Foro Global sobre Seguridad Alimentaria y Nutrición (Foro FSN)

Dear friends,

Since the beginning of the discussion, Dr. George Kent has used NAFTA as an example stating that the priority in these types of agreements is to defend the business interest of the large producers, obviously, since they are the ones being represented in the negotiations.

The issue is that in order to achieve this production system that stresses profits instead of food supply, government regulations and structures that always seek financial gain have been implemented, disregarding not only the food supply, but also the environmental and cultural impact.

In Mexico, the effects from NAFTA have been devastating for the small producers and for the impoverished population, since producers cannot compete against large corporations, and the population´s food purchasing power decreases daily.  At the same time, the large producers find themselves in a period of bonanza, since the structure that has been established works for them to export farm products that indeed have risen over the last few years, a fact that makes Mexican officials proud.  However, what they do not take into account is that in order to achieve this production, they use resources that should be used to benefit the population at large.  

The government encouraged community organizations to be established in every state to determine how resources allotted to farming should be spent.  These organizations locally manage state-funded programs, steering them towards what is deemed convenient according to local and national needs.  In theory it seems right, but in fact, if these organizations are run by the producer elite circle, as they in fact are, it is reasonable to assume that their priorities shall be in line with what serves their best interest, not what the population or the small producers need, who, as Dr. Kent states, have no place to share their opinion nor defend their interests during the decision-making process.

Therefore, even if it seems unrealistic, it is also necessary to weigh human rights and environmental issues during trade agreements, and the financial issue should not be the top priority.  If not done, we will all have to bear the cost, as it is already happening in Mexico, with violence and poverty levels that a few years ago would have been unimaginable.

Best regards from Mexico,

Moisés Gómez Porchini

I have spent most of my carrier working on food security and nutrition (that is from a micro entry point) in an institutional context which privileged national and global policies and saw international trade as an important dimension of food security.  It is revealing that I realized only late in my carrier that only 11% of the food consumed in the world came from international trade, and that somehow the tail was wagging the dog. 

As we were trying to understand why people were malnourished and food insecure in specific areas, again and again we faced 1/ changes in diets related to globalization and reduced use of and consideration for traditional foods and 2/increased precarity of livelihoods as local farmers  were encouraged to "take advantage of the opportunities of globalisation"and concentrate on commodities which would meet the needs of mass distribution. Food products were not food anymore but a means to generate income, and the environmental impact, in particular on biodiversity didn't come into the picture. Socio-economic differences, indebtedness and poverty increased and people migrated away from their areas in search of jobs. Societies break up, rural areas die progressively and consumers health is undermined by inappropriate diets. 

Another interesting dimension related to trade is that of food standards. It was never clear to me why a unique set of food safety standards would be required, since some foods have to travel for months exposed to heat and humidity while others were commercialised locally in very different specific contexts. One clear impact has been that smallholder farmers in many areas were not able to access the market any longer and that production was concentrated in the hands of those who could afford to garantee these standards. Recent developments include institution of food fortification standards that exclude non-fortified foods, and sustainability is now the new item on the agenda.

I am increasingly convinced that sustainable development and resilience can only be achieved if we re-localise policy making,  build on existing experience, making the best use of local natural resources and engaging all actors in the process.  It is not acceptable that promotion of local foods to protect and create jobs, maintain culture and environment, and contribute to more healthy diets is seen as a violation of the principle of free circulation of goods. This of course does not mean replacing one approach with the other but finding the right combination in specific contexts and ensuring micro-macro linkages through real dialogue.  Trade certainly has a role to play in food security but should be held accountable for its social, environmental and health impact.

As Carlo Petrini said at the 7/2 event "Le idee di Expo verso la Carta di Milano", free market cannot apply to food. 

I am not sure that anybody adheres any longer that markets should be free of any control are a contribution to public good. But it should not apply to food. 

Dear participants,

We are now at the end of our discussion and we wanted to thank you for rich, detailed and thought-provoking inputs. They certainly provide motivation for further thinking, discussion and debate.

The discussion has also highlighted the need for more analysis as well.  Of course, different desires, motivations and interests can be the cause of a difference of opinion or a perspective on an outcome.  But we note that sometimes the existing data and evidence are missing so an assertion is in fact more of a supposition on cause and effect rather than something that can be substantiated on current knowledge.  Hopefully this dialogue will help us in defining ripe areas for future analysis!

