Agrifood Global Market and Social Market Economy

A renovation of international institutions can reduce the unequal distribution of agrifood resources at global level.
Fusing the European experience of the Social Market Economy and the Kyoto Protocol international experience, the guidelines for a new institutional model have been traced in order to merge the global market freedom with the solidarity of the European economic system.
International cooperation can take advantage from the result of the Kyoto Protocol and establish an institutional structure that allows guiding the private economic interest in the pursuit of the common good. The proposed instrument through which it is possible to achieve this result is a system of concessions "Cap and Trade" directed to orient the agrifood market to a substantial reduction in the number of undernourished people in the World.
This thesis wants to be a starting point for the construction of a concrete political instrument and it wish to be an appreciable hint for the political debate that the EXPO Milano 2015 calls everyone to lead.
The steps followed during the processing of the job are briefly exposed below.
The first part of the paper highlights how certain economic resources can be global public goods, and for this reason, subject to supranational policies. It especially analyses the problem of global warming as the counterface of the ecological sustainability global public good.
Then it is shown how the international cooperation can work only if the economic interests of the parties involved subsists. No government coercive power can be exercise without the convenience perception of private entities.

On this hypothesis, it is argued the ordoliberalism approach as an alternative to neoliberalism. In particular, the experience of the German Social Market Economy and its guiding principles are presented.
The Kyoto protocol is therefore discussed from the point of view of the Social market Economy. It is then specified the evolution of the regional Emission Trading System toward an international Cap and Trade institution.
Subsequently the key elements of the Cap and Trade model are researched in order to adapt it to other contests. The Cap and Trade model has to act differently according to the characteristics of the market.
To adapt it to the agrifood market purpose, a preliminary market analysis has been developed. The considered qualitative and quantitative investigations how the undernourishment issue under a new skin undertaken.
These argumentations are useful to understand better the shortage of the international food security policies that the governments have taken since today.
In the last part of the work is exposed the core of the thesis: an alternative solution that merge the Cap and Trade model theory with the spotted peculiarities of the agrifood market.
The suggested solution is the creation of a Cap and Trade mechanism for the agrifood wastefulness, creating a trading system for “wasting allowances”. Similarly to the existing Emission Trading System (ETS), the creation of a WAsting Trading System (WATS) is proposed.
The WATS aspires to be an international allowances trade market, supporting the agrifood international market. It is a Cap and Trade mechanism with slightly different characteristics:

a) The total amount of allowances reflects the global sustainability level of agrifood producible resources;
b) Each country hold a number of allowances proportional to its population. It reflects the national optimal level of consumption;
c) Under-consumer countries can allocate or sell allowances proportionally to the discrepancy between real and optimal national consumption; the financial resources obtained has to be devolved for enhance internal agrifood market;
d) Wholesalers need to obtain allowances to sell into an overstock market proportionally to consume discrepancy of that country. The over-consumer country allowances deficit will be covered by the importers allowances;
e) Wholesalers who provide agrifood products in an under-consumer country can sell its surplus allowances on the WATS market.
f) The proportionality between consume discrepancy and allowances is yearly reduced.

The WATS manages to incentive the redistribution of agrifood resources, rewarding the wholesalers who invests in the under-consumer country (e). This dynamic allows enhancing the agrifood supply.
Furthermore, the possibility of selling at auction the allowances provides the financial resources to stimulate the demand side too (c).
According the author’s opinion this mechanism shows that is possible to lead the market forces towards the public interest thanks to a proper regulation.
In the latest decades, the public opinion has perceived the globalisation as a negative leviathan to defy. Nevertheless, globalization is not hellish; multinational enterprises and global bankers are just private subjects that aim to reach their own interest.
If the proper “rules of the game” are set, the lobbing power can converge unto the common public good. Is it possible to transform this big problem in a big opportunity for the collectivity?