1. Introduction
This note highlights some salient issues for consideration in the context of the WTO negotiations on agriculture in relation to incorporating food security concerns in a revised WTO Agreement on Agriculture. It presents recent data on the state of food insecurity, the basic objective and requirements for enhancing food security in those parts of the world (countries) with large proportions of food insecure people, and discusses the requirements for enhancing food security in relation to the WTO Agreement on Agriculture.
Food security as defined by the 1996 World Food Summit is a situation in which 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. Indicators of food security can be defined at different levels - for the world as a whole, for individual countries, or for households. Ultimately, however, food security concerns the individual and its principal determinant is the individuals entitlement to food - ability to produce and/or purchase food.
At the national level, adequate food availability means that on average sufficient food supplies are available, from domestic production and/or imports, to meet the consumption needs of all in the country. Similarly, as in the case of individuals, purchasing power at the national level - the amount of foreign exchange available to pay for food imports - is a determinant of national food security.
The opposite to food security is food insecurity. Food insecurity can be transitory (when it occurs in times of crisis), seasonal or chronic (when it occurs on a continuing basis). A person can be vulnerable to hunger even though he or she is not actually hungry at a given point in time.[2]
2. The state of food insecurity
An indication of the absolute and relative number of people living with hunger and fear of starvation (chronic food insecurity) in developing countries is presented in Table 1. The data, which are based on the latest estimates of undernourishment (as an indicator of chronic food insecurity) around the world by the Inter-Agency Working Group on Food Insecurity and Vulnerability Information and Mapping System (FIVIMS), indicate that 792 million people in 98 developing countries were not getting enough food to lead a normal, healthy and active life.
Another 34 million people in the industrialized countries and especially in countries in transition also suffer from chronic food insecurity. Overall, the bulk of the chronically food insecure people (undernourished) live in countries with very low per capita incomes, with countries in sub-Saharan Africa and South Asia having the highest proportion of undernourished.
3. The link between food security and poverty
The common bond of undernourished and vulnerable people is poverty. Their incomes are too low to provide adequate nutrition.
Table 1 also provides information on the proportion of people, by country, living on less than $2 a day, a benchmark defined by the World Bank as the upper poverty line.[3] As will be noticed, there is a high degree of correspondence between the proportion of people below the poverty line and the proportion of undernourished people across countries.
Similar information is also provided in Table 2, by region, on the number of people living on less than $1 a day, which is the World Banks lower poverty line. In 1998, about 1.2 billion people were below this lower poverty line, 98 percent of whom were in developing countries. Sub-Saharan Africa and South Asia had the highest proportion of poor people, respectively 46 percent and 40 percent of their populations.
4. Policy priorities for countering chronic food insecurity
To combat hunger and food insecurity at the national, as well as the global level, the ultimate solution is to provide undernourished people with opportunities to earn adequate incomes and to assure an abundant supply of food from either domestic production or imports, or both.
With 70 percent of the worlds extremely poor and food insecure people living in rural areas, the role of agriculture, which is the predominant economic activity in rural areas, is crucial in the eradication of poverty and food insecurity. The rural poor depend on agriculture for both their incomes and their food entitlements. More generally, in most countries with a high incidence of food insecurity, agriculture is the mainstay of the economy. It accounts for a large share of gross domestic product (GDP), employs a large proportion of the economically active population, represents a major source of foreign exchange and supplies the bulk of basic foods (see Table 3).
Thus chronic food insecurity can only be addressed effectively through policies that accelerate agricultural productivity growth and food production - the rapid development of agricultural potential.
The contribution of food imports to food availability at the national level is limited by the foreign exchange earning capacity of the country. Thus, closing the widening food gap through commercial imports is not a realistic possibility for most countries that have poor prospects for substantial increases in foreign exchange earnings and/or already face heavy external debt burdens.
As the information provided in Table 3 indicates, for some countries, food imports accounted for more than 50 percent of total export earnings, minus debt servicing. Food aid, which has been in the past used in some cases to meet uncovered market demands as well as to feed hungry people directly, has been on the decline and in any case is not a sustainable solution.
In sum, policies that raise incomes of the poor, accelerate agricultural productivity and food production and enhance the ability of the country to import food (by strengthening its export earning possibilities) are crucial for confronting food insecurity in many developing countries.
