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/Viewpoint

Unhindered Trade Feeds World

Productivity, Supply Come Off Market Directly Through Policy Actions, Export Restrictions

 

If the world is to succeed in alleviating poverty and providing the necessary framework for sustainable development on the planet, there is no more pressing need than ensuring the supply of affordable food for all people. Not only has the world failed to adequately address the issue of food security, but the situation threatens to take a turn for the worse in the near future.

There are two keys to tackling this problem, enhancing production, particularly in Africa and ensuring that trade in food flows unhindered from the lands of plenty to the lands of little. Without immediate action in these two areas, there is a risk that hunger will become even more widespread, with many million more lives at stake.

Lately, the spectres of famine hang menacingly over the Horn of Africa, with millions of people in Somalia, Ethiopia, and Djibouti left vulnerable. In Somalia alone, 15 million people, nearly half the population of the country, went hungry.

The irony is that in the 1970s, Africa was a net exporter of food and such crises were far less common. Yet within 20 years, Africa had become a net food importer.

The reason for this is simple. Even at a time of great productivity gains globally, African agricultural production has failed to keep pace with the growing population.

Between 1960 and 2008, corn production yields doubled from 2.5tn to five tonnes a hectare. Yet, in Africa, yields have remained stuck at under two tonnes per hectare. Milk production for each cow in Africa is a quarter of the global average.

Hunger and malnutrition simply cannot be tackled unless supply is improved, and that means boosting yields in Africa. African governments need to reassess policies that have discouraged farmers from staying on the land. Instead, farmers should be offered incentives to use new methods and technologies to increase yields.

It can be done. One needs only to look at Brazil to see that African agriculture can be turned around. Just 30 years ago, Brazil was a net importer of basic foodstuffs. Today, thanks to sound policies and enhanced investment in research and development, Brazil is among the world's top exporters of wheat, corn, chicken, beef, and sugar.

The burden must not fall on Africa alone. The developed world also has a role to play by curbing the use of trade distorting subsidies that result in food surpluses being dumped on third country markets.

Low levels of African agricultural productivity have kept the continent on the sidelines of global agricultural trade and helped create a situation today in which a handful of countries dominate production and export. In a world of nearly 200 countries, there are only between five and 10 major exporters of cereals. Rice, the staple food for most of humanity, is a case in point. Roughly 70pc of rice production comes from five countries including China and India.

With production and export in the hands of so few countries, an event in any one of them that curtails grain supply on the market can lead to sharp spikes in prices. In some cases, supply can be affected by floods or droughts that lie outside the control of policymakers. But in other cases, supply comes off the market as a direct result of policy actions, notably restrictions on exports. Governments that impose export restrictions, such as quotas, taxes, or bans, often do so for the understandable reason that they want to ensure adequate supplies of meat or cereals for domestic consumers. Yet, trade in agricultural products represents such a small percentage of overall production that the absence of even one big player from the export market can have a dramatic effect on prices.

Fortunately, governments have come to see that humanitarian efforts can be undermined by such restrictions. A recent meeting of the agriculture ministers of developed countries resulted in an agreement to resist the use of any restrictions adversely affecting efforts to feed the hungry.

Last week, at the World Trade Organisation’s (WTO's) ministerial conference, ministers took up the issue again and adopted a resolution ensuring that the supply of food available to feed the bottom billion is unhindered by export restrictions.

These two policy prescriptions represent the best hope for confronting one of the most serious problems faced. The Earth's population is set to grow from seven billion to nine billion by 2050, so, unless we take urgent action, the food security crisis will only become more acute

By Pascal Lamy 

Pascal Lamy is director general of the World Trade Organisation (WTO).  

 
 
 
 
 
 

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