Transparent agricultural trade and markets are key to prevent food crises

10/06/2020

10 June 2020, Washington, DC - While the number of countries implementing food export restrictions has already diminished, significant impacts of the COVID-19 pandemic on our food systems, agricultural trade and markets remain.

To get an update on the COVID-19 pandemic’s impacts on agricultural markets and trade, world food supply and food prices, and learn about differences and similarities between the Great Recession of 2009 and the Great Lockdown of 2020, FAO North America in partnership with FAO in Geneva organized an interactive webinar, moderated by Tom Pesek, Senior Liaison Officer at FAO North America.

“Food trade and markets impact what foods are available and affordable to us, and affect our food choices every day. Some countries are mostly deserts, some countries are mostly mountains, some countries are small islands, and some countries are land-locked, so it becomes clear that in many contexts food trade has a critical role to play in eradicating global hunger and malnutrition,” said Vimlendra Sharan, Director of FAO North America.

“In times of crises and uncertainty, some policymakers are tempted to implement food export restrictions, which can create food shortages, price spikes and price volatility. We have to learn from previous crises and avoid the damaging impacts of food export restrictions, especially on low-income and food-deficit countries. Agricultural trade needs to work for food security and nutrition, not against it,” Sharan urged.

“FAO’s work on trade and markets focuses on transparent and efficient food and agricultural commodity markets and trade for global food security. We provide data and information on markets and policy developments, evidence-based policy advice, develop capacities and facilitate policy dialogue,” emphasized Boubaker BenBelhassen, Director of FAO’s Trade and Markets Division.

“The FAO Food Price Index, Agriculture Market Information System (AMIS), Global Information and Early Warning System (GIEWS), and Food Price Monitoring and Analysis (FPMA) are key tools on market diligence and early warning to prevent food crises. The OECD-FAO Agricultural Outlook and The State of Agricultural Commodity Markets are two key publications,” BenBelhassen added. As outlined in the Policy Brief Agri-food markets and trade policy in the time of COVID-19, FAO works to keep agri-food supply chains alive, mitigate food supply disruptions and promote food security.

“Most WTO Agreements are relevant to trade in agricultural products, especially the Agreement on Agriculture and SPS Agreement,” said Edwini Kessie, Director of the Agriculture and Commodities Division at WTO. “COVID-19 impacts agri-food markets and supply chains in production, processing and demand, but overall, there is an abundant food supply and food prices are decreasing. In response to the COVID-19 crisis, WTO is monitoring trade-related measures to enhance transparency. AMIS has been very useful to provide data to policymakers in the current crisis,” he added. “FAO and WTO partner on a variety of issues from AMIS to Codex Alimentarius, and the International Plant Protection Convention as international standard-setting bodies.”

Josef Schmidhuber, Deputy-Director of FAO’s Trade and Markets Division presented key findings from his study Comparing crises: Great Lockdown versus Great Recession. There are both similarities and important differences between the Great Lockdown of 2020 underway with the Great Recession of 2009. The main differences include the scale of recession in the world economy, which is forecasted to be much worse under the current lockdown. While commodity export countries had a boom in 2007/08, and are now negatively affected. In sharp contrast to the recession of 2009, currently, cereal stocks are at a record high, energy and transportation prices are low, there are no price hikes in fertilizer costs, and currencies of commodity exporters have depreciated, boosting exports. “Perhaps the most important difference between now and then is that policymakers seem to have learned a lot, particularly on the macroeconomic side in terms of fiscal and monetary policies,” Schmidhuber added. “Small Island Developing States are hardest hit by the current crisis. They depend on food imports, tourism and remittances, which all have been severely impacted by the COVID-19 pandemic."

“COVID-19 is a global health crisis, it is not a food crisis. However, it will be one if the enabling environment for food production and trade remain under continued stress,” Carolyn Rodrigues Birkett, Director of the FAO Liaison Office in Geneva added. “As a response to the pandemic, there could be a tendency to resort to protectionist measures and trade. However, policy measures should aim to address actual rather than perceived demand and supply disruptions. The issue of transparency is of paramount importance for any policy actions affecting international trade in agriculture,” she concluded.

Watch the webinar recording.

Access the presentations

Further information

FAO Liaison Office for North America

Transparent agricultural trade and markets are key to prevent food crises