments in government bonds. By

ﬁre. […]

certainly played a role in limiting top

The rapid expansion of ﬁnance has contributed to income inequality in a number of ways

contrast, today’s top earners are more

incomes there.

likely to be either a salaried employee,

“Financialisation”:

for example an executive like Morgan

[…] The rapid expansion of ﬁnance has

Tax and pay: The past few decades

Stanley chairman James Gorman, or a

contributed to income inequality in a

have also seen substantial falls in top

company founder, like Facebook’s Mark

number of ways, the most obvious being

tax rates in many developed countries.

Zuckerberg.

that ﬁnancial sector workers tend to be

Across OECD countries, the average top

very highly paid. In Europe, they account

statutory tax rate fell from 66% in 1981

Why do the 1% earn so much? There’s

for 1 in 5 of the top 1% of earners even

to 41% in 2008. High earners have

no single answer to why the 1% earn so

though, overall, they account for only 1

beneﬁted from other changes in tax

much. Multiple factors have contributed

in 25 of the total workforce. These high

regimes, too. Tax on property and on

to the rise of top incomes, and the

salaries might be justiﬁed if such workers

inheritances has tended to fall, allowing

signiﬁcance of each of these is not the

had very high levels of productivity.

high earners to build up wealth. […]

same in every country.

However, comparisons with similarly skilled workers in other sectors suggest

“Superstars” in a global economy:

this is not the case. Financial workers–

The labour market for high-skilled

particularly the highest earners–thus

workers has gone global, especially in

seem to enjoy a wage premium over other

sectors like ﬁnance, where ﬁrms in

comparable workers.

ﬁnancial centres like London and

Singapore may be competing to attract

“Too much ﬁnance” fuels income

the same people. In this competitive

inequality in other ways, too. The wide

labour market, employers seek to attract

availability of credit allows high earners

not just good employees but the very

to increase their borrowings, allowing

best. That helps explain why there can

them to gain more from investment

be a wide pay gap between those seen

opportunities than people on lower

as being at the very top of their game

incomes. In addition, higher earners

and those just behind.[…]

also beneﬁt from the expansion of stock

*Extract adapted from Chapter 3 of Income Inequality: The Gap between Rich and Poor, by Brian Keeley, 2015, OECD Insights series, OECD Publishing, http://dx.doi.org/10.1787/ 9789264246010-en See also Denk, Oliver (2016), “Are you in the 1%?” on OECD Insights blog, http://oe.cd/1eV Denk, Oliver (2015), “Who are the top 1% earners in Europe?”, OECD Economics Department Working Papers, No 1274, OECD Publishing, http://dx.doi. org/10.1787/5jrp1g39gkzw-en Visit http://www.oecd.org/inequality.htm

ECONOMY AND SOCIETY

Financing democracy

Nano bodies

What do sunscreen, deodorant, smartphone batteries and tennis rackets have in common, besides being everyday items? They are all likely to contain nanomaterials. These very small objects– from 1nm to 100nm–are increasingly used for industrial, commercial and medical purposes. The number of products containing them leapt ﬁvefold from 2006 to 2011. Nanotechnology may be revolutionary, but is not without risks.

Finance is a necessary component of the democratic process: money enables the expression of political support, as well as competition in elections. Yet, money may also be a double-edged sword, by becoming a means for powerful interests to impose their influence on policies and people. For instance, access to public procurement has been used by elected representatives to reward corporations that backed their campaigns. Highspending areas that require long-term investments, such as infrastructure and city planning, are particularly vulnerable to the risk of political capture. This may lead to policies that do not prioritise the public interest, and undermine public trust in government. Financing Democracy points to loopholes in existing regulations. In particular, many countries struggle to define and regulate “third-party” campaigning by organisations or people who are not political parties or candidates–charities, faith groups, private firms and people. Only a handful

of countries have regulations on thirdparty campaigning. Globalisation further complicates this situation: more and more foreign companies with domestic business interests are able to inﬂuence electoral outcomes, which makes disclosure of donor identity all the more important. Half of OECD countries, including France, Korea and Mexico, ban anonymous donations to political parties, and 38% ban anonymous donations to parties above certain thresholds. Only 16 OECD countries have campaign spending limits for both parties and candidates. Such limits can prevent a spending race and give candidates a more even chance.

Because they can more easily penetrate skin and cells than larger compounds, nanomaterials may carry serious health

Institutions responsible for enforcing political finance regulations should have a clear mandate, adequate legal power and the capacity to impose sanctions, the report recommends. Other measures countries should think of include: design sanctions against breaches of political finance regulations that are both proportionate and dissuasive, strike a balance between public and private political finance and aim for fuller disclosure with low thresholds, while taking privacy concerns of donors into consideration. Neïla Bachene OECD (2016), Financing Democracy: Funding of Political Parties and Election Campaigns and the Risk of Policy Capture, OECD Public Governance Reviews, OECD Publishing, http://dx.doi. org/10.1787/9789264249455-en

©Alamy

Running for elected ofﬁce is a worthy but often costly business, and election campaigns increasingly rely on funding. But at what price for the political system? What are the democratic risks associated with the funding of political parties and their election campaigns? How might regulation address those risks and tip the balance in favour of the interests of all citizens, and not just the well-off? Financing Democracy sheds light on these key–and somewhat taboo–questions.

The ever-increasing amounts of nanomaterials going into household waste pose a serious threat to human health and ecosystems. Indeed, engineered nanomaterials are entering landfill sites, incinerators and wastewater treatment facilities that are not designed to filter out particles as tiny as a millionth of a millimetre in size. As a result, nanoparticles are ending up in sewerage sludge used as agricultural fertiliser and in sewage plant effluent that flows into rivers and lakes, as well as in recycled goods.

OECD Observer No 306 Q2 2016

risks from cancer causing properties in lungs and toxic effects to the nervous system; their antibacterial properties could also harm ecosystems. And yet, waste containing nanomaterials is disposed of along with conventional waste, with no special precautions or treatment. While state-of-the-art waste treatment plants may collect a large share of nanomaterials from waste, less efﬁcient processes used in much of the world mean a signiﬁcant amount is likely released into the environment as exhaust gas from incineration, as ash applied on roads, as treated wastewater or leaches into soil and water sediment. The presence of nanomaterials in the dried and composted wastewater sludge that is often spread on farmland as fertiliser poses a particular concern. In

France, half the national wastewater sludge is used for agricultural fertilisation. The potential transformation of engineered nanomaterials in soil, their interactions with plants and bacteria and their transfer to surface water has never been studied in depth. A report, Nanomaterials in Waste Streams calls for more work on the risks and impacts of nanomaterials entering waste streams. The report evaluates four waste treatment processes–recycling, incineration, landﬁlling and wastewater treatment–based on research carried out in Canada, Germany, France and Switzerland– and recommends the adoption of best available technologies and state-of-theart processes to reduce risk. That is why there are serious concerns about the effectiveness of waste treatment processes

that use sub-standard technologies, such as incinerators with insufficient flue gas treatment or uncontrolled landfills. More research is needed into the type and amount of nanomaterials entering waste streams, what happens to them inside treatment facilities and the potential impacts of residual waste containing nanomaterials. The OECD also urges greater safety measures for workers at recycling facilities. Neïla Bachene References OECD (2016), Nanomaterials in Waste Streams: Current Knowledge on Risks and Impacts, OECD Publishing Kearns, Peter (2010), “Nanomaterials: Getting the measure”, OECD Observer No 279, May Visit www.oecd.org/environment/waste/

Helping struggling students to succeed More than a quarter of 15-year-old school students in OECD countries fail to achieve the most basic level of proficiency in mathematics, reading and science. In other countries, the share is often much larger. Such poor performance at school has severe consequences for individuals: low-performing students tend to have less motivation and self-confidence, will skip classes and perhaps miss days at school. In the long run, this affects their lives and compromises a country’s economic and social prospects. To address this, Low-performing Students: Why they Fall Behind and How to Help them Succeed looks at family background, education career and attitudes towards school. Low performing-pupils are defined as students who fail to reach level 2 in the OECD’s worldwide PISA survey of competence among 15-yearolds, which means they typically struggle to understand instructions on, say, an aspirin bottle. In countries where educational resources are distributed

more evenly across schools, there is less incidence of low performance in mathematics, the report ﬁnds. Not surprisingly, teachers count, too: students whose teachers have low expectations of them or are often out are more likely to struggle at school. Though a few countries, such as Italy and Mexico, have managed to reduce their share of low performers in mathematics, overall improvements are rare. Good policies can have an effect, however, such as offering special programmes for vulnerable groups, such as migrants– in France, 30% of struggling students have an immigrant background,–or by gender. In Chile, for instance, 58% of low performers at school are girls. Involving parents formally in school management, for example through school boards, has proven its worth, with countries such as Japan showing the beneﬁts. Neïla Bachene

See www.oecd.org/pisa/ OECD (2016), Low-Performing Students: Why They Fall Behind and How To Help Them Succeed, PISA, OECD Publishing, http://dx.doi. org/10.1787/9789264250246-en

ECONOMY AND SOCIETY

BlogServer Understanding and managing the unequal consequences of environment pressures and policies Shardul Agrawala and Rob Dellink

The consequences of degradation of environmental quality as well as the consequences of environmental policies are typically unevenly distributed. In general, poorer countries and lower income households are more severely affected by environmental degradation and at the same time have less capacity to adapt. From OECD Insights. More here: http://oe.cd/1pw

The rise of the robots–friends or foes for developing countries? Johannes Jütting and Christopher Garroway

The doctor will see you now (if you turn on the video) Mark Pearson

An elderly man with cardiovascular disease tests his own blood pressure, and sends the results to an online application that his doctor can access. Another patient with depression living in a rural area far from health services tells a psychiatrist how he is feeling via a video connection. All of this occurs without the patients leaving their homes. From OECD Insights. More here: http://oe.cd/1pA

Europe’s top 1%: Who they are and how you get in Oliver Denk

Extreme inequality at the top of the earnings scale has been high and rising in countries around the globe. But who are the select few with the highest labour incomes? And what determines who they are? From OECD Ecoscope. More here: http://bit.ly/29OOfuG

Africapolis: Measuring urbanisation dynamics in West Africa Sahel and West Africa Club (SWAC) Secretariat

