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Agricultrual policy needs to be guided by evidence-based assessments of gaps and needs identified in collaboration with the farming community and others in the production chain.

The source of data used to assess needs and other aspects of policy planning need to be subject to appropriate standards of statistical design and that take into account the nature of the target population, onthe one hand, and the specific inmformation desired, on the other.

Policy propositions need to be able to gain traction by providing farmers feasible objectives that they can afford and deliver based on gradual improvements in productivity so as to enhance resilience and long term sustainability. To ensure an efficient implementation the extension serivces need to be involved, together with farmer asssociations in the whole policy cycle (planning, implementation, monitoring & evaluation and ex-post analysis). Effective extension can accelerate the diffusion of innovation while direct farmer oversight can help enhance transparency and, with this, the confidence of the sector in government policy-making.


A sound guideline to the range of considerations that need to be taken into account in the selection of policy procedures is Article 39 of the Founding Treaty on the Functioning of the European Union (TFEU). Here the objectives of the Common Agricultural Policy were specified to be:
  • to increase agricultural productivity by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilization of the factors of production, in particular labour;
  • thus to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture;
  • to stabilize markets;
  • to ensure the availability of supplies;
  • to ensure that supplies reach consumers at reasonable prices
This is a sound set of objectives for any national or EU-wide agricultural policy.

It is important to acknowledge that the CAP objectives are unambiguously founded on rational technical, economic and financial concepts.

They can be summarized as central indicators for policy achievement including:
  • increased agricultural productivity
  • technical progress
  • optimization of factor allocation
  • development of agricultural production
  • a fair standard of living for the agricultural community
  • increasing the individual earnings of persons engaged in agriculture;
  • sustained availability of supplies;
  • accessible supplies at reasonable prices for consumers
The objectives of CAP also combine both output OBJECTIVES and METHODS (means of achieving objectives) in order to make explicit the means of achieving the objectives. These objective and methodological components relate to important economic perspectives and these are set out in the table below.

In order to sustain the evolution in economic growth of an agricultural sector it is important to maintain an emphasis on the objectives of productivity, reduction in unit costs, increases in operational margins and real incomes.

These considerations provide a foundation for the identification of procedures and methods to be applied in the establishment of a practical and effective policy decision analysis cycle covering planning, policy operational administration, monitoring & evaluation and ex-post analysis.




OBJECTIVES


METHODS


Physical



Technical
(technical-physical performance)


  • development of agricultural production
  • sustained availability of supplies


  • technical progress
  • increased technical productivity


Economic



Economic
(unit prices, vertical relationships: input costs, output prices, margins, profit)


  • accessible supplies at reasonable prices for consumers



  • increased agricultural productivity
  • optimization of economic factor allocation
  • increased economic productivity


Financial



Financial
(Cash flow, positive, overheads, income, time based)


  • increasing the individual earnings of persons engaged in agriculture


  • increased agricultural productivity
  • optimization of financial factor allocation
  • increased financial productivity


The main operational significance of the above analysis is that sound policy needs to be more concerned with transformative change than with income transfer from government budgets to private bank accounts of farmers in the form of production or land area subsidies. Production subsidies are what created "wine lakes" and "butter mountains" and a serious misallocation of budgets.
The over-response to interest groups, including agricultural cooperatives, backfired on CAP leading to demands to redue EU budgets allocated to agriculture. The adjustment involved introducing Rural Development as an escape clause that received more funding as a basis for claiming reductions in agricultural payments.



What has emerged as the rational interprepation of CAP and which was the practice in the 1960s, before CAP existed, is a renewed emphasis on farm resilience. This is the development of the ability of farms to resist increasingly variations in yields and market prices assocated with seasonal weather conditions and external global supply variations affecting prices. The way in which this is achieved is set out under the methods column in the table above. Some 80% of economic growth emanates from changes in technology and technique, learning and the accumulation of tacit and explicit knowledge leading to innovation. It is this process that is associated with rises in physical productivity, the provision of opportunities to allocate resoures more efficiently so as to lower unit costs and augment margins and income while maintaining sales prices within accessible ranges for consumers.



AgroInfoSys has adopted for one of the most robust systems approaches founded in advancing W3 techniques and standards including ECMA and ISO programming language standards. We support the standards work of the Open Quality Standards Initiative2 (OQSI). OQSI work is distinct in that it places particular emphasis on the advances in logic & analytical techniques and their incorporation into online information management systems to secure more economic, efficient and effective operations management.

We are using the OQSI standard Data Reference Models3 (DRMs) to summarise procedural objectives, methods and data requirements as a first step in "designing" procedures. The procedural models are prototyped (concept demonstration) through the use of the Policy Procedure Prototyping Platform (4P)4 a server side operational platform built in DScript (the server side extension of te ECMA standard 262 and ISO/IEC standard 16262). 4P is an emerging standard of OQSI.

Further information on 4P can be accessed by clicking on the PPPP menu item above. .


1 Hector W. McNeill is an agricultural economist and systems engineer with over 45 years professional experience. His first exposure to agricultural policy making was in 1964 at Cambridge University under David Wallace the pioneer of the use of gross margin analysis in farm planning and policy making. Content from DAI-2010-2015, Food, Fibre & Feedstock policies, GBF, London 2012

The W3 consortium is headed by Tim Berners-Lee and their website is here
2 The OQSI site can be accessed here
3 DRM-Data Reference Model - for further information see
4 4P-Policy Procedure Prototyping Platform - for further information see

The Decision Analysis Initiative 2015-2020
George Boole Foundation