According to a
recent inter-agency report, about 16% of the world’s population is chronically
undernourished. Aid for Trade is making a contribution to addressing the
problem, but much more needs to be done to coordinate policy approaches that
will work.
Increased aid and
investment in farming in the developing world have consistently been recognized
as part of the solution, most recently by agriculture ministers at the G-20
meeting in June 2011. The inter-agency report, Price Volatility in Food and
Agricultural Markets: Policy Responses,1 presented at the G-20,
points out that in the future, demographic trends, water availability and
changes to the Earth’s climate will make it harder for governments to ensure
that everyone has enough to eat. Less widely recognized is the need for this investment
to fit within a broader strategic vision of economic development.
However, funding
commitments – such as those that the G-8 made at L’Aquila in 2008 – have yet to
be fulfilled. The stalling of the World Trade Organization’s (WTO) Doha Round
of negotiations is hampering progress towards the promise made decades ago to
discipline developed country farm subsidy spending and improve poorer farmers’
access to global markets.
While an
aggregated US$ 40 billion has already been generated by the WTO’s Aid for Trade
initiative, a few major OECD countries are still providing annual support to
their own agricultural producers, worth over US$ 250 billion as recently as
2009. Thus the real challenge is one of equitably and effectively distributing
the resources that are needed to enable farming in developing economies to
furnish adequate additional food.
Too often, farmers
in poor countries lack infrastructure – storage facilities, rural roads and
electricity – as well as inputs such as machinery, fertilizer and water.
Ensuring that all producers can access local, regional or global markets must
be a priority. International Centre for Trade and Sustainable Development
(ICTSD) research suggests that Aid for Trade may help solve some of these
problems – but national actors must collaborate to integrate trade policies
into broader development plans.
For example, close
coordination between government agencies, farmers and commercial banks is
enabling Cambodia to diversify into rice exports, and helping Mauritius add value
in the sugar industry and bolstering foreign direct investment.2
ICTSD has also
examined the trade policy dimensions of food price volatility.3 If
governments can cooperate on export restrictions, biofuel policies or properly
functioning stocks and reserves, they will be closer to overcoming shortcomings
in international governance.
Increased aid is vital – especially if targeted towards
helping the most vulnerable producers to sell to local, regional and global
markets. Aid disbursements must be of sufficient scale to meet the challenges
that developing countries face, today and in the future, and be part of a
broader package of global trade policy reforms to achieve sustainability.
1 Food
& Agricultural Organization of the United Nations (FAO), International Fund
for Agricultural Development (IFAD), International Monetary Fund (IMF),
Organization for Economic Co-operation and Development (OECD), United Nations
Conference on Trade and Development (UNCTAD), World Food Programme (WFP), World
Bank, World Trade Organization (WTO), International Food Policy Research
Institute (IFPRI) and the High- Level Task Force on the Global Food Security
Crisis (UN HLTF) (2011), Price volatility in Food and Agricultural Markets:
Policy Responses. Rome, FAO.
2 Sok,
S. (2011). Trade Diversification after the Global Financial Crisis: Cambodia
Rice Export Policy Case Story. www.ictsd.org/i/publications/105557/.
3 Tangermann, S.
(2011), Policy Solutions to Agricultural Market Volatility: A Synthesis,
www.ictsd.org/i/publications/108969/. Diaz-Bonilla, E. and Ron, J.F. (2011),
Food Security, Price Volatility and Trade: Some Reflections for Developing
Countries, www.ictsd.org/i/publications/97273. Babcock, B. (2011), The Impact
of US Biofuel Policies on Agricultural Price Levels and Volatility, www.ictsd.org/i/publications/108947/.
The Third
Aid for Trade Global Review: Advancing food and
nutrition security
Aid for Trade is primarily a vehicle to enable
developing countries, particularly least developed countries, to integrate
better into the multilateral rules-based trading system. The Third Aid for
Trade Global Review took place at the World Trade Organization in Switzerland
on 18 and 19 July 2011.
At the event, UN Secretary-General Ban Ki-moon spoke
about the interconnection of issues such as climate change, water scarcity,
energy shortages, global health, gender empowerment and the food crisis.
Speaking specifically about the food crisis, Mr. Ban
said, ‘We must fully utilize the potential of Aid for Trade to advance food and
nutrition security. The recent decision by the G20 to remove export
restrictions on food purchased for humanitarian aid is a welcome [...] first
step. A level playing field will contribute immensely to food and nutrition
security, especially for the world’s poorest and most vulnerable people.’
As the largest multilateral team dedicated entirely to
trade-related technical assistance, ITC provided six case stories for the
Global Review relating to, for example, ITC’s work in the African cotton sector
and efforts to improve the quality of Ethiopian coffee.
For more information visit: www.intracen.org/about/aid-for-trade.