Africa is the least urbanised continent in the world but an urban transition is very much underway. This is particularly visible in West Africa where the number of urban agglomerations increased from 152 in 1950 to almost 2,000 in 2010. Between 2000 and 2010 alone, the urban population grew by over 40 million people, making towns and cities home to 41% of the region’s total population. From OECD Insights. More here: http://oe.cd/1pu

Resilience of economies to exogenous shocks Aida Caldera Sanchez and Giuseppe Nicoletti

Countries are subject to economic shocks originating from longterm trends such as demography and short-term events such as ﬁnancial crises, but healthy economies should be resilient to both. It is important to understand the factors that shape a country’s economic resilience, deﬁned broadly as a country ability to contain long and short-term vulnerabilities as well as its capacity to resist and recover quickly when shocks occur. Ideally, whatever the shock, policies should be such that they help the economy remain close to its welfare potential in a sustainable way, notably in terms of jobs, incomes and quality of life. From OECD Insights. More here: http://oe.cd/1pv

In January, the World Economic Forum meeting in Davos, Switzerland saw members of the global elite extolling the virtues of the so-called “4th industrial revolution”. The catch-all term, also known as “Industry 4.0,” ties together a wide range of cutting-edge digital technologies–such as 3-D printing, machine intelligence, the internet of things, cloud computing, and big data–into a vision of a future world of work. In this brave new world, smart factories will operate by automation with machines exchanging data seamlessly. The consequences for the work force in both developing and developed countries will be huge. From OECD Insights. More here: http://oe.cd/1hS

Learning by heart may not be best for your mind Alfonso Echazarra

Some of the greatest geniuses had remarkable memories. Mozart, according to legend, sat and listened to Allegri’s “Miserere”, then transcribed the piece of music, entirely from memory, later in the day. Kim Peek, the savant who was the inspiration for the blockbuster ﬁlm, Rain Man, memorised as many as 12,000 books. But unlike Mozart, who composed more than 600 works during his brief life, Peek was unable to distinguish between the relevant and the irrelevant, or discover hidden meanings and metaphors in the texts he had committed to memory. From OECD Education & Skills Today. More here: http://bit.ly/ 29saPEX

We can do better on education reform Andreas Schleicher

A generation ago, teachers could expect that what they taught would equip their students with the skills needed for the rest of their lives. Today, teachers need to prepare students for more change than ever before, for jobs that have not yet been created, to use technologies that have not yet been invented, and to solve social problems that we just can’t imagine. And many of the world’s social and economic difﬁculties end up on the doorsteps of schools too. From OECD Education & Skills Today. More here: http://bit.ly/ 2a1AYek These extracts from blogs are courtesy of OECD Insights, OECD Education & Skills Today, OECD Ecoscope, Wikigender, Wikiprogress and other content and social media platforms managed by the OECD.

OECD Observer No 306 Q2 2016

How do you measure

a Better Life? For nearly a decade, the OECD has been working to identify societal progress – ways that move us beyond GDP to examine the issues that impact people’s lives. The OECD’s Better Life Index is an interactive tool that invites the public to share their thoughts on what factors contribute to a better life and to compare well-being across different countries on a range of topics such as clean air, education, income and health. Over ﬁve million visitors from around the world have used the Better Life Index and more than 90 000 people have created and shared their personal Better Life Index with the OECD. This feedback has allowed us to identify life satisfaction, education and health as top well-being priorities. What is most important to you?

Create and share your Better Life Index with us at: www.oecdbetterlifeindex.org

The OECD Better Life Index enables you to rate countries according to the importance you give 11 topics. Each petal of the ﬂower represents one topic and the size of the petal the country’s rating for that topic.

Find out more about how life compares in OECD countries by ordering the book How’s Life? Measuring Well-Being. Available now on the OECD Online Bookshop: http://www.oecd.org/bookshop

SPOTLIGHT

Towards a productive, sustainable and resilient global food system

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Stephane Le Foll, French Minister of Agriculture, Agrifood and Forestry, and Thomas J Vilsack, US Secretary of Agriculture, and Co-Chairs of the 2016 OECD Agriculture Ministerial Meeting

The 2016 OECD Agriculture Ministerial meeting on “Better Policies to Achieve a Productive, Sustainable and Resilient Global Food System”, which we are honoured to serve as co-chairs, comes at an opportune moment. This is the ﬁrst time in six years that agriculture ministers will come together at the OECD to explore challenges and opportunities facing the global food system. Moreover, our meeting follows closely on the frameworks of the UN Sustainable Development Goals (SDGs) and the Paris Agreement on climate change, two agreements that will require substantial contributions from agriculture. We know that agriculture is the foundation for a promising global future. At this meeting, our task will be to build on progress that is already being made and to consider what policies could help us adequately feed a growing human population, protect our natural resources, and support the world’s farmers and rural citizens, all in the face of new challenges presented by a changing climate. Some of the keys to meeting these common challenges are already clear. Increasing productivity has long been a focus of policy makers, and sustainability has gained increased attention in recent years. In addition, more work remains to be done to improve the farming and food sector’s resilience when confronted by weather- and market-related shocks, to limit disease and sanitary risks, and to enhance agricultural trade. The opportunity is before us now to come together and discuss the strategies and policy packages for agriculture that we agree offer the best chances for moving forward and meeting the challenges of tomorrow. We know that international co-operation will be crucial to the success of our efforts. International co-operation on transparency is vital for supporting policy dialogue that reﬂects the best available information, especially in times of unusual market conditions. The multinational G20 Agricultural Market Information System, or AMIS, provides a good example of what can be achieved in this area. Agriculture’s contributions to climate change mitigation and adaptation efforts also require increased international co-operation and mutually reinforcing strategies to develop climate-smart management techniques and efforts like the 4 in 1 000 initiative to maintain and enhance soil carbon stocks. The frameworks of the UN SDGs and the Paris Agreement

on climate change provide operational targets to reach some of those challenges, but we will need a transition forward in several policy areas to integrate those efforts into a robust, resilient and competitive agriculture and food system. We will need to increase support for agricultural innovation in all its forms, including science and technology, education and training, and changes in farm management and structure. To facilitate this, we will need to encourage development of the digital economy and data openness related to agriculture and nutrition; increase investments in research and development and both top-down and bottom-up knowledge sharing and innovation systems; and continue support for the bioeconomy, including renewable biomass energy and materials. Trade based on open markets will be essential to ensure that commodities and food can be effectively distributed when and where they are needed, while promoting high environmental objectives, inclusive development and responsible business conduct. Domestic policies will be needed that do not shield producers from global markets, but provide a safety net during times of unexpected adversity and to adjust to changing demands. Rural economic development policies, tailored to promote growth in speciﬁc areas, will be needed to improve rural employment opportunities and revitalise rural areas. As we develop solutions, we will also need to promote the development of agriculture and food systems that are both competitive and responsibly managed. We must ensure that we meet the needs of the most vulnerable populations within each food system, address food loss and waste, and pay attention to the intersections of animal, plant, and human health. Comprehensive and consistent policy packages, developed with the broad support of local food and farm sectors, will be needed to achieve this range of goals. We anticipate that our upcoming discussions will allow us to learn from each other as we draw on our diverse national contexts and experiences. We recognise that the OECD’s robust research programme is already investigating many of these challenges and opportunities. But we expect the new paradigm we will discuss on 7-8 April to identify new areas for the OECD to study in depth. We will need a strong evidence base to design the best policy mixes that can achieve our shared goals, while considering the local context and conditions for successful implementation. We will want to see work that addresses the role of science and innovation in all its forms, the integration of environmental and climate performance, and a greater focus on sector-wide resilience that beneﬁts farms, rural communities, and consumers. Again, we want to express the privilege we feel in co-chairing this important meeting, and we look forward to our discussions. Together we can all lay the foundations for a resilient food and agriculture system for the future. French Ministry of Agriculture, Agrifood and Forestry http://agriculture.gouv.fr US Department of Agriculture www.usda.gov For co-chairs’ summary, see page 20

SPOTLIGHT

ROUNDTABLE ON AGRICULTURE

Roundtable on agriculture Agriculture faces a challenging future. The world’s population is rising and pressures on natural resources are mounting, while environmental issues such as climate change loom large.

Plant it! And let innovative businesses grow

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Alexander Brewster, Farmer and Nuﬃeld Scholar 2016*

The EU’s Common Agricultural Policy (CAP), in its current form, rewards lack of technical innovation, protects the primary producer from the marketplace and, by default, stifles any meaningful land churn or proactive farm succession. This protectionism has to stop in order to allow innovative and sustainable businesses to grow. Farm size will certainly increase, but this added efficiency is needed to keep European food production competitive. What needs to be done in practical terms? Plant it! All upland and other unproductive land should be redirected towards maximising carbon capture through ecological stability. A base level of agricultural support should be provided, with the focus of this reformed payment on water quality, and carbon capture and management. Savings from a reformed CAP budget should be redirected towards agricultural research into genetic progression and efficiency through plant and animal science. At present, most of the large investments in agriculture come from private limited companies in a relentless attempt to capture market share, with a race to the bottom in terms of sustainable agriculture.

The co-operative model as a route to market should be further developed to reduce the primary producer’s exposure to the commodities market; in the past this model of agricultural co-operation has helped lead to a standardisation of production and a higher farm gate value. A new model of co-operation would also aim to add environmental value to the market value. For example, a carbon tax, where a value of carbon exchange per kilo of output per hectare would be added to the cost of production, could favour local production, but with the overarching aim of reducing global food miles. The overall investment priority should be people, whether through investment in education in general or in the development of strategic groups delivering sustainable approaches through food and farming academies. A world population of 11 billion by 2100 is a sobering and challenging prospect. Sustainable innovation has to be encouraged and rewarded. Developments in agriculture are a slow process and achieving sustainable productivity growth has to start now. *Nuﬃeld Farming Scholarships Trust sponsors UK farmers and those working in associated industries and in rural industry, with a view to developing agricultural sector leaders and innovators. Visit www.nuﬃeldscholar.org

A paradigm shift to a long-term strategy is needed Carmel Cahill, Deputy Director, OECD Trade and Agriculture Directorate The production and input subsidies which governments have put in place over many years may now be exacerbating the problems agriculture faces. Across the 49 countries whose policies are regularly measured and monitored by the OECD, 67% of the support to farmers derives from

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In this OECD Observer Roundtable, we ask a range of experts and stakeholders: What innovations or new policies are needed to enable the farm and food sectors to deliver sustainable productivity growth?

