European Parliament, Committee on International TradeHearing on Trade and Food Security, 10 July 2013
Trade and food security:Towards greater policy coherence?
Jonathan HepburnProgramme Manager, Agriculture
1. Food security: how does it relate to trade?
ICTSD
Ensuring food security requires coordinated action:on equity, the environment - and also trade
Source: FAO, Oct 2012. ICTSD
Undernourishment in the developing world
Photo: IPRD: http://iprd.org.uk/?p=6577
Access and availability:trade policies must help reduce poverty
Source: ICTSD adaptation of graph based on FAO 2236data in Konandreas, P. (2012), “Trade Policy Responses to Food Price Volatility in Poor Net Food-Importing Countries”. http://ictsd.org/i/publications/134356/ ICTSD and FAO. ICTSD
19611963
19651967
19691971
19731975
19771979
19811983
19851987
19891991
19931995
19971999
20012003
20052007
1600
1800
2000
2200
2400
2600
2800World food supply (calories / person / day)
Foo
d:
Ca
lori
es
/ p
ers
on
/ d
ay
Average Dietary Energy Requirement at world level for 2005-07: 2236Kcal/person/day
"Food security existswhen all people, at all times,have physical, social and economic access to sufficient, safe and nutritious food which meets their dietary needs and food preferences for an active and healthy life."
World Food Summit, 1996.
Trade measures can affect different groups and individuals differently
ICTSD
For example:
* rural / urban
* net producer / consumer
* landowner, tenant farmer, landless labourer
2. New food security challenges in global markets
ICTSD
High and volatile prices: new challenges
Source: FAO food price index (real prices), May 2013
1/1
99
0
3/1
99
1
5/1
99
2
7/1
99
3
9/1
99
4
11
/19
95
1/1
99
7
3/1
99
8
5/1
99
9
7/2
00
0
9/2
00
1
11
/20
02
1/2
00
4
3/2
00
5
5/2
00
6
7/2
00
7
9/2
00
8
11
/20
09
1/2
01
1
3/2
01
2
5/2
01
3
0
20
40
60
80
100
120
140
160
180FAO Food Price Index. 2002-04 = 100
ICTSD
Projections: price trends set to continue
Source: OECD-FAO Agricultural Outlook, 2012-2021 ICTSD
Poor food-importing countriesespecially vulnerable
Source: Konandreas, P. (2012), “Trade Policy Responses to Food Price Volatility in Poor Net Food-Importing Countries”. http://ictsd.org/i/publications/134356/ ICTSD and FAO. Adapted by ICTSD from analysis by the author, based on FAO data. ICTSD
Net food importing developing countries (NFIDCs)
Least developed countries (LDCs)0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
200.0
%
Share of food imports as % of total merchandise exports (1990-99)
Average 30%
Average61%maximum
maximum
minimum
minimum
Biofuel blending mandates:Pushing up prices when yields are low
Source: Babcock, B (2011), "The Impact of US biofuel policies on agricultural price levels and volatility”. ICTSD, Geneva. http://ictsd.org/i/publications/108947/ ICTSD
Food export restrictions:exacerbating shortages on world markets
Source: Headey, D, “Rethinking the global food crisis: the role of trade shocks”. IFPRI discussion paper 00958, March 2010
The effects of export restrictions on rice prices
ICTSD
Climate change: trade can only partially offset growing food insecurity
Source: Adapted from Nelson et al, (2009), “The Role of International Trade in Climate Change Adaptation”. ICTSD and IPC. http://ictsd.org/i/publications/66988/Note: Assuming no carbon fertilisation under NCAR and CSIRO climate change scenarios. Figures given are to the nearest million.
