This record is a partial extract of the original cable. The full text of the original cable is not available.

191050Z Jan 06

UNCLAS SECTION 01 OF 05 PARIS 000348 
 
SIPDIS 
 
FROM USOECD 
 
STATE FOR EUR/ERA 
USDA FOR FAS/DHANKE/ACOFFING/JLAGOS 
STATE PASS USTR FOR ASTEPHENS 
 
E.O. 12958:  N/A 
TAGS: EAGR ETRD SENV OECD
SUBJECT: OECD: AGRICULTURAL POLICIES AND MARKETS GROUP 
SUCCEEDS IN CLEARING STUDIES FOR PUBLICATION 
 
 
¶1.   SUMMARY: The 39th Session of the Working Group on 
Agricultural Policies and Markets (APM) of the 
Organization for Economic Cooperation and Development 
(OECD) met at OECD Headquarters in Paris 3-4 November 
¶2005.  The meeting proceeded smoothly even though it 
had a large work agenda.  The Secretariat exhibited 
increasingly less patience as delegations continued to 
request more time to review documents.  Nevertheless, 
all of the papers proposed for declassification either 
were declassified immediately or are expected to be 
through written procedure.  Such approvals included the 
"Decoupling-Policy Implications" paper, which received 
only minor edits from most delegations.  The "Policy- 
Related Transactions Costs and Policy Choice" report 
was subject to a lot of debate from Norway, Japan, and 
Korea, sparking contention with the Secretariat, which 
wanted immediate declassification.  The Secretariat's 
attitude worsened during the discussion over the 
biofuels paper, and subsequently became abrasive when 
Poland asked for more review time, with the Secretariat 
later lashing out at New Zealand's constructive 
comments on the private standards paper.  Members gave 
other documents, such as "Changes in Retailing Buying 
Behavior," "Policies that Affect Land Mobility," "The 
Role of Compensation in Policy Reform," and "Evaluating 
the Degree of Jointness" the most negative reviews, 
with many delegates questioning the overall 
methodologies, case studies, and other elements of 
these papers.  The remaining studies received reactions 
ranging from general enthusiasm to little to no 
interest.  The meeting ended on an upswing with a 
positive reaction to the roll-out in Brasilia of the 
report on Brazil's agricultural policies.  END SUMMARY. 
 
¶2.   Both the draft agenda for the current session 
(AGR/CA/APM/A[2005]2) and the draft summary record of 
the previous APM meeting (AGR/CA/APM/M[2005]1) were 
approved. 
 
-------------------------- 
Agricultural Policy Reform 
-------------------------- 
 
¶3.   Decoupling-Policy Implications (For 
Declassification) (AGR/CA/APM[2005]22): The Secretariat 
noted changes made from the previous (Spring 2003) 
draft of this paper, explaining that it had modified 
the background and methodology as well as some of the 
conclusions for Asia.  Generally, most of the 
delegates, who responded with technical comments, 
including the United States, France, the EC, and 
Denmark, were quite pleased with the progress of the 
paper and supported its declassification on the 
assumption that the Secretariat would incorporate each 
delegate's edits.  Japan, however, had significant 
concerns with paragraphs 38 and 39 that were not 
resolved after a brief exchange with the Secretariat. 
Japan agreed to have a bilateral with the Secretariat 
so that a decision could be made on declassification by 
November 4.  The document was declassified on this 
date. 
 
¶4.   Policy-Related Transaction Costs and Policy 
Choice:  Main Report (For Declassification) 
(AGR/CA/APM[2003]REV2):  This report got a lukewarm 
reception, with many delegations expressing their 
disapproval of the draft for not having  incorporated 
many of their previous suggestions.  Japan had the most 
considerable complaints.  Its main concern was that it 
did not want dead-weight losses to be added to transfer 
losses, and asked for these categories to be analyzed 
separately.  Norway and Korea also were not ready for 
declassification, although only Norway offered to 
provide written comments.  However, these three 
delegations did not garner much support from other 
participants, such as Canada, the EC, New Zealand, 
Australia, Denmark, Spain, and Germany, who each 
thought that the methodology was sound and pushed for 
declassification.  The United States had no comments. 
Because of the pressure from other delegations, Japan 
noted that it wanted its recommendations incorporated 
since it was unclear what the Secretariat intended to 
do with the work in the future.  Japan's statement 
prompted the EC and Switzerland to chime in that they 
wanted more transparency from the Secretariat so that 
delegates have a better idea of future plans for the 
paper.  In the end, the Secretariat stated that it 
aimed to work with delegates to address their concerns; 
however, it had no more resources/funding to continue 
the project, which already had been delayed many times 
since some countries provided scant information to the 
author.  Japan, Norway, and Korea agreed to forward 
their written comments to the Secretariat by the end of 
November.  The final product would be placed on the 
Agriculture Directorate's restricted website (Delegates 
Corner), with declassification by written procedure 
planned for early December. 
 
