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/.