Экономические науки/ 12.Экономика сельского хозяйства.

Janna S. Jirickova, post graduated student, Russian economy and state academy under President of RF, city Moscow

Safarbi M. Pshikhachev, PhD, Kabardino-Balkarian State Agrarian University devoted by V.M. Kokov, city Nalchik

Aslan H. Toguzloev, PhD, Kabardino-Balkarian State Agrarian University devoted by V.M. Kokov, city Nalchik

Sustainable agriculture: global trends and factors

A great number of economists of the past age urged to substantiate scientifically the idea of harmony of private property and free enterprise undertakings with more and more employable people being involved into economical life and assistance rendered to those citizens of the society who are not able to guarantee their selves adequate conditions of life. Social contrasts coming along with modern civilizations for the period of all stages of their progress or existing are apprehended and interpreted in peculiar way in contemporary history under conditions when the world community at UNO summits (in Stockholm – 1972, Rio de Janeiro – 1992, Johannesburg – 2002, Rio de Janeiro – 2012) showed clear-cut rush for transition towards sustainable development standpoints. Within the last decade of the 20^th century the problem of poverty and gap between rich and poor as well as disparities in the level of economic enlargement of the countries belonging to the “Gold Billion” and the countries of Third World strengthening sharpened brilliantly in conditions of demographic explosion.

In this way the tendencies in CIS (Community of Independent States) with many transformational socio-economic contradictions and conflicts in the period of transition and demarche aside from sustainable development vector towards the vector of more characteristic for less developed countries than to the high developed one.

The tendency of global scale poverty, absolute and relative impoverishment of broad masses of people with FAO declaration on work against poverty and its radical reduction in halve by 2015 (Extract of Millennium Development Goals (MDGs): 1. Eradicate extreme poverty and hunger. Target 1. Halve, between 1990 and 2015, the proportion of people whose income is less than US$ 1 a day. 2. Halve, between 1990 and 2015, the proportion of people who suffer from hunger), though smoothly drifted on to a new century all the same. Moreover, nowadays these issues are aggravated by coincidence and interlace of world finance crisis with the world food crisis alongside a background of multi-years global energy problems. The analysis of published works of foreign and national economists on the problem gives the ground to suggest that world crises (finance, food, energy) have deep-rooted imperative interconnected reasons. Thus doctor I. Ustiyan concerning food crisis sings out four groups of reasons: systematic and economic; egocentrism of narrow-minded and technocratic pragmatists; absolutization of all-powerfulness of techniques and technology; specific economic, ecological-climatic. [1]

Systematic and economic reasons. The UN experts and leading economists of the world are single in their views that uncontrolled growth of prices on wheat, rice and, as a result of it, food crisis sprang from one and the same reason: prevailing of a cost neoclassical paradigm of market economy that means the world market economy is oriented to cost indices without taking due account of overall nomenclature of produced material goods.

Egocentrism of narrow-minded technocratic pragmatists and absolutization of power of techniques and technology and as a result of it making a fetish of marginal ecological imperatives took place.

Concrete economic reasons of get higher in price for food caused by the sharp increase of demand for food-stuffs in China, India and other countries of the world; by the decrease of world supplies of grain to the marginal bottom level for the last 30 years.

Ecological-climatic reasons. The question is about the broken ecological equilibrium of our planet as a result anthropogenic and technogenic activity of mankind especially for the last 50 years. To doctor Ustiyan’s opinion the present deep food crisis has already inflicted damage to the world estimated in 300 billion of dollars. The summit of the eight developed countries held in Japan in 2008 decided to allocate $10 billion for fighting against hunger and malnutrition of population and private financial funds – $ 4.5 billion. But it is not enough because only the African countries to the South of Sahara by the World Bank estimate need the emergency aid of $ 30 billion. In the absence of proper aid the losses of crops raised in 2008 in 37 countries of the World most suffered from crisis can grow from 30% to 40%. It will aggravate the heavy burden of hunger and malnutrition of poor layers of population.

In that regard the models of dualistic economy has become particular important. Neoclassical models of development offered at one time by W.A. Lewis, J. Fei, D. Jorgenson, G. Ranis and others aimed at creating the conception of modernization as a counterbalance to neokeyncian systems of economic growth and by that way to providing elimination of real dualism between poorly developed, traditional and modern, pre-industrial, natural and market economies, but however it didn’t find any substantial application in practice, because globalization of economy with the promises of leveling economy of different types of countries with their own level of development, established technology, traditions in management are still carried out exactly but back to front.

