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Paper No. 5
Food security and the WTO trade negotiations: key issues raised by the World Food Summit
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This paper sets out the key issues relating to food security raised by the outcome of the World Food Summit (WFS) held in November 1996, in relation to the forthcoming trade negotiations in WTO. The World Food Summit Plan of Action contains seven commitments, three of which bear directly on the food security - international trade interface. These commitments relate to food, agricultural and overall trade policies; sustainable food and agricultural production and practices; and improving physical and economic access by all, at all times, to food. The multifunctional character of agriculture, which relates to non-trade concerns and which is noted in the Plan of Action, is also discussed.

I. Introduction

This paper discusses, in the context of the forthcoming trade negotiations, the key issues arising from the outcome of the World Food Summit, without taking a position on any of these issues. In its Article 20 the Agreement on Agriculture states that the reform process will take into account also non-trade concerns. Such concerns, addressed in the preamble to the Agreement, include food security and the need to protect the environment, and taking into account the possible negative effects of the implementation of the reform process on the least-developed and net food-importing developing countries. Food security was the focus of the WFS, particularly in respect of the developing and least-developed countries2. The Summit also gave due attention to environmental protection in the context of underpinning the longer-term sustainability of food production systems.

The following section of this paper recalls the outcome of the WFS and discusses briefly the complex, multifaceted issue of food security, inevitably involving a consideration of questions such as market access and food quality and safety as well as sanitary requirements which, strictly speaking, are trade rather than non-trade concerns. The intention is to separate out the food security - trade concerns in a broad sense from the Summit's outcome. The WFS also defined agriculture broadly to include fisheries and forestry. However, without discussing classification issues, this paper focuses mainly on land-based food production systems.

II. The outcome of the World Food Summit

The main achievement of the 186 Heads of State and Government or their representatives attending the Summit was their approval on 13 November 1996, by consensus, of the Rome Declaration on World Food Security and the World Food Summit Plan of Action. Fifteen delegations made reservations and/or interpretative statements on these texts, which are recorded in the Summit's report. However, these do not substantively change the thrust of the Summit's outcome. The Declaration, which notes the agreement of participating governments that trade is a key element in achieving food security, contains seven commitments covering the key components of a food security strategy: an enabling political, social and economic environment; improved access to food; sustainable food production; food, agricultural trade and overall trade policies; preparedness for natural disasters and man-made emergencies; investment; and implementation, monitoring and follow-up.3 Each of these commitments is elaborated on by a 'basis for action' and a series of 'objectives and actions'.

Of the seven commitments, those concerning access, sustainable food production and trade are of greatest relevance to the issue of food security. They will be reviewed in the next section in more detail, but some further points should first be noted:

  1. The adopted texts build on a prior internationally agreed definition of food security.4 Thus the Summit stated that: "Food security exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life." To achieve food security, concerted action is required at all levels - the individual, household, national, regional and global. It is the totality of this 'concerted action' which the Summit addressed.
  2. While the Rome Declaration reaffirmed the "right of everyone to have access to safe and nutritious food, consistent with the right to adequate food and the fundamental right of everyone to be free from hunger", neither it nor the Plan of Action is an elaboration of the right to food. However, Objective 7.4 of the Plan of Action sets out to clarify the content of the right to adequate food and the fundamental right of everyone to be free from hunger. It emphasises the full and progressive realisation of this right as a means to achieving food security for all.
  3. The outcome of the Summit reflects the evolution in thinking - in both the industrialised and the developing countries - about the process of development. The environment - development - food security nexus had been explored in the annual sessions of the Commission for Sustainable Development (CSD) established by the United Nations Conference on the Environment and Development (UNCED), held in Rio di Janeiro in June 1992. The Rome Summit, however, focused on the food and agricultural and rural development perspective.

III. A review of selected commitments

i) Commitment Four: food, agricultural trade and overall trade policies

This commitment is taken first because it is the one which has the most relevance to this paper. The 'basis for action' under this commitment begins with the statement that "Trade is a key element in achieving world food security." The term 'trade' is used without any qualification and thus refers to trade in general and not only in agricultural and food products. The text continues by saying that trade contributes to food security by stimulating "... economic growth, which is critical to improving food security", and that it has a major bearing on access to food through its positive effect on economic growth, income and employment. Yet it also recognises that such benefits might not reach the poorest. Therefore it calls for "appropriate domestic economic and social policies" to better ensure that all, including the poor, benefit from economic growth" stimulated by a more liberal trade regime.

