UNCTAD Discussion Forum, 27 Nov 2013
' Why trade matters in development strategies'
Session on trade policy issues in dealing with food security
Jonathan Hepburn
Programme 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
Undernourishment in the developing world
Photo: IPRD: http://iprd.org.uk/?p=6577
Source: FAO, Oct 2013. ICTSD

Access and availability: trade policies must help reduce poverty
World food supply (calories / person / day)
2800
2600
2400
2200
2000
"Food security exists when 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."
1800
World Food Summit, 1996.
1600
1963
1961
1967
1965
1971
1969
1975
1973
1979
1977
1983
1981
1987
1985
1991
1989
1995
1993
1999
1997
2003
2001
2007
2005
Average Dietary Energy Requirement at world level for 2005-07: 2236Kcal/person/day
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

Trade measures can affect different groups and individuals differently
For example:
* rural / urban
* net producer / consumer
* landowner, tenant farmer, landless labourer
ICTSD

2. New food security challenges in global markets
ICTSD

FAO Food Price Index. 2002-04 = 100
180
160
140
120
100
80
60
40
20
0
Source: FAO food price index (real prices), May 2013 ICTSD

Source: OECD-FAO Agricultural Outlook, 2012-2021 ICTSD

Share of food imports as % of total merchandise exports (1990-99)
200.0
180.0
160.0
140.0
maximum
120.0
100.0
80.0
60.0
maximum
Average
61%
40.0
20.0
Average
30% minimum minimum
0.0
Net food importing developing countries (NFIDCs)
Least developed countries (LDCs)
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

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
The effects of export restrictions on rice prices
Source: Headey, D, “Rethinking the global food crisis: the role of trade shocks”. IFPRI discussion paper 00958, March 2010
ICTSD

Climate change: trade can only partially offset growing food insecurity
Increased no. of malnourished children by 2050 due to climate change
Sub-Saharan Africa
South Asia
East Asia and the Pacific
Europe and Central Asia
Middle East and North Africa
Latin America and the Caribbean
0 2 4 6 8 millions of additional malnourished under-5 children by 2050
10
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.
12
ICTSD

3. Boosting farm productivity: can trade policy help?
ICTSD

Sustainable farm productivity growth needed to raise rural incomes and match growing demand
Sub-Saharan Africa
Northern Africa
Actual crop yield (2005) as % of potential yield
South Asia
Southern America
0 10 20 30 40 50 60 70 80
Source: The State of the World's Land and Water Resources for Food and Agriculture: Managing Systems at Risk (2011)
90 100
ICTSD

China: reporting rapid increase in minimally trade-distorting farm subsidies
800000
700000
600000
500000
400000
300000
200000
100000
'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
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: China's subsidy notifications to the WTO; ICTSD compilation.
Domestic support in 2008 was RMB688bn (USD99bn), green box was RMB593bn.
General services
ICTSD

16000
14000
12000
10000
8000
6000
4000
2000
0
Environmental programmes
Investment aids
Natural disaster relief
Food security stockholding
General services
Input + investment subsidies for low-income, resource-poor producers
Source: India's official notifications to the WTO; ICTSD compilation ICTSD

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.
300,000
Producer support estimate (USD): transfers to producers from taxpayers and consumers
250,000
200,000
150,000
100,000
50,000
0
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
-50,000
Source: OECD data, adapted by ICTSD
OECD
European Union-27
China
Japan
United States
ICTSD

4. Strengthening global governance on trade and food security
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.
ICTSD

Bali 'low ambition' - but ministers could seek to address 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 ICTSD

Photo: UN News Centre. http://www.un.org/apps/news/story.asp?
NewsID=39927#.UdWOmM5_4p8
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
ICTSD

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