¶5.   Adjustment Options and Strategies in the Context 
of Agricultural Policy Reform and Trade Liberalization 
(For Declassification) (AGR/CA/APM[2005]18/REV1): The 
Secretariat grew increasingly frustrated during the 
 
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discussion of this paper when two Members requested 
additional time for review.  France's comments were 
mainly editorial, though others were more empirical, 
such as a request for further elaboration of the 
Australian pork industry.  Japan had written comments 
that it offered to give to the Secretariat.  Canada 
expressed the most dissatisfaction with the project, 
noting that the Irish example was a poor one, because 
Ireland had never truly revamped its agricultural 
policy, and that the methodology used in analyzing 
Canada's agriculture in paragraph 21 was incorrect. 
The United States agreed with Canada and said that some 
of the paragraphs should be sharpened, but did not 
oppose declassification.  The Secretariat was very 
surprised by Canada's response since it was the only 
delegation that had a serious problem with the 
document; Canada and Japan said they would have 
bilaterals with the Secretariat to resolve the issues. 
All delegations agreed to declassify the paper 
contingent on the incorporation of Japan's and Canada's 
comments.  The final product will be placed on 
Delegates Corner, with declassification by written 
procedure planned for early December. 
 
¶6.   OECD Agricultural Policies 2006:  At a Glance (For 
Information and Guidance) (AGR/CA/APM[2005]23): For the 
most part, the delegations received this paper very 
well.  France noted it would like the creation of a box 
to compare the data of different developing countries. 
Switzerland also had a very positive reaction and was 
pleased with the second revision.  The EC favorably 
reviewed the report and noted that France had a good 
point about adding a box since it would help the reader 
better visualize different developing nations. 
Although the Secretariat at first questioned the value- 
added of the box, it finally agreed to incorporate it. 
 
¶7.   Improving Indicators of Support for Agricultural 
Policy Evaluation (For Information and Guidance) 
(AGR/CA/APM/RD[2005]3):  The Secretariat began the 
discussion by mentioning that it plans to have a second 
meeting of  experts on this issue in 2006.  The outcome 
will be discussed at the May 2006 APM, where it will be 
determined if it is possible to start collecting data 
from OECD members for a new Producer Support Estimate 
(PSE) analysis.  During the October 2006 meeting, 
Members will decide whether to use the collected 
information for reports prepared in 2007.  The 
Secretariat apologized for the late arrival of the 
 
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paper, explaining that many expert comments did not 
arrive until the last day of the deadline and 
expressing regret that many experts did not respond. 
It further stated that a clear explanation will be 
available to delegates on PSE changes and the formula 
will be provided, so that OECD members can test the PSE 
and provide feedback. 
 
-------------------------------- 
Clarifying Global Market Impacts 
-------------------------------- 
 
¶8.   Agricultural Market Impacts of Future Growth in 
the Production of Biofuels (For Declassification and 
Guidance on Further Work) (AGR/CA/APM[2005]24): Most 
countries supported this study, with only slight 
reservations coming from Germany and the United States, 
which noted that Members had only agreed at the April 
APM meeting to having a scoping paper prepared.  The 
Nordic countries were generally quite pleased with the 
document.  Conversely, Netherlands wanted to know the 
Secretariat's intentions for projects based on this 
 
SIPDIS 
analysis before it would agree to declassification. 
Canada and France offered similar sentiments.  Japan 
asked for annexes that would provide figures and data. 
The EC ended the round by remarking that the data on 
Poland contradicted other Polish studies.  Immediately, 
Poland responded by saying it was not informed of the 
inconsistency and wanted to talk with its experts at 
home before it could agree to declassification.  The 
Secretariat welcomed almost all of the comments, but 
 
SIPDIS 
consequently lashed out at Poland, saying that that it 
wanted the paper to be declassified and was "tired of 
playing cat and mouse games" with all the delegations. 
Poland remained firm and continued to ask for more time 
to review the document.  At one point, Canada requested 
that the Polish piece be pulled out of the study in 
order to advance the issue.  In the end, Poland agreed 
to send written comments to the Secretariat within 7-10 
days.  The paper, with tracked changes, would be posted 
on Delegates Corner for declassification under the 
written procedure by late November. 
 
