Download Last update - February 2012 food security in the wto WTO rules The

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 lowincome 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.
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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 June 2011 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.
Find more on the WTO website
Food security in the WTO: http://www.wto.org/foodsecurity
Information session with Ban Ki-moon’s food security envoy 18 November 2010
Agricultural Market Information System: http://www.wto.org/english/tratop_e/agric_e/amis_e.pdf
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