5. The WTO Agreement on Agriculture and food security
The focus of the WTO Agreement on Agriculture (AoA) is not food security. Its objective is to establish a fair and market-oriented agricultural trading system through reductions in agricultural support and protection. The expectation is that this would result in correcting and preventing restrictions and distortions in world agricultural markets. As is well known, the focus of the framers of the AoA was a perceived need to correct a situation of mounting production surpluses in a number of food products produced in a number of developed countries through rising levels of budgetary support and import protection. The most direct trade-distorting aspect of this situation was the escalating use of export subsidies (subsidy wars) to dispose of these mounting surpluses on world agricultural markets.
On the other hand, for the vast majority of developing countries the situation was different. Rather than excessive support and rising production surpluses, their situation was one of inadequate production and insufficient support to raise agricultural productivity and food production in line with their food needs and agricultural potential. Hence, the situation of many food insecure countries is fundamentally different, and, accordingly, requires a different approach from that of reducing support to agriculture.
6. Lessons from the history of agricultural development
Several lessons from the history of agricultural development, in different parts of the world, are worthy of note. First, hardly any country has been able to initiate and sustain modern economic growth without first exploiting and developing its agricultural potential. The initial effects were to raise rural income, assure a growing food supply and increase the national standard of living through reductions in poverty and food insecurity (undernourishment).
Secondly, a successful take-off to sustained agricultural growth was achieved through a judicious mix of subsidies (e.g. inputs and water management subsidies), pricing polices and border measures, as well as other institutional and infrastructural support measures (agricultural credits, extension services, land reform as needed, seed banks, crop insurance, storage facilities, road and transport, market and distribution systems) which provided the incentives and the means for peasant farmers to produce and innovate, albeit on a limited scale initially.
Thirdly, if the goal of agricultural policy is to raise agricultural productivity and production (e.g. in the case of a developing economy), then coupled rather than decoupled policies are the most effective for providing rapidly the intended results. For example, one dollar spent on coupled policies would produce more outputs than the same dollar spent on decoupled measures.
7. The relative effects of policies and countries on distortion in world agricultural markets
A related relevant issue is the relative contribution of various policy measures and countries to distortions in world agricultural markets. The policy criteria approach, which implicitly was used in the Agreement on Agriculture, is to classify policy measures into boxes (amber, green, blue) based on a pre-assignment as to their minimal or otherwise trade distorting nature. Another approach is to focus on the policy impacts of individual countries on markets.
The policy classification approach, because it is not based on actual policy impacts, can lead to anomalies. For example, some countries can technically be in compliance with their commitments under the AoA by shifting, i.e. re-instrumenting, their support from the amber to the green box with basically the same effects on markets. On the other hand, some other countries, because of their negligible size in world agricultural markets, either as exporters or as importers, could utilize policies classified as highly trade-distorting without creating any discernible distortion of world agricultural markets. This raises the question of the best approach to reducing distortions while allowing non-offending countries to continue to have policy flexibility.
In any event, even if a relatively large food insecure developing country does create a discernible distortion of world agricultural markets, there needs to be an evaluation of the trade-off between this minimal degree of distortion and the enhanced food security of several hundred million people.
8. Policy implications in the context of the WTO negotiations on agriculture
As has been seen, there are large differences in food insecurity between richer WTO members and poorer ones. Given the extent of food insecurity in the poorer countries, there is a need for increased, rather than decreased, support to agriculture in these countries in order to accelerate agricultural productivity and production growth. Increased support in these countries would in all probability have negligible effects on distortions in world agricultural markets. In any case, the benefits of improvement in living standards and reduction in food insecurity (undernourishment) are likely to far outweigh the cost of any distortion in world agricultural markets.
Accordingly, food insecure countries (i.e. those with a high proportion of undernourished population and/or people living in households that consume less than US$1 or US$2 per day) should be exempted, as currently are LDCs, from reduction commitments under a revised Agreement on Agriculture. Their policy flexibility should be unconstrained, unless it can be demonstrated, on a country-specific basis, that the use of otherwise prohibited policies have led to their obtaining an increased share in world trade, in a particular product, above a defined de minimis level.