Commitment Four, while stating that trade "allows food consumption to exceed food production," implicitly recognises that trade also allows food (and agricultural non-food) production to exceed consumption, leading to the well-known 'vent for surplus' argument explaining the role of agricultural trade in economic development. Hence, food trade not only improves the physical and economic access to food, on the side of supply, by increasing food availability, which also contributes to lower food prices for domestic consumers, but also promotes, on the side of demand, the international exchange of surplus food and agricultural products. In other words, it improves entitlements through exchange and, in so doing, widens the range of food available for consumption, improving diets and satisfying food preferences. But food and agricultural trade may also have, through the effects of competition, harmful effects on traditional food production systems and those engaged in them. In this context, the Commitment (Objective 4.1) specifically refers, inter alia, to seeking to avoid the adverse trade-induced impacts "on women's new and traditional economic activities towards food security."

Objective 4.1 also expresses a concern about the possible conflict between trade and environmental policies and states that the international community will endeavour to ensure the "mutual supportiveness of trade and environment policies in support of sustainable food security." The Marrakesh Ministerial Decision on Trade and Environment of 14 April 1994 represents a shift in perspective, towards ensuring that environmental measures do not unfairly affect market access for developing countries' food and agricultural exports, including fish and fishery products. These two concerns are separate, the first relating to the longer-term sustainability of food security with the needed conservation of the integrity of the underpinning natural resources, together with the human resources - knowledge and experience - required to manage them. This important issue is discussed below, in the context of Commitment Three. The second concern relates to market access needed to exploit the income-earning potential to be derived on the basis of the 'vent for surplus' argument. Improved food security may indeed result from unimpeded market access.

Two further concerns addressed by Commitment Four, and linked also to Commitment Three, relate to food safety and sanitary requirements, where the international community pledged to continue to assist countries to "adjust their institutions and standards" to such requirements5. The issue of food safety has taken on particular significance in recent years with the outbreak of Bovine Spongiform Encephalitis (BSE) in cattle (mad cow disease), with its believed transmittal to human beings. Even more recently dioxin has been allegedly found in some traded animal products in Europe and traced to contaminated feeds. The food safety issue was even addressed at the G7 meeting in Cologne in June 1999. Food safety including, from the consumer point of view, the issue of genetically modified organisms (GMOs) constitutes a major challenge to the proponents of a more liberalized food and agricultural trading regime. The Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) aimed at furthering the use of harmonised measures on the basis of international standards, guidelines and recommendations, appears to fail to prevent faulty domestic control of standards from affecting the quality of exported food products, particularly those with a longer production-processing chain typical for animal food products.6 In this regard, FAO has developed a draft Code of Practice for Good Animal Feeding, through the Codex Alimentarius Commission, but all such codes need the appropriate national monitoring and control measures to be effective. If the recent, most publicised, international food safety scares are a correct indication of the actual situation, assistance to countries to "adjust their institutions and standards ...to food safety and sanitary requirements" needs to be strongly underlined.

International trade not only permits food consumption in a country to exceed production (it need not have self-sufficiency in food) but also offers a means (which is likely to be less costly than holding strategic reserves of food) to even out fluctuations in domestic supplies even when self-sufficiency is broadly achieved. Such generalizations have been supported during the past half century or more by the secular decline in world prices of traded food products relative to those of manufactures and by lower transport and port handling costs. All of this is largely self-evident, but the key issue remains the reliability of supply of key food commodities and the level and variability of world market prices. Memories of the World Food Crisis of 1973-74 linger on as well as the spectre of food embargoes.