For example, one of the theorists of economic convergence Dutchman Jan Timbered who together with Norwegian Ragnar Frish became in the first Nobel laureates on economy for creation and application of dynamic models for the analysis of economic processes, in the middle of 1970 prepared a report offered by Roman Club “Revision of International Order” (published in 1976). In his scientific report the author suggested to shorten a gap in take-home pay between the rich and the poor from 13:1 to 3:1 (3:1 is maximum possible correlation between rich and poor regions of European Union or even more practically at least up to 6:1. [2]

The strategy of the development suggested by Jin Tinbergen combining education, eradication of poverty, development on its own basis on a background of scientifically substantiated ecological policy unfortunately still remained within the framework of good wishes, as after more than 30 out of brilliantly expected 40 years, we have still more contrast world where disparities in the level of economic development have considerably grown up and show a stronger rising unhelpful tendency.

A search of a new paradigm for development in transitional conditions that we are having in the CIS countries must be realized to our mind on the ways of making innovative type of development providing socially oriented, ecologically substantiated market management efficiency. In this regard it is appropriate to remind the words of academician A.A. Nikonov: “Neither western, neither eastern nor Israel models will not grow up on Russian ground as a national product by end use”. In order to construct its own model it is necessary to come out first of all from modern realities of a country, its historical past with all its heavy burden, as well as from world accumulated experience. One can always find a lot of useful time tested things in world practice and science to assemble on its own framework. It should not be ignored. [3]

It is important from this standpoint to define acceptability of one or another standard of foreign experience for agriculture in the transitional terms of the CIS countries estimating the role of innovative component here.

It is also important to define to what extent a model of agriculture is receptive to innovations, imperative and one or another innovation is realized in proper time; how well in innovative type of economy became materialized in business and how far this economic system is viable in fact. As a methodological premise it should be mentioned that though the concept “innovation” was first introduced by Y. Schumpeter at the end of 1920^th who characterized it as “changes” and during the 20^th century innovations in economy were analyzed from the point of typical changes in market conditions: introduction of new up-to-date machinery and technology; food product with new properties; application of new raw materials; management of production and resource providing; creation of new sales markets; improvement of population’s standard of living and quality of life. However, the agrarian practice shows that the efficiency of innovative measures appears much more below required results without taking into account ecologic-economical constituents.

In this regard a topical question becomes urgent weather innovation responds to settle up imperative guidelines as early as the end of 18^th century our compatriot A.T. Bolotov did really an innovative breakthrough concerning development and realization in his estate ecologically sound model of agriculture supposing optimum combination of the systems of agriculture and stock raising. It should be noted that after more than two ages these researches remain actual so long as the question is about imperatively vital irremovable phenomena. In this case the peculiar barrier raised on the way of imperative development was a mobilization type of economy, permanently prevailing in Russia those centuries as antipode to the innovative type which mainly realized in the USA and in a number of the developed countries.

Various approaches have been developed in the past couple decades to collaborate ecologically sound models of agriculture. The developed countries demonstrate the advantage of new and innovative ideas directed on introduction of finished up scientific researches in agrarian sphere that makes it possible to gain competitive advantages. Shortly describing from these positions the current world agriculture it should be noted that the last two or three decades there happened the situation where all pores were so impregnated with technocratic factors that the industrial technology was christened “conventional agriculture”, side by side alternative technology being cultivated as “organic farming” in the context of more capacious ecological-economically balanced sustainable development as well as rural development. The conventional agriculture stresses increased production and intensification through progressively specialized activity. By contrast, the approaches concerning alternative agriculture seek to meet the dual goals of increased productivity and reduced environmental impact. They have to do this through solving imperative tasks on the ways of diversification and selection of inputs and management practices that foster positive ecological relationships and biological processes within the entire agro-ecosystem.

Undoubtly, the innovative factors has become a core of these transformations, when, on one hand, the organic agriculture has already emerged on a qualitatively new basis and began to win the niches, and, on the other hand, there appeared the intensive high technology connected with the cultivation of genetically modified organism (GMO) and genetically modified products (GMP). At all diversity of GMO and GMP estimations, the warning of many scientists about the giving segment being fraught with serious consequences represents the first line of innovative activity.