Table 1. Indicators of hunger and poverty for selected WTO members
Region/Country |
Number of |
Share of |
People living on less |
|
(million) |
(percent) |
(percent of |
(year) |
|
Africa |
146.5 |
|
|
|
Angola |
5.0 |
43 |
... |
|
Benin |
0.8 |
14 |
|
|
Botswana |
0.4 |
27 |
61.4 |
1985-86 |
Burkina Faso |
3.5 |
32 |
85.8 |
1994 |
Burundi |
4.3 |
68 |
... |
|
Cameroon |
4.1 |
29 |
|
|
Central African Republic |
1.4 |
41 |
84.0 |
1993 |
Chad |
2.7 |
38 |
|
|
Congo |
0.9 |
32 |
... |
|
Côte dIvoire |
1.9 |
14 |
49.4 |
1995 |
Dem. Rep. of the Congo |
29.3 |
61 |
... |
|
Egypt |
2.6 |
4 |
52.7 |
1995 |
Gabon |
0.1 |
8 |
... |
|
Gambia |
0.2 |
16 |
... |
|
Ghana |
1.9 |
10 |
... |
|
Guinea |
2.1 |
29 |
... |
|
Kenya |
12.2 |
43 |
62.3 |
1994 |
Lesotho |
0.6 |
29 |
65.7 |
1993 |
Madagascar |
5.8 |
40 |
88.8 |
1993 |
Malawi |
3.2 |
32 |
... |
|
Mali |
3.4 |
32 |
90.6 |
1994 |
Mauritania |
0.3 |
13 |
22.1 |
1995 |
Mauritius |
0.1 |
6 |
... |
|
Morocco |
1.4 |
5 |
7.5 |
1990-91 |
Mozambique |
10.7 |
58 |
78.4 |
1996 |
Namibia |
0.5 |
31 |
55.8 |
1993 |
Niger |
4.5 |
46 |
85.3 |
1995 |
Nigeria |
8.6 |
8 |
90.8 |
1997 |
Rwanda |
2.3 |
39 |
84.6 |
1983-85 |
Senegal |
2.0 |
23 |
67.8 |
1995 |
Sierra Leone |
1.9 |
43 |
74.5 |
1989 |
Swaziland |
0.1 |
14 |
... |
|
Tanzania, United Rep. of |
12.7 |
41 |
59.7 |
1993 |
Togo |
0.8 |
18 |
... |
|
Tunisia |
0.1 |
* |
11.6 |
1990 |
Uganda |
6.0 |
30 |
77.2 |
1992 |
Zambia |
3.9 |
45 |
91.7 |
1996 |
Zimbabwe |
4.2 |
37 |
64.2 |
1990-91 |
Asia |
334.3 |
|
|
|
Bangladesh |
46.8 |
38 |
77.8 |
1996 |
India |
207.6 |
21 |
86.2 |
1997 |
Indonesia |
12.3 |
6 |
66.1 |
1999 |
Jordan |
0.2 |
5 |
7.4 |
1997 |
Korea, Republic of |
0.5 |
* |
<2 |
1993 |
Kuwait |
0.1 |
4 |
... |
|
Malaysia |
0.5 |
* |
... |
|
Mongolia |
1.1 |
45 |
50.0 |
1995 |
Myanmar |
3.1 |
7 |
... |
|
Pakistan |
28.9 |
20 |
84.7 |
1996 |
Papua New Guinea |
1.3 |
29 |
... |
|
Philippines |
15.2 |
21 |
... |
|
Sri Lanka |
4.5 |
25 |
45.4 |
1995 |
Thailand |
12.2 |
21 |
28.2 |
1998 |
United Arab Emirates |
0.0 |
* |
... |
|
Latin America and the Caribbean |
54.6 |
|
|
|
Argentina |
0.4 |
* |
... |
|
Bolivia |
1.8 |
23 |
38.6 |
1990 |
Brazil |
15.9 |
10 |
17.4 |
1997 |
Chile |
0.6 |
4 |
20.3 |
1994 |
Colombia |
5.2 |
13 |
28.7 |
1996 |
Costa Rica |
0.2 |
6 |
26.3 |
1996 |
Cuba |
2.1 |
19 |
... |
|
Dominican Republic |
2.2 |
28 |
16.0 |
1996 |
Ecuador |
0.5 |
5 |
52.3 |
1995 |
