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How can WTO rules and regulations contribute to food security?
Geneva, July 2008
Ralf PetersTrade Negotiations and Commercial Diplomacy Branch
Division on International TradeUNCTAD, Geneva
United Nations Conference on Trade and DevelopmentUnited Nations Conference on Trade and Development
Annual price movements
0
50
100
150
200
250
300
2000 2001 2002 2003 2004 2005 2006 2007
MeatDairyCerealsOilsSugar
Source: David Vanzetti and Ralf Peters, UNCTAD estimates with ATPSM
2007/08 rice prices
0100200300400500600700800900
1000
Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July
Source: USDA. Thai grade B
Contributing factors to food crisis• Short term factors
– Rising oil prices– Increase of bio-fuels– Supply shortages: drought – Speculation– Export restrictions– Lack of market structures that ensure fair competition
• Medium/long term factors – Population growth – Changing diet in emerging countries– Falling stocks– Weak agricultural sector in developing c. and LDCs
Impacts
• Net seller or buyer– Poor spend large share of income on food and are
often net buyers– Risng food prices increases poverty (WB 2008)– Food bill doubled in low income food deficit DCs
LDC food imports
1005100
1010015100201002510030100
Cereals
Vegeta
ble Oils
Dairy
Meat
Sugar
Total
$m
20072008
~40% increase
Source: FAO
WTO provisions and food security
• Tariffs• Export restrictions • Special products• Safeguards• Domestic Support
Can Doha solve the crisis?
• Liberalization of agricultural sector • Rising world prices• Domestic prices may fall (not LDCs)• Shift in production to developing countries
Change in productionFull liberalisation
-20.00
-15.00
-10.00
-5.00
0.00
5.00
10.00
Lives
tock
Bovinem
eat
Poultry
Milk, co
nc.
Wheat
RiceMaiz
eSug
ar, ra
w
Sugar,
refin
ed
Oilseed
s, tem
p.
Oilseed
s, tro
p.
Chan
ge in
% WorldDevelopedDevelopingLDC
Source: David Vanzetti and Ralf Peters, UNCTAD estimates with ATPSM
Change in global productionFull liberalisation
World
-2.50
-2.00
-1.50
-1.00
-0.50
0.00
0.50
1.00
Lives
tock
Bovinem
eat
Poultry
Milk, co
nc.
Wheat
RiceMaiz
eSug
ar, ra
wSug
ar, re
fined
Oilseed
s, tem
p.Oilse
eds,
trop.
Chan
ge in
%
Source: David Vanzetti and Ralf Peters, UNCTAD estimates with ATPSM
Results • Change in Production
– Production in developed countries mostly falling – Production in developing countries mostly increasing;
but e.g. in case of wheat from low base– World production increasing or slightly decreasing;
but changes small • Self sufficiency increasing in DCs but world
production not always increasing – But scenario too ambitious– Doha mostly about squeezing out the water (tariffs in DCs
and DS in developed)
Recommendation • Doha contribution limited
– But should continue• Developing countries
– Investment in agriculture to increase productivity– Research and development– Temporarily subsidising inputs to increase production
• Developed countries– Reduce or eliminate trade distorting subsidies– Careful with bio-fuels– Technology transfer– Support DCs (ODA for Agriculture dropped by 65% in 20
years)
Note: This publication has been made available by CSEND with the agrement of the author.
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