In this regard Commitment Four sets the objective (Objective 4.2) of meeting "essential food import needs in all countries, considering world price and supply fluctuations and taking especially into account food consumption of vulnerable groups in developing countries." The admonition that food exporting countries should act as reliable sources of supplies to their trading partners and administer all export-related trade policies and programmes responsibly is consistent with the decision that governments and the international community should examine "WTO-compatible options and take any appropriate steps to safeguard the ability of importing developing countries...to purchase adequate supplies of basic foodstuffs from external sources on reasonable terms and conditions." Facilities already exist to assist the least-developed and net food-importing developing countries in financing essential food imports, through international financial institutions (mainly the International Monetary Fund), but they are not automatically accessible. It is possible, and it would perhaps be desirable, that such issues will receive attention under Article 20 of the Agreement on Agriculture, with the continuing negotiations taking into account the experience to date in implementing the reduction commitments and the effect of such commitments on world trade in agriculture. It is to be hoped that what will be included in such 'experience' is not defined on such a narrow basis as to cover only the application of the reduction commitments. It should also include other factors that may have adversely effected the reliability of trade as a support to improved food security and which may be susceptible to changes in trade policy in exporting countries.

Commitment Four recalls Article 12 of the Agreement on Agriculture, which refers to export prohibitions and restrictions in the context of domestic supply shortfalls in the exporting country rather than the application of trade embargoes for political or military motives. There is, moreover, the affirmation of the Rome Declaration that "Food should not be used as an instrument for political or economic pressure" and of "the necessity of refraining from unilateral measures not in accordance with the international law and the Charter of the United Nations and that endanger food security".

Commitment Three: Sustainable food, agriculture, fisheries, forestry and rural development, policies and practices

Commitment Three is of key importance because it is concerned with the expansion of food production (and hence with the issue of a certain degree of self-sufficiency in food), and with the sustainability of policies (and hence with the natural resource-use aspects of food production); it also refers specifically to the multifunctional character of agriculture, but without explicitly stating what that involves. These issues, along with those arising from Commitment Two relating to access to food, lie at the core of the debate on non-trade concerns (NTCs) which the Summit itself, probably deliberately, did not enter into. It is not possible to avoid the NTC issue in this paper. Moreover, it is useful to consider what is meant by the multifunctional character of agriculture (see Box 3).

Commitment Three relates more to the typical food-deficit, developing country situation where expanding food production is one of the primary means to increase the availability of food and income for those living in poverty. The issue of food self-sufficiency is not directly addressed, and rightly so. The approach is linked to improving access to food through raising effective demand and is linked to rural development: stimulating production and promoting economic diversification. It is also particularly concerned with protecting fragile environments and with the sustainable management of natural resources. In this respect, the links between the concept of sustainable agricultural and rural development (SARD) and food security-focused development of the Rome Plan of Action are clear7. Key phrases used in 'Objectives and Actions' of Commitment Three are:

This is a complex agenda because it is a statement on human-centred, gender-sensitive, participatory, resource-conserving, small-scale, local knowledge-using, bottom-up agricultural and rural development into which food security is woven as an integral part. It may be contrasted with an efficiency-seeking, large-scale, technology and profit-driven, top-down development where food security may well improve, but not necessarily equitably so, either spatially (i.e. between rural and urban areas or between richly endowed regions and marginal ones) or within the society (essentially the poor and less well-off compared to the affluent). Perhaps unjustly, liberalized food and agricultural trade has come to be associated with the second rather than the first development paradigm. Of course, it can be argued that even if this latter link holds, then less optimal or desirable situations that emerge can and should be corrected by domestic food and agricultural and rural development policies rather than by international trade policies.

Within Commitment Three, unlike the NTC approach, food security and environmental concerns and objectives are interwoven and considered in a holistic way. Promoting the conservation and sustainable use of biological diversity in general, and plant genetic resources in particular, receives particular attention mainly because the vision of agricultural development is one where farmer-developed land and traditional varieties of major crops continue to provide the core food production systems, with modern varieties broadening but not replacing indigenous cultivated plant germplasm. Nevertheless, a utilitarian approach is fostered through integrating conservation and sustainable utilisation of plant genetic resources for food and agriculture, by appropriate in situ and ex situ approaches. Conservation through in situ approaches is particularly important because the aim is to conserve the diversity of cultivated plants while using them, along with their wild relatives, within productive landscapes to maintain evolutionary processes. Ex situ conservation cannot replicate these processes. Much of this thinking derives from the Fourth International Technical Conference on Plant Genetic Resources, held in Leipzig in June 1996.8 There are similar concerns relating to animal genetic resources, although the problems naturally differ and formal intergovernmental discussion of them has only recently got under way.9

