1. We all agree: access to food a major problem for humanity

• True today: 1 billion chronically undernourished
          2 billion suffering from malnutrition

• Even truer tomorrow:

  • World population 9 billion by 2050

  • “nutrition transition”/shift of diet from carbohydrates cereals towards proteins

  • new production constraints

  • urbanization/availability of arable land
    climate change
    competition from bioenergy (bioethanol).

• Therefore supply/demand imbalance which could lead to increased prices of which the poorest would be the victims: 50% of income is spent on food in the developing countries, 20% in the developed countries. The lower the income, the heavier the percentage.

2.What are the solutions? Some are consensual, some more subject to discussion, including the role of international trade and its regulation.



3. Consensus

• Reduce poverty: it is the poor that are hungry, above all because their income is too low. Hunger = availability + accessibility of food;

• increase production (correct the underinvestment of the past few decades in agriculture, irrigation; considerable potential for improving yield notwithstanding environmental constraints);

• put an end to waste: 30% of world food production not consumed/wasted;

• restrain the trend towards dietary excesses among the well to do populations.

 

4. 4. Debate on the opening up of trade and the regulation of agricultural trade. This debate has pervaded the WTO and its predecessor, the GATT, for 30 years, between:

• The all market proponents: imbalance between supply and demand will be regulated by full opening up of agricultural markets. Let the best producers produce at the best price so that consumers have better access to food, including the most needy. Theory generally held by the most competitive.

• 
  The proponents of “agricultural specificity”, sometimes known as “multifunctionality”: what applies to tyres and socks does not apply to food. The agricultural economy does not follow the same rules as the industrial economy (various reasons). Theory generally held by the less competitive.
  
  About 50/50 among the 153 WTO Members. Not a North South issue, since there are advocates of both theories in both hemispheres.

 

5. 5. So, we have to build a compromise. The foundations of this compromise were laid during the Uruguay Round in the '90s. At the request of the developing countries, currently being revised in the Doha Round which has practically been completed in the agricultural area, even if there remain difficulties in other areas of negotiation

Outline of this compromise

• Recognition of the positive effects of opening up trade:
  
  (i) International trade serves as a conveyor belt between countries which produce a lot and well, and countries which produce little and badly. Some countries have structural deficit: Middle East, Egypt, China, Japan. Others have structural surplus: Brazil, Thailand, Australia. Open and deep markets are less sensitive to short term variations in production and to speculation (wheat market versus rice market).
  
  (ii) For this conveyor belt to operate, it is necessary to correct the most obvious distortions, particularly those affecting the developing countries which have considerable agricultural potential.

1. X subsidies which have had devastating effects on certain products in the developing countries.

2. Domestic subsidies which distort trade: the richer the country, the greater the subsidies.

3. The highest customs protection which prohibits access to the markets of the developing countries and the introduction of value added agricultural subsectors (tariff escalation).

For the three cases, the DDA has already accepted:

• To recognize the specificities of the agricultural economy:
  
  (i) The diversity of types of agricultural production means that full competition not possible (subsistence agriculture, local market agriculture, international agriculture). 70% of poor live in rural areas. Switching from one type to another is problematic.
  
  (ii) Therefore: authorize maintenance of certain types of support (customs protection or subsidies), adjusting according to level of development.
  
  (iii) Specific support post DDA:

1. Agricultural protection three times higher (on average) than industrial protection.

2. Significant flexibilities for non trade distorting subsidies (green box $40 billion EU and US).

3. Trade distorting subsidies reduced by half [from $450 billion to $220 billion]/no such thing for industry.

(iv) Developed country/developing country adjustment:

1. Average post DDA protection ceilings:

Developed countries	5 %
Emerging countries	40%
LDCs	70%

2. Total authorized post DDA trade distorting subsidies:

Current	60% developed countries	40% developing countries
DDA	25% developed countries	75% developing countries

3. SSM for developing countries/end of SSG for developed countries.

(v)These “pro development” results probably explain why it is now the developing countries that are pushing for a prompt conclusion to the negotiations.

 

6. However, there remain new issues in comparison with these traditional approaches: volatility, food standards, export restrictions.

(i) The first two are not WTO issues, but are dealt with in other international organizations (FAO/WFP, international standardization bodies like Codex Alimentarius). Apparently no WTO obstacle.

(ii) Export restrictions. Surprisingly little/poor regulation at the WTO. Recent subject which is at the origin of recent offshore agricultural developments (sometimes known as appropriation of agricultural land). But for the moment, WTO negotiating mandate does not allow for serious disciplines in the short term.

 

Conclusion

Agricultural trade and its regulation have a role to play among other international and domestic policies aimed at improving access to food, which many consider to be a human right.

Cf. upcoming report of TF presided by UN SG bringing together all the international organizations including WTO, with the involvement of the NGOs.