It should be noticed that biofarms appeared in Western Europe in 1920^th and on the other side of the ocean in the middle of the century but their share is still rather short now that tells about difficulties in mastering ecologically non-polluting technologies. On the contrary, a new branch in technology focused on GMO and GMP going applied on the fields only in 1990^th is forwarded as almost a doubled green revolution. It has become to grow in multiple for an extremely short period of time, especially in Northern America and Asia; moreover, the party concerned directly declares that is a ring-buoy to settle up the problem of starvation and under-nourishment in the world, and also ecological problems connected with economy of chemical means. The argument, in my opinion, doesn’t hold water.

Speaking about search of a paradigm for the development and concrete models of agriculture in the context of structural shifts and displacement of accents among the factors of agrarian production, it should be recollected the methodological approach of Hayami J. and Rutton W. who classified, in the early seventies (1970), when the sharpness of environmental problems in agro sector was less obvious than now – agrarian technologies (land-saving techniques and labour-saving techniques). [4]

The classical example of labour-saving techniques is the countries of immigrants: the USA, Canada, Australia, where rise and development of industrial systems of agriculture came along with the replacement of living labour against a background of multiple growth of labour productivity and technogenich loadings on land resources. Japan, India and China belong to the countries with land-saving techniques. They applied different scenarios of development of farming systems with overall agrarian overpopulation in the countryside and insufficiency of land resources. Both models in historical aspect adapted various alternative proportions in correlation of factors of agrarian production as land resources labour forces.

At the current stage under conditions of system ecological crisis such division can be accepted only with some reservations as in the same countries, where the labour-saving technologies were cultivated, simultaneously against the background of favourable functioning of innovative system in economy, the measures for working out and developing ecological programs on restoration of soil fertility and also sustainable development of agriculture are carried out. For example, the experts from the USA Department of agriculture underline, not without pleasure, that annually at the expense of conservation measures more than billion tons of the fertile soil is saved that is equal to a train of soil loading trucks through all America from New York to Los Angeles.

According to Hayami and Rutton models of agriculture with inherent land-saving technologies the changes have been made in the classification for the period of the last three decades. The technocratic speed up by the western standard creates a lot of deadlock situations with the view of ecological consequences of economic advance in agriculture. It goes without saying that in the presence of objectivity ineradicable geographic and demographic aspects, the agrarian economy can’t just ignore, Japan, by the contrast with India and China should be singled out among the countries with land-saving technologies since the Japanese have reached such results that gross national product (GNP) per head make up $39184 and GNP in agriculture per head in the countryside area - $16714; here they displayed a great inventive activity in the point of product line diversification and ensuring more zealous use of ground resources (an arable land – 4.5 million, pastures – 0.4 million hectares).

Chinese and Indian models may be classified as land-saving ones only by stretching a point since there are ecological problems connected just with land permanent status: the expansion of erosion of the fertile land possibility, an unfavorable balance between the expenditure of fertile soil and its restoration, deficiency of fresh water and pumping out of underground water used for irrigation; excessive application of mineral fertilizers and pesticides; overgrazing of available pastures and their degradation. For instance, India has got a total number of cattle – 283.2 million (it is 26.2 million head of cattle more than available in China, the USA and Australia taken together), sheep and goats – 182.5 million head, natural pastures only 11 million hectares; as compared with the U.S.A. where 95 million head of cattle, 8.6 million of sheep, pastures – 234 million hectares; there are 27.5 million, 104.4 million and pasture land – 404.9 million hectares correspondingly.

According to the researches of Sju Disin only across China the area of land exposed to erosion has expanded from 1.15 million in the mid-eighties. He points out that annual wash-out of soil at the rate of 5 billion tons including 50 million tons of rich upper layer-humus, there for reservoirs are intensively covered with silt and level of river waters comes up. For example, Huanhe river level rises as high as 10 centimeters. [5] In the beginning of XXI century we can observe only the growth of these ecologically unfavourable phenomena so far as the flywheel of economic advance is still untwisted. It is remarkable to notice that the rate of growth in farm products in developing countries twice as high as developed countries in accord with results of the past century. Thus, the amount of world agrarian production (in comparable prices by 2000) had been increased from $415.0 billion in 1900 to 2475.0 billion in 2000.

The six fold growth for a century shows diversity of many – coloured pictures in different countries, but, as a hole, the amount of output in developed countries makes $140.0 and $605.0 billion respectively, or increase by 4.3 times; in developing countries accordingly $202.0 and $1690.0 billion or growth by 8.4 times. [6]

Dynamics of agrarian production being illustrated in diagrams clearly shows the influence of developed and developing countries upon the world-wide level of agriculture for a last quarter of the century.

Diagram 1

Index of agrarian production in some developed countries.

World Australia Canada France Germany GB the U.S.A.

