DEPUTY DIRECTOR-GENERAL ALAN WM. WOLFF

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It is a pleasure to welcome you today at this symposium on trade in the global agri-food system. You will have the opportunity to hear from experts from both developed and developing countries on the challenges facing the agricultural sector in the future and the opportunities to enhance the agricultural sector’s ability to contribute to sustainable outcomes.

This is the second symposium organized in Geneva bringing together experts from around the world. Last year the focus of our discussions was the global agricultural trade landscape. The speakers highlighted the policy diversity that exists among WTO Members and shared perspectives on how to approach current challenges in the agriculture sector.

This year the theme for the symposium is the role of trade in global agri-food systems. The objective of this event is to provide an opportunity for WTO Members to reflect on the ways that trade interacts with other parts of the agri-food system and how trade may play different roles, depending upon future scenarios– particularly related to climate change and digital innovation in the sector.

The livelihoods of more than 60% of the world's 7.7 billion people depend on agriculture. So, creating the conditions for a healthy resilient agri-food system is essential for improving their incomes. The system’s health depends on connections –connections of producers to markets, consumers with preferred products, and regions with surplus production to regions with production deficits. This is increasingly important where changes in climate and natural disasters occur. By linking markets, producers and consumers, more closely together, trade plays an increasingly important role in creating conditions for globally sustainable agri-food systems.

Agricultural trade has been growing in the past decade and the structure of trade has evolved. Exports of agricultural products increased by 70% from 2006 to 2016, with an average growth of 5% per year. With the rapid expansion of South-South trade, the participation of middle and low income countries in global agricultural markets has increased. The FAO estimates that the share of imports by middle- and low-income countries sourced from other middle- and low-income countries increased from 41.9% in 2000 to 54.4% in 2015. During the same period, exports followed a similar trend. By 2015, about half of the exports of middle- and low-income countries were destined for other ‘South’ countries.

Yet the patterns of trade that currently exist may create food security risks if extreme weather events become the norm. OECD studies have shown that agricultural trade typically flows from a small number of exporters to a large number of importers. For rice and wheat, for instance, the five largest importers jointly account for less than 30% of global imports. In contrast, agricultural exports are typically highly concentrated which creates a risk for significant impacts on global markets if major exports suffer from bad harvests or implement substantial, policy changes.

The role of agriculture within our Member countries and those who seek to join the WTO depends on the specific characteristics with that country such as population density, the relative size of urban and rural populations and income levels, as well as the resource base including water and arable land. While these different conditions can make it difficult to find common ground, it is precisely this diversity that drives a healthy global food system.

The agri-food system is in the process of changing dramatically and change is expected to accelerate in the coming years. Extreme weather events and increased likelihood of unexpected pest outbreaks create challenges for agricultural producers. Governments need to address critical environmental challenges, including soil degradation and water shortages, while improving food security.

On the positive side, innovative new technologies can offer new possibilities for farmers to manage their production and connect to consumers. One study showed that the productivity benefits of using ICTs in promoting access to real time price information in Africa have led to an increase up to 36% of farmers’ income in countries such as Kenya, Ghana, Uganda and Morocco. The increasing adoption of deep learning, computer vision technologies, and predictive analytical technologies for agricultural applications is a major driving force for the market growth in countries such as Australia, China, Japan, and India.

The challenge will be to ensure that these technologies are harnessed to contribute to agricultural productivity improvements for small holders as well as farmers with large holdings, women as well as men, for the old as well as the young.

A more open, less distorted trading system is necessary to ensure that the agri-food system can respond effectively to shocks. But trade is only one component within complex domestic policy contexts. Governments need to assemble a set of policies, taking into consideration their unique economic and environmental context, that will enable the agri-food sector to contribute to peace and prosperity. Policy packages incorporating coherent macroeconomic policies, nutrition policies, research and development, and agricultural extension services must ensure future resilience in the sector.

Trade creates opportunities and with an enabling policy environment, these opportunities can have a positive impact both for producers and consumers. Yet we need to keep an eye on the constraints that may make it difficult for certain groups to gain access to new opportunities. Even with rapid technological change, smallholders may struggle to connect to markets – for many reasons including weak infrastructure, inadequate training to support technology adoption, or technologies that are not suited to their particular situation. We need to ensure that as the agricultural sector is being transformed, the conditions are in place for the less-advantaged to have access to the opportunities that are created.

I have three main points to highlight about how the WTO contributes to a healthy agri-food system.

