Last update - February 2012
food security in the wto
WTO rules
The rules that WTO members negotiated and agreed (the Agriculture Agreement) can contribute to more secure food supplies and more stable prices.
Volatility and stability
First, international trade allows food to be moved from regions where there is a surplus to areas where there is a shortage. These situations can change according to the weather and other factors, so trade is an efficient way to even out supply fluctuations across the globe. This in turn reduces market volatility and increases food security.
Sometimes uncertainty can be caused by changes in policy. The WTO promotes consistent and predictable trade measures through bindings (commitments, for example to set ceilings on tariffs, which are legally bound in the WTO), rules, and procedures for governments to disclose and share information on their actions. This helps to reduce uncertainty in food markets caused by policy changes.
Inefficiency and purchasing power
In the long-term, high subsidies and import barriers distort markets and prevent an effective distribution of production around the world. They depress the prices that farmers in low-income non-subsidizing countries need in order to increase their productivity. When producers in some areas can increase their productivity, international trade helps spread the gains to the rest of the world, for example through lower prices or better quality products.
For that to work more effectively around the world, price distortions should be reduced. Within countries, prices should send accurate signals to farmers about whether they should invest and produce more, so that resources are allocated more efficiently to agriculture or other activities according to their real potential (or “comparative advantage”). Nationally, trade and other economic and structural policies can combine to limit costly inefficiencies, boost purchasing power, and national production and income, and with it the country’s food security.
In the WTO
The current agriculture negotiations aim to continue the reform of the present Agriculture Agreement. Members have agreed to further cuts, sometimes substantial, in subsidies, particularly in rich countries, and in high tariffs. At the same time the negotiations envisage more room to manoeuvre to secure supplies for poorer populations in developing countries, for example through public stockholding.
Some importing countries want tighter disciplines on export restraints, which they say jeopardize their food security. Some export restrictions and taxes are designed to keep supplies secure domestically but some analysts say this worsens the situation globally.
High Level Task Force
The UN High Level Task Force (HLTF) on the Global Food Security Crisis (see also this on the FAO website) was set up by the UN Chief Executive Board (CEB) in April 2008 in the wake of spiralling food prices. It is chaired by the UN Secretary General with the FAO Director-General as its vice chair. It comprises heads or other representatives of 22 international organizations, including the WTO and relevant parts of the UN Secretariat. International experts, non-governmental organizations and the Red Cross/Red Crescent have also been consulted in laying out the global coordinated strategy to confront high prices.
The Comprehensive Framework for Action (CFA). In July 2008, the task force developed its first action framework outlining the its strategy and guiding principles, adopting a comprehensive approach to food security — availability, access, stability and utilization. In September 2010, the framework was updated to cover a wider range of issues and more detailed treatment of all aspects of food and nutrition security. The WTO Secretariat and other agencies participating in the task force have contributed to developing the framework.
The latest situation: market information
The WTO is working with eight other international organizations on an Agricultural Market Information System (AMIS). A joint Secretariat is hosted by the UN Food and Agriculture Organization (FAO) and includes the International Fund for Agricultural Development (IFAD), Organization for Economic Co-operation and Development (OECD), UN Conference on Trade and Development (UNCTAD), World Food Programme (WFP), the World Bank, the WTO, International Food Policy Research Institute (IFPRI) and the UN High Level Task Force (HLTF). The International Grains Council (IGC) will cooperate by attending the expert meetings and exchanging market information.
The system is used to detect abnormal market conditions that would affect food security and to devise well-informed, coordinated strategies to deal with them. It is the result of a recommendation by a group of organizations including the WTO in their report on “Price Volatility in Food and Agricultural Markets: Policy Responses” submitted in June2011 to the G-20 meetings of major economies (not to be confused with the G-20 in the WTO agriculture negotiations).
The WTO is contributing expertise to the information system, principally by sharing trade policy information that members have notified to the WTO, but no finance, the Secretariat told the 29 September 2011 meeting of the Agriculture Committee.
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