We both have particularly enjoyed and learned a great deal from the experiences in specific regions, countries and projects.  We were pleased that so many of you took the time to share your experience, using that to address the questions posed.  For us, it is this kind of sharing that makes online consultations like the FSN so valuable (thank you to FAO and FSN!!)  Many of you have highlighted certain lessons that can only be learned from hands-on experience, and we highly value that. For example, the situation in the Near East and North Africa region as explained by Isin Tellioglu and the case of peanut trade in Senegal and Cameroon shared by Lal Manavado.

Many problems with trade have been highlighted, including land grabs, resource degradation and the loss of small farmers’ livelihoods due to the changing structure of agricultural production and trade, skewed towards large farms and corporations. Ekaterina wonders if trade, in this case, is the root of these problems, or these are wider issues that need comprehensive policy response and certainly a more stringent regulation to correct directly for the market failures that cause them. 

We both note how many contributors spoke of the need for a need for more coherence between trade rules and food security measures.  Dr. Mishra calls for trade rules to give priority to food security measures.  After giving us some historical perspective, Jasmin Marston calls for a realignment towards a fairer trading systems where agriculture and food security are concerned.  Andrew MacMillon feels it is wrong to blame global trade rules for the fact that more than half the world’s population is malnourished but goes on to say that trade rules are not helping matters.  Professor Dhar appreciated the moderators raising the issue of non-trade measures and states “carving out non-trade measures is indeed a task that the trade regime has not addressed despite being asked to on numerous occasions.”  He specifically notes that the architects of the WTO AoA stated in the preamble to the Agreement that the “reform programme [initiated by the AoA] should be made in an equitable way among all Members, having regard to non-trade concerns, including food security…”

Ekaterina felt that a lot of the debate focused on protecting domestic farmers from external competition, which is only one side of the story. In addressing food insecurity, she argues that one should not neglect the income opportunities that trade provides, including those for the rural poor. There are many positive and well-documented cases that deserve attention. This is not to say that the gains are automatic or that everyone gains from trade. On the contrary, these cases show what is needed from market participants and government institutions to succeed in seizing the opportunities in trade, and that it is essential to ensure that producers benefit from the export earnings.

Another point Ekaterina would like to make is that the implications of trade agreements for domestic agricultural policy are often overestimated. Under the current domestic support rules of the WTO, there is still substantial space for supporting agriculture in developing countries. Countries should indeed have the liberty to design their agricultural policies as they see fit, to achieve their food security goals. However, if they also want to benefit from market access in other countries, they would be expected to offer something in exchange. That is the underlying principle of any international public good. What becomes critical then, is what type of support should be provided, to whom and through which means. In general, one of the weakest points in this regard has been the lacking support to infrastructure, market development and supporting the farmers to get organized, working through cooperatives or other structures, to professionalize their marketing functions and integrate vertically, capturing a larger share of the value added generated in the sector.

Susan appreciated the exchange around whether or not a food security strategy that explicitly included support for small-scale farmers in agro-biodiverse settings could be compatible with a global market-based approach to food security.  Several contributors simply said no, that global markets undermine small-scale farmers in agrobioverse settings.  This related to many of the posts on the need for coherence and non-trade measures to promote food security.  Susan is uncertain of the role that global markets can play in overall food security without non-trade measures. It is not a trade or anti-trade or a market or anti-market stance.  It is about understanding the appropriate role and boundaries of the different approaches.  Raising incomes is not synonymous with food security though this sometimes underlies pro-market stances. 

And returning to her well-worn subject, small-scale farmers in agrobiodiverse setting, Susan argues that food security over the long run will require support to these systems and an ability to prioritize measures related to them over trade rules.  Our world is facing increasing and unpredictable change. The best defence against unpredictability is diversity. The vast majority of genetic and species diversity is maintained on-farm in the form of diverse portfolios of landrace varieties and crop wild relatives adapted to local conditions and continuing to evolve in situ. However, the shift away from traditional production systems and the cultivation of landrace varieties (FAO 2010) has resulted in a loss of 75 percent of plant genetic diversity, and is most reported in the case of cereals where modern breeding efforts are most concentrated. Wale et al (2011) explain that farmers have financial incentives to replace diverse sets of landrace varieties with monocultures of uniform, high-yielding varieties, and abandon traditional agricultural systems. Repercussions will be felt in terms of nutrition, resilience against environmental stress and loss of traditional knowledge.  Just to be clear, modern varieties can offer immense public benefit. However the paradox remains: breeding new varieties adapted to increasing and erratic global change is predicated on the availability of allelic variation within and between crop species, while their dissemination contributes to the erosion of this diversity.  Insofar as trade and market incentives result in the replacement of landrace varieties, long-term food security requires measures to balance and support these systems.

