Delivering food security through international trade

ID-10035220When discussing global food security, the issues of access and availability commonly come up.  As One Billion Hungry examines, we currently produce enough food to feed the world, although demand is rapidly outpacing supply as populations and incomes rise and as the impacts of climate change escalate, and yet almost 900 million people do not get enough food to eat. Increasing food production, while critical, is unlikely to solve hunger and malnutrition alone. A new report by the Global Harvest Initiative highlights the importance of trade to food security, examining how our global trade systems can and must change to serve the whole of the population.

Coming at a particularly relevant time, following the success of the Bali trade talks and with negotiations for several bilateral trade agreements underway, the report, International Trade and Agriculture: Supporting Value Chains to Deliver Development and Food Security, was developed by GHI in collaboration with trade experts from the New Markets Lab, TransFarm Africa, and the International Food & Agricultural Trade Policy Council.

Given increasing globalisation, global trade and markets are becoming more important in the decisions of individual farmers. For farmers to invest in their farming enterprises, an end market must be available to them. This means that international trade decisions made in far off countries are having more of an impact on farmers on the ground. The report urges an holistic and integrated approach to trade with the aim of developing effective in-country enabling environments and efficient and fair value chains.

Specifically the report highlights the following actions needed:

  • Consistent, transparent, and science-based frameworks for regulating food safety, along with reliable processes for administering sanitary and phytosanitary (SPS) rules, are critical to value chain development and increased agricultural trade;
  • Legal and regulatory issues play a significant role at all stages in value chain development – including inputs, production, processing, transport, and end markets – and many of these issues are covered by trade rules and disciplines;
  • Trade policy instruments can help foster the development of reliable systems for moving goods – including food, inputs, and equipment – and services through necessary legal and policy infrastructure and appropriate trade facilitation interventions;
  • A stronger focus on services will be increasingly important to agricultural trade, with laws and regulations needed that can support open systems for transport and distribution services; financial services; and wholesale, retail, franchising, and other services;
  • In places like sub-Saharan Africa where so many markets are small and landlocked, regional integration and harmonization of laws and regulations will be critical to agricultural growth, and particular focus should be placed on how laws and regulations are being implemented in practice;
  • Adequate and equitable intellectual rights protection is becoming increasingly important as technology, information sharing, and communication play an even larger role in value chain development;
  • With agricultural markets becoming more and more global, inward-looking policies – including forced localization – will need to be handled carefully so that they do not pose a threat to agricultural development and food security; and
  • There is a widespread need for commercially-focused capacity building designed to facilitate market development and generate regulatory reform in the agricultural sector.

Undertaking these actions should be the responsibility of the World Trade Organisation and a variety of international trade partnerships. The report clearly shows the need for innovation in trade and for greater transparency, in part to help uncover the potential for trade to actually help develop markets. As GHI state “Trade can and should impact individuals positively, add value economy-wide, and deliver broader food security and development benefits.”

While the report highlights the potential of trade to open up opportunities for farmers there is little mention of the need to protect farmers from the impacts of liberalisation, particularly where markets are mostly informal. Aiding small-scale farmers to meet the requirements of global markets in cost-effective ways must surely go alongside the increasing reach of international trade?

Update on WTO Doha Round

bali_logoChapter four of One Billion Hungry describes the Uruguay and, later, Doha rounds of international trade negotiations. At the time of publishing little headway had been made in reducing tariffs, trade barriers and protectionist measures in the agricultural sector (tariffs for agricultural products are an average 62% compared to 4% for industrial goods) and since the Doha round began in 2001, there has been a stubborn stalemate between developed and developing countries. Reducing the number of proposals to agree in 2011, including measures on intellectual property and trade in services, (and spurring the moniker “Doha Lite”), the World Trade Organisation were seeking agreement between the 159 member countries at a recent meeting in Bali, the success of which looked likely to determine the continuance of Doha altogether, and the value of the WTO itself as this would be the first ever deal agreed under the WTO since its inception 1995.

On the 3rd to the 7th December ministers of trade met in Bali and despite several disagreements and standoffs, which threatened to derail the process, an agreement was met. So what was agreed exactly?

Central to the agreement is “trade facilitation”, which commits members to implement binding rules that reduce the amount of customs paperwork needed and set maximum time limits for goods crossing borders, a proposal that is estimated to add over $1 trillion to the global economy. For regions where goods crossing borders are subject to lengthy delays and difficulties, resulting in high transaction costs, an agreement such as this could lower the cost of imports. Reducing these transaction costs associated with trade by just 1% could boost the global economy by $40 billion, according to a report by the Organisation for Economic Co-operation and Development. And the bulk of this increase in economic wealth is expected to benefit developing countries such as Uzbekistan, Tajikistan, Kazakhstan and the Central African Republic, which, according to the World Bank’s Doing Business Index, have the worst scores for the ease with which goods can be traded across their borders.

A further agreement was around increases in farm subsidies, which are currently limited under the WTO Agreement on Agriculture. India insisted it should be allowed to subsidise grain as part of its effort to tackle food insecurity, paying farmers higher than market prices for grains for its government domestic stores. As an interim measure, WTO members agreed not to bring disputes against countries breaching the farm subsidies limits as part of food security measures while a longer term solution is found but there remains concern that this gives India the power to distort global trade and undercut producers in other countries. Despite the negative impacts of subsidies, an alternative is yet to be found, and without this compromise India would have backed out of the agreement altogether, although they did agree not to ”distort trade or adversely affect the food security of other [WTO] members”. Development agencies are concerned that the agreement only last four years and only relates to currently held public food stock holding programmes. [Read more…]

What we’ve been reading this week

This week’s summary on the news stories, reports and blogs that have grabbed our attention. We welcome your thoughts and comments on these articles.

Walking the talk: Why and how African governments should transform their agriculture spending, Action Aid

AGRA Strengthens Efforts to Help Governments Attract Private Investment in Local Agribusinesses, AGRA

Climate Change and Agriculture in East Africa, IFPRI

WTO overcomes last minute hitch to reach its first global trade deal, Reuters

Amb. Quinn’s Remarks: Keynote at UN World Food Day Observance in New York, The World Food Prize

African Plant Breeding Academy launched, World Agroforestry Centre

The Guardian and Observer Christmas appeal 2013: Future Africa, The Guardian

Book links food security to political stability, Cornell Chronicle [Read more…]

What we’ve been reading this week

This week’s summary on the news stories, reports and blogs that have grabbed our attention. We welcome your thoughts and comments on these articles.

One small change of words – a giant leap in effectiveness!, World Agroforestry Centre

Policy: Twenty tips for interpreting scientific claims, Nature

Enabling African Farmers to Feed the World, Farming First

Roundtable on Sustainable African Agriculture and CAADP 2014 review, PAEPARD

Agricultural Input Subsidies. The Recent Malawi Experience, Ephraim Chirwa and Andrew Dorward

African Farmers Reap Gains Of Biotech Cotton, CoastWeek

Humans are becoming more carnivorous, Nature

Seeds of hope emerge across the world’s drylands, World Agroforestry Centre

Environment, Food and Rural Affairs Committee to examine Food Security, UK Parliament

For sustainable growth, count on agriculture, Thomson Reuters Foundation [Read more…]