Latin America and the Caribbean
Middle East and North Africa
Europe and Central Asia
East Asia and the Pacific
South Asia
Sub-Saharan Africa
0 2 4 6 8 10 12
Increased no. of malnourished children by 2050 due to climate change
millions of additional malnourished under-5 children by 2050
ICTSD
3. Boosting farm productivity: can trade policy help?
ICTSD
Sustainable farm productivity growth needed to raise rural incomes and match growing demand
Source: The State of the World's Land and Water Resources for Food and Agriculture: Managing Systems at Risk (2011)
Southern America
South Asia
Northern Africa
Sub-Saharan Africa
0 10 20 30 40 50 60 70 80 90 100
Actual crop yield (2005) as % of potential yield
ICTSD
China: reporting rapid increase in minimally trade-distorting farm subsidies
Source: China's subsidy notifications to the WTO; ICTSD compilation. Domestic support in 2008 was RMB688bn (USD99bn), green box was RMB593bn. ICTSD
1999 2000 2001 2002 2003 2004 2005 2006 2007 20080
100000
200000
300000
400000
500000
600000
700000
800000
'De minimis' trade-distorting support
Regional assistance programmes
Environmental programmes
Investment aids
Resource retirement programmes
Producer retirement programmes
Natural disaster relief
Income insurance / safety-nets
Decoupled income support
Domestic food aid
Food security stockholding
General services
RM
B y
uan (
mn)
India: also rapidly increasing farm subsidies
Source: India's official notifications to the WTO; ICTSD compilation ICTSD
1998-9
9
1999-2
000
2000-0
1
2001-0
2
2002-0
3
2003-0
40
2000
4000
6000
8000
10000
12000
14000
16000
Environmental programmes
Investment aids
Natural disaster relief
Food security stockholding
General services
Input + investment subsidies for low-income, resource-poor producers
Support
, m
illio
n U
S$
Aid to agriculture falls as share of total aid
Source: OECD. In Konandreas, P. (2012), “Trade Policy Responses to Food Price Volatility in Poor Net Food-Importing Countries”. ICTSD and FAO. http://ictsd.org/i/publications/134356/ ICTSD
Support to farmers in the OECD: despite reforms, still around US$250bn p.a.
ICTSD
19861988
19901992
19941996
19982000
20022004
20062008
2010-50,000
0
50,000
100,000
150,000
200,000
250,000
300,000
OECDEuropean Union-27ChinaJapanUnited States
USD
(m
n)
Source: OECD data, adapted by ICTSD
Producer support estimate (USD): transfers to producers from taxpayers and consumers
4. Strengthening global governance on trade and food security
ICTSD
Improving coordination: domestically and internationally
ICTSD
* UN HLTF, revitalised CFS, G-20... some improvement in international coordination on trade + food security
* Still need to ensure policy coherence for development at domestic level, in developed and developing countries
Photo: Wikimedia commons, Presidency of the Nation of Argentina.G-20 summit, Cannes 2011.
Bali MC9: an opportunity to ensure trade rules support food security?
ICTSD
Bali 'low ambition' - but ministers could seek to identify ways forward on trade and food security at 3 levels:
1). in the 'small package'
2). in the unresolved Doha agenda
3). in the new trade policy environment
Photo: Ammad Bahalim, ICTSD
Towards more equitable and sustainable global markets
ICTSD
Beyond the trading system, effective regulatory frameworks are needed to:
1). internalise costs of maintaining environmental public goods (e.g. climate)
2). sustainably boost farm productivity in developing countries
3). provide targeted consumer subsidies to the poorest and most vulnerable people
Photo: UN News Centre. http://www.un.org/apps/news/story.asp?NewsID=39927#.UdWOmM5_4p8
References:
Babcock, B. (2011), "The Impact of US biofuel policies on agricultural price levels and volatility”. ICTSD, Geneva. http://ictsd.org/i/publications/108947/
Clay, E. (2012), “Trade Policy Options for Enhancing Food Aid Effectiveness”. ICTSD, Geneva. http://ictsd.org/i/publications/133713/
FAO, (2011), “The State of the World's Land and Water Resources for Food and Agriculture: Managing Systems at Risk”. Routledge / Earthscan.
FAO, (2012), “The State of Food and Agriculture 2012”. FAO, Rome.
Headey, D. (2010), “Rethinking the global food crisis: the role of trade shocks”. IFPRI discussion paper 00958, March 2010
Hepburn, J (2012), “Food security and the multilateral trading system”. In Meléndez-Ortiz, Bellmann and Rodriguez Mendoza (eds), The Future and the WTO: Confronting the Challenges. 2012. http://ictsd.org/i/publications/138578/
Josling, T. (2011), “Global Food Stamps: An Idea Worth Considering?”. ICTSD, Geneva. http://ictsd.org/i/publications/111809/
Konandreas, P. (2012), “Trade Policy Responses to Food Price Volatility in Poor Net Food-Importing Countries”. ICTSD and FAO. http://ictsd.org/i/publications/134356/
Nelson et al, (2009), “The Role of International Trade in Climate Change Adaptation”. ICTSD and IPC. http://ictsd.org/i/publications/66988/
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More ICTSD analysis on trade and food security is online at: www.ictsd.org/programmes/agriculture/
ICTSD
Thank you.Jhepburn [at] ictsd.ch