One area that certainly needs more reliable evidence and analysis is the implication of trade for diets and nutrition. Some situations mentioned by the contributors raise red flags, as worsening nutrition is sometimes a result of greater involvement in trade. Ekaterina points out that in such cases it would be useful to understand what the underlying problem is – if incomes from exporting cash crops rise, presumably this additional income (in households that benefit) should be spent on more nutritional products. So the question becomes: Are these products not available? Or is this a question of educating households about nutrition, choices, food preparation? When Ekaterina worked in the FAO Regional Office in Santiago, Chile, there was a wonderful initiative that involved renowned chefs, who published easy recipes and demonstrated to the wider population how to cook nutritious and tasty food with relatively low-cost products: Beans, maize, potatoes. We also worked closely with street markets on promoting fruit and vegetable consumption through awareness raising actions. These types of initiatives can make a big difference.  

As Ann Steensland mentions, “trade cannot address all of the socio-economic and political challenges that influence food security and nutrition”, but we think this discussion demonstrated that there is certainly a relationship, whether positive or negative. It is a challenge for researchers, policy makers, NGOs, farmers and consumers to figure out the priorities and the policy actions in each particular country case.

As we noted in the start of this summary, there is a need for more information and analysis. As Dr. Mishra elegantly and succinctly put it:

• First, the points of intersection between food security and the agreement should be clarified.
• Second, the relationship between international commitments to food security and commitments to trade liberalization must be assessed in order to have coherence.
• Third, ways to broaden the definition of food security and its application within trade agreements should be explored.

As your moderators, we apologize for not being able to call out each one of your contributions individually in our comments and in this summary.  We have both learned a lot and you have given us both a lot to think about in our work.  We hope you all feel the same way.

Thank you so much for your participation and we are glad to keep up the conversation bilaterally if you want to contact either of us individually.

All the best,

Susan and Ekaterina

Last but not the least; I would like to address your question from the viewpoint of intellectual property rights and equity (farmers’ rights; access and benefit sharing), which are equally important in determining the availability of food resources for trade and development. My observations and comments are given in the attached file.

Availability of food is dependent on production wherein progressively enhanced productivity of crops, animals, poultry and fish is necessary to enhance production for meeting the ever-increasing demand. The trade agreements administered by the WTO do no directly determine the policies to ensure food availability but indirectly the agreement on trade related aspects of intellectual property rights (TRIPS) and the sanitary and phytosanitary agreement (SPS) affect the availability of food resources through innovative biological interventions and by ensuring their safe transboundary movement, respectively,

‘Food security and sustainable agriculture’ is one of the 7 priority areas of Rio +20. Further, the United Nations’ Agenda 21 as well as the FAO Global System have accorded priority to conservation and sustainable utilization of genetic resources for food and agriculture (GRFA) including a time bound commitment for their integration into sustainable agriculture. Similarly, ‘conservation of habitats’ was advocated much earlier by the United Nations Environment Programme in the Stockholm Declaration wherein some of the habitats could be harboring wild relatives of crop plants.  Nonetheless, a grand challenge is to visualize and agree upon how to, where to, and how much In situ On Farm conservation of the existing conventional crop materials should be promoted, and the smallholder conservers incentivized for the same through policy interventions to ensure a progressive germplasm input for crop improvement for posterity. 

The non-legally binding FAO international undertaking (IUPGR) was transformed into the first legally binding international treaty (ITPGRFA) to accommodate the objectives of the Convention on Biological Diversity (CBD) particularly the facilitated access, and a revised agreed interpretation of the IUPGR i.e. the realization of farmers’ rights. The WTO Agreements are neutral to these developments. However, the protection of plant breeders’ rights, a model brought forward from the UPOV Convention, which was another revised agreed interpretation of the IUPGR, could not be addressed in its successor ITPGRFA. The TRIPS Agreement under the WTO mandated the protection of plant varieties in member countries, either by patents, or a sui generis IPR or a combination of the two. However, the implementation of this part of the trade agreement by the WTO members has been selective. 