These issues have direct bearing on the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), to which the Rome Plan of Action, again probably deliberately, does not directly refer. The TRIPS Agreement is distinct from the Agreement on Agriculture and lays down its own review process.10 The key issue here is how to confer adequate plant variety protection (PVP) so as not to inhibit the transfer of needed plant germplasm while protecting local and possibly vulnerable farming systems. While the review process is under way, States can continue to avail themselves of Article 27, paragraph 3(b), of the TRIPS Agreement, which allows for the exclusion from patentability of plants and animals other than micro-organisms. However, PVP itself has to be provided for either by patents or by an effective sui generis system or by any combination of them. It has been observed that the terms used in the Article are not defined and are open to varying interpretations.11

iii) Commitment Two: Improving physical and economic access by all, at all times, to food

This commitment is mentioned because it emphasises the human-centred, gender-sensitive approach of the Plan of Action. The issue of physical access to food and the role of trade in this connection was discussed above under Commitment Four. This Commitment broadens the scope, to focus additionally on economic access to food and hence the need for "secure and gainful employment" as well as "equitable and equal access to productive resources such as land, water and credit ." Underlying this concern is the need to focus attention on "vulnerable and disadvantaged individuals, households and groups", among which women predominate. Such focused attention raises at least two issues relating to trade. Firstly, imported food products are accessible to different groups of people compared to food domestically produced, especially through self-provisioning. Secondly, the gender issue in this context underlines that proceeds from traded food products, and particularly from higher value products aimed at export markets, may not accrue to the women in poor households and thereby may not contribute to improved food security. Indeed women's scarce time may be diverted from self-provisioning activities to producing such traded products. Such issues were alluded to under Commitment Three and are only flagged again here.

The safety of food and its 'appropriateness' also come to the fore in Commitment Two: "..ensure that food supplies are safe, .... appropriate and adequate to meet the needs...of the population" and again "Encourage...the production and use of culturally appropriate, traditional and under-utilized food crops... and the sustainable utilization of unused or under-utilized fish resources". Specific reference is made to the Agreement on the Application of Sanitary and Phytosanitary Measures and "other relevant international agreements that ensure the quality and safety of food..."

The issue of food quality, particularly in the context of international food trade, is a challenge that has to be met. That of the interaction between such trade and the use of culturally "appropriate, traditional and under-utilized food crops" and fish products does not appear to have been given due attention in the Agreement on Agriculture.

IV. Some preliminary conclusions

From the above discussion, the following key issues emerge relating to food security in the context of the forthcoming trade negotiations. They may be divided into what may be termed 'general' and 'specific' issues. The general ones are the following:

These are indeed wide-ranging issues; the more specific issues are:

Finally, it should be noted that the trade-food security interface, as revealed by the above analysis and in the context of international law, is not limited to the Agreement on Agriculture alone but also involves other UR Agreements, such as that on TRIPS.

Box 1
The Seven Commitments of the World Food Summit

(Rome, 13 - 17 November 1996)

One....ensure an enabling political, social and economic environment designed to create the best conditions for the eradication of poverty and for durable peace, based on full and equal participation of women and men, which is most conducive to achieving sustainable food security for all;

Two.... implement policies aimed at eradicating poverty and inequality and improving physical and economic access by all, at all times, to sufficient, nutritionally adequate and safe food and its effective utilization;

Three .... pursue participatory and sustainable food, agriculture, fisheries, forestry and rural development policies and practices in high and low potential areas, which are essential to adequate and reliable food supplies at the household, national, regional and global levels, and combat pests, drought and desertification, considering the multifunctional character of agriculture;

Four.... strive to ensure that food, agricultural trade and overall trade policies are conducive to fostering food security for all through a fair and market-oriented world trade system;

Five .... endeavour to prevent and be prepared for natural disasters and man-made emergencies and to meet transitory and emergency food requirements in ways that encourage recovery, rehabilitation, development and a capacity to satisfy future needs;

Six .... promote optimal allocation and use of public and private investments to foster human resources, sustainable food, agriculture, fisheries and forestry systems, and rural development, in high and low potential areas;

Seven .... implement, monitor and follow-up this Plan of Action at all levels in cooperation with the international community.