------------------------------------------ 
Analyzing Developments in the Food Economy 
------------------------------------------ 
 
¶9.   Changes in Retail Buying Behavior and the Impacts 
on Structure and Returns on Agriculture (For Discussion 
and Guidance and Further Work) (AGR/CA/APM[2005]25): 
Most delegations gave lukewarm support to the study and 
thought it had the potential to add value to existing 
scholarship, although many found limitations in its 
scope.  For example, Slovakia questioned the 
fundamental methodology since it focused on only a few 
nations.  Canada similarly thought that the study was 
too narrow and complicated.  France agreed and 
critiqued some of the case studies.  The United States 
offered a few technical comments to clarify 
distribution channels available to farmers and asked 
for a more geographic discussion of markets.   The 
Secretariat concurred and promised to incorporate all 
 
SIPDIS 
the delegates' comments. 
 
¶10.  Private Standards and Developing Country Access to 
Global Supply Chains (For Discussion) 
(AGR/CA/APM[2005]26; AGR/CA/APM[2005]27; 
AGR/CA/APM[2005]28):  Many delegations warmly supported 
this work and encouraged further studies on the 
subject.  However, there were solid critiques from 
Mexico, France, and New Zealand.  Mexico stated that 
the study should not only focus on the benefits of 
meeting private standards, but also show the 
difficulties, poking briefly at the UK for having asked 
Mexico to have emergency exits in its avocado fields. 
France agreed in principle that the paper needs to 
improve its approach and also recommended it 
distinguish between public and private standards. 
Likewise, New Zealand asserted that the work should 
focus on factors that are important for developing 
countries, and also made some solid points on the 
applicability of the questionnaire used in the study, 
which asked general questions and did not seem to delve 
into specific issues.  The Secretariat responded, in 
what some considered an unduly harsh manner, that: 1) 
Mexico needs to be more specific; 2) it had addressed 
the differences between public and private standards; 
and 3) the questionnaire is sound and does not need to 
be narrowed. 
 
¶11.  Analysis of Price Transmission along the Food 
Chain (For Discussion and Guidance on Further Work) 
(AGR/CA/APM[2005]29): The Secretariat said that it 
would keep this document unclassified as a working 
paper, meaning it will be available publicly.  The 
methods suggests in the paper would be used to complete 
other studies, such as one to be completed in May 2006 
on retail buying behavior, which will focus on the 
policy implications of price transmission based on a 
number of case studies.  Most delegations thought the 
work had merit and only criticized the highly technical 
language it used, asking for a glossary and 
explanations in the "common tongue."  Members also 
wanted to know what an unclassified "working paper" 
meant.  The United States had a few comments on the 
methodology, which the Secretariat explained in detail. 
 
------------------------------------ 
Linking Policy Goals and Instruments 
------------------------------------ 
 
¶12. The Six-Commodity PEM model: Preliminary Results 
(For Discussion and Guidance on Further Work) 
(AGR/CA/APM[2005]30): An experts' meeting on this paper 
is planned for Spring 2006.  The Secretariat asked 
whether OECD Members would be able to provide more 
national data.  The United States gave the Secretariat 
some written comments after the meeting.  A few 
delegations, such as France and Canada, questioned the 
numbers used in the model, with only France, Canada, 
the EC, and the Czech Republic committing to send 
experts to the upcoming meeting.  The Secretariat 
explained that many of the numbers used in the model 
are merely placeholders for those to be settled on 
during the experts' meeting. 
 
¶13. Scoping Paper on Information Deficiencies and 
Agricultural Policies (For Discussion and Guidance on 
Further Work) (AGR/CA/APM[2005]31):  Japan was the only 
country that explicitly praised the project.  France 
and Australia also supported the work, although less 
enthusiastically, asking for clarification on a few 
grammatical and logistical issues.  The United States 
and Canada were the only delegations that expressed 
reservations, saying that the project was low on the 
priority list, especially since the proposal did not do 
a good job in defining its objectives and prioritizing 
its components, which seemed to be overly focused on 
environmental issues.  The Secretariat was hopeful that 
it would be able to work with the United States and 
Canada to make the study more attractive and plans to 
take a broader approach than just the environment. 
 