Carmel Cahill direct price support, and production and input subsidies. Only a negligible share is invested in specific measures targeting sustainable productivity growth. A major shift in policies is needed, which will enable farmers to seize the opportunities that are opening up in a context of rising populations and incomes, and to respond to the challenges of scarce resources and climate change. What does this mean in practice? First, we need to carry out in-depth examinations of innovation systems, asking in particular whether the different sectors and actors are sufficiently joined up to be able to deliver on sustainable productivity growth. Second, we need to make sure that all the players along the food supply chain, from farmers to retailers, are aware of, and have the knowledge and training needed, to adopt sustainable production and business practices. Scarce natural resources need to be appropriately priced. Third, in a world where market, climate and resource-related risks abound, we need to devise risk management systems that clearly delineate the respective roles and responsibilities of farmers, markets and governments. We need to be careful not to crowd out private, market-led initiatives, and not to mask the need for adaptation by insuring the uninsurable. Lastly, we need to foster strong and competitive farm and food businesses by allowing necessary structural adjustment and creating an enabling business environment, especially in rural areas. This means ensuring, inter alia, wellfunctioning markets, finance, logistics and regulatory systems.

OECD Observer No 306 Q2 2016

SPOTLIGHT

OECD Observer Roundtable

What innovations or new policies are needed to enable the farm and food sectors to deliver sustainable productivity growth?

www.oecd.org/agriculture

Plug those subsidy leakages

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Ashok Gulati, Infosys Chair Professor for Agriculture at the Indian Council for Research on International Economic Relations (ICREIR)

In the last 12 years, the global population has increased by almost a billion people– the largest increase in the shortest time period in human history. Of the 7.35 billion people alive in mid-2015, 60% were living in Asia and within Asia, China and India together accounted for 2.7 billion people, or some 37% of the global population. According to UN population projections from 2015, India’s population is likely to surpass that of China, at 1.4 billion by 2022, and reach 1.7 billion by 2050. As India’s overall GDP growth is likely to hover around 7% per annum for the next decade or so, per capita incomes are likely to rise by 5.5% to 6% per annum. Today, an average Indian household spends about 45% of its expenditure on food, and with rising incomes, the pressure on food will be tremendous. With limited land (2% of global land) and water (less than 4% of global fresh water supplies), and the increasing frequency of extreme weather events resulting from climate change, India will be challenged to ﬁnd more food,

feed and fibre for its people in an efficient and sustainable manner. The potential answer to these increasing challenges lies in innovations, in policies, technologies, institutions and products. Accordingly, a major reform agenda is needed for agro-food policies in India. Just take the case of food and fertiliser subsidies in the country’s Union Budget 2016-17. The two together amount to a budget of over US$30 billion, and have in addition generated unpaid bills of more than US$16 billion. Massive inefficiencies plague the public distribution system of highly subsidised food, with leakages amounting to more than 40%. This is the case with fertiliser consumption, where urea is highly overused, and diverted to non-agricultural uses, and even to neighbouring countries. Innovations in policies, switching from price support in food and fertiliser to direct income support (cash transfers) through Aadhaar (Unique Identification Number) has the potential to plug leakages, and save the government at least $7-8 billion per annum. This can be invested in better water management, so as to get more crop for every drop of water, thereby feeding India in a sustainable manner. Visit http://icrier.org

Towards agricultural knowledge systems Handewi Purwati Saliem, Director, Indonesian Center for Agriculture Socio Economic and Policy Studies (ICASEP) The agri-food sector faces several emerging challenges, of which three in particular: ﬁrst, growing and shifting food demand, which necessitates appropriate responses from the food production system; second, limited natural resources (land, water, energy), which emphasises the need to place priority on productivity growth; and third, uncertainties for agricultural productivity brought about by climate change, which make the efforts needed more complex, with harder constraints. These challenges are more pronounced in developing countries, where agriculture is made up predominantly of smallholder farms. In responding to these challenges, national governments should focus on

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To do this will require a paradigm shift, away from short-term market and income support measures, which often create perverse signals and counter-productive effects, to a long-term strategy that will allow the sector to become more market oriented, more competitive and resilient, and above all more sustainable. Scarce public resources spent in this way will generate much higher returns for all.

Handewi Purwati Saliem the following innovations and policies: (i) increasing investment in rural and agricultural infrastructures to promote a more conducive business environment, more efficiency, and lower logistical costs; (ii) building agricultural knowledge systems that are capable of delivering innovations throughout the supply chain; (iii) promoting a more open trade regime, which benefits smallholder farms and ensures that consumers have reliable access to food; (iv) building resilience, particularly at the farm level to ensure their capacity to respond to shocks, coupled with risk management tools, such as crop insurance; (v) strengthening the capacity of smallholder farms to access new technology and growing market opportunities; (vi) encouraging government spending policy away from subsidy and direct assistance towards spending on general services, such as infrastructure and research and development; and (vii) promoting the transformation of smallholder farms from subsistence to profit-oriented and commercial farms. In addition, there are strategic policy areas which should be pursued at the global and regional levels. These include continuing unfinished business on multilateral trade talks as mandated by the World Trade Organisation ministerial meeting in Nairobi. They include increasing investment and engagement by international donor agencies and philanthropists in international agricultural research and development, particularly that undertaken by CGIAR (a global research partnership, visit

www.cgiar.org). Policy coherence and co-ordination across countries should also be promoted to create a predictable policy and regulatory environment for the private sector. Finally, international and regional collaboration should be strengthened across countries and organisations in areas such as knowledge sharing and capacity building .

Smart and digital agriculture holds many promises for a more sustainable, productive, and competitive farm sector. We have seen solutions that have the potential to improve resource efﬁciency, animal health, carbon footprint, and farmers’ position in the supply chain. But we have yet to witness a wider uptake in the broader farm community. Developing new solutions is not enough in itself; encouraging sufﬁcient uptake is an issue we must address.

Visit http://pse.litbang.pertanian.go.id/eng/

Uptake and collaboration matter

Collaboration is the key to making innovation happen. Collaboration is especially relevant when speaking about opportunities in digital agriculture where technologies need to be adapted to users’ needs. This means giving farmers and agri-business leaders the tools and conﬁdence to reach out to new partners in the digital and information technology industry. We need to establish vehicles to bring together people from the agri-food and IT sectors, as well as researchers and investors. In so doing, common opportunities will be identiﬁed, key collaborations will be established and things will start to happen.

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Phil Hogan, European Commissioner for Agriculture and Rural Development

The recent COP21 climate agreement in Paris has highlighted yet again the need for agriculture to become more efﬁcient and climate-friendly. But we also know we need to produce more, and better, food to feed a growing global population. This will be achieved only through a smart policy mix to unleash the power of research, innovation and collaboration in the sector.

Smart, innovative agriculture holds many promises for a more sustainable, productive and competitive farm sector. By working together, we can achieve these vital changes.

The EU is taking a position of global leadership to make this happen. We are prioritising innovation in a big way, because we know that agriculture must become smarter, leaner and cleaner. We have to increase yields while respecting safety standards and ensuring sustainability. As I often say, we have to learn to produce more while using less.

Thomas Kirchberg, Member of the Executive Board, Südzucker AG, and Vice-Chair of the BIAC Food & Agriculture Committee*

For a stable innovation and investment framework

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Our challenge is to assess which policies can make this happen. If we give farmers and agri-businesses the right support, they will succeed. Farmers never stop innovating. Every generation brings new technological and organisational improvements.

Visit ec.europa.eu/agriculture

SPOTLIGHT

ROUNDTABLE ON AGRICULTURE

Unprecedented growth opportunities are foreseen for the agri-food sector because of rising global demand for agricultural products and food. At the same time, meeting this demand in a sustainable way is the biggest challenge the sector has faced to date, given limited availability of new productive land and climate change. If we are to succeed, we need closer co-operation between all stakeholders–states, science, donors, civil society actors and the private sector–for instance, via public-private partnerships in research, joint initiatives for enhancing biodiversity or involvement of agribusiness in development aid. The key to sustainable productivity growth is availability and access to modern production methods and technologies, such as improved crop protection, new high-yielding and stress-resilient varieties, precision farming, big data analytics and advanced irrigation systems. These reduce the need to farm additional land and simultaneously contribute to conservation of natural resources, ensuring security of supply for food companies. The role of agricultural policy is to provide a stable framework for innovation and investment to foster sustainable productivity increases. More specifically, it should support agricultural research, knowledge transfer to farmers and their investments in the adoption of new technologies. At present, new approaches often take too long to arrive on the ground and the needs of practical farming are not communicated sufficiently to the scientific community. Only profitable farming will be attractive for the young generation and ensure supplies of agricultural products in the future. Therefore, when adopting new requirements and standards, policy makers should take into account the competitiveness of domestic producers in the global context. Both farmers and businesses would be helped significantly by cuts to red tape. For times of crisis, effective safety-net programmes are crucial. *BIAC is the Business and Industry Advisory Committee to the OECD, visit www.biac.org

OECD Observer No 306 Q2 2016

SPOTLIGHT

OTHER STORIES

Financing smallholder farmers: Growth potential

Casting oﬀ towards a blue future

Joacquim is a subsistence farmer from Etatara in Mozambique. At 46 years old, he is his family’s sole breadwinner, responsible for supporting his wife and three orphaned grandchildren.

Open any atlas, look at any globe, and Ireland appears as a small green island on Europe’s Atlantic rim. In fact, Ireland’s territory is almost the size of Germany, and mostly blue.