Box 2
Defining food security

The Rome Summit built on the definition of food security endorsed by the FAO/WHO International Conference on Nutrition held in Rome in December 1992, namely: "access for all people at all times to enough food for an active, healthy life." The Summit elaborated on this definition by adding the ideas of having both physical and economic access rather than just 'access'; having both safe and nutritious as well as sufficient food; and stating that the food should meet people's dietary needs as well as their food preferences for an active and healthy life. The Summit thus fleshed out the earlier definition, linking food security to trade through the notions of 'access' and 'sufficiency'.

An alternative approach to defining food security is that of 'entitlements' to food, and has been put forward by A.K. Sen1. Each person has an entitlement to food derived from his or her own production, from exchange through barter, markets or working in non-food production activities, or from transfer (of food) either from the family, the community, civil society or the State. The direct link between trade and this approach is through the entitlement of exchange.

__________________________

Hunger and Entitlements, World Institute for Development Economics Research, Helsinki, 1987.

Box 3
The multifunctional character of agriculture

Agricultural activities, apart from producing food and fibre etc for which there is a market and which therefore have a monetary value, also involve externalities for which there are no identified markets - i.e. they are subject to market failure. Such externalities may be positive or negative. Of course, all economic activities to some degree share this characteristic, although it seems that agriculture is unique in the range of externalities ascribed to it. Such externalities also may be termed public goods (or public bads, if negative) as opposed to private goods.1 The distintinction is important in as much as public goods (or bads) and their associated market failures may justify government intervention to ensure or control their supply through subsidies or regulation or taxation. In practice agriculture is often held to produce a public good, in order to justify continued intervention by the State, although strictly speaking there are no grounds for such a claim.

Until relatively recently, it was agriculture's negative environmental externalities - pollution of surface and ground water and air, loss of habitats and biodiversity, soil erosion, etc - which received most attention from policymakers, involving taxes or regulations to correct for market failures. Now it is being increasingly argued that agriculture also produces positive externalities, alternatively known as multiple functions, the related market failures of which merit policy interventions such as subsidies or other means of agricultural support to ensure their continued 'production'.

There is a broad consensus on what these multiple functions are, although there is a variety of taxonomies by which they are organized. The main point is that they should be genuine externalities and not simply extensions of agriculture's economic primary function of producing food, fibre etc, although they may be in joint supply with them. If this strict definition is applied, the following is a shortlist of functions:

  • Food security, including nutritional and food safety aspects, sometimes termed 'strategic' functions.
  • Environmental: protection of natural resources, including natural habitats and biodiversity and so contributing to the sustainability of food production systems; disaster prevention (floods and landslides); protecting rural landscapes.
  • Social and cultural: linked to employment and income generation in rural areas and hence sustaining the viability of rural communities and maintaining rural society.

Some of these functions are interrelated or synergistic. For example, protecting rural landscapes may promote tourism and hence generate employment and so maintain rural communities. Some observers contend that agriculture's multiple functions cannot be separated and therefore must be performed "on the same spot", but that would rule out the use of tradable permits between agricultural regions. These positive externalities or multiple functions have also been described in general international usage as non-trade concerns - (NTCs) for example, in Article 20 of the Agreement on Agriculture. However, as has been seen, when the multifaceted issue of food security is opened up, as it was at the Rome Summit, there are several clear links between trade and food security. Setting such semantic considerations aside, the next step is to examine what are NTCs commonly cited under the three headings above - food security, environment and social - and relate them to the Rome Plan of Action and particularly its Commitment Three which, as noted above, sets out to pursue, inter alia, sustainable food and agricultural policies and practices, considering the multifunctional character of agriculture. A pertinent observation at this point is that some of the main proponents of NTCs are industrialised countries, in particular those with what may be termed 'difficult' agricultural production environments (harsh climate, mountainous terrain, etc) and with an enduring rural tradition and concern for the conservation of rural landscapes. They also possess the financial means to subsidise their agricultural sectors and their populations generally spend a small share of their disposable income on food.

