UN calls for stronger coordination of trade and agricultural development policies to achieve food security
People's Daily Online, United Nations, December 9 (Reporter Yin Miao) The Food and Agriculture Organization of the United Nations released the "State of Agricultural Commodity Markets" report on the 9th in Rome, the capital of Italy. The report argues that regulations governing international agricultural commodity trade should focus on improving national food security and other development goals, and that practical approaches should be adopted at the national level to expand food trade and coordinate agricultural and trade policies in order to achieve national and global food security goals.
The organization released this latest edition of its flagship publication with the aim of reducing the current polarization of views on agricultural trade issues. Some insist that free trade can promote the supply of and access to food, while others, taking into account recent food price volatility, believe that a more cautious approach should be taken toward trade issues, including various safeguard measures for developing countries.
Over the past decade, enormous changes have taken place in the field of global trade, with the value of trade in food alone, especially that driven by fruits, vegetables, fish, meat and dairy products, tripling. In addition, the economic geography has also changed. Latin America has replaced North America as the largest net food exporter, thus revealing a new political map of South-South trade. At the same time, the number of regional trade agreements has surged. Although agricultural imports are distributed across many countries, exports are mainly concentrated in a few countries, such as Brazil's sugar or the United States' coarse grains, making supply disruptions more likely.
At the same time, new and more nuanced dynamics are emerging in trade patterns, including the rise of global value chains and vertical integration in the production and marketing of agricultural products. With regard to such development trends, although participation in value chains also provides smallholder farmers with important income-generating opportunities, market power and standardization, which are just as important as price issues, touch upon assumptions of competitive markets and the traditional approach of making full use of comparative advantage. The “supermarket revolution” occurring in many developing countries is also constantly changing the balance between opportunities and risks. On the one hand, retail chains are breaking commodity purchasing habits and adopting direct procurement methods; for example, the market share of the three largest multinational banana trading companies was rapidly halved, falling from 70% in 2002 to 37% today. On the other hand, although supermarkets usually serve low-income urban consumer groups, producers may be affected because they lack the capacity to make the necessary investments to meet requirements for quantity, cost, quality and uniform standards.
The "State of Agricultural Commodity Markets" points out that the expected growth of global agricultural trade, accompanied by changes in trade patterns and multiple risks on the global supply side, will make trade and its governance exert an increasingly important influence on the degree and nature of food security around the world. Therefore, the challenge facing policymakers has evolved into ensuring that the expansion of agricultural trade “can promote rather than hinder the elimination of hunger, food insecurity and malnutrition.” The report's subtitle is “Better balancing national priorities and collective interests.” It emphasizes that the role of trade depends on different national characteristics, such as income, economic and land tenure structures, as well as the stage of agricultural development and the degree of farmers' participation in global value chains. Given such different national conditions, international rules on the formulation of national trade policies should support efforts to mitigate disruptions affecting the four dimensions of food security (availability, access, utilization and stability).
The report says that coordinating short-term and long-term goals is becoming increasingly important, because various disruptive factors differ greatly in nature, and market shocks caused by uncertainty arising from geopolitics, weather and policy will become more frequent. Efforts originally intended to intervene in and protect domestic markets from global price fluctuations may ultimately instead lead to intensified domestic price volatility, while agricultural incentives can play an important role in promoting agricultural production and efficiency and driving broader economic growth.
The report argues that appropriate policies usually depend on the degree of development and competitiveness of domestic markets and provide participants with tools to manage risk. Where these conditions are not yet in place, domestic support policies should not be completely rejected, and incorporating food security into the trade policy decision-making process is one way to make trade a “driver” of sustainable development and a core objective in eliminating hunger.