The economic growth path of the developed countries has appeared much more low the average world value level as it is commonly well-known that the reached high level of agrarian production is the result of the advanced agricultural practices, high intensity of production and in these conditions it’s much more difficult to keep further build-up the rate of production output. Besides, the dynamics is effective by the policy of government regulation of agrarian sector, the situation of world market as well as removal, due to agro-ecological programs, of erodible farming areas under crops out of circulation.

A profound impact on the world amount of output of agrarian products was exerted by the countries shown in diagram 2. This peculiar feature of a last quarter of the past century gives an obvious picture of sharpen increase of agrarian production first of all in China and Vietnam, a little bit lower a path of the curve for such countries as India, Brazil, Indonesia, Pakistan but, as a hole, they show an essential growth as compared with the average world value and also the level of other developing countries anyhow involved in the process, and marked in due time by “green revolution” with the effect of “overtake and surpass” development being inherent.

Diagram 2.

Index of agrarian production output in some developing countries

World Brazil China India Indonesia Pakistan Vietnam

At such a sharp upgrade and upraise of agricultural production in some large countries of the Third World against the fact of moderate growth in the developed countries it was possible to hope for some leveling or smoothing of real dualism in agrarian sphere on global scale but it doesn’t occur. On the contrary, here and below there is a statistical sampling from official statistics of the International organization of the United Nations on Food and Agriculture – FAO [7] gives reason to suppose that polarization between developed and developing countries is permanently increasing that means an obvious drifting from a sustainable development vector at mega-level.

Here are some data. Gross national product output per capita in a country and gross farm product per capita for a rural inhabitant according to FAO data: (in American dollars for 2004) the USA – 36352; 27651 respectively; Canada – 24835; 24428 respectively; Australia – 22303; 20826 respectively; Great Britain – 26399 and 17567 respectively; France – 22987 and 20334 respectively; Germany – 23238 and 12236 respectively. There exists such a high level of life support in these countries, with undernourishment rate in all six countries less than 2.5%.

Striking contrasts can be observed in the countries of the Third World: Democratic Republic of Congo, population 54.4 million, 72% suffer from continual undernourishment, GNP per capita $90 and $81 per capita for rural dwellers; Ethiopia, population 72.4 million, 46% undernourished, GNP per capita $109 and $56 a year for rural dwellers; Bangladesh, 149.7 million of population, 30% undernourished, GNP per capita $371 and $164 per capita for rural dwellers.

Economic growth in China allowed to reach GNP which amounted to $1441 per capita for rural dwellers; moreover according to FAO data out of 1 billion 320.9 million people the share of the undernourished makes 12%. But it should be noticed that the report on world-wide development for 2008. Agriculture on service to development informs that the rapid development of farming over the last years in China due to introducing the system of responsibility of households as well as liberalization of markets and fast technological transformation was a principle cause of decrease in poverty in rural areas from 53% in 1981 to 8% in 2001. [8] The acceleration of economic growth came after the upraise in agriculture that greatly reminds the fact how a revolution in agriculture brought about industrial revolutions spread about the countries of a moderate climate belt from England in the middle of XVIIIth century up to Japan of the end of XIXth century.

The data of World Bank and the UN FAO for China varied a little, but nevertheless an unprecedented economic growth in agriculture is quite obvious. It made it possible in a most multi-populated country to remove the tension of food problem with many other social and ecological problems available in the country. In other words, for China the urgency quest for a new modern ecological-economically comprehensive model of agricultural development is not less topical than in other countries where it is still necessary to provide appropriate acceleration of agrarian economy.

By data of above mentioned FAO year-book indicators for India – creation of GNP per capita and GNP in farming per capita for rural dwellers $538 and $242 respectively, out of population - 1billion 081 million people 20% undernourished; Pakistan - $547 and $242 respectively, population 157 millions, 23% undernourished. In other words, only these three countries have got a problem of chronically undernourishment of more than 410 million people.

We have to point out that such problem remains at essential increment of produced foodstuffs. The agrarian sector of these three countries for the last quarter of the century had essential growth at the expense of strengthening of intensive factors: use of irrigation systems, substantial increment of mineral fertilizers. So, the manufacture of mineral fertilizers in these countries in these countries totally makes 48.7 million tons or 10 million tons more.

