How better take into account the impact of trade on food security and nutrition?
The High Level Panel of Experts on Food Security and Nutrition (HLPE)
May 15, 2017
The High Level Panel of Experts on Food Security and Nutrition (HLPE), an interface with the scientific community of the FAO's Committee on Global Food Security (CFS), has renewed, upon the request of the FAO, a process to identify critical and emerging issues for food security and nutrition in order to assist CFS members “in setting priorities for future actions and attention needed in key areas”.
The synthesis report of this dialogue has just been published1. Among the various themes addressed the issue of the impact of international trade on food security and nutrition (FSN).
Far from the exaggerated analyses sometimes encountered, the HLPE report reminds us that there is neither consensus nor an unequivocal link between trade openness and food security: “Trade affects the four pillars of FSN in a complex way, both positively and negatively”. Moreover, because of the “inability to adequately guarantee the fair distribution of the benefits of trade on a global scale ..., the popularization of the pursuit of trade liberalization” has weakened. And “the willingness of countries to entrust their food security to international markets ... is in decline”.
Consequently, the Doha failure is explicit: “WTO member states have been unable to revise or add to the rules governing multilateral trade in agricultural produce ... many aspects of the existing rules are outdated”.
Finally, the report points to the clear contradiction between the objective of developing trade in the name of the benefits of competition on the one hand, and the increasing concentration of international trade players on the other.
Let us hope that the lucidity of these findings can help in escaping the crisis of multilateralism, because it is not so much the opening of trade itself as the structural instability of international markets that poses a real problem. A new WTO agricultural cycle will have to be based on the prerequisite of the structural instability of agricultural markets to build the conditions for cooperation between national and regional agricultural stabilizing policies...
Momagri Editorial Board
Trade in food is expanding rapidly but the expansion is not equal across regions or commodities (FAO, 2015b). Global agricultural exports nearly tripled in value between 2000 and 2012 (FAO, 2015b). FAO and OECD predict over 95 percent of the consumption growth in food between now and 2024 will occur in the global South (OECD/FAO, 2015). This expansion of international trade includes its rising importance in the distribution of staple foods. Where today one in six people in the world is estimated to obtain their staple calories from international trade, by 2050 that figure could rise as high as one in two (Fader et al., 2013). Trade affects all four pillars of FSN in a complex way, both positively and negatively (Murphy, 2015). Moreover, trade policies interact with other powerful drivers, especially technology and demographic trends, which shape food production, distribution and consumption and compound the dynamic nature of the challenges. This complexity coupled with the rapid pace of change makes it difficult for policy-makers to address FSN as they agree, revise and implement multilateral trade rules.
The member states of the World Trade Organization (WTO) have largely proved unable to revise or add to the rules that govern multilateral trade in agricultural commodities, with the notable exception of the 2015 decision to permanently eliminate export subsidies. This means many aspects of the existing rules are out of date (see, for example, Galtier, 2015, for a discussion of the need to update the method used to calculate domestic support to agriculture). In the meantime, a growing debate over the need to address rising inequality and the failure to properly ensure that the benefits of trade are widely shared (discussed, for example, in a recent report jointly published by the WTO, the World Bank and the International Monetary Fund [IMF]) has weakened public support for a trade liberalization agenda. Some countries have adopted food sovereignty policies that explicitly privilege local and domestic markets rather than international trade (Lambek et al., 2014).
Several regions face fragile food supply lines and weak agricultural risk management strategies, due to wars, piracy, changing and unpredictable weather and ageing infrastructure. International trade in most agricultural commodities is managed through a small number of vertically integrated firms (Murphy et al., 2012). Most of the staple foods sold in international markets are primarily sourced from just a half dozen countries. The challenges of financialization, closely linked to trade and investment agreements, and linked to the problem of concentrated market power in commodity trading was noted in the first HLPE note on Critical and Emerging Issues (2014a). These challenges have yet to be addressed.
Thus, on the one hand cooperation on trade is more important than ever for FSN; yet, on the other, there is a decline in countries’ willingness to trust their food security to international markets and in their willingness to cooperate in the agreement of international trade rules.
It is not simple to give policy advice for trade and FSN (FAO, 2015b). The role of international trade in the realization of FSN has been the source of long-standing controversies among governments, civil society organizations and academics. Many economists argue that the environmental and social concerns associated with freer trade are best addressed with domestic policies that do not distort trade (Diaz-Bonilla, 2015). Others encourage markets but support market interventions as well (Timmer, 2015), while the food sovereignty movement argues that local markets are the priority (Windfuhr and Jonsén, 2005). Looking ahead, these challenges raise the following questions:
- How can policy help markets better capture the “true costs of production”, including externalities that have a long-term impact on FSN, such as carbon emissions, fresh water use, soil depletion, biodiversity loss?
- Existing trade rules have significantly limited the role of governments in food distribution (buying from farmers, storage or export enterprises). But private monopolies and oligopolies are common. How can competition be ensured while respecting the very different political objectives and legal capacities of different countries to make and enforce regulations?
- How to reconcile the competing and sometimes contradictory demands of international trade and local and subregional markets?
- What next steps would support governments in the identification of their relative strengths and weaknesses in international markets with a view to developing trade strategies that respect their food security and nutrition needs?
- How best to rebuild a common basis for multilateral negotiations in the context of trade for FSN?
- How might trade and investment rules address the increasing concentration in food and agricultural commodity markets?
1 The entire report is available from