As of now, the UPOV membership is increasing. There are 72 members and 59 observer States in the UPOV Council, and some non-member countries are observers in its Administrative and Legal Committee (CAL) and/or the Technical Committee. In addition to the 59 observer states, UPOV Council also has 19 Intergovernmental Organizations and 31 International Non Governmental Organizations as Observers. On the other hand, inclination of some other countries to emphasize that they have adopted a non-UPOV model is affecting homogenization, which is urgently required. It is a fact that irrespective of the membership or models adopted, all countries that have their PVP laws in place have adopted the basics of the UPOV model law. This includes the standards for determination of eligibility of varieties for the grant of title (i.e. novelty, distinctness, uniformity, stability, and distinct denomination), the test guidelines (UPOV test guidelines or the national test guidelines that are also developed more or less based on UPOV guidelines), the reference varieties to compare candidate varieties (UPOV and national sets for respective crops), the research and breeding exemption, etc. The UPOV system is progressively developing argument and practices to accord farmers’ exemptions under its 1991 model. But there is much more to be done to bridge the gap in overall understanding of the PVP law for moving closer towards international harmony in context of sui generis PVP as per the TRIPS-UPOV. At the same time, realization of farmers’ rights could be strengthened under ITPGRFA.

In addition to PVP, another important area needing priority attention of the international community including the business world is international understanding on germplasm collecting and transfer to safeguard increased availability of food through breeding, plant improvement and business/trade in plant varieties. In 1994, during the consolidation of the IUPGR and its revised agreed interpretations, FAO also brought out an ‘International code of conduct for plant germplasm collecting and transfer’ (ICCPGCT). The intergovernmental body negotiating the revision of IUPGR in harmony with CBD had also recommended that the code should be reviewed and revised after the finalization and enforcement of the Treaty (ITPGRFA). Much has changed but the revision is still pending. On the other hand, enormous stakes are involved in generating progressively evolved germplasm and its access to breeders and researchers for utilization and benefit sharing.

The degree, variability and intensity of human intervention in agriculture is bound to increase with increased pressures from opposite forces shrinking the agriculture resource base. This could be detrimental to both trade and food security.  Small-scale farmers in agro-biodiverse settings have limitation in their understanding to develop their own niche markets and value chains that may have capability to scale up and are compatible with global markets. Protection of geographical indications (GI) could be ideal in two ways. First, for promoting dual protection of competitive farmer varieties, i.e. by GI in addition to their protection under the PVP law, and secondly to extend unlimited (on a time scale) protection to the promising ones through renewal of registration. However, for the time being, this is far from being an adequate preposition to safeguard food security beyond the real-time climate change scenario, and further indulgence is required. 

Impact Investing, Capital Investment, & B Corps

One rarely explored aspect of the intersection between Trade Policy and Food Security is the issue of Capital Investors, and “Benefit Corporations” or “B Corps”.  This issue is a corollary to my post on “Impact FDI’s vs. 100% Exporters”.

IF one of the important ways to improve food security is to develop the Holistic Food Value Chain (or FSVC), and IF that development is to be done in such a way that FDI’s will have a positive impact on the entire FSVC, THEN the question becomes one of “Where does the capital come from?” Who, or what type of firms, are willing and able to invest in “B Corp” or “Benefits Corporation” firms whose mission is to promote that Holistic Food Value Chain (FSVC)?

Capital investment will be necessary to transform subsistence level & manual farming in many rural areas (of Africa & elsewhere) to the Holistic Food Value Chain.  Some level of mechanization of farming must occur, storage & handling methods must be developed, transportation must be improved, and markets must be expanded.  Those transformative changes require capital investment from somewhere and by someone.

To date, much of the recent efforts at improving smallholder farming seem to have gone into farm productivity improvements.  As my earlier post pointed out, this is a necessary (i.e., important) but not sufficient condition.  Groups like the HGBuffett Foundation, the Gates Foundation, and others have invested, or committed to invest, millions of US$ to improve seed, soil, fertilizer, and related farm productivity. 

Howard G. & Howard W. Buffett’s book “40 Chances” is a good view of that approach to Investment in smallholder farm productivity.  Unfortunately, both Buffetts presume that storage and transportation systems either pre-exist, or will be magically developed by someone.  Given that they are farming in Decatur, IL and Nebraska, that is an understandable presumption.  However, they did not go back into history far enough to see that 170 years ago, grain elevators and railroads did not exist in their locations.  The Gates Foundation efforts at food security improvements and ZeroHunger in Africa are similarly myopic, in terms of focusing primarily on farm productivity rather than the entire FSVC.