Food security. This objective or peacetime function receives high priority in several industrialised countries, mainly for strategic reasons because their food security as such, in normal conditions, is hardly in question. For example, Norway recognises that because of high food production costs, it would be much more cost-efficient for several countries, including Norway, under ordinary circumstances, to rely entirely on world markets for their food supplies.2 However, based on historical experience and due to the uncertainty associated with future international supplies, national production policies have been and will always be (author's highlighting) a central element in Norway's food security policy. National stocking of food can only partly compensate for the risk that a tight international food supply situation may be of long duration. This risk applies not only to a situation of war but also to peacetime crises such as plant and animal diseases, extensive radioactive fallout, or major shifts in global demand and supply. Food security policies based on a minimum level of self-sufficiency, by preserving the capacity to produce, can be regarded as a risk insurance, with the public costs involved related to the population's risk aversion and its willingness to pay for that insurance.

There are four components to Norway's food security policy: firstly, the need to protect arable land from degradation and alternative use; secondly, to maintain food self-sufficiency from domestic production, measured in terms of calories, at the minimum current level of 50 percent (57 percent including fish products); thirdly, to maintain a "fairly sizeable", well trained and experienced farming population; and fourthly, to maintain a decentralised food production structure as being less vulnerable in times of crises.

Does food security in fact increase with the level of self-sufficiency? It can indeed be argued that a policy of self-sufficiency is likely to make domestic food prices more rather than less unstable. Also, by promoting food self-sufficiency, the agricultural sector is likely to become more dependent on inputs with a high import content, particularly with regard to energy. In turn, energy, i.e. fuel, is more likely than food commodities to be subject to effective trade embargoes or sudden price hikes. Yet political support for a food self-sufficiency policy still remains strong in some countries. However, the government response could be a more rational food security policy based on a range of options. Such a policy would be based on an assessment of the main sources of food supply uncertainty: firstly, unforeseen variations in supply caused by natural events - adverse weather or outbreaks of pests and diseases of important food crops in major producing countries; secondly, man-made events such as hostilities or disasters (such as another Chernobyl) of a sufficient magnitude to affect trade flows; and thirdly, political interventions short of war such as trade embargoes. In the face of such uncertainties, there is a range of possible policy interventions, other than only promoting self-sufficiency; they relate to consumption (e.g. promoting the substitution between foods), production (e.g. making it more responsive to a sudden need to increase supply), storage and marketing (strengthening supplier-importer links). Such policies need not be discussed further here.

The environmental function. The potential for agriculture to yield environmental services is now widely recognized among the OECD countries. Thus a recent OECD paper states: "The provision of environmental benefits and amenities is increasingly seen as an element of the 'multifunctionality' of the [agricultural] sector."3 The word 'amenities' is significant because it differentiates the industrialised and developing country concerns, with those of the former focusing primarily on protecting agricultural landscapes and those of the latter focusing on the resource-protecting services - prevention of soil erosion and watershed protection, for example - without which food security may be threatened. Indeed, Commitment Three refers to the need "To combat environmental threats to food security....erosion of biological diversity, and degradation of land and aquatic-based natural resources .....to achieve greater production."4 The Commitment does not, however, explicitly ascribe these needs to the multifunctionality of agriculture.

The socio-cultural function. Again, the respective industrialised - developing country interpretations of this function are nuanced differently. The former are primarily concerned with avoiding the depopulation of the countryside which uncontrolled social and economic forces would probably bring about. They are also concerned with maintaining populated rural landscapes and viable rural communities for tourism purposes while also noting that an agrarian structure based on many relatively small, owner-occupied family farms is more conducive to social stability and cultural preservation than one dominated by relatively few large holdings. Food security also is thought to be promoted by a decentralised, evenly distributed, production structure. The developing countries, and many developed countries also, tend to refer to agriculture as being a traditional 'way of life' which has cultural and societal connotations. Rapid rural-urban migration is also cited as a potential disruptive force in a developing country society, contributing to urban unemployment, crime, etc.

Increasingly, discussions on the multifunctionality of agriculture have come to take on a 'normative' stance. They do so by implying that there is some desirable typology of agriculture or agricultural and rural development paradigm that would maximise these functions or positive externalities. This typology has become known as 'multifunctional agriculture'.

