Extending special and differential treatment (SDT) in agriculture for developing countries[95]

1. Introduction

The Doha Ministerial Declaration reaffirmed that “provisions for special and differential treatment are an integral part of the WTO Agreements” and agreed that “all special and differential treatment provisions shall be reviewed with a view to strengthening them and making them more precise, effective and operational” (paragraph 44). It further decided that modalities for the further commitments in agriculture, including provisions for special and differential treatment, should be established no later than 31 March 2003 (paragraph 14).

What might this mean in the context of the post-Doha negotiations on agriculture? The argument put forward in this paper is that the instruments to give effect to special and differential treatment (SDT) are in a state of flux (because of changes in national and multilateral trade policy), but that the principles remain valid and justify the creation of new instruments. One feature of a new SDT regime is likely to be that there is greater differentiation among WTO members, which in turn implies the establishment of objective criteria on which to determine the extent of differentiation. Following WTO precedent, these criteria would probably be established by other international bodies to which reference would be made in the Agreement on Agriculture (AoA) - for example, the United Nations list of the least developed countries (LDCs).

“Old” SDT

The history of SDT has been well documented (see, for example, Michalopoulos, 2000, Whalley, 1999 and Fukasaku, 2000). In essence, the argument is that:

• Special and differential treatment had its origins in a view of trade and development that questioned the desirability of developing countries liberalizing border measures at the same pace as industrialized countries;
• The popularity of this approach was (possibly temporarily) in decline in many developing countries during the Uruguay Round;
• Consequently, many SDT provisions on border measures and subsidies envisage that developing countries (other than the LDCs) follow a similar path to that of the industrialized countries, but at a slower pace;
• Other SDT provisions (particularly those covering positive support to developing countries via financial and technical assistance or technology transfer) were not agreed in a form that is enforceable within the WTO system.

In other words, the “actionable” SDT provisions in the Uruguay Round Agreement are weaker than in its predecessors because support for the approach to trade and development that underpinned them was relatively weak during the negotiations. There are plenty of “non-actionable” provisions, but many developing countries and observers are unhappy with their implementation. The WTO Secretariat’s assessment of SDT implementation of the AoA is summarized in Table 1.

Could there be a “new” SDT?

The obvious question is whether new circumstances and new trade and development strategies would justify new, actionable, SDT measures. The default answer would seem to be positive. Unless there is now a view that all countries are equal, so that “one size fits all”, there exists a potential case for SDT. Since few industrialized countries fail to differentiate between geographical regions and/or social groups in their domestic economic policy it would be inconsistent for them to argue that globally - where objective differences between regions are much greater than domestically - uniformity of policy should be the rule.

Table 1. Implementation of SDT under the AoA: WTO Secretariat assessment

Provision	Usage
Superior market access for developing countries (Preamble)	Greater liberalization on tropical products and some others of interest to developing countries.
Transition periods (Article 15.2)	Included in schedules.
Domestic support for agricultural and rural development subsidies (Article 6.2)	Included in schedules.
Higher de minimis for domestic subsidies (Article 6.4 (b))	Included in schedules.
Lower reductions for export subsidies (Article 9.2(b)(iv))	All ten developing countries with export subsidy reduction commitments have used this provision.
Export subsidies exempt from reduction (Article 9.4)	Included in schedules, and some developing countries have used the provision.
Exemption from reduction commitments on diversification of export prohibitions and restrictions (Article 12.2)	No developing country has notified the use of such measures.
Exemption from reduction commitments in respect of public stockholding for food security (Annex 2, para. 3, footnote 5)	Included in schedules, and several developing countries have used the provision.
Exemption from reduction commitments for food subsidies to the poor (Annex 2, para. 4, footnotes 5 and 6)	Included in schedules, and several developing countries have used the provision.
Exemption from reduction commitments for staple foods (Annex 5, Section B)	Schedules of the Republic of Korea and the Philippines reflect recourse to this provision.
Developed country support for net food-importing developing countries and least developed countries (Article 16.1 & 16.2)	Monitoring has been included in most meetings of the Committee on Agriculture.