Full article http://oe.cd/1jL

Full article http://oe.cd/1jM

MULTIMEDIA

It’s time to act on climate change

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Help build responsible agricultural supply chains Enterprises involved in agricultural supply chains can create employment, raise labour standards, enhance production processes and reduce pollution. But their activities can also contribute to the likes of food insecurity, land eviction and child labour, not to mention environmental degradation. The OECD and the Food and Agriculture Organisation of the United Nations (FAO.org) have developed guidance to help enterprises observe standards of responsible business conduct and avoid such adverse impacts, while promoting sustainable development. Find out more at: http://oe.cd/rbc-agriculture-supply-chains

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No 302 April

2015

Water

Towards a brighter future

©Roy Philippe/HEMIS.F

Saving farmers lives: OECD Tractor Codes

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Our water empire Unclogging ﬁnance Water governa nce matters Israel’s water innovations Deﬂation watch Doctors at large

Inclusive business can help solve the sustainability equation

©Noah Beckwith

Noah Beckwith, Development Finance Practitioner Actions that address the inter-connectedness of environmental and social challenges are critical for achieving sustainable development. Governments, international organisations, development finance institutions and donors, among other actors, recognise that long-standing barriers between aid, trade, investment and natural resource management must fall, both in the developed and developing world. The twin objectives of economic growth and poverty reduction cannot be achieved without modifying entrenched commercial practices that harm or destroy environmental and social capital. This is where inclusive business comes in as one of many so-called impact investment strategies. It is about investing for profit and purpose, and fighting poverty, too. In 2004, our perception of the poor was transformed from a dependent millstone to a 4 billion-strong market opportunity by the late CK Prahalad’s book, The Fortune at the Bottom of the Pyramid. Inclusive business takes this opportunity as its point of departure. It refers both to companies whose goods or services address issues of access, affordability, or quality, enabling the poor to meet their basic needs; and to firms which draw the poor into supply chains as producers, suppliers, distributors or employees in enduring and mutually-beneficial ways. Since the mid-2000s, the development finance community, long aware of the correlation between poverty and unsustainable resource usage, has come to see inclusive business as a promising sustainable development strategy for two reasons. First, it enables economic growth, private sector development and poverty alleviation in a resource-neutral or positive way. And second, it allows stretched public funds to be strengthened with private-sector capital looking to combine profit with purpose. The challenge now is to move inclusive business higher up the agenda. With nearly 10% of the world population living in poverty and over 700 million people living in extreme poverty in 2015, the poor, long at the epicentre of environmental and social degradation, must be engaged as part of the solution. The agriculture sector, which accounts for over 90% of economic output in some developing countries, shows how this is possible. It is beset by low yields, little value addition, fragmented supply chains and often harmful environmental practices (use of damaging fertilisers and pesticides, for example). Subsistence or small-holder farmers, lacking know-how and technology, are trapped in a vicious circle of limited output and earnings. An inclusive business approach to agriculture addresses this as an opportunity. It invests in a range of actors along the supply

SPOTLIGHT

AGRICULTURE

chain–agro-processors, seed companies, equipment leasing companies, financial institutions creating input-financing and crop insurance schemes–so that the poor can produce less harmfully, more efficiently and sustainably. The motivation is not altruism or philanthropy, nor is it corporate social responsibility (CSR); rather, these are businesses generating financial returns and positive impacts by addressing environmental and social challenges in a “win-win” for people’s earnings and the market. Take rice production in Thailand, for instance. Since the early 1990s, Arvind Narula, a third-generation Indian-Thai, has produced basmati rice through a contract-farming model engaging the hill tribes of north-east Thailand, an ethnic group marginalised for centuries. By converting farmers to organic production and providing training and know-how, his company, Urmatt (www.urmatt.com), which espouses inclusive business, produces superior-grade rice, which commands premium prices

The poor, long at the epicentre of environmental and social degradation, must be engaged as part of the solution worldwide. Local value capture is increased through processed by-products, such as rice bran (made from rice husks, usually discarded) keenly sought by the cosmetics industry and the medical community. In fact, preliminary research indicates that rice bran may have cancer-fighting properties. Urmatt’s strategy has created a virtuous circle whereby it is able to secure a consistent, quality supply of its products by investing in farmers and expanding their opportunities. Their incomes have increased dramatically as a result. As more products are introduced–chia seeds, organic eggs–the waiting list of farmers looking to work with Urmatt grows. Moreover, environmental degradation is averted in the process, while social capital develops as livelihoods improve and poverty falls. Inclusive business approaches such as Urmatt’s show how needs can be met in ways that enhance rather than deplete environmental and social capital. It also shows that small and medium-sized enterprises, which account for over 90% of economic activity in some developing countries, are a key constituency in solving these challenges. As countries refine their implementation strategies on climate change and the Sustainable Development Goals (SDGs), they should look to the growing coalition of investors who are ready to deploy capital for financial return as well as impact. Multilateral organisations such as the OECD, by collecting data and scrutinising performance, could play a key role in promoting inclusive business, too. After all, sustainability, but also productivity, would benefit. beckwithnb@aiif.net World Bank (2016), Development Goals in an Era of Demographic Change, World Bank Group, Washington DC Prahalad, Coimbatore Krishnarao (2004), The Fortune at the Bottom of the Pyramid, Wharton School Publishing

OECD Observer No 306 Q2 2016

SPOTLIGHT

AGRICULTURE

Better policies for agriculture

©OECD/Michael Dean

Summary by the Co-Chairs, Meeting of the Committee for Agriculture at Ministerial Level, 7-8 April 2016*

Ministers of Agriculture and Representatives of OECD’s 34 member countries and the EU and those of Argentina, Brazil, Colombia, Costa Rica, Indonesia, Latvia, Lithuania, Peru, Romania, Saudi Arabia, South Africa, Ukraine, and Viet Nam, along with Representatives, of BIAC, FAO, IFAD, IFPRI, TUAC, UN and WTO, met in Paris for the ﬁrst time in six years to explore challenges and opportunities facing the global food system around the theme Better Policies to Achieve a Productive, Sustainable and Resilient Global Food System. Minister Stéphane Le Foll of France and Secretary Tom Vilsack of United States, co-chairs of the meeting, led a day and a half of intensive discussions on the future of agriculture and agriculture’s role in the global future, kicked off by a presentation with OECD Secretary-General Angel Gurría, to invited members of the press and public on their shared vision for the sector. The co-chairs welcomed the participation of countries currently in the process of becoming members of the OECD and other invited non-member countries, recognising the need to encourage international co-operation and to incorporate a broad range of views in discussing our shared future. The inclusion of those additional countries, the participation of the international organisations and OECD Advisory Groups (the Business and Industry Advisory Committee to the OECD (BIAC) and the Trade Union Advisory Committee to the OECD (TUAC)), enriched the debate and brought important new dimensions to the meeting. We ﬁrst focused on the key challenges facing the global agriculture and food system. The overriding challenge in global agriculture is to ensure food security for more than nine billion people by 2050 while sustainably managing the natural resources upon which our food system depends. At the same time, agriculture will need to meet the challenge of climate change adaptation and mitigation, help in improving nutrition, and foster

economic opportunities that revitalise rural areas and assist smallholders facing poverty and lagging growth. The frameworks of the UN Sustainable Development Goals (SDGs) and the Paris Agreement on climate change provide operational targets to meet those challenges, given a context of increasing weather-related shocks, sanitary risks, and changing markets. Productivity has long been a focus of policy makers and sustainability has received increased attention over the past few years, but resilience of the farm and food sector in the face of those risks remains insufficiently tackled in the policy agenda. Our policies must promote the resilience, as well as the productivity and sustainability of the agriculture and food sector and rural communities; achieving those shared goals will require sustained international co-operation. Ministers agreed that a transition is needed to reach the policy environment most conducive to moving the global agriculture and food system towards the needed level of productivity, sustainability and resilience. We agreed with long-standing OECD recommendations that policies should have transparent objectives; that they should be targeted to specific outcomes and be tailored to achieving those outcomes with as little impact on unrelated activities as possible; that they should be flexible enough to be applied in diverse situations and to be adapted to changing priorities; and that they should be consistent with trade rules and obligations and be equitable within and across countries. In addition, greater policy coherence will be needed to build the policy environment that supports our agreed targets. *Page 1 of 4-page text issued under the responsibility of co-chairs, Minister Stéphane Le Foll, France, and US Secretary Thomas J Vilsack, United States. For the full four-page summary, see http:// oe.cd/ag-ministerial-2016-summary Check out the Twitter feeds at #FutureofAg

OECD.ORG

Japan tragedy: Five years later Five years ago, on 11 March 2011, a violent earthquake struck eastern Japan. The tsunami that ensued devastated the inland up to 10km and put the Fukushima nuclear power plant at risk, forcing it out of action. The result was a humanitarian and environmental crisis. The National Police Agency of Japan put the total death toll at 15,894 people, while

2,561 are still missing. Japan is still absorbing the enormity of the disaster, both physically in rebuilding, and emotionally. “Many people are still leading uncomfortable lives in the affected areas”, Prime Minister Shinzo Abe said during his 11 March 2016 memorial address. “We commit ourselves to providing care for

their minds and bodies, forming new local communities and supporting industrial development of the affected areas.” OECD Secretary-General Angel Gurría also shared his strong support to the families and communities affected, and underlined his conviction to keep working closely with Japan on this, and many other important issues. “We have witnessed unprecedented resilience amongst the Japanese people in these five years. We admire their courage and know that Japan is emerging from the disaster stronger.” The OECD helped Japan in the aftermath of the disaster via the OECD Tohoku School Project, Mr Gurría pointed out, and the OECD Nuclear Energy Agency continues to work closely with Japan to improve nuclear safety and regulation. “I said it in 2011 and say it again now– we have absolute confidence in Japan’s capacity to overcome the Great East Japan Earthquake and tsunami, building on its unique stock of human capital, financial wealth, technology and discipline.” Brian Keeley, “Fukushima’s lessons in recovery”, in OECD Observer No 290-291, Q1-Q2 2012, http://oe.cd/UV

©Kyodo Kyodo/REUTERS

Motohide Yoshikawa, Ambassador and Permanent Representative of Japan to the OECD, “Japan: Remembering and rebuilding”, in OECD Observer No 290-291, Q1-Q2 2012, http://oe.cd/UW See www.oecd.org/japan/remembering-the-people-ofjapan-message-from-secretary-general.htm

March on gender–

©Julien Daniel / OECD

To mark International Women’s Day on 8 March, the OECD Development Centre’s WikiGender blog has launched a new March on Gender initiative, involving a month of discussions and events focused on gender equality and policy issues. WikiGender was launched in 2008, with a French version rolled out in 2015. It has become a hub for gender equality experts and practitioners, policymakers, students, and the general public, with contributions on gender questions welcome throughout the year. March on Gender will be an annual feature. Visit www.wikigender.org

–as new portal is unveiled Meanwhile, a new OECD Gender Portal has been launched, offering more than 80 key indicators and interactive charts that you can easily modify and share to see how your country compares on gender equality. What is the gender pay gap in your country? Do boys or girls perform better at school? In which country is it easier for women to start a business? The portal gathers links to a range of resources on gender issues, including articles from OECD Observer, OECD Insights and the OECD Yearbook. Visit http://www.oecd. org/gender/

Happiness expert Malene Rydahl visited the OECD on 24 February 2016, giving a talk and sharing insights from her book Heureux comme un danois (as happy as a Dane). Visit http://oe.cd/1i3

OECD Observer No 306 Q2 2016

OECD.ORG

Recent speeches by Angel Gurría Towards a new era of enforcement Opening remarks at the OECD Anti-Bribery Ministerial Meeting in Paris, France, 16 March 2016 Launch of the OECD Economic Survey of Lithuania 2016

©OECD/Julien Daniel

Presentation in Vilnius, Lithuania, 15 March 2016

High-Level Seminar on International Financial Architecture: “From Nanjing to Paris” Plenary session remarks at the French Ministry of Finance and Public Accounts in Paris, France, 31 March 2016 From commitment to implementation of the Sustainable Development Goals: Policies, data

Ms Berglind Ásgeirsdóttir, Iceland Mr Michael Forbes, Ireland Mr Paul Dühr, Luxembourg Mr Pavel Rozsypal, Czech Republic Mr Paulo Vizeu Pinheiro, Portugal

Remarks delivered in Athens, Greece, 10 March 2016

Ms Marlies Stubits-Weidinger, Austria

Improving women’s access to leadership: What works?