¶14. Policy Design Characteristics for Effective 
Targeting:  Preliminary Report (For Discussion and 
Guidance on Further Work) (AGR/CA/APM[2005]32): The 
Secretariat asked the delegations to provide their 
 
SIPDIS 
experiences with targeting policy and any advice that 
could help better the scholarship.  Most countries 
showed interest in the work, requesting further 
clarification on many of the piece's theoretical 
points.  For instance, the EC wanted the paper to use 
more empirical methodologies.  Other delegations, such 
as France, New Zealand, Denmark, and Australia, had 
more questions on modeling techniques, definitions, 
expected conclusions, having a more geographical focus, 
and the necessity of defining targeting from income 
assistance.  The United States questioned the lack of 
direction, since part of the piece had a more general 
theme while other sections were more specific.  The 
Secretariat agreed to incorporate most of the 
 
SIPDIS 
suggestions. 
 
-------------------------------- 
Overcoming Constraints to Reform 
-------------------------------- 
 
¶15. Policies that Affect Land Mobility and Land/Quota 
Values:  Project Proposal (For Discussion and Guidance 
on Further Work) (AGR/CA/APM[2005]33):  Most 
delegations had an initial negative reaction to the 
paper and wondered what its purpose was.  However, many 
were helpful in giving direction to the Secretariat. 
The United States suggested doing a literature review 
to better focus the study and ensure it does not 
produce any inaccurate or misleading results. 
Delegations, including France, Canada, Japan, the 
Netherlands, and New Zealand, supported the U.S. 
proposal, stressing that the work's use of the PEM and 
GTAPEM models were not useful in understanding land 
mobility and quota values.  The Secretariat agreed to 
come back with a literature review in the revision and, 
after, to seek  further ideas from Members. 
 
¶16. The Role of Compensation in Policy Reform: Project 
Proposal (For Discussion and Guidance on Further Work) 
(AGR/CA/APM[2005]34):  At the onset, the Secretariat 
was particularly enthusiastic about the study and eager 
to hear comments from the delegations.  The reaction 
from most members was generally more quizzical than 
negative in nature.  For example, many delegates wanted 
more information, since there was neither discussion of 
methods of research nor a description of which case 
studies would be used.  Canada and Australia did not 
particularly like the paper's definition of subsidy as 
a fundamental right and said the Secretariat should 
characterize subsidy as a privilege.  Although the 
Secretariat agreed with most of the comments provided 
 
SIPDIS 
by other delegates, it strongly disagreed with Canada 
and Australia on terminology, though ultimately 
consented to redraft the paper with new language. 
 
-------------------------- 
Agriculture Sustainability 
-------------------------- 
 
¶17. Evaluating the Degree of Jointness: Project 
Proposal (For Discussion and Guidance on Further Work) 
(AGR/CA/APM[2005]35): Most of the delegations supported 
the proposed work's going forward, but reaction 
generally was mixed.  Several, including Norway, the 
Netherlands, France, Australia, Japan, Korea, and the 
EC, requested that the document have more empirical 
examples.  Canada offered the most scathing criticism, 
questioning whether there was any value to the study. 
The United States and New Zealand took more moderate 
positions, with New Zealand requesting more rigorous 
analysis, and the United States asking for a scoping 
paper to be drafted.  The Secretariat easily agreed to 
add more empirical analysis and will have a synthesis 
report by the May 2007 APM.  Moreover, it plans to 
organize a workshop from November 13 to December 1, 
2006 to review three papers that provide policy advice 
within the theme of jointness. 
 
¶18. Other Business: The Secretariat gave an update on 
past and future OECD activities.  The Global Forum 
(which took place in early December 2005) was to have 
participation from five ambassadors, five or six 
Agricultural Secretaries/Under-Secretaries, and five or 
six high level officials from nonmember economies.  The 
study on Brazil's agricultural policies had been 
released in-country and received an enthusiastic 
reaction from the government and the local press.  The 
workshop on policy coherence for agriculture and rural 
development policies in Slovakia went very well, and 
focused on agricultural and rural development policy. 
 
REID