Another source of potential capital are the International Aid Agencies and/or NGOs.  This source of capital has its own challenges, however, because both government aid agencies and non-profit NGO’s are primarily geared towards emergency assistance.  Because their donor base, funding strategies, and programs (government and non-profits) are focused on addressing crises, funds are rarely allocated towards addressing the underlying systemic causes of food insecurity.  Handing out food, or distributing farm hand tools is a good photo opportunity.  Building grain silo’s, or roads, or buying trucks to move food to markets are long-term capital projects that do not seem to fit the mission of “emergency aid & development”.

The one source of capital that seems to be developing, albeit still in its infancy, are the “Impact Investors” and the “Benefit Corporation” (aka “B Corps”).  Alice Korngold (A Better World, Inc.: How Companies Profit by Solving Global Problems...Where Governments Cannot) and Cathy Clark, Jed Emerson and Ben Thornley (The Impact Investor: Lessons in Leadership and Strategy for Collaborative Capitalism) have written two of the best, and most recent, books on this area.  Paul Polson, CEO of Unilever is perhaps the most vocal advocate of this approach, from a large corporate POV.  Lord Michael Hastings (UK) is another very strong advocate. 

The first challenge for many Impact Investors and B Corps is the tension between “insisting on normal Private Equity Returns” vs. “lesser financial returns (ROI) but greater “Impacts” as measured by some desired metrics.  Are the Impact Investors willing to trade off lower ROI for greater impacts on the “number of lives affected” through investment in food security, grain silos, roads, or markets?

A second challenge, especially in some areas of Africa, is the question of whether the Impact Investors and B Corps are willing to trade off the possibility of some capital loss for the chance to achieve a higher return among the “most needy”?  Some Impact Investors have chosen to avoid all risk of capital loss, and hence make their impact investing sound good, but their investments are in “safe” areas that really don’t need their capital.  Other Impact Investors have chosen to split their ImpInv Funds into several pools, with some funds allocated to “higher risk of capital loss”.  Those are the investors who can really make a difference in alleviating global hunger – IF they also focus on the entire Food Value Chain, not just farm productivity improvements.

The jury is still out on whether relatively new Impact Investment Funds located in New York, San Francisco, and London have the ability to change the future of Food Security by thoughtful, and perhaps audacious, capital investments in the entire Food Value Chain.  Keep Trade Policy neutral, and encourage/support these new sources of capital, and we can eliminate world hunger by 2030.

Dennis Bennett

CEO

AfriGrains

1. From your knowledge and experience how have trade agreements and rules affected the four dimensions of food security (availability, access, utilization, stability)?             

As a necessary element to human survival, food is a human right. Small, local family farms are the bedrock of traditional rural communities and global food security- the ability of countries to produce the food they need to survive. Yet the global food supply is increasingly falling under the control of giant multinational corporations. Large agribusinesses have rewritten the rules of the global agricultural economy, using “free trade” agreements to turn food into a commodity for profit rather than a human right. The global corporatization of agriculture has had disastrous effects on farmers, food security, and the environment.

Global agricultural policy used to be geared towards maintaining stability in global markets. Supply management programs, also called commodities agreements, helped maintain production around the same as demand, so that farmers didn’t produce an oversupply that would cause prices to collapse. These programs helped keep market prices above a price floor, which is a minimum price over the cost of production that farmers need to survive. In addition, countries have historically promoted their local economies by protecting domestic production from foreign competition. Most countries maintain taxes on foreign imports, called tariffs, as well as outright limits on the quantities of foreign imports, called quotas, in order to favor local economic development. This has especially been true in the agricultural sector, where local food production is key to food sovereignty.

Feeding the world in 2050 when our global population is expected to reach over 9 billion is one of the most daunting challenges of our time. In the face of climate change, and with scarce land and water resources, we must rapidly address this challenge and lay in place the right frameworks to boost food production and freeze the environmental footprint of agriculture all along the food value chain. We must also unlock the potential of millions of small producers who could be part of the solution to feed the planet.

Trade is an integral aspect of increased productivity and food security. All farmers, regardless of size, will only produce more when they see an available market. These decisions are no longer as local as they once were. With agricultural value chains becoming more complex, actions taken in far off capitals – and regional and international institutions as well – will have an impact on the rural small farmer more than ever before. The laws and regulations governing the different aspects of value chain development, many of which are part of trade agreements and institutions, also directly tie into market opportunity and productivity.