Mr Okko-Pekka Salmimies, Finland

Mr Dionisio Pérez-Jácome Friscione, Mexico

Mr Klavs A. Holm, Denmark

Mr Noé Van Hulst, Netherlands

Women’s Day in Paris, France, 8 May 2016

Mr Kazuo Kodama, Japan

Shanghai G20: International tax

Mr Iztok Jarc, Slovenia

Remarks at the G20 Finance Ministers’ and Central Bank Governors’ Meeting in Shanghai, People’s Republic of China, 27

Ms Annika Markovic, Sweden

February 2016 OECD’s 2016 Going for Growth-Restoring healthy growth: policies for higher and more

Ms Claudia Serrano, Chile Mr Daniel Yohannes, United States Ms Elin Østebø Johansen, Norway Mr Ulrich Lehner, Switzerland

inclusive productivity

Mr Carmel Shama-Hacohen, Israel

Presentation in Shanghai, People’s Republic of China, 26 February 2016

Mr Jakub Wisniewski, Poland

International Peace Prize from Slovakia 2015 Remarks delivered in Bratislava, Slovak Republic, 19 February 2016

Mr Zoltan Cséfalvay, Hungary Mr Gabriele Checchia, Italy Mr Pierre Duquesne, France Mr James Kember, New Zealand

and ﬁnancing

50th high-level meeting of the OECD

Opening remarks at the 2016 Global Forum on Development in Paris, France, 31 March 2016

Development Assistance Committee (DAC)

Ms Michelle d’Auray, Canada

Opening remarks in Paris, France, 18 February 2016

Mr Brian Pontifex, Australia

Putting cities at the heart of the ﬁght for

Reinforcing corporate governance in the Arab region for more resilient, inclusive and

Mr Matei Hoffmann, Germany

inclusive growth Speech delivered in the context of the launch of the Inclusive Growth in Cities Campaign at the Ford Foundation in New York, US, 29

sustainable growth

Mr George Krimpas, Greece

Mr José Ignacio Wert, Spain Mr Jean-Joël Schittecatte, Belgium

March 2016

Keynote speech at the Arab Regulators Corporate Governance Forum in Abu Dhabi, UAE, 9 February 2016

High-Level Commission on Health Employment and Economic Growth

Launch of the Global Platform for “Governance of the Future”

Opening and closing remarks delivered in Lyon, France, 23 March 2016

Opening remarks at the 4th World Government Summit in Dubai, UAE, 8 February 2016

Ms Zeynep Sava Suca, Turkey

Towards better public governance to promote prosperity for all

——

China’s economic growth and reform in the new Five-Year Plan Speech during the China Development Forum in Beijing, People’s Republic of China, 20 March 2016

Mr Marten Kokk, Estonia

Launch of the OECD Economic Survey of Greece 2016

Speech on the occasion of International

For a complete list of the speeches and statements, including those in French and other languages, go to: http://www.oecd.org/about/ secretary-general/

Ambassadors

Keynote speech at the 4th World Government Summit in Dubai, UAE, 8 February 2016

Mr Jong-Won Yoon, Korea Mr Christopher Sharrock, United Kingdom —— Mr Juraj Tomáš, lovak Republic Chargé d’Affaires a.i.

Chargée d’Affaires a.i.

European Union Ms Maria Francesca Spatolisano

OECD.ORG

Calendar highlights Please note that many of the OECD meetings mentioned are not open to the public or the media and are listed as a guide only. All meetings are in Paris unless otherwise stated. For a comprehensive list, see the OECD website at www.oecd.org/newsroom/upcomingevents

APRIL

Launch of African Economic Outlook 2016

6-9

Institute for New Economic Thinking (INET) Annual Meeting, Paris, France

26-27 G7 Leaders’ Summit, Ise-Shima, Japan

7-8

OECD Ministerial Agriculture Meeting, Paris, France

11-12

World Strategic Forum, Miami, US

31 May- OECD Week: OECD Forum 31 May-1 June; 2 June OECD Ministerial Council Meeting 1-2 June, including launch of OECD Economic Outlook No. 99

18-19 12th Annual Meeting of the OECD LEED Forum on Partnerships and Local Development, Venice, Italy

7-8

2016 Conference of the Global Forum on Productivity: Structural Reforms for Productivity Growth, Lisbon, Portugal

AUGUST 28 Aug- World Water Week, Stockholm, 2 Sep Sweden

JUNE 8-9

Global Forum on Responsible Business Conduct, Paris, France

SEPTEMBER 4-5

G20 Leaders Summit, Hanghzou, China

19-20 Global Water Summit 2016, Abu Dhabi, UAE

5-9

Global Green Growth Week, Seoul, Korea

20-21 Global Green Growth Forum 2016, Copenhagen, Denmark

Launch of OECD Business and Finance Outlook 2016

Launch of OECD Regions at a Glance 2016

Launch of Education at a Glance 2016: OECD indicators

20-21 Netherlands-OECD Global symposium on ﬁnancial resilience throughout life, Amsterdam, The Netherlands

21-23 Ministerial Meeting on the Digital Economy: Innovation, Growth and Social Prosperity, Cancun, Mexico

17-18

European Heritage Days

29-30 Skills Summit 2016, Bergen, Norway

Launch of OECD International Migration Outlook 2016

18-22 OECD Integrity Week 2016, Paris, France

World Earth Day

MAY 11-13

NOVEMBER

JULY OECD Forum on Tax Administration: 10th Plenary Meeting, Beijing, People’s Republic of China

20-21 G7 Finance Ministers and Central Bank Governors’ Meeting, Sendai, Japan

Latvia’s accession to the OECD

Launch of OECD-FAO Agricultural Outlook 2016-2025

Launch of OECD Employment Outlook 2016

7-18

UN Climate Change Conference (COP22), Marrakech, Morocco

28 Nov- Global Forum on Competition 2 Dec

OECD Observer No 306 Q2 2016

REVIEWS OECD iLibrary

A rural trip through time Imagine travelling through time, not as Stephen Hawking would, through wormholes into a new dimension, but rather just to see how farming might look several decades from now. How policy makers and farmers might appreciate such foresight. Alternative Futures for Global Food and Agriculture proposes to do just that, by exploring three potential “futures” which our food and agricultural systems may face in the lead up to 2050. Will global food systems be able to feed nine billion people without destroying sensitive ecosystems or social coherence? Can agricultural productivity keep up with rapidly increasing demand while facing signiﬁcant and unpredictable challenges

such as climate change, livestock diseases and other factors which escalate production costs? Will farming be a proﬁtable business in the coming decades, and help rural areas to develop? These are just some of the key questions the study helps to address. The many uncertain and ever-changing factors surrounding these questions can pose immense challenges for the development of long-term policy and industry strategies to address them. Rather than present forecasts or projections, Alternative Futures for Global Food and Agriculture sets out different possible scenarios that take political, economic, technological and other “known unknowns” into account, opening the way for the development of appropriate strategies for both governments and businesses. The three potential “futures” explored are: “individual, fossil fuel-driven growth”, which portrays a world driven by the strong

focus of individual countries and regions on their own economic growth, and relatively minimal emphasis by governments or their citizens on environmental or social challenges; “citizen-driven, sustainable growth”, in which consumers and citizens drive their governments to emphasise environmental and social protection above all, and in which global co-operation is relatively limited; and, lastly, “fast, globally-driven growth”, characterised by a strong focus on international co-operation to achieve economic growth, and in which environmental issues receive less attention. Though each of these alternatives suggests very different outcomes, they all point to the need for policies that are sufﬁciently robust, comprehensive and versatile to respond to the challenges ahead. OECD (2016), Alternative Futures for Global Food and Agriculture, OECD Publishing, http://dx.doi.org/10.1787/9789264247826-en

Water: It’s all or nothing M Major ﬂoods and droughts a have prevailed h iin many countries tthroughout 2015. South Africa saw S tthe emergence of its worst drought o iin 30 years, Ethiopia iis threatened with a major food crisis, and California suffered its fourth consecutive year of drought. Floods caused over 2 000 deaths in India last summer, while England, Paraguay and South Carolina reported unprecedented ﬂood damage. The trouble is, climate change is expected to increase the frequency and severity of such extreme weather events in the coming years. Governments can do a lot better in improving the mitigation and management

of drought and flood risks, argues Mitigating Droughts and Floods in Agriculture: Policy Lessons and Approaches. Part of broader OECD work on risk management in agriculture, this report builds on recent trends, experiences and research in OECD countries, particularly Australia, Canada, France, Spain and the UK, in the sustainable management of floods and droughts in agriculture, and sets out recommendations for policy approaches. The report provides a general policy framework to enable countries to analyse their own drought and flood policies and identify potential strategies. The study argues that comprehensive and coherent government policies at local and national levels are necessary, particularly if agriculture is to meet the growing food needs of a larger urban population. It examines policy approaches to water rights and water allocation, weather and

hydrological information, innovation and education, and insurance and compensation against drought and ﬂood risks, and explores how they might be combined in more consistent ways to improve risk management. The reduction of subsidies, for example, such as guaranteed prices or insurance subsidies, that distort incentives, would enable farmers to base production and investment decisions on the real costs and beneﬁts of risk taking. OECD (2016), Mitigating Droughts and Floods in Agriculture: Policy Lessons and Approaches, OECD Studies on Water, OECD Publishing, http://dx.doi.org/10.1787/9789264246744-en See also http://wp.me/p2v6oD-2oR

