I attended a meeting at FAO last week. The Committee on Commodity Problems held an event in which experts from WTO and other trade related organizations discussed the linkages between trade and agricultural policy. The impact of climate change on agriculture and our response to it loamed large over the meeting. The main ideas and issues discussed are set out below.
FAO DG da Silva presenting to delegates in The Green Room at FAO in Rome
FAO Director General José Graziano da Silva highlighted three areas where trade and food security concerns are linked.
- Prioritizing global agreements over bilateral and regional agreements which should complement not substitute agreement.
- Most of the 850 million people in the world who are hungry are smallholders and family farmers in developing countries. Family farms produce 80% of world food production. Export subsidies are particularly harmful to them as they face difficult conditions to compete with producers from developed countries.
- Standards and food safety rules based on science based evidence are required in trade rules. If every govt applies different standards, trade would be more costly. Food safety is fundamental to food security.
Roberto Azevedo, the DG of the WTO followed with an opening speech via videolink. He highlighted the elimination of export subsidies achieved in Nairobi at the 10th Ministerial as the most significant recent achievement in trade reform. He said it will help level the playing field and deliver SDG 2. Together with the Trade facilitation agreement this is a big achievement.
The DDG of WTO and its Director of Agriculture went into more detail on the upcoming Ministerial meeting in Buenos Aires where agriculture will be an important topic in negotiations. The three main issues for negotiation include domestic support, public stock holding (PSH) and export restrictions. A big related issue for negotiation is fishery subsidies. It appeared from discussions at the meeting that success most likely in the PSH negotiations.
In a panel session that included representatives from ICTSD, OECD and FAO, the linkages between trade, climate change and food security were further explored. Several themes emerged.
Climate change is having strong negative impact on productivity. This will alter the patterns of trade.
Trade can be a tool to address climate change.
- we can expect an increase in extreme weather events which will have an impact on global markets (shortages ). This will lead to govt responses for example export bans. This may have positive short term effects in price increases but longer term creates reduction in private sector incentives to invest in infrastructure so reduce future resilience to shocks.
- CC likely to give rise to food-borne diseases. We need to ensure trade not overly restrictive in response and that we strengthen food safety control systems to counter this
- CC itself can be directly affected by trade by increases in transportation of food and indirectly by incentivize production thru unsustainable practices
There is a need to reconcile domestic support (to boost productivity) and respecting trade policy objectives to keep trade open. Does trade policy have the framework to meet the challenges of climate change in view of this?
Trade is an enabler but not sufficient alone to achieve public policy goals. It is a blunt instrument to change public policy outcomes like non-communicable diseases and biodiversity. The focus must be on getting domestic policies right.
In view of the challenges to sustainability, agricultural policy should be structured around three pillars of support for:
- a bundle of environmental goods and services
- risk management
Broadly, policies must ensure input and output markets function efficiently and we must resolve land issues.