First, the WTO plays an important role in ensuring robust connections among different parts of the agri-food system. The WTO system was established to contribute to predictability and transparency in the global trading system. Before the establishment of the WTO, the world’s agricultural markets were described by some as being “in disarray”. Some countries were providing high levels of domestic support to producers which by the mid-1980's had grown to about 60 % of the value of agriculture production in OECD countries. As a result of domestic support and border protection, countries generated massive production surpluses which could be disposed of in world markets only with export subsidies. Unstable global markets and artificially low agricultural prices created challenges for all countries. The GATT rules gave special treatment to agriculture – carving agriculture products out of disciplines that existed for other products. The WTO was created to address these limitations - WTO Members agreed to limit their trade- distorting subsidies, including export subsidies. They also agreed that negotiations would continue to achieve the long-term objective of substantial progressive reductions in support and production. Of course, this progress was made possible by changes in domestic policy objectives. Now with broader coverage of international rules in the WTO, by promoting transparency and predictability, WTO rules plays a key role in creating the conditions for a resilient agri-food system.

Second, through the WTO’s monitoring functions, WTO Members can identify and respond to policies that create unfair trading conditions and distortions of global markets. The WTO’s Committee on Agriculture is one venue Members have available to engage with each other to examine the overall conditions of the agricultural trading system. Secretariat monitoring reports highlight trends in policy interventions, providing essential information for policy makers facing a rapidly changing agri-food system. Monitoring reports generate essential feedback – about the health of the trading system, about potential risks for producers, and about trends that could destabilize markets. The information which is available to all Members can then be used to inform decision-making and debate, or to identify collective action that might be necessary to stabilize the system and encourage healthy trading relationships.

Lastly, the WTO rules provide the flexibility for governments to respond to changing conditions, to respond to their changing needs and priorities. The WTO rules are structured to provide policy space so that governments can adapt their measures to their particular domestic conditions. And this is essential, given the diversity of conditions that exist among Members.

No one set of policies will solve the complex challenges WTO Members face. A robust policy framework requires balancing diverse needs. Policy decisions taken at the country level can have wide systemic effects – on economic outcomes, on agricultural outcomes, and on environmental outcomes. Ultimately, collectively, national choices will have an impact on the sustainability and health of the global agri-food system. By broadening our perspectives, we can better understand the ways these complex systems interact and the way that policy decisions shape farmers’ decisions, firms’ decisions, and consumers’ decisions.

WTO rules were created to minimize the potential negative spillover from trade-distorting policies, but there is room for improvement in the rules to enable the multilateral trading system to respond effectively to transformation in the agriculture sector to ensure that all countries benefit from the system.

The WTO can contribute to collective problem-solving by providing opportunities to reflect and discuss together, and ultimately to improve the international trade framework for agriculture.

This week's programme of events at the Secretariat includes this symposium, the meeting of the Committee on Agriculture, and an information session on international food aid. In other rooms Members are discussing other issues that affect the agriculture ecosystem, including government procurement, how to facilitate trade for small businesses, and the monitoring mechanism for special and differential treatment. These events and meetings provide venues for diverse viewpoints to be expressed and debated.

For the next two days at this Symposium, we will have the opportunity to reflect on the current issues facing the global agri-food system. The four sessions cover a wide range of topics – from the role of trade in the agri-food system to the impact of border measures on economic outcomes; from public spending in agriculture to innovations to address the challenges faced by small producers. Discussants will provide country-specific perspectives highlighting their own domestic contexts. Most importantly, there will be time for an exchange of views among participants on these important issues.

The global food system is rapidly changing, and we will need to find ways to work together to address the complex challenges.

I firmly believe that with a shared commitment to strengthen connections within agri-food system, to pay attention to the broader impact of policy choices, and to be willing to adapt to changing conditions, we can ensure that trade continues to play its vital role in creating resilient, inclusive global food systems.

Conclusion

I encourage you to take full advantage of this symposium - to explore new ideas and to engage in a dialogue with each other. Together we can identify opportunities to strengthen the agriculture and food system and build sustainable solutions through the common efforts of WTO Members.

Agriculture is central to the multilateral trading system. It is imperative that progress be made to improve that system as it applied to agriculture. Demography demands it, as the world is projected to have 2.1 billion more people to feed by the year 2050. We need to look at where the demand will be, and where, as best as we can tell, where the supplies will come from. Given sharp changes in climate conditions and natural disasters, the system that is developed by the Members of the WTO has to be nimble, more so perhaps than at any time in recent history.

These two days will be well spent if it is in further preparation for meeting future needs, for trying to gather more knowledge as to what that emerging system will look like that will receive the general support of the WTO’s Members. Technologies will be only part of the answer. International cooperation within a better WTO framework will be needed, with coordination of consistent national programs. Progress is needed providing the entire food value chain, from the farm to the consumer, with ample food, that is both safe and secure, that sustains both the planet and its inhabitants.

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