Sunday, June 10, 2012

Food security, WTO and domestic policy space

Congolese boys push a wooden bicycle as they transport goods to the market near Goma, in Democratic Republic of Congo, on December 4. (Simon Maina/AFP/Getty Images)
(Congolese boys push a wooden bicycle as they transport goods to the market near Goma, in Democratic Republic of Congo, on December 4. (Simon Maina/AFP/Getty Images)

An interesting debate between Olivier De Schutter, United Nations Special Rapporteur on the Right to Food and Pascal Lamy, Director General of the WTO regarding the relationship between international trade and food security as well as the role of the WTO throws open issues of food security in the context of globalised trade.The Epoch Times captured this debate here.

Olivier De Schutter in his report in November 2011 titled "The World Trade Organization and the Post-Global Food Crisis Agenda Putting Food Security First in the International Trade System" seriously questioned the adequacy of the present multilateral legal framework to address the issue of food security of States implying that countries must have much more domestic policy choice to ensure food security and strengthen its fight against hunger. He calls into question the compatibility of WTO rules in ensuring food security and advocates an overhaul of the present legal framework. Questioning the model of reliance on international trade to address food security issues, he opines:
"The increased dependency on international trade by many countries with significant food production capacity can have a number of direct and indirect impacts on the realization of the human right to adequate food. This may lead to loss of export revenues when the prices of export commodities rapidly fluctuate downwards. When low-priced imports arrive on the domestic markets –- against which local producers are unable to compete—,local producers suffer ; and when the prices of food commodities go up, balance of payments problems for the net food-importing countries. High food import dependence also further exposes producers and consumers to increased vulnerability both to worsening terms of trade and to fluctuations in commodity prices. Such situations significantly reduce the capacity of States that are highly dependent on international trade and imports to buffer external shocks, such as overproduction or harvest failures in other States."
Assessing WTO's track record in addressing issues of food security, the Special Rapporteur felt: 
"The WTO’s track record of taking food security seriously is mixed. To a certain extent the WTO’s track record reflects the dominance of net food exporters in the negotiations for whom food security is a low priority compared to opening markets for their exports. The structure of WTO negotiations themselves, which involve tradeoffs between agriculture and other goods trade (e.g., services, industrial goods, etc.) in practice precludes food security from being addressed in isolation and on its own merits instead of as a  “bargaining chip” to be leveraged. In addition, the relative lack of expertise on food security among trade negotiators and the WTO secretariat provides a further explanation for the way food security has been ignored."
Recommending a number of steps to enhance domestic control over food security issues, the Report sought a panel of experts to to systematically analyze the compatibility of existing WTO rules, and those under consideration in the Doha Round, with best practices and current national and international food security strategies and policies. The report essentially questions the compatibility of WTO rules to protect food security and seeks a broader mandate to the States to take measures in times of a food crisis.

Pascal Lamy, the Director General of WTO responded to the Report of the UN Special Rapporteur in a letter by questioning the rationale that international trade in food products is antithetical to food security concerns.
"Secondly, I fundamentally disagree with your assertion that countries need to limit reliance on international trade to achieve food security objectives. On the contrary, there is agreement among most UN-led experts that international trade is part of the package of solutions to achieve food security. The UN High Level Task Force on the Global Food Security Crisis in their 2010 Updated Comprehensive Framework for Action noted that “more liberalized international markets would contribute to global food and nutrition security through increased trade volumes and access to diverse sources of food imports.” (“Updated Comprehensive Framework for Action”, United Nations High Level Task Force on Global Food Security Crisis, September 2010, paragraph 76.) The Inter-agency report for the G-20 stated, for example, that “trade is an essential component of any food security strategy” and that “Policies that distort production and trade in agricultural commodities potentially impede the achievement of long run food security”. (Price Volatility in Food and Agricultural Markets: Policy Responses”, Policy Report including contributions by FAO, IFAD, IMF,OECD, UNCTAD, WFP, the World Bank, the WTO, IFPRI and the UN HLTF, 2 June 2011, page 23.) Indeed, our Members negotiate towards a more level playing field in agriculture in order to enhance their ability to achieve food security."
He argued that the WTO rules provide sufficient policy space for countries to implement food security policies that are nationally relevant.
Current WTO rules in agriculture and possible outcomes from the DDA allow policy space and flexibility in these areas. Hence, the Agreement on Agriculture leaves developing countries broad room to implement measures to achieve their national objectives, including food security, notably through Green Box support and Article 6.2 development programmes. As you rightly mention, the Doha Round would further increase this flexibility by relaxing some of the Green Box criteria to make it easier to use by developing countries, for example on public stockholdings for food security purposes."
Asserting that WTO rules provide for preventing trade distorting measures, he concludes by referring to several mechanisms to review the relationship between international trade and food security thus rejecting, by implication, the need for a panel of experts as suggested by the UN Special Rapporteur.

The debate raises interesting questions:

1. Is international trade in food products and food security incompatible?
2. Do WTO Agreements provide sufficient domestic regulatory space for countries to address their food security concerns?
3. is there a fundamental difference between the tarde in non-food products and food products and do they have to be treated differently?
4. Will increased international tarde in food products, hence more imports benefit end consumers due to a fall in prices?
5. Are developing countries impacted by a loss of control over their food security when they depend largely on cheaper food imports? Can there be a cartelisation and subsequent impact on food prices?
6. Do the present WTO rules, especially the Agreement on Agriculture, have sufficient policy space that countries can use to protect their domestic interests?
7. Can the interests of small, marginal farmers, the poor and the marginalised be protected by the State with increased trade/imports in food?
8. Are interests of small, marginal and other farmers really in increased access to export markets? 

Each country perhaps needs to draw a matrix of interests specific to their conditions which would involve small, marginal, large farmers, rural and urban consumers, exporters and importers of food and business interests to assess the impact of international trade in food vis vis food security.


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