El Salvador |
0.6 |
11 |
51.9 |
1996 |
Guatemala |
2.5 |
24 |
64.3 |
1989 |
Guyana |
0.2 |
18 |
... |
|
Haiti |
4.8 |
62 |
... |
|
Honduras |
1.3 |
22 |
68.8 |
1996 |
Jamaica |
0.2 |
10 |
25.2 |
1996 |
Mexico |
5.1 |
5 |
42.5 |
1995 |
Nicaragua |
1.5 |
31 |
... |
|
Panama |
0.4 |
16 |
25.1 |
1997 |
Paraguay |
0.7 |
13 |
38.5 |
1995 |
Peru |
4.4 |
18 |
41.1 |
1996 |
Suriname |
0.0 |
10 |
... |
|
Trinidad and Tobago |
0.2 |
13 |
... |
|
Uruguay |
0.1 |
4 |
6.6 |
1989 |
Venezuela |
3.7 |
16 |
36.4 |
1996 |
Eastern Europe and Central Asia |
5.7 |
|
|
|
Albania |
0.1 |
3 |
... |
|
Bulgaria |
1.1 |
13 |
7.8 |
1995 |
Croatia |
0.5 |
12 |
... |
|
Estonia |
0.1 |
6 |
17.7 |
1995 |
Georgia |
1.2 |
23 |
... |
|
Kyrgyzstan |
0.8 |
17 |
... |
|
Latvia |
0.1 |
4 |
8.3 |
1998 |
Poland |
0.3 |
* |
10.5 |
1993 |
Romania |
0.3 |
* |
27.5 |
1994 |
Turkey |
1.2 |
* |
18.0 |
1994 |
|
|
|
|
|
Memo item: |
|
|
|
|
Non-WTO members |
275.8 |
|
|
|
Afghanistan |
14.6 |
70 |
... |
|
Algeria |
1.4 |
5 |
15.1 |
1995 |
Cambodia |
3.4 |
33 |
... |
|
China (incl. Taiwan Province) |
140.1 |
11 |
53.7 |
1998 |
Eritrea |
2.2 |
65 |
... |
|
Ethiopia |
28.4 |
49 |
76.4 |
1995 |
Iran, Islamic Rep. of |
4.1 |
6 |
... |
|
Iraq |
3.5 |
17 |
... |
|
Korea, Dem. Peoples Rep. |
13.2 |
57 |
... |
|
Lao PDR |
1.5 |
29 |
... |
|
Lebanon |
0.1 |
* |
... |
|
Liberia |
1.1 |
46 |
... |
|
Libyan Arab Jam. |
0.0 |
* |
... |
|
Nepal |
6.2 |
28 |
83 |
1995 |
Saudi Arabia |
0.6 |
3 |
... |
|
Somalia |
6.6 |
75 |
... |
|
Sudan |
5.1 |
18 |
... |
|
Syrian Arab Rep. |
0.2 |
* |
... |
|
Viet Nam |
16.5 |
22 |
... |
|
Yemen |
5.7 |
35 |
35.5 |
1998 |
Yugoslavia |
0.3 |
3 |
... |
|
Armenia |
0.7 |
21 |
... |
|
Azerbaijan |
2.4 |
32 |
... |
|
Belarus |
0.1 |
* |
<2 |
1998 |
Bosnia Herzegovina |
0.4 |
10 |
... |
|
Kazakhstan |
0.7 |
5 |
15.3 |
1996 |
Moldova Rep. |
0.5 |
11 |
32 |
1992 |
Russian Fed. |
8.6 |
6 |
25.1 |
1998 |
Tajikistan |
1.9 |
32 |
... |
|
Turkmenistan |
0.4 |
10 |
59 |
1993 |
Ukraine |
2.6 |
5 |
77.2 |
1992 |
Uzbekistan |
2.6 |
11 |
26.5 |
1993 |
Developing countries |
791.9 |
18 |
... |
|
a The term undernourished in the context of the World Food Summit 1996 refers to persons whose food consumption level is inadequate in terms of calories consumed relative to requirements on a continuing basis.b $2 a day refers to the upper poverty line as defined by the World Bank (2001), World Development Report 2000/2001.