BOOKS OECD iLibrary

Most popular Farm Management Practices to Foster Green Growth This report looks at farm management practices with green growth potential, from farmer-led innovations, such as those directly linked to soil and water, Integrated Pest Management, organic farming, to science-led technologies, such as biotechnology and precision agriculture. ISBN 978-92-64-23864-0 March 2016, 160 pages €35 $42 £28 ¥4 500

Alternative Futures for Global Food and Agriculture This book develops three contrasting scenarios to illustrate alternative futures, based on several global economic models and extensive discussions with relevant stakeholders, and outlines policy considerations to help ensure that future needs are met in an economically, environmentally and socially sustainable manner. ISBN 978-92-64-24775-8 March 2016, 108 pages €24 $29 £20 ¥3 100

OECD Review of Fisheries: Country Statistics 2015 This publication contains statistics on fisheries from 2007 to 2014. Data provided concern fishing fleet capacity, employment in fisheries, fish llandings, d aquaculture l production, d recreational fisheries, government financial transfers, and imports and exports of fish. ISBN 978-92-64-25125-0 March 2016, 524 pages €95 $133 £86 ¥12 300

All publications are available to read and share at www.oecd-ilibrary.org International Standards for Fruit and Vegetables: Cherries This brochure is published within the framework of the Scheme for the Application of International Standards for Fruit and Vegetables established by OECD in 1962. It comprises explanatory notes and illustrations to facilitate the uniform interpretation of the Cherries Standard. ISBN 978-92-64-24861-8 March 2016, 55 pages €40 $48 £32 ¥5 200

Mitigating Droughts and Floods in Agriculture: Policy Lessons and Approaches Climate change is expected to increase the frequency and magnitude of extreme weather events, notably of droughts and floods to which the agriculture sector is particularly exposed. This book reviews and analyses policy approaches that foster efficient, resilient and sustainable management of droughts and floods in agriculture. ISBN 978-92-64-24673-7 February 2016, 72 pages €24 $29 £20 ¥3 100

Innovation, Agricultural Productivity and Sustainability in the Netherlands The review examines the conditions in which businesses in the Netherlands undertake innovation in the food and agriculture sector to become more productive and environmentally sustainable. ISBN 978-92-64-23845-9 December 2015, 184 pages €45 $54 £36 ¥5 800

Drying Wells, Rising Stakes: Towards Sustainable Agricultural Groundwater Use The report provides a characterisation of the diversity of groundwater systems, reviews policies in OECD countries, and proposes a package of recommendations to ensure that groundwater can sustain its services to agriculture and contribute to climate change adaptation. ISBN 978-92-64-23869-5 November 2015, 176 pages €45 $54 £36 ¥5 800

Agricultural Policy Monitoring and Evaluation 2015 This annual publication provides information on policy developments and related support to agriculture in OECD countries and selected partner economies, measuredd withh the h OECD Producer Support Estimate methodology. ISBN 978-92-64-23452-9 September 2015, 296 pages €65 $78 £52 ¥8 400

OECD-FAO Agricultural Outlook 2015 This edition of the Agricultural Outlook provides projections to 2024 for major agricultural commodities, biofuels and ﬁsh. ISBN 978-92-64-23190-0 July 2015, 144 pages €65 $78 £52 ¥8 400

OECD Observer No 306 Q2 2016

BOOKS OECD iLibrary

Special Focus: Agriculture Farm Management Practices to Foster Green Growth This report looks at farm management practices with green growth potential, from farmer-led innovations, such as those directly linked to soil and water, Integrated Pest Management, organic farming, to science-led technologies, such as biotechnology and precision agriculture. ISBN 978-92-64-23864-0 March 2016, 160 pages €35 $42 £28 ¥4 500

OECD Review of Fisheries: Country Statistics 2015 This publication contains statistics on fisheries from 2007 to 2014. Data provided concern fishing fleet capacity, employment in fisheries, fish llandings, di aquaculture l production, d recreational fisheries, government financial transfers, and imports and exports of fish. ISBN 978-92-64-25125-0 March 2016, 524 pages €95 $133 £86 ¥12 300

All publications are available to read and share at www.oecd-ilibrary.org International Standards for Fruit and Vegetables: Cherries

This brochure is published within the framework of the Scheme for the Application of International Standards for Fruit and Vegetables established by OECD in 1962. It comprises explanatory notes and illustrations to facilitate the uniform interpretation of the Cherries Standard. ISBN 978-92-64-24861-8 March 2016, 55 pages €40 $48 £32 ¥5 200

Innovating agriculture: Growing small ideas into game-changers “ “Necessity is tthe mother of iinvention” is an oft-repeated o phrase that is p highly relevant h tto agricultural ssystems today. Growing global G demand for food, d ffuel and ﬁbre will have to be met by improving agricultural productivity growth, which will be a tall order, given increasing pressures on natural resources, resulting from climate change and competition for land, for instance. Any growth in agriculture will therefore have to be achieved sustainably through more efﬁcient resource use. Effective agricultural knowledge and innovation systems can go a long way towards addressing these challenges. A new OECD book series, Innovation, Agricultural Productivity and Sustainability, explores the relationships between innovation, productivity and sustainability

in individual countries, and examines the respective roles of the government and private sector in strengthening agricultural innovation systems and facilitating their adoption at farm and agri-food firm levels. The series explores the conditions in which food and agriculture businesses in Australia, Brazil, Canada and the Netherlands innovate in order to become more productive and environmentally sustainable. Factors influencing innovation are examined: economic stability, governance and trust in institutions; a favourable and predictable environment for investment; capacities and public services enabling business development; as well as an effective agricultural policy and the operation of agricultural innovation systems. The studies find strengths and weaknesses in the four countries examined. While the policy environment in the Netherlands is one of the most favourable to innovation investment, there is room for improvement, including in

OECD Observer Crossword

access to capital for small and mediumsized enterprises, and levels of public funding for research and education institutions. The agriculture and agroprocessing sectors in Brazil, meanwhile, have demonstrated impressive growth thanks to productivity improvements and new technologies, but a number of obstacles remain, including framework conditions for innovation. Although the overall policy framework in Australia is supportive of innovation, agribusiness currently underinvests in rural R&D, perhaps due to public overinvestment in applied research. And ﬁnally, while the general policy environment in Canada is conducive to the investment necessary for productivity growth, the enabling environment for productivity- and sustainability-oriented innovation could be improved, the report ﬁnds. Three more titles in this series are expected in 2016, covering China, Turkey and the US. See www.oecd-ilibrary.org/fr/agriculture-and-food/ oecd-food-and-agricultural-reviews_24114278

No 2, 2016 Across 1 Renewable 5 Basic protein 7 Book that covers the globe or African mountains 8 Crop production 10 French for island 11 Relating to country areas as opposed to urban 13 3rd most spoken language around the world, abbr. 14 Org. dedicated to working for peace, development and human rights, abbr. 15 Everest or Kenya, e.g. 16 Marketing medium 17 Long period of time 18 Genetically engineered, for short 20 Noted agreement on climate change 22 The G in the UN’s SDG’s 23 Medical procedure, for short 24 “___ a small world!” 25 Ending this is one of the UN’s SDGs

Down 1 Largest supplier of food and agricultural produce in Latin America 2 Canola or sunﬂower or soybean, for example 3 Sudden increase 4 What hens do 5 Big lamb producer 6 Device 9 Middle East country which is the largest producer and exporter of pistachio nuts 12 Manage 15 Moi? 16 Change to survive in changing conditions 18 China is the largest producer of this fruit 19 Largest producer of corn in the world 20 Baked taro root 21 “Quiet” 22 Information

For crossword soloutions do the OECD crossword online. See www.oecdobserver.org/crossword

OECD Observer No 306 Q2 2016

BETTER POLICIES FOR BETTER LIVES

OECDâ&#x20AC;&#x2122;s global knowledge base

www.oecd-ilibrary.org

DATABANK

Agricultural production grows strongly–

However, the composition of support is at least as important as the total level, as this impacts agricultural production, trade, incomes and markets. Market price support and payments based on output, for example, are burdensome for taxpayers and markedly distort production and

1970-79

1980-89

1990-99

2000-09

2000-12

Regional growth 2000-12 4 3 2 1

pe ro Eu

nia

rt Am hern er ica Ca rib be an

Ce n Am tra er l ica W es te rn As ia

he rn As ia

er n As ia

st Ea

nr al As ia

ric

as As t ia

-1

So Am uth er ica

Source: OECD (2015), Issues in Agricultural Trade Policy: Proceedings of the 2014 OECD Global Forum on Agriculture, OECD Publishing

Asia also experienced relatively strong growth. However, production growth in Europe was signiﬁcantly lower, and even fell in per capita terms in North America, indicating the reduced importance of these regions in global agricultural output

growth. Meanwhile, overall production growth in Africa ran at more than 3% per year, but growth in per capita terms was signiﬁcantly slower than in other developing regions. See www.oecd.org/agriculture

Composition of producer support estimate by country, 2012-14 % of gross farm receipts % 60 Support based on commodity output

Payments based on input use

Payments not requiring commodity production

Other payments

50 40 30 20 10

Source: OECD (2015), Agricultural Policy Monitoring and Evaluation 2015, OECD Publishing

trade. Moreover, the subsidised use of inputs, such as fossil energy or fertilisers, can potentially lead to environmentallydamaging production practices. China, Colombia, Iceland, Indonesia, Israel, Japan, Kazakhstan, Korea and Turkey are among those countries that provide most of their support in the form of inﬂuencing

in ra

Ze w

li a

ra st

Au Ne

ile

fri

az Br

nd la

-10

pa n Ko re a Ic e la nd Tu rk e In do y Eu ne ro s pe ia an Un io n 1 Ch i Co n a lo K a mb z a ia kh st an Ru ss ian Me x ic Fe de o ra tio n Ca na da Is ra el

Over the past 20 years, support provided to agricultural producers in 49 countries analysed by the OECD has been following a downward trend. The percentage Producer Support Estimate (%PSE) fell from 21% of gross farm receipts in 199597 to 17% in 2012-14 globally, edging up slightly at the end of the period to reach US$601 billion (€450 billion) in value terms. Average support in OECD countries has been declining in developed economies, from around 30% of gross farm receipts in 2000 to around 20% today. But it has risen in emerging economies by 10-15 percentage points to about 20% over the same period, driven mostly by increasing support in Indonesia and China, but also in Kazakhstan.

