Agriculture, trade, and environment : achieving complementary policies

Book excerpt: Trade liberalisation affects the pattern and structure of agricultural production, with consequences for the environment. But what are these impacts? And do agri-environmental policies affect international competitiveness? This study takes an in-depth look at the pig sector in OECD countries and draws some conclusions about the most appropriate forms of policy intervention. Further trade liberalisation is likely to strengthen market trends in the pig sector. Production is expected to slow, if not contract, in OECD European and Asian countries. In these countries, government support for pig production in the form of tariffs and/or export subsidies is generally the highest, and the environmental impacts of pig production on water and air pollution are of greatest concern. This book argues that liberalising trade is therefore likely to generate some environmental benefits. Regulatory requirements are the most important type of agri-environmental measures affecting pig production, and these mainly focus on the appropriate management of manure to reduce water pollution. Using comparative analysis, this study concludes that while manure management regulations do differ among countries, the cost effect on pig producers is not significant in explaining differences in international competitiveness.€ This is the first in a series of in-depth studies being undertaken by the OECD to investigate the linkages between agriculture, trade and the environment. Other studies examining the dairy and arable crop sectors are underway.