* - less than 2.5%
... - data unavailable
Source: FAO (2000), The State of Food Insecurity in the World 2000, Rome: FAO, Table 1; World Bank (2001), World Development Report 2000/2001: Attacking Poverty, Table 4.
Table 2. Estimates of poverty, by region, 1998
Region |
Number of people |
Share in total |
East Asia |
278.3 |
15.3 |
Eastern Europe and Central Asia |
24.0 |
5.1 |
Latin America and the Caribbean |
78.2 |
15.6 |
Middle East and North Africa |
5.6 |
1.9 |
South Asia |
522.0 |
40.0 |
Sub-Saharan Africa |
290.9 |
46.3 |
Total |
1 198.9 |
24 |
Source: World Bank (2001), World Development Report 2000/2001: Attacking Poverty (New York: Oxford University Press), Table 1.1.Table 3. Relative importance of agriculture in selected WTO member countries, 1999
Region/Country |
Share of |
Agricultural |
Food imports as |
Africa |
|
|
|
Angola |
12.3 |
72.1 |
9.2 |
Benin |
38.6 |
55.0 |
21.0 |
Botswana |
3.6 |
44.7 |
9.8 |
Burkina Faso |
33.3 |
92.2 |
27.7 |
Burundi |
54.2 |
90.4 |
26.1 |
Cameroon |
42.4 |
60.6 |
5.9 |
Central African Republic |
52.6 |
73.5 |
10.1 |
Chad |
39.8 |
76.1 |
7.8 |
Congo, Rep. |
11.5 |
41.5 |
6.6 |
Côte dIvoire |
26.0 |
50.3 |
5.3 |
Dem. Rep. of the Congo, |
57.9 |
63.7 |
6.3 |
Djibouti |
3.6 |
na |
39.7 |
Egypt |
17.5 |
34.0 |
19.5 |
Gabon |
7.3 |
39.2 |
3.1 |
Gambia |
27.4 |
79.2 |
41.8 |
Ghana |
10.4 |
57.1 |
14.6 |
Guinea |
22.4 |
84.2 |
19.5 |
Guinea-Bissau |
62.4 |
83.1 |
49.7 |
Kenya |
26.1 |
75.9 |
11.8 |
Lesotho |
11.5 |
38.2 |
44.0 |
Madagascar |
30.6 |
74.7 |
na |
Malawi |
35.9 |
83.3 |
18.7 |
Mali |
46.9 |
81.5 |
11.8 |
Mauritania |
24.8 |
53.0 |
56.4 |
Mauritius |
8.6 |
12.2 |
7.4 |
Morocco |
16.6 |
36.9 |
26.6 |
Mozambique |
34.3 |
80.8 |
46.7 |
Namibia |
10.0 |
42.1 |
2.7 |
Niger |
41.4 |
88.1 |
27.2 |
Nigeria |
31.7 |
34.2 |
13.3 |
Rwanda |
47.4 |
90.5 |
55.7 |
Senegal |
17.4 |
74.0 |
28.9 |
Sierra Leone |
44.2 |
62.7 |
80.3 |
South Africa |
4.0 |
9.9 |
1.9 |
Swaziland |
16.0 |
34.3 |
6.4 |
Tanzania, Un. Rep. of |
45.7 |
80.9 |
18.6 |
Togo |
42.1 |
60.3 |
14.4 |
Tunisia |
12.4 |
25.0 |
6.3 |
Uganda |
44.6 |
80.6 |
38.5 |
Zambia |
17.3 |
69.9 |
8.5 |
Zimbabwe |
19.5 |
63.2 |
na |
Asia |
|||
Bangladesh |
22.2 |
56.7 |
26.8 |
India |
29.3 |
60.1 |
11.5 |
Indonesia |
19.5 |
49.1 |
8.8 |
Jordan |
3.0 |
11.7 |
18.9 |
Korea, Rep. of |
4.9 |
10.6 |
2.3 |
Kuwait |
0.4 |