Source: Derived from WTO (2000), 23-27.

• A single, uniform policy is inappropriate for all WTO members;
• Broad groups of States share similar characteristics;
• It is possible to identify variations in the scope or implementation of WTO rules that are appropriate to the circumstances of each broad group.

If every country is different, the only place to introduce modulation into WTO commitments is in the national schedules. And shared characteristics among a group of States have no operational importance if it is not possible to identify instruments that answer to those shared differences from other WTO members. The task, therefore, is to identify the groups and the appropriate instruments.

One area in which there appears to be a consensus is that developing countries may require special treatment that they do not currently receive with respect to WTO rules that are administratively or technically difficult or costly to implement (see Michalopoulos, 2000, Whalley, 1999, Finger and Schuler, 2000, Henson and Loader, 2001). These relate in particular to some of the “new areas” of trade policy and involve most directly the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS). But they do not appear to be a special problem in the AoA itself because the removal of “old protectionism” (i.e. border measures and direct subsidies) is less advanced for temperate agricultural products than for industrial goods and tropical agriculture. Since the AoA is doing for temperate agriculture what the GATT did for other goods decades ago, the “old issues” still predominate.

However, it does not follow that there is no scope for new SDT. One strong candidate is in the area of food security. The “special” role of agriculture is a feature of several WTO members’ proposals to the Committee on Agriculture (not least the proposal of the EU, with its concern for “multifunctionality”).

It is evident that while some agricultural exporting countries are highly suspicious of multifunctionality as a (none too) covert means of perpetuating protectionism in industrialized countries, in many developing countries agriculture does play a major role in the economy and in the livelihoods of vulnerable people that sets it apart from other sectors.

This would seem to be precisely the area where SDT could come into play: to distinguish between genuine and justifiable claims for special treatment (especially if those receiving it were unlikely to cause major distortions to world trade) and those that are not. The rest of this paper considers the characteristics of country groups in relation to food security, how they might be measured, and what SDT might be justifiable. It is not the only exercise in this direction (see, for example, Diaz-Bonilla et al. 2000), but it is in the nature of the task that these exercises are complementary.

What is meant by the term “justifiable”? The WTO has a dual mandate, and different answers could be given under each. One goal is to foster the liberalization of world trade on the grounds that this is a common good. A foundation stone of the “old SDT” was that this assumption was questioned for countries on the periphery. More recently, though, opinion has tended to swing towards the notion that liberalization is generally good for development (and, therefore, that the burden of proof lies with those who wish to delay it).

But the WTO has another mandate which is, perhaps, a less controversial basis for SDT. This is to agree new rules for international trade. Since the WTO acts by consensus, rules can be adopted only if they are supported by all. And if some developing countries are reluctant to accept new rules, this will block progress. The justification for SDT is that it will provide an objective basis on which to modulate new rules and, hence, help consensus building.

2. Which States are food insecure?

The answer to the question “which States are food insecure” is not obvious, since it is people, and not countries, that are normally considered to be food secure or insecure. How can concepts and measures that have been developed in relation to individuals be applied to States? Is the prevalence of food insecurity best indicated by poverty indicators (like GDP per head), or are there countries that are especially food insecure even though they are not necessarily the poorest? And, once we have identified those that are food insecure, what practical modulation of current, or likely future, WTO commitments does this status justify?

What is “national” food insecurity?

If food insecure countries are to be given special support in the new round of agricultural negotiations (such as less onerous subsidy restrictions and priority food and financial assistance outside the WTO), it is important that they be identified correctly. By analogy to the analysis of individuals following Sen (Drèze and Sen, 1990), the food security of a country can be said to depend upon:

• its production entitlements, which reflect the food that can be produced domestically;
• its trade entitlements, which reflect its ability to earn sufficient foreign exchange from exports to purchase imported food; and
• its transfer entitlements, which cover food that can be obtained either directly through food aid or indirectly by (semi-) commercial imports financed through financial aid.