The potential gains associated with increased trade and easier movement of goods and services are becoming increasingly clear. Trade has now become a significant component of food security efforts and the broader agricultural development agenda. A strong enabling environment – with transparent and well-implemented laws, regulations, and trade policy – is central to value chain development. One of the biggest challenges in creating this enabling environment will be closing the gap between the system on the books and the realities in the market. This applies to domestic and regional laws and regulations, implementation of trade agreements, and transparent regulatory systems alike.

There are positive developments taking place at the intersection of trade, agriculture, and food security. But trade needs to be further integrated and better used as a tool for market development and productivity enhancement. In order to open markets effectively and to the benefit of all, innovation from both the public and private sectors will be increasingly important.

Overall, the 21st century will require a trade policy that is forward-looking and innovative in order to take advantage of future market opportunities. Trade can and should impact individuals positively, add value economy-wide, and deliver broader food security and development benefits. The new vision for agriculture should focuses on three strategic areas:

§  Facilitating leadership commitment to action by facilitating dialogue, commitment building and collaboration among diverse stakeholders;

§  Supporting country transformation by catalyzing and supporting action-oriented, multi-stakeholder partnerships at regional and country levels; and

§  Promoting innovation and best practice by facilitating exchange of innovation, experiences and best practices among stakeholders and regions, and monitoring partnership impact to track progress.

2.    What is your knowledge and experience with creating coherence between food security measures and trade rules?  Can rights-based approaches play a role?

Trade in agriculture is a vital part of international development. Ensuring that developing countries can have food security and benefit from international trade should be a priority for developed and developing countries alike. The right to food is a fundamental human right. Global commitments to make food security a reality for all people recognize that fair rules for international trade within a multilateral trade system are essential to achieve this goal. In developing countries, on average almost 60% of people are involved in food production. Trading food at fair prices is essential for their short and long term development. The link between trade and food security becomes clear through an examination of the basic principles, specific policies, and implications of international agreements for people who cannot take food security for granted. Basic principles and specific policies are both important in the debate about food security and trade liberalization:

• First, the points of intersection between food security and the agreement should be clarified.
• Second, the relationship between international commitments to food security and commitments to trade liberalization must be assessed in order to have coherence.
• Third, ways to broaden the definition of food security and its application within trade agreements should be explored.

Agricultural production is about our human need for food, not simply about markets. It is true that not all regions of the world can or should attempt to be competitive in the area of agriculture exports. Households and countries may be able to rely on the international supply of food to satisfy their needs, but only if the rules for trade are fair and give priority to the need for food security. In short, developed and developing countries must work together to ensure that more liberalized trade agreements are compatible with food security.

3.    How can a food security strategy, including components that explicitly support small-scale farmers in agro-biodiverse settings, be implemented in ways that might be compatible with a global market-based approach to food security? 

Food security is recognized world-wide as a fundamental dimension of national development, good governance and basic human rights. The generally accepted definition of food security is: “Food security exists when all people, at all times, have physical and economic access to sufficient, safe, and nutritious food, enabling them to meet their dietary needs and food preferences for an active and healthy life”. Food security is recognized as a basic human right under international law. However, the global food system today is beset by serious challenges and risks:

• production and prices have become more volatile; 
• hunger and poverty levels remain high, particularly among farming communities; and
• unsustainable practices exacerbate environmental challenges. 

By the year 2050, the world’s population will have risen to 9 billion. Feeding this population will require substantial changes to ensure the production, distribution and consumption of sufficient nutritious and sustainably produced food. As the economy grows and markets develop for a variety of products, subsistence production is gradually replaced by production for the market. This tendency is further strengthened when an economy opens up to the outside world. If this happens at an advanced stage, when the population has already crossed the threshold of hunger, as has been the case in the Western world, the shift from subsistence food production to market production does not pose a serious problem to food security. In fact, it may even enrich the diet of the population by enabling it to obtain a wide variety of food from all over the world. But if market orientation occurs at an early stage, when a large section of the population has yet to secure access to sufficient food to guarantee a minimum required diet, questions are bound to arise regarding its impact on food security.

Questions have indeed arisen in recent years in the context of the macroeconomic reforms currently sweeping the Developing World. Markets are opening up both internally and externally, thus providing incentives to farmers to shift towards cash crops. Structural adjustment programs are strengthening these incentives by making production for export more profitable than before. Partly as a result of these policy reforms and also because of increasing urbanization, agriculture can be expected to become increasingly diversified and commercialized in coming years.

