Trade is vital for food security – WTO

The World Trade Organisation (WTO) says that international trade plays a key role in ensuring food security.

The World Bank Food Price index for July this year showed a 33% rise staying close to 2008 peak levels.

Many factors have been cited as the cause of these high food prices. Some say long-term structural factors, and others short-term, such as biofuels, rising oil prices, declining grain stocks, financial speculation, and climate change are some of the contributing factors to food insecurity and high food prices.

In a speech delivered to a congress of agricultural economists in Zurich, WTO Director-General Pascal Lamy said the goal is to provide a broader trade policy context coherent with international agricultural trade policy framework.

“This has been visible in the Doha Round of trade talks. International trade, if properly instrumentalized, though should help us exit these repeated crises. And, to my mind, the Doha Round remains an opportunity for vital agricultural reform,” Mr Lamy told the gathering.

He argues that “Trade policy — no doubt — has its place in this picture. But it cannot and does not, by itself, answer each and every challenge in agriculture not least because, at the end of the day, trade is no more than a simple transmission belt between supply and demand – It allows food-surplus countries to complement the countries in food-deficit. That transmission belt has to work smoothly, with as little friction as possible, but it is simply one element of a much more complex machine.”

According to Mr. Lamy, one must understand the size of agricultural trade to put matters in context.

“International trade in agriculture is less than 10% of world trade. Furthermore, whereas 50% of the world’s production of industrial goods enters international trade, it is important that you know that only 25% of the world’s agricultural production is traded globally.”

In the case of rice, he said, “this figure drops to 5-7%, making for a particularly thin international rice market. In addition, of the world’s 25% of food production that enters international trade, the vast majority (two-thirds) is processed food, and not rice, wheat, or soya as some would like to claim.”

To suggest that less trade, and greater self-sufficiency, are the solutions to food security, would be to argue that trade was itself to blame for the crisis. A proposition that would be difficult to sustain in light of the figures I just cited, he said.

By Ekow Quandzie