This suggests that the most food insecure countries are those that combine inadequate domestic production with an export structure (not necessarily just for agriculture) that is unsatisfactory inasmuch as they have one or more of the following characteristics:

• low export value per head of population and poor growth prospects;
• heavy dependence upon exports of a small number of commodities facing fluctuating supply or demand;
• heavy reliance of exports on a single market with fluctuating demand.

It follows that neither low GDP nor dependence upon imported food is, by itself, necessarily an indicator of national food insecurity. Some modest importers would be more insecure than larger exporters - because they cannot afford greater imports! It is the combination of characteristics that is important.

Does existing WTO terminology adequately capture this combination? The answer is “No”. Within the WTO the term “food security” is used in a much narrower sense and relates primarily to the adequate supply of imported food. Some 20 countries are recognized as net food-importing developing countries (NFIDCs), and the 49 LDCs also receive special attention. This usage reflects concern that the liberalization of world agricultural trade could lead to a rise in world prices for commercial imports and a reduction in the volume of food aid. Yet only one NFIDC (Kenya) falls within the 30 countries with the lowest per caput availability (a fairly robust proxy for food insecurity), and three of those 30 are neither LDCs nor NFIDCs (see the annex to this paper).

But if the existing definitions appear inadequate, how could they be refined? The entitlements analysis demonstrates that, in one sense, almost all aspects of the WTO regime may have food security effects. For example, the Multifibre Arrangement, by restricting the clothing industries of many developing countries, has certainly impacted adversely on trade entitlements. But it is hard to imagine a consensus emerging in WTO for substantial and enforceable SDT treatment to all countries satisfying such broad criteria unless it was restricted to the very poorest and smallest among them.

The LDCs come close to satisfying these broad criteria. All have a low level of economic diversification, but limiting differentiated treatment to those countries alone would represent a substantial retreat from the present situation with respect to SDT. A reasonable working assumption is that there exist also some other countries that are food insecure - but how are they to be defined in a way that commands respect? Some focusing will be necessary. An operationally effective definition is needed to allow modulation of those WTO rules with greatest food security implications.

A first step towards establishing the criteria for membership of this group is to identify the areas of WTO rule-making that might be problematic, and why. This is done in the next section. Then, an initial illustrative analysis is made of criteria that are relevant to such concerns and of the range of countries captured by various thresholds.

3. The scope of SDT

Current provisions

To the extent that the food security implications of multilateral reforms have been identified, the texts agreed in WTO do not provide any direct operational measures to deal with the consequences, except in so far as that slower and lower commitments on market access and domestic subsidies are adequate to deal with the problem. The assumption from the various declarations made in the final texts is that such modulation of domestic measures by food insecure countries is not considered to be adequate.

The Marrakesh Agreement includes, for example, a Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries which, inter alia, commits WTO “to establish appropriate mechanisms to ensure that the implementation of the results of the Uruguay Round on trade in agriculture does not adversely affect the availability of food aid”. Ministers further agreed “to ensure that any agreement relating to agricultural export credits makes appropriate provision for differential treatment in favour of least developed and net food-importing developing countries”. However, as is clear from Table 1, little concrete action has been undertaken.

There are two, not mutually exclusive, avenues for the future:

• Identify more clearly the types of domestic action that can be justified for food insecure countries in order both to focus attention on the need to support them and to ensure that their freedom of manoeuvre is not limited by future rules;
• Make the existing hortatory declarations enforceable, either by endowing WTO with a financial facility or by making final agreement on the next AoA conditional upon appropriate decisions being made in the multilateral and bilateral bodies that have the relevant portfolio responsibilities and financial resources.

A precise identification of appropriate new SDT measures cannot be provided until there exists some greater understanding of the new rules likely to be adopted in the AoA negotiations. But there is an expectation that the new Round will cover all three