In order to gain further insight into the importance of subsistence income on the ‘down’ side, it is necessary to consider the forces that are responsible for reducing subsistence income. Two kinds of forces need to be distinguished here. They may be referred to as ‘push’ forces and ‘pull’ forces. Pull forces are those that divert household resources from subsistence production to potentially more attractive market-oriented activities. Push forces operate when the loss of resources (such as land, labour and capital) compel households to cut down on subsistence activities. These two forces must be distinguished because the loss of subsistence income is arguably more likely to entail losses in food security when it is caused by push forces rather than by pull forces. Most importantly, pro-poor transformation of rural economies requires increasing agricultural productivity and efficiency along value chains, diversifying economic activity, and integrating the rural economy into the broader economy through sound market systems. And for the rural and urban poor alike food security is rooted in sufficient, sustainable income. Through value chain and market system analysis, it is possible to:

a)    identify constraints in agricultural markets, including input and output markets; and

b)    develop solutions that change the structure of incentives so that market interactions benefit the poor.

It is difficult to find references to certain topics in discussions on linkages between trade and food security. Probably it is an indicator of the low priority of those topics and the predominance of a paradigm that focus the attention of those that support it but also of those who dislike it. One example is regional integration processes and improvement of trade between neighbor countries, it is almost absent of the discussion. It has different implications in terms of food security: lower diversification and higher exposure to shocks, lack of opportunities for people in border regions, higher dependence on remote providers to balance supply and stocks during crisis…

Regarding to international standards, there are many countries where food safety policies only pay attention to the export sector and some wealthy urban sectors, creating a dual market, a formal one for those who can afford and other informal for local poor, creating in addition barriers that marginalize economically some groups instead of supporting them to strengthen their capacities to meet the standards and be part of the formal economy.

A human rights based approach can help to handle some of the negative externalities of trade on food security, not only for cases related to free trade agreements, also in other areas, promoting empowerment and increasing participation on decision making to balance priorities, including the needs of vulnerable people.

>> ENGLISH VERSION BELOW <<

Le commerce des produits agricoles est indispensable pour relier les zones excédentaires et les zones déficitaires de produits agricoles. Le transfert des excédents de produits agricoles vers les zones où la demande n’est pas encore couverte est très important pour optimiser l’utilisation de la production agricole disponible, éviter le gaspillage et permettre à toute zone ou tout pays de se concentrer sur la production de spéculations agricoles qui lui procurent des avantages comparatifs. Cette conception a fait notamment l’objet de la théorie de l’avantage comparatif de l’Economiste classique David RICARDO (1772-1823). Cette théorie stipule que « chaque pays a intérêt à se spécialiser dans la production du ou des biens pour lesquels il dispose d'un avantage comparatif par rapport aux autres pays et à acheter les biens qu'il n'a pas produits ». C'est une théorie en faveur d'une division internationale du travail et du libre-échange. La spécialisation de chaque pays permet une économie du facteur travail, favorisant ainsi les gains de productivité et la hausse du volume produit. L’existence même des nations serait fondée sur cette réalité, vu qu’un pays ne peut produire à lui seul tous les produits agricoles dont il a besoin pour la sécurité alimentaire de ses populations. Mais, la théorie suppose implicitement que c’est le surplus de la production dans une zone ou pays qui est exporté vers une zone ou pays déficitaire pour qu’il y ait équilibre. Malheureusement, ce n’est pas souvent le cas. Il est fréquent que les exportations pénalisent même les populations d’une zone excédentaire qui se retrouve finalement avec une disponibilité alimentaire inférieure à la demande, entravant ainsi la sécurité alimentaire. On pourrait parler du phénomène de commerce « pervers » des denrées alimentaires.

Trade in agricultural products is essential to connect the surplus areas to deficit areas of agricultural products. The transfer of agricultural surpluses to areas where demand is not yet covered is very important to optimize the use of available agricultural production, to avoid waste and to allow any area or country to focus on production of agricultural crops that give it a comparative advantage. This particular design was the subject of the theory of comparative advantage of the classical Economist David RICARDO (1772-1823). This theory states that "each country should specialize in the production of goods for which it has a comparative advantage over other countries and to purchase goods that he has not produced." It is a theory in favor of an international division of labor and free trade. The specialization of each country allows labor economy, promoting productivity gains and higher produced volume. The nations’ existence is based on this reality, since no country can produce itself all agricultural products it needs for food security of its people. But the theory implicitly assumes that it is the surplus of production in an area or country that is exported to a deficit area or country for there to be balance. Unfortunately, this is not often the case. Food export even penalizes populations of excess area that ends up with food availability below demand, hindering food security. We could talk about the phenomenon of "perverse" food trade.

