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Other Perspectives at the OECD-China Meeting
Many issues were discussed at the recent OECD-China meeting, including Chinese government policies in the context of demographic change, as well as the private sector and its role in Chinese agricultural development (featuring GHI and GHI member companies). In addition to these two areas of discussion, many participants discussed the regulatory and legal frameworks associated with Chinese agriculture. In the closing remarks of the meeting, Carmel Cahill, senior counselor of the OECD’s Directorate for Trade and Agriculture, stressed the “importance of the general policy environment and particularly the need for a clear and stable policy framework providing clear signals to farmers and the need to pay attention to credit availability and risk management.”
Catherine Moreddu of the OECD and Joerg Wuutke, chair of the BIAC China Task Force, both commented on the necessity of improving and standardizing intellectual property rights (IPR). IPRs allow innovators rewards for their insights, and therefore make innovation more attractive economically. Ms. Moreddu mentioned that competitive funding mechanisms can be employed to reward and foster innovation, as well as more closely link the private and public sectors. In order for these competitive funding schemes to work, however, IPRs must be guaranteed and better enforced. Joerg Wuutke of BIAC agreed, stressing the need for greater standardization of government regulations and requirements, and for better enforcement of IPR, particularly with regard to the widespread use of illegal agrochemicals.
On a similar note, Betty He of Novozymes emphasized the need for the development of consistent technical standards for animal feed. Novozymes is a Danish company that uses biological enzymes to improve plant and animal productivity, and reduce the use of chemical inputs. Agricultural technology companies such as Novozymes produce products capable of improving farm output, efficiency and sustainability, but require adequate legal frameworks to ensure a fair playing field. Ms. He also mentioned the need for better agricultural extension to promote these technologies.
Cheng Guoqiang, Secretary General of the Development Research Council in China, agreed on the need for greater agricultural extension. Mr. Guoqiang also felt that China focuses too much on implementing agricultural price supports. These policies, he notes, are convenient for politicians, and have immediate benefits for farmers, but hurt consumers by artificially raising prices, and distort the market, creating inefficiencies. Instead, Mr. Cheng believes that China should promote greater imports to reduce prices and market distortions.
Chinese policies supporting agriculture and innovation are closely linked. The general consensus from the meeting was that there is great potential for innovation and growth in the Chinese agricultural sector, but also many policies that provide incorrect incentives or distort prices. In particular, the Chinese government should ensure a standardized and fair regulatory framework and provide greater intellectual property rights in order to realize the most productivity gains and to access state of the art innovation in agriculture.
For the agenda and speaker presentations, please see the link here.