1.1 |
5.0 |
Malaysia |
13.2 |
19.4 |
2.4 |
Mongolia |
32.8 |
24.9 |
5.5 |
Myanmar |
53.2 |
70.5 |
na |
Pakistan |
26.4 |
47.5 |
19.7 |
Papua New Guinea |
24.4 |
74.7 |
6.3 |
Philippines |
16.9 |
40.2 |
4.9 |
Singapore |
0.1 |
0.2 |
1.0 |
Sri Lanka |
21.1 |
45.8 |
9.3 |
Thailand |
11.2 |
57.2 |
1.2 |
United Arab Emirates |
2.2 |
5.0 |
5.0 |
Latin America and the Caribbean |
|||
Argentina |
5.7 |
10.0 |
3.6 |
Bolivia |
15.4 |
44.5 |
5.9 |
Brazil |
8.4 |
17.3 |
22.5 |
Chile |
7.4 |
16.0 |
4.1 |
Colombia |
13.5 |
21.0 |
7.1 |
Costa Rica |
15.2 |
20.7 |
2.9 |
Cuba |
na |
14.5 |
na |
Dominican Republic |
11.6 |
17.4 |
7.4 |
Ecuador |
12.9 |
26.5 |
4.6 |
El Salvador |
12.1 |
29.7 |
10.7 |
Grenada |
8.4 |
na |
19.4 |
Guatemala |
23.3 |
46.7 |
11.3 |
Guyana |
34.7 |
18.3 |
6.3 |
Haiti |
30.4 |
62.9 |
62.7 |
Honduras |
20.3 |
32.6 |
na |
Jamaica |
8.0 |
21.0 |
10.4 |
Mexico |
4.9 |
22.1 |
4.5 |
Nicaragua |
34.1 |
20.8 |
33.8 |
Panama |
7.9 |
20.8 |
7.6 |
Paraguay |
24.9 |
34.8 |
2.1 |
Peru |
7.1 |
30.7 |
13.7 |
Suriname |
26.0 |
19.2 |
na |
Trinidad and Tobago |
1.8 |
9.0 |
7.1 |
Uruguay |
8.5 |
12.8 |
3.0 |
Venezuela |
5.0 |
8.4 |
5.7 |
Eastern Europe and Central Asia |
|||
Albania |
54.4 |
48.9 |
58.6 |
Bulgaria |
18.7 |
7.5 |
2.9 |
Croatia |
8.9 |
9.1 |
4.2 |
Estonia |
6.3 |
11.6 |
4.0 |
Georgia |
26.0 |
20.5 |
na |
Kyrgyzstan |
46.0 |
26.3 |
14.5 |
Latvia |
4.7 |
12.2 |
5.4 |
Lithuania |
10.4 |
12.8 |
2.4 |
Poland |
4.9 |
22.2 |
2.1 |
Romania |
16.4 |
15.9 |
3.7 |
Turkey |
17.6 |
46.9 |
2.5 |
Memo item: |
|||
Developed countries |
|||
Belgium |
1.1 |
1.9 |
na |
Canada |
2.7 |
2.4 |
1.1 |
Czech Republic |
4.2 |
8.5 |
1.0 |
Denmark |
4.0 |
3.9 |
2.2 |
Finland |
4.0 |
5.8 |
1.1 |
France |
2.3 |
3.5 |
2.2 |
Germany |
1.1 |
2.6 |
1.8 |
Hungary |
6.0 |
11.1 |
1.1 |
Iceland |
11.2 |
8.3 |
1.7 |
Ireland |
5.6 |
10.6 |
1.9 |
Israel |
na |
2.8 |
2.5 |
Italy |
2.6 |
5.6 |
3.0 |
Japan |
1.7 |
4.3 |
2.9 |
Liechtenstein |
na |
na |
na |
Luxembourg |
0.8 |
2.2 |
0.4 |
Malta |
3.2 |
2.0 |
4.2 |
Netherlands |
3.1 |
3.5 |
3.3 |
New Zealand |
7.4 |
9.1 |
1.8 |
Norway |
2.0 |
4.7 |
0.8 |
Portugal |
3.9 |
13.2 |
5.2 |
Slovakia |
4.4 |
9.3 |
1.7 |
Slovenia |
4.0 |
2.2 |
2.1 |
Spain |
3.5 |
7.7 |
2.5 |
Sweden |
2.2 |
3.3 |
1.0 |
Switzerland |
na |
4.3 |
1.1 |
United Kingdom |
1.8 |
1.8 |
2.5 |
United States |
1.7 |
2.2 |
1.0 |