Along with this there centralized the overwhelming majority of irrigated lands: India – 50.1 million in hectares or 29% of areas under crops; China – 49.8 million in hectare or 52% of areas under crops; Pakistan occupies the fourth place in the world (after the USA – 21 million in hectare or 11% of areas under crops) with irrigated lands of 17.2 million in hectare or 80% of areas under crops. [9]

India and China are leaders not only through plenty of irrigated lands available but also deficiency of fresh water: India – 104 billion of cubic meters, China – 30 billion of cubic meters. [9] Besides, if take into account a substantial share of these countries out of 47.7 million hectares of irrigated lands being already salted all over the world, one can imagine the scale of technocratic excesses that makes classification of land-saving technology formalistic.

Undoubtedly, the high level of labour productivity is the result of permanent unchecked advance of industrial technologies along with replacement of direct labour by materialized one. But the point of the problem lies in the fact that the technocratic variant of development of agriculture today has already produced a menacing ecological situation of natural resources in many regions of the world. If the Third World countries will henceforward build up the rate of production in accord with the Western Technologies variant, the overcoming of real dualism in the world agrarian economy and large-scaled transition to ecological-economic balanced sustainable development, that is the call of the present-day time, can become unrealizable.

Summarizing the problems of overcoming a real dualism of the world agrarian economy and social contrasts on the global level, it is necessary to say about a qualitatively new paradigm offered by Vajtzekker and Lovins. How to reconcile a high quality of life and solicitous attitude to natural resources? The answer to this question can be found in the new paradigm (“The Factor of Four”[10]), which offers a new approach to progress, making the increase in efficiency of resources as corner-stone of any progress. By their statement, we can live twice better, consuming at the same time twice less natural resources, and that is necessary for a mankind sustainable development in the future. The decision consists in using the electric power, water, fuel, materials, the fertile lands and other resources more effectively and often without additional expenses and even to benefit.

The search for a new paradigm of development and overcoming of the real dualism in agrarian economy should be carried out on the ways of more perfect use of objective requirements of multi-purpose and diversified agriculture. Much of the additional production must originate in ways that follows working out the concrete research, which have to be increasingly oriented in the namely directions that it must:

- improve the capacity of world agriculture to underpin further considerable development in production and also get better dietary attributes of the produce;

- move up the efficiency of the underprivileged in the agro-ecological and social-economic aspects where they practice organic agriculture and earn to living;

- bring back and maintain the creative capability of natural resources while minimizing unpleasant effects on the wider environment.

These considerations suggest a growing role for rise and development of the innovative system in agrarian sphere. The basic condition while building up the innovative system on intra-national scale is the formation of innovative partnership of government structures, managing subjects, representatives of business, financial and non-government organizations, scientific and educational institutions.

The modernization of agro-industrial production oriented to the adjustment with resource-saving technologies presuppose, as it is stressed in the scientific report to the Roman Club, a power-saving type of reproduction, development of essentially new technologies for generation, transmission and consumption of electric-power capacities and, as a result – to increase in multiple productivity of the resources. The priority development of such type of reproduction, undoubtedly, can bring about the greatest economic, social and ecological effects, and became a basis of a new paradigm of ecological-economically balanced sustainable agriculture.

References

1. I. USTIJAN. The Global Food Crisis: a wake up call for the beginning of XXI century, Economist, № 10, 2008, pp. 63-79.

2. M. SAZHINA. An Economic Olympus: Sketches about Nobel Laureates on Economy. M.: Publishing House “Business Literature”, 2007, p. 36.

3. A. NIKONOV. The Spiral of a Centuries – Long Drama: Agrarian Science and Politics in Russia from the 18^th through the 20^th Centuries. – Moscow: The Encyclopedia of Russian villages Publishing House, 1995, p. 437.

4. Y. HAYAMI and V. RUTTON. Agricultural Development: an International Perspective. L. The John Hopkins Press, 1971, p. 44.

5. SJIJ DISIN. Environment Problems of China. Translation from Chinese. – M.: Progress, 1989, p. 167.

6. World-Wide Economies. Global Tendencies for 100 years. – M.: Economist, 2003, pp. 590 – 592.

7. FAO Statistical Yearbook. Country Profiles, 2005 – 2006, vol. 2.

8. The Report on World Development 2008. Agriculture at service to sustainable development, Washington, The World Bank, 2007, p. 9.

9. SANDRA POSTEL. Pillar of Sand. Can the Irrigation Miracle Last? – New York, London, WWNorton&Company, 1999, pp. 41 – 42.

10. E. VAITZEKKER, E. LOVINS, L. LOVINS. The Factor of the Four. A Half of Expenses, Two-fold Return. A New Report to the Roman Club. M.: Academia, 2000.