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Feeding the hungry: the role of aid for trade.
Subject:
Agricultural industry (Investments)
Agricultural industry (Conferences, meetings and seminars)
Author:
Melendez-Ortiz, Ricardo
Pub Date:
07/01/2011
Publication:
Name: International Trade Forum Publisher: International Trade Centre UNCTAD/GATT Audience: Trade Format: Magazine/Journal Subject: Business; Business, international; Economics Copyright: COPYRIGHT 2011 International Trade Centre UNCTAD/GATT ISSN: 0020-8957
Issue:
Date: July-Sept, 2011 Source Issue: 3
Topic:
Event Code: 250 Financial management Computer Subject: Company investment
Product:
SIC Code: 0100 AGRICULTURAL PRODUCTION--CROPS
Organization:
Organization: G-20
Geographic:
Geographic Scope: United States Geographic Code: 1USA United States

Accession Number:
279891906
Full Text:
According to a recent inter-agency report, about 16% of the world's population is chronically undernourished. Aid for Trade is making a contribution to addressing the problem, but much more needs to be done to coordinate policy approaches that will work.

Increased aid and investment in farming in the developing world have consistently been recognized as part of the solution, most recently by agriculture ministers at the G-20 meeting in June 2011. The inter-agency report, Price Volatility in Food and Agricultural Markets: Policy Responses, (1) presented at the G-20, points out that in the future, demographic trends, water availability and changes to the Earth's climate will make it harder for governments to ensure that everyone has enough to eat. Less widely recognized is the need for this investment to fit within a broader strategic vision of economic development.

However, funding commitments--such as those that the G-8 made at L'Aquila in 2008--have yet to be fulfilled. The stalling of the World Trade Organization's (WTO) Doha Round of negotiations is hampering progress towards the promise made decades ago to discipline developed country farm subsidy spending and improve poorer farmers' access to global markets.

While an aggregated US$ 40 billion has already been generated by the WTO's Aid for Trade initiative, a few major OECD countries are still providing annual support to their own agricultural producers, worth over US$ 250 billion as recently as 2009. Thus the real challenge is one of equitably and effectively distributing the resources that are needed to enable farming in developing economies to furnish adequate additional food.

Too often, farmers in poor countries lack infrastructure--storage facilities, rural roads and electricity--as well as inputs such as machinery, fertilizer and water. Ensuring that all producers can access local, regional or global markets must be a priority. International Centre for Trade and Sustainable Development (ICTSD) research suggests that Aid for Trade may help solve some of these problems--but national actors must collaborate to integrate trade policies into broader development plans.

For example, close coordination between government agencies, farmers and commercial banks is enabling Cambodia to diversify into rice exports, and helping Mauritius add value in the sugar industry and bolstering foreign direct investment. (2)

ICTSD has also examined the trade policy dimensions of food price volatility? If governments can cooperate on export restrictions, biofuel policies or properly functioning stocks and reserves, they will be closer to overcoming shortcomings in international governance.

Increased aid is vital--especially if targeted towards helping the most vulnerable producers to sell to local, regional and global markets. Aid disbursements must be of sufficient scale to meet the challenges that developing countries face, today and in the future, and be part of a broader package of global trade policy reforms to achieve sustainability.

THE THIRD AID FOR TRADE GLOBAL REVIEW

Advancing food and nutrition security

Aid for Trade is primarily a vehicle to enable developing countries, particularly least developed countries, to integrate better into the multilateral rules-based trading system. The Third Aid for Trade Global Review took place at the World Trade Organization in Switzerland on 18 and 19 July 2011.

At the event, UN Secretary-General Ban Ki-moon spoke about the interconnection of issues such as climate change, water scarcity, energy shortages, global health, gender empowerment and the food crisis. Speaking specifically about the food crisis,

Mr. Ban said, 'We must fully utilize the potential of Aid for Trade to advance food and nutrition security. The recent decision by the G20 to remove export restrictions on food purchased for humanitarian aid is a welcome [...] first step. A level playing field will contribute immensely to food and nutrition security, especially for the world's poorest and most vulnerable people.'

As the largest multilateral team dedicated entirely to trade-related technical assistance, ITC provided six case stories for the Global Review relating to, for example, ITC's work in the African cotton sector and efforts to improve the quality of Ethiopian coffee.

For more information visit www.intracen.org/about/aid-for-trade

RICARDO MELENDEZ-ORTIZ

Chief Executive

International Centre for Trade and Sustainable Development

(1) Food &Agricultural Organization of the United Nations (FAO), International Fund for Agricultural Development (IFAD). International Monetary Fund (IMF). Organization for Economic Co operation and Development (OECD). United Nations Conference on Trade and Development (UNCTAD), World Food Programme (WFP), World Bank, World Trade Organization (WTO), International Food Policy Research Institute (IFPRD and the High-Level Task Force on the Global Food Security Crisis (UN HLTF) (2011). Price volatility in Food and Agricultural Markets Policy Responses. Rome, FAO

(2) Sok, S. (2011). Trade Diversification after the Global Financial Crisis: Cambodia Rice Export Policy Case Story www.ictsd.org/i/publications/105557/

(3) Tangermann, S. (2011). Policy Solutions to Agricultural Market Volatility. A Synthesis. www.ictsd.org/i/publications/108969/ Diaz Bonilla, E. and Ron. J.F. (2011), Food Security, Price Volatility and Trade: Some Reflections for Developing Countries, www.ictsd.org/i/publications/97273. Babcock, B. (2011), The Impact of US Biofuel Policies on Agricultural Price Levels and Volatility, www.ictsd.org/i/publications/108947/.
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