Dear Susan,

Thank you for your response to the posting from Global Harvest Initiative (GHI) and the Inter-American Development Bank (IICA).  We agree that a richer, more nuanced conversation about the linkages between trade and food security is essential if we are to maximize the benefits, and reduce the risks, of global and regional trade, particularly for smaller and medium scale producers.

The Rome Declaration on Nutrition (ICN2, 2014) recognizes that the “root causes of and factors leading to malnutrition are complex and multidimensional” and identifies “poverty, underdevelopment and low socio-economic status [as] major contributors to malnutrition in both rural and urban areas.”  (Pg. 1, 5 and 5.a.)  The Declaration emphasizes that raising the productive capacity, income, and resilience of small producers, especially women, plays an “important role in reducing malnutrition.” (Page 4, 14.f.) Trade cannot address all of the socio-economic and political challenges that influence food security and nutrition, but trade creates opportunities for small scale producers to increase their incomes – a critical component of increasing food security and reducing malnutrition. 

One example comes from the International Fund for Agricultural Development (IFAD) which facilitates a public-private partnership designed to help smallholders cocoa producers expand exports of dried cocoa beans certified as very organic and fair trade.  (Full project description attached.) Sao Tome and Principe is home to one of the rarest and most expensive cocoa beans on the market, but the cocoa price crash of 1998 devastated the local cocoa industry.  In 2003, IFAD facilitated a partnership between 500 farmers in 14 communities and Kaoka, a leading French organic chocolate producer, who agreed to purchase all the organic-certified cocoa that the farmers could produce and provide technical and commercial advice.   Thanks to the project, known as PAPAFPA (Participator Smallholder Agriculture and Artisanal Fisheries Development Programme), smallholder cocoa producers have resumed cultivation and organized themselves into associations and cooperatives. 

The result, both in terms of productivity and incomes, has been dramatic.  Export of cocoa has increased from 50 to 900+ tons in just ten years (2003-2013). Producers now sell their cocoa for more than double the price, they have a stable set of buyers for their product, and incomes have increased fivefold.  The benefits of the revitalized cocoa value chain spread beyond the original participants in the project.  “Thanks to IFAD and its partners, nearly 2,200 farmers have enhanced their living conditions and strengthened food security by growing cocoa certified as organic and fair trade.” (IFAD Rural Poverty Portal.)  The increased income has allowed families to invest in home improvements, such as generators and refrigerators, while the producer associations have invested in community health care centers and sanitation projects.  All of these investments enable and encourage good nutrition.

One of the biggest believers in the potential for trade to improve food security and reduce poverty is Ambassador Darci Vetter, U.S. Chief Agriculture Trade Negotiator. At a recent event hosted by the Global Harvest Initiative in Washington D.C., Ambassador Vetter said, “Good trade policy is good food security policy.”  She described the goal of trade as providing more people with access to more nutrient rich foods, while increasing farmer income and reducing the environmental footprint of agriculture.  The key, said Ambassador Vetter, is to listen to markets. “Export bans, refusing to let products leave creates disincentives for the farmers. Some of the highest tariffs that we see are among and between countries that…are producing staple crops that their neighbors need but [the farmers] can’t get them to market.”  Meanwhile, highly subsidized production “creates overproduction that perhaps the land and water cannot support,” she said.

In order to maximize the opportunity for trade to increase food security and nutrition, particularly for small scale producers, value chain development and market access initiatives need to be supported by policies and programs that promote women’s social and economic empowerment, provide nutrition and financial education, improve food storage and safety, and stimulate the market for affordable, nutrient rich foods.  Measuring the direct impacts of trade on food security and diets can be challenging (as Ruth Campbell of ACDI/VOCA describes in her submission.)   Nonetheless, the current success and future potential for local, regional, and global trade to increase incomes, expand access to affordable nutritious food, and improve the socio-economic status of women means that trade is a critical tool in meeting the imperative to reduce global poverty, hunger, and malnutrition.

Ann Steensland

Senior Policy Associate, Global Harvest Initiative