On Ethics and Economics of Changing Behavior in Food and Agricultural Production, Consumption and Trade-Some Reflections on What to do

On Ethics and Economics of Changing

Behavior in Food and Agricultural

Production, Consumption and Trade-

Some Reflections on What to Do

Joachim von Braun

Director General

International Food Policy Research Institute

H.E. Babcock Workshop: Ethics, Globalization and Hunger:

In Search of Appropriate Policies

Cornell University, November 17-19 , 2004

Outline

1. Ethical issues in food and agriculture

2. Ethical principles in economics and the medical field

Whose ethics?

Ethical perspectives in modern economics

Lessons from the medical field

3. The food system

Trends in consumer behavior

Trends in producer behavior

The role of the information industry

Trends in Trade

4. Reflections on what to do

Ethical Issues in food and agriculture

Hunger and malnutrition

Consumer trust in food safety

Information asymmetries between

consumers and producers

Externalities from consumer and

producer behavior

Ethical issues in food and agriculture:

Hunger in the Developing World

500

600

700

800

900

1000

1980 1990 2000

Year

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of

Un

de

rno

uri

sh

ed

Pe

op

le, m

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Developing World

Developing World, w ithout China

Some causes of hunger and malnutrition

Limited access to production

technologies

Inadequate land and intellectual

property rights

Limited access to markets


Consumer trust in food safety

Increased use of pesticides and

Genetically Modified Foods

unknown effects on human health

Externalities of production processes

on animal welfare and the

environment


Information asymmetries between

producers and consumers

Growing concentration of Producers

Food industry may transmit information to consumers

in a selective manner Infringement of consumer

sovereignty

Agricultural research increasingly conducted by private

corporations Research outcomes may be geared

towards profit maximization rather than enhancing

consumer interests


Externalities from Consumer and

Producer behavior

Intergenerational transmition of unhealthy

consumer behavior

Ethically founded production and trade

regulations may adversely impact the poor

through price and income effects

Outline



Whose ethics?



3. The food system




Trends in Trade


Whose ethics?

Two conflicting approaches

Consequentialist approach: Ethical value of a deed

should be based on the consequences it brings about with

the goal of maximizing welfare for all stakeholders

(Neo) -Kantian approach: An ethical action is valuable

in itself – emphasis on “obligation,” “duty” and “rules”

Other approach

Virtue ethics: individuals make ethical decisions based

on pursuit of “excellence”- emphasis on values such as

“courage, wisdom, temperance, fairness, integrity, and

consistency”

Ethical perspectives in modern

economics

Evolution of modern economics:

1. Concentration on the “engineering” approach

Narrow definition of human behavior Assumption that all

humans act in rationally, guided only by self-interest

Exclusion of other explanatory factors such as social institutions (e.g.

community, culture and religion etc.)

Exclusion of environmental and social limitations of humans

2. Concentration on “positive” economic analysis

Difference between “positive” and “normative” is not clear cut

Welfare economics; impossible to make a strictly positive analysis

because ultimately involves value judgment from the economist

Welfare economics based on the Pareto principle

Ethical perspectives in modern

economics

Results of narrow perspective in

economic theory

Neglect of human motivations such as

“duty” and “altruism”

Neglect of social institutions that have a

significant impact on human behavior (e.g.

religious institutions)

Some lessons from the medical field

Institutionalization of ethics

Existence of medical associations at every level

with the purpose of promoting ethical behavior

Stimulation of high ethical moral aspirations

Existence of a code of ethics based on the

Hippocratic Oath

Existence of restrictive requirements to

further strengthen trust and confidence

between patients and physicians.

Outline



Whose ethics?



3. The food system




Trends in Trade


Food systems:

Consumer driven systems

RESEARCH

RETAILERSCONSUMERS

AGRI-

INDUSTRIESPRODUCERS

Food Systems


Dominant trend: Globalization and growing retail food system

(Supermarkets)

Developed countries:

Decline in the percentage of total household expenditure on food +

Greater variety and choice of foods

Increased concern and dissatisfaction with food safety and impacts of

current food production processes on biodiversity and the environment =

Increased demand in alternative foods (e.g. organic foods)

Developing Countries:

Urbanization Increased demand in processed foods

Large portions of the population (esp. in rural areas) lack access to healthy

diets and remain outside the globalized food system

Food Systems


Bifurcation of world agricultural sector

85% of world farms are smaller than 2 hectares (in low-income countries)

Large farms in OECD expanding

Concentration of agricultural sector through vertical integration of producers and marketers

Alignment of small scale farmers in developing countries with large producers esp. in alternative agricultural production

Increased concentration = more power for large producers in food related information provision

Increased responsibility of producers in insuring food safety

Longer and more complex food chains + limited government resources for safety assurance

High quality standards may limit opportunities for partnership between corporations in the North and small farmers in the South

Food Systems

Role of the information industry

Recent consumer behavior changes due in part to better

access to food related information

Biases in the food information industry

Consumers may choose to be imperfectly informed if the price of the

news story is higher than the marginal benefit it brings

The biggest source of information, the popular media has inbuilt biases:

• General tendency to cover more widely bad news because of demand

• Many media organizations adhere to a certain ideology and promote that

ideology in their stories

Producer marketing and advertising campaigns are the second biggest

source of information –potential for selective provision of information

Consumer and public interest groups

• Small budgets for advertising and marketing

• However, they have been effective in insisting on the right to information and

inducing producer behavior change

Food Systems

Trends in Trade

Current WTO round of negotiations (“Development

Round”) driven by ethical concerns and need for

efficient use of global agricultural resources

Increased trade liberalization

• Need for universal quality standards = Joint FAO/WHO

initiative- CODEX ALIMENTARIUS COMMISSION

• In Europe: public‟s sense of loss of control in cultural

patrimony because of increased imports of food products

Outline



Whose ethics?



3. The food system




Trends in Trade


Reflections on what to do

Establishing „Food Ethics Commissions‟:

Diversity of positions on what is ethical + variety of actors = Need for discussion platforms

Aim: provide transparent arena for discussion on what is ethical behavior in the context of a country’s culture, general environment and specific needs

Incentives for behavior change

Remove harmful incentives

Provide better information to consumers through restrictions on false advertising, introduction of labeling requirements, and increased support to consumer groups

Establish industry Codes of Conduct: Stress individual responsibility to corporate professionals

Establish better business ethics: Consumers in the North usually willing to pay high prices for products that do not violate their ethical principles (e.g. success of “Fair Trade” and “eco-labeling”)

Reflections on What to Do

Ethics of governance and rights

Promote a rights-based approach to food security

Encourage consumer activism by ensuring civil rights

and freedoms are protected

Where a basic framework does not exist, the

government has to promote discourse on ethics issues

by ensuring the right to information and education

Reflections on what to do

Roles of actors in providing an ethical environment:

Consumers: Responsibility for their individual diets + responsibility to exercise

their rights and freedom in expressing their concern about food production

Producers: Responsibility in supplying accurate information to current

consumers + responsibility to future consumers in ensuring that current

production processes do not affect future food security

Media: Responsibility in providing accurate information- restrict “false

reporting”

Government: Responsibility of initiating and developing a national strategy to

promote ethical behavior

International organizations: Responsibility of providing an ethical framework

for global action to end hunger

Documents

On Ethics and Economics of Changing Behavior in Food and Agricultural Production, Consumption and Trade-Some Reflections on What to do