1961-69

Net per capita production

Net production

–as support trends downwards

Decadal growth rates

3 2.5 2 1.5 1 0.5 0

it z

Global agricultural production has in fact grown strongly for a number of years. During the 2000s, global annual compound production growth rates surpassed 1990s levels, returning to rates of around 2.5% per year recorded for previous decades. The 2000s also saw the fastest per capita agricultural production growth rates, close to twice those seen in previous decades. This suggests strong productivity in a period when agricultural production growth outstripped population growth at a faster pace than at any time over the previous 40 years. The balance of global production growth appears now to be shifting to emerging markets. The 2000s saw strong production growth in South America and Southeast Asia, continuing trends from the 1990s. Other regions in

Period compound annual growth rates, %

As agriculture has proven itself able to respond to shifts in demand in the past, it could be argued that food security is less an issue of food supply and more one of affordable access.

Net agricultural production

1. EU27 for 2012-13; and EU28 from 2014 when available. 2. The OECD total does not include the non-OECD EU member states. http://dx.doi.org/10.1787/888933234359

market prices and through output-linked payments, accounting for over 70% of the total PSE in 2012-14. These transfers are also important in the composition of support in Canada, Norway, the Russian Federation and Switzerland, where they account for between a third and twothirds of all the producer support.

OECD Observer No 306 Q2 2016

DATABANK

% change from:

previous period

previous year

level: current period

same period last year

Australia

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.6 0.5 -0.4 0.1 -0.2 0.5

3.0 3.1 4.7 1.9 3.0 1.3

Current balance Unemployment rate Interest rate

Q2-2014 Q4-2015 Q1-2016 Q2-2014 Q2-2014 Q1-2016

-12.8 -15.2 5.8 5.9 2.3 2.7

-10.0 -12.9 6.2 5.6 2.9 2.5

Austria

Gross domestic product Industrial production Consumer price index

Q1-2016 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.6 0.2 -0.9 0.0 -0.2 1.0

0.9 1.0 0.2 2.3 1.0 1.8

Current balance Unemployment rate Interest rate

Q1-2014 Q4-2015 Q1-2016 Q2-2014 Q2-2014 Q1-2016

1.5 5.0 5.9 -0.2 0.3

3.2 3.1 4.7 5.5 0.0 0.2

Belgium

Gross domestic product Industrial production Consumer price index

Q1-2016 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.2 0.1 0.6 1.2 -0.3 0.4

1.0 1.5 3.4 1.2 0.4 1.8

Current balance Unemployment rate Interest rate

Q1-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

-0.2 1.2 8.6 8.5 -0.2 0.3

-5.0 0.6 8.6 8.4 0.0 0.2

Canada

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.8 0.2 -0.3 0.8 0.3 1.3

0.5 2.5 -0.8 4.5 2.2 1.5

Current balance Unemployment rate Interest rate

Q2-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

-10.9 -11.5 7.0 7.2 0.8 1.2

-15.0 -12.8 6.8 7.1 1.0 1.2

Chile

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q1-2016 Q2-2014 Q1-2016

0.2 0.1 -0.5 -3.3 0.8 1.6

1.4 2.1 -1.2 -1.5 4.6 5.1

Current balance Unemployment rate Interest rate

Q1-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

-2.0 -1.7 6.3 6.2 3.9 3.6

-0.8 -3.1 5.9 6.1 3.0 5.0

Czech Republic

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.0 0.3 0.0 0.2 0.4 0.1

4.0 2.5 5.8 2.6 0.2 0.5

Current balance Unemployment rate Interest rate

Q2-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

-1.9 0.6 6.2 4.2 0.3 0.4

-1.0 0.2 6.9 5.7 0.3 0.5

Denmark

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.2 0.1 -2.7 0.6 0.0 0.4

0.5 1.1 0.8 -2.1 0.6 0.3

Current balance Unemployment rate Interest rate

Q2-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

5.3 4.7 5.8 6.4 -0.1 0.3

5.8 6.7 6.9 6.3 -0.1 0.3

Estonia

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q1-2016 Q2-2014 Q1-2016

0.9 1.1 3.3 1.3 0.3 0.1

0.8 2.9 -2.2 2.5 -0.4 0.0

Current balance Unemployment rate Interest rate

Q1-2014 Q4-2015 Q2-2014 Q4-2015 Q2-2014 Q1-2016

-0.1 0.0 6.2 7.5 -0.2 0.3

0.0 0.2 8.3 6.5 0.0 0.2

Finland

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.2 0.0 0.5 -0.3 0.2

-0.1 0.9 -0.4 -1.9 0.0 0.9

Current balance Unemployment rate Interest rate

Q1-2014 Q3-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

-0.4 0.5 8.6 9.3 -0.2 0.3

-0.5 -0.7 8.1 9.1 0.0 0.2

France

Gross domestic product Industrial production Consumer price index

Q1-2016 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.0 0.5 -0.5 0.6 -0.5 0.4

0.1 1.3 -2.1 2.3 0.0 0.6

Current balance Unemployment rate Interest rate

Q1-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

-0.5 -6.7 10.2 10.1 -0.2 0.3

-13.2 0.1 10.3 0.0 0.2

Germany

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

-0.2 0.3 -0.9 -0.3 -0.4 0.2

1.3 -0.3 1.5 0.3 1.1

Current balance Unemployment rate Interest rate

Q1-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

68.6 71.1 5.0 4.3 -0.2 0.3

65.0 70.1 4.8 5.3 0.0 0.2

Greece

Gross domestic product Industrial production Consumer price index

Q4-2015 Q1-2014 Q4-2015 Q2-2014 Q1-2016

0.1.. 2.4 2.1 -2.0 1.2

-0.8.. 2.0 0.5 -0.9 -1.5

Current balance Unemployment rate Interest rate

Q2-2014 Q4-2015 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.6 0.4 24.4 27.1 -0.2 0.3

-1.9 0.2 26.0 27.6 0.0 0.2

Hungary

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.8 1.0 3.5 1.6 -0.4 0.2

3.0 3.7 10.3 8.7 -0.2 0.3

Current balance Unemployment rate Interest rate

Q4-2013 Q3-2015 Q2-2014 Q4-2015 Q2-2014 Q1-2016

1.4 1.2 8.0 6.3 2.8 1.2

0.3 1.0 10.4 7.3 4.6 1.9

Iceland

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

-1.2 -1.1 -5.0 -1.9 0.9 0.1

3.4 2.2 -4.0 -1.7 2.3 1.9

Current balance Unemployment rate Interest rate

Q1-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

0.0 0.1 3.2 5.1 6.6 6.1

0.2 0.1 4.2 6.1 6.2 5.4

Ireland

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q1-2014 Q1-2016 Q2-2014 Q1-2016

2.7 1.5 3.8 3.3 -0.6 0.8

6.5 9.3 2.8 7.7 -0.1 0.4

Current balance Unemployment rate Interest rate

Q1-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

3.0 2.6 11.7 8.8 -0.2 0.3

3.2 2.5 10.0 13.7 0.0 0.2

Israel

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.9 0.4 -3.9 2.2 -1.0 0.4

2.2 -0.6 1.5 -0.5 0.8

Current balance Unemployment rate Interest rate

Q2-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

3.6 2.2 5.3 6.1 0.7 0.1

4.8 1.7 6.7 5.4 0.2 1.5

Italy

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

-0.2 0.1 -0.5 0.0 -0.4 0.2

-0.2 1.0 -0.1 1.4 -0.1 0.4

Current balance Unemployment rate Interest rate

Q1-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

10.5 7.9 12.5 11.5 -0.2 0.3

11.5 -0.1 12.3 12.2 0.0 0.2

Japan

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

-0.3 -1.8 -3.6 0.0 -0.5 2.5

0.0 0.8 -1.4 2.4 3.6 0.1

Current balance Unemployment rate Interest rate

Q2-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

24.0 6.3 3.6 3.2 0.2 0.1

23.3 18.7 4.0 3.5 0.2

Korea

Gross domestic product Industrial production Consumer price index

Q1-2016 Q2-2014 Q2-2014 Q1-2016 Q2-2014 Q1-2016

0.4 0.5 -0.9 0.3 0.4

3.5 2.7 -0.6 1.2 1.0 1.6

Current balance Unemployment rate Interest rate

Q2-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

23.6 3.8 3.7 2.7 1.6

23.5 19.4 3.6 3.1 2.7 2.1

Luxembourg

Gross domestic product Industrial production Consumer price index

Q4-2015 Q1-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.8 1.1 -0.1 2.0 -0.5 0.5

3.0 3.8 8.8 1.5 0.9 0.2

Current balance Unemployment rate Interest rate

Q1-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

0.6 6.3 6.1 0.3 -0.2

0.6 1.1 6.3 5.8 0.2 0.0

Mexico

Gross domestic product Industrial production Consumer price index

Q1-2016 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.8 1.0 -0.2 0.9 -0.1 1.2

2.8 2.7 .. 3.6 2.7

Current balance Unemployment rate Interest rate

Q2-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016

-7.1 -6.8 5.0 4.2 3.8 3.7

-5.7 -5.0 4.3 5.1 4.3 3.3

DATABANK

level:

% change from: previous period

previous year

current period

same period last year

Netherlands

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.3 0.7 6.4 3.7 -0.6 0.8

1.2 1.1 -2.0 -1.9 0.6 1.0

Current balance Unemployment rate Interest rate

Q4-2013 Q4-2015 Q1-2016 Q2-2014 Q1-2016 Q2-2014

24.7 14.9 7.0 6.5 -0.2 0.3

25.6 17.2 6.67.1 0.2 0.0

New Zealand

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.5 1.1 -0.6 -1.1 0.3 0.2

3.3 3.7 2.7 1.0 0.4 1.6

Current balance Unemployment rate Interest rate

Q4-2015 Q4-2013 Q1-2016 Q2-2014 Q1-2016 Q2-2014

-0.7 -1.3 5.6 5.7 2.6 3.4

-1.8 -1.8 6.4 5.8 2.6 3.6

Norway

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.9 -1.2 -3.1 -1.1 0.7 1.0

0.3 1.8 -2.3 0.2 3.2 1.8

Current balance Unemployment rate Interest rate

Q4-2015 Q2-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014

12.4 6.4 3.3 4.6 1.8 1.1

14.3 15.6 3.5 3.8 1.8 1.4

Poland

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q1-2016 Q2-2014 Q1-2016

0.6 1.5 -0.2 0.1 -0.7 0.0

3.3 4.1 3.4 2.4 -1.0 0.3

Current balance Unemployment rate Interest rate

Q4-2015 Q1-2014 Q1-2016 Q2-2014 Q1-2016 Q2-2014

-0.8 -0.3 9.2 6.8 2.7 1.7

-3.0 -1.5 10.5 8.0 2.9 1.8

Portugal

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q1-2016 Q2-2014 Q1-2016

0.3 0.2 -0.9 1.6 -0.9 1.0

0.9 1.3 0.8 1.5 -0.3 0.5

Current balance Unemployment rate Interest rate

Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016 Q2-2014

-0.1 0.2 14.4 12.1 -0.2 0.3

1.0 0.3 16.9 13.5 0.2 0.0

Slovak Republic

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.6 1.0 -0.8 1.7 -0.4 0.2

4.0 2.4 5.0 4.9 -0.5 -0.1

Current balance Unemployment rate Interest rate

Q4-2015 Q1-2014 Q1-2016 Q2-2014 Q1-2016 Q2-2014

-0.1 0.5 13.4 10.3 -0.2 0.3

0.5 -0.2 14.3 12.2 0.2 0.0

Slovenia

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.6 1.0 -0.1 1.8 -1.4 1.5

2.8 2.6 3.8 3.9 -0.7 0.6

Current balance Unemployment rate Interest rate

Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016 Q2-2014

0.7 0.8 9.5 8.2 -0.2 0.3

0.7 0.9 10.5 9.2 0.2 0.0

Spain

Gross domestic product Industrial production Consumer price index

Q1-2016 Q2-2014 Q2-2014 Q1-2016 Q2-2014 Q1-2016

0.8 0.6 0.6 0.1 -2.0 1.0

3.4 1.2 2.8 2.3 -0.7 0.2

Current balance Unemployment rate Interest rate

Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016 Q2-2014

-5.6 5.3 24.7 20.5 -0.2 0.3

1.3 6.2 26.2 23.2 0.2 0.0

Sweden

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q1-2016 Q2-2014 Q1-2016

0.7 1.3 -1.4 0.3 0.6 0.1

2.6 4.5 -0.6 5.2 0.0 0.7

Current balance Unemployment rate Interest rate

Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016 Q2-2014

7.5 7.5 8.0 7.1 -0.5 0.6

9.2 7.5 8.0 7.8 0.9 0.0

Switzerland

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q4-2013 Q4-2015 Q2-2014 Q1-2016

0.0 0.4 -0.1 -1.0 -0.5 0.5

0.3 1.1 -4.6 -1.2 -1.0 0.1

Current balance Unemployment rate Interest rate

Q4-2015 Q4-2013 Q4-2015 Q2-2014 Q1-2016 Q2-2014

14.3 16.1 4.4 4.7 -0.8 0.0

15.1 21.2 4.2 4.1 0.0 -0.8

Turkey

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

-0.5 0.7 -0.9 5.1 2.6 2.2

4.4 2.5 6.9 2.6 8.6 9.4

Current balance Unemployment rate Interest rate

Q4-2015 Q2-2014 Q4-2015 Q1-2014

-9.3 -6.7 10.4 9.1 ..

-17.5 -13.4 8.5 10.5 .. ..

United Kingdom

Gross domestic product Industrial production Consumer price index

Q1-2016 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.9 0.4 -0.4 0.3 -0.5 0.7

3.2 2.1 0.8 2.1 0.3 1.7

Current balance Unemployment rate Interest rate

Q4-2015 Q1-2014 Q4-2015 Q2-2014 Q1-2016 Q2-2014

-30.6 -38.4 6.3 5.0 0.6 0.5

-27.3 -37.3 7.7 5.7 0.5 0.5

United States

Gross domestic product Industrial production Consumer price index

Q1-2016 Q2-2014 Q2-2014 Q1-2016 Q2-2014 Q1-2016

0.1 1.1 -0.6 1.3 0.1 1.2

2.6 1.9 -1.7 4.2 2.1 1.1

Current balance Unemployment rate Interest rate

Q4-2015 Q2-2014 Q1-2016 Q2-2014 Q1-2016 Q4-2013

-125.3 -98.5 6.2 4.9 0.0 0.6

-106.1 -103.1 7.5 5.6 0.2 0.2

European Union

Gross domestic product Industrial production Consumer price index

Q1-2016 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.2 0.5 0.0 0.4 ..

1.2 1.7 1.3 1.7 0.7 0.1

Current balance Unemployment rate Interest rate

Q4-2015 Q1-2016 Q2-2014

45.7.. 8.9 10.3 ..

53.3 .. 9.7 10.9 .. ..

Euro area

Gross domestic product Industrial production Consumer price index

Q1-2016 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

0.0 0.6 -0.1 0.4 ..

0.7 1.6 0.8 1.5 0.0 0.6

Current balance Unemployment rate Interest rate

Q4-2015 Q4-2012 Q1-2016 Q2-2014 Q1-2016 Q2-2014

87.6 51.7 10.3 11.6 -0.2 0.3

87.3 17.2 11.2 12.0 0.0 0.2

Brazil

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q1-2016 Q2-2014 Q1-2016

-0.6 -1.4 -2.3 -1.9 3.0 2.0

-6.0 -0.8 -11.8 -4.2 10.1 6.4

Current balance Unemployment rate Interest rate

Q2-2014 Q3-2015

-19.6 -11.4 .... ....

-19.9 -47.0 .. .. .. ..

China

Gross domestic product Industrial production Consumer price index

.. .. 2.2 2.1

Current balance Unemployment rate Interest rate

Q4-2015 Q2-2013

Q2-2014 Q1-2016

.. .. -0.4 0.6

54.2 76.1 .... 4.6 5.2

58.1 73.1 .. .. 4.7 5.6

India

Gross domestic product Industrial production Consumer price index

Q4-2015 Q2-2014 Q2-2014 Q4-2015 Q2-2014 Q1-2016

1.2 1.7 -2.3 2.0 -0.5 2.5

5.9 7.5 4.3 1.7 6.9 5.7

Current balance Unemployment rate Interest rate

Q4-2015

-6.4.. .. ..

-6.3.. .. ..

Indonesia

Gross domestic product Industrial production Consumer price index

Q2-2014 Q4-2015

4.9 5.1 .. 4.3 7.1

Current balance Unemployment rate Interest rate

Q3-2015 Q4-2013

Q2-2014 Q1-2016

1.3 1.2 .. 0.4 1.2

-3.5 -3.9 .... 8.5 7.9

-7.3 -6.2 .. .. 5.7 8.9

Russian Federation

Gross domestic product Industrial production Consumer price index

Q1-2014 Q2-2014 Q1-2016 Q2-2014 Q1-2016

-0.3.. 0.9 0.5 2.6 2.3

0.7.. -1.6 1.6 8.4 7.6

Current balance Unemployment rate Interest rate

22.7 15.8 .... 12.6 8.8

23.4 15.7 .. .. 18.4 7.4

Gross domestic product Industrial production Consumer price index

Q2-2014 Q4-2015

0.2 .. 2.0 2.3

0.3 1.1 .. 6.6

Current balance Unemployment rate Interest rate

-3.5.. .... 5.8 6.9

-5.0 .. .. .. 5.1 5.9

Non-members

South Africa

Q2-2014 Q1-2016

Gross domestic product: Volume series; seasonally adjusted. Leading indicators: A composite indicator based on other indicators of economic activity, which signals cyclical movements in industrial production from six to nine months in advance. Consumer price index: Measures changes in average retail prices of a ﬁxed basket of goods and services. Current balance: Billion US$; seasonally adjusted. Unemployment rate: % of civilian labour force, standardised unemployment rate; national deﬁnitions for Iceland, Mexico and Turkey; seasonally adjusted apart from Turkey. Interest rate: Three months.

Current balance data are reported according to the BPM6 classiﬁcation except Mexico and non-members.

Q1-2015 Q2-2014

Q1-2016 Q2-2014 Q4-2015 Q2-2012 Q1-2016 Q2-2014 Q3-2015 Q1-2016 Q2-2014

..=not available, 1 Key Partners. Source: Main Economic Indicators, May 2016.

OECD Observer No 306 Q2 2016

DATABANK

Asia’s riskier outlook

Real GDP growth in Southeast Asia, China and India, % change 10

Real GDP growth slowed in most of the emerging economies in Asia in 2014 and remained subdued in 2015, the Economic Outlook for Southeast Asia, China and India 2016 says. In fact, most countries in the region recorded slower growth in 2015 than in 2014–the exceptions being Brunei Darussalam, Thailand, Viet Nam and India. China and the ASEAN region recorded their slowest growth since the start of the global ﬁnancial crisis. Still, growth in most of the region should pick up as economic activity revives in the advanced economies, declining oil prices boost consumption and investment growth revives, the report believes, while pointing to “broadly favourable” economic fundamentals. The fall in core inﬂation has given most countries more scope for supportive monetary policy. Current account and capital account balances have deteriorated somewhat, but overall external positions remain sound. Financial markets in the region have shown relative resilience in the face of declining net

8 6

2011 -1 3 average

4 2

2016-20 average

0 10

China

8 6 4 10

2 0

Myanmar

India

Viet Nam 10

Lao PDR

10 8

Thailand 10

10 8

Philippines

Cambodia

10 8 6 4 2 0

Malaysia

Brunei Darussalam

4 2

2 0

Indonesia

Singapore

http://dx.doi.org/10.1787/888933309398

Source: OECD Development Centre, MPF-2016.

capital inﬂows and uncertainties linked to the prospects for monetary tightening in the US and slower growth in China. These uncertainties pose downside risks for the outlook, with further risks coming from adjustments to the boom in real estate

prices and in credit growth in a number of countries. Find out more about Economic Outlook for Southeast Asia, China and India 2016: Enhancing regional ties at http://oe.cd/M5

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