These issues cannot be examined too closely here. The Rome Summit only 'considered' the multifunctional character of agriculture in passing, probably not wishing to get involved in a debate on the subject. However, it is pertinent to ask, while not denying the validity of certain of the arguments for a multifunctional agriculture, what is the appropriate area of policy to achieve the benefits or services sought: food, agricultural, rural, social, regional? In all of these areas of policy, international trade has a bearing, of course.5 Another issue is: Are all of the functions listed above in joint supply with agriculture's primary function of producing food, fibre, etc.? In other words, is it necessary to produce these products to achieve the externalities sought? The answer must be: not always. Furthermore, there is the "necessity test": should a policy measure designed to promote the positive externality be challenged as being inconsistent under the GATT? Article XX of the GATT requires that the measure in question must not only be allowable under the exceptions relating to the protection of the environment and human health, but also be necessary to fulfil the policy objective. Thus far, no dispute panel has accepted the necessity of a measure inconsistent with other provisions of the GATT even if the objective of the policy complied with the allowable exceptions. Hence, the potential importance of the NTC arguments for those industrialised countries seeking to protect their agricultural sectors. Of course, developing countries, and particularly the LDCs, are allowed varying latitude in their policy support measures to agriculture, as provided for in Article 15 of the Agreement on Agriculture.

_______________________

It is not appropriate here to attempt to go into the definition of public goods except to state that they are non-rival in consumption and non-excludable - if the 'good' is produced, nobody can be prevented from consuming or otherwise benefiting from it; i.e. it is consumed collectively and a market for it does not exist. See Paul Samuelson in his publications beginning from the mid-1950s.

2 See "Non-Trade Concerns in a Multifunctional Agriculture - Implications for Agricultural Policy and the Multilateral Trade System," paper submitted by Norway to the WTO Committee on Agriculture, 2 June 1998 (mimeo).

3 "Agricultural policy: the need for further reform", discussion paper prepared for the meeting of the OECD Committee for Agriculture at Ministerial level, Paris, 5 - 6 March 1998, (AGR/CA7(MIN(98)2), p.8.

4 Objective 3.2.

5 FAO and the Government of the Netherlands are sponsoring an international Conference on the Multifunctional Character of Agriculture and Land, to be held in Maastricht, 12-17 September 1999. For details and documents see: www.fao.org/mfcal.



1 Prepared by Mr T.J. Aldington, former Senior Technical Adviser and Secretary, Committee on Agriculture of FAO. The views expressed are those of the author and do not necessarily reflect those of FAO or its Member governments.

2 Food issues that included those relating more to developed country situations were addressed at the FAO/WHO International Conference on Nutrition (ICN), held in Rome in December 1992.

3 The text of each Commitment (reproduced in Box 1) and of the concomitant "bases for action" and "objectives and actions", were carefully elaborated by the Summit. The summaries provided in the main text of this paper have no official status and are designed to assist the general reader.

4 See Box 2 for the earlier definition, endorsed in December 1992 by the FAO/WHO International Conference on Nutrition.

5 Cf. Objective 4.1 (d). This paragraph does not refer specifically to developing countries, but the term "countries" can be implicitly read in that sense in the light of other paragraphs of the Objective.

6 The Agreement stresses the rights of WTO Members to protect human, animal and plant life and health. In the dioxin case, as compared with the earlier BSE case, many countries exercised their rights quickly and responsibly once the initial facts were known. Thus, despite the failure of the production and processing system in one country, the Agreement (especially the emergency provisions of Article 5, paragraph 7) proved protective of food quality and safety in those countries that decided to prohibit the import of potentially affected products.

7 The SARD concept stems from Chapter 14 (SARD), Agenda 21 of UNCED.

8 The outcome of this conference was the Global Plan of Action for the Conservation and Sustainable Utilization of Plant Genetic Resources.

9 Animal genetic resource issues were discussed at the Eighth Regular Session of the Commission on Genetic Resources for Food and Agriculture (CGRFA) in April 1999.

10 The review process for Article 27, para 3 (b), is scheduled to begin in 1999; that for the Agreement as a whole is set for 2000.

11 For an excellent discussion of the key issues and options for the 1999 review of the paragraph in question, see the Discusion Paper by Geoff Tansey, Trade, Intellectual Property, Food and Biodiversity, Quaker Peace and Service, London, February 1999.

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