Ivar Hovland
Adviser
Abstract
This report focuses on agriculture and its impacts in rural areas. Agriculture is an important activity in the Norwegian periphery, directly and indirectly. A deregulation of agriculture will most probably have negative impacts on agricultural production and employment. This, in turn, will have negative impacts on other sectors. Since agriculture is overrepresented in the periphery, and there are few alternative sources of employment, reduced activity in agricultural can lead to increased centralisation. This can be a problem since the relatively low population densities already imply a danger of depopulation in the periphery. Some motivations for regulating agriculture are based on the sector's importance in the periphery. Regulations are also motivated by other facts. It is very difficult to distinguish precisely between rurality and other motivations. However, part of the motivation is agricultural production itself, or aims that can be deducted from production. Distribution of income is an example of this. From a theoretical point of view, subsidies should, in order to be as efficient as possible, be directed directly towards the problems they are meant to cure. If the aim for granting agricultural support is rural development and not agricultural production, then it is better to grant subsidies that do not depend upon production. Rural development (RD) can be thought of as complementary to agricultural production (AP): (*) RD = f(AP), f'(AP) > 0 This means that you get more RD if AP increases, and less RD if AP decreases. By subsidising AP, you will automatically get more RD. The function (*) does not, however, say anything about the efficiency of subsiding AP for gaining RD, compared to using the same amount of subsidies directly at gaining RD. The function does not describe whether subsidies that are production dependent are preferable to non-production subsidies from a rural development point of view. Using the function (*) and the fact that the secondary effects of reducing agricultural subsidies may be substantial in the peripheries, one may argue, however, that agriculture is important and that agricultural production is an essential industry for rural development. We would also like to underline the fact that agricultural has several non-food impacts and that multifunctionality is much more than rural development. It is especially difficult to distinguish between «rural development» and «cultural landscape». The relationship between them should probably be discussed further.
Abstract
This report was written in connection with the preparations of the Norwegian authorities for the new round of WTO negotiations on further liberalization of world trade. The report surveys the natural conditions in Australia, France, New Zealand, Norway and the USA, and studies their influence on agriculture, e.g., on farm size, farmland distribution, types of production and production costs. However, it is not easy to limit the analysis to merely the natural conditions for farming, since a number of other political, legal, economic, historic and cultural factors also determine the conditions for agriculture in a country. The report includes agroclimatic data such as length of growing-season, temperature sums, mean temperatures and mean precipitation. Not surprisingly, the climate in Australia and New Zealand is significantly different from the climate in Norway. In these two countries, low temperatures are not a major growth-limiting factor, as they are in (parts of) France, Norway and the USA. Especially in Australia, growth is mainly limited by too high temperatures, excessive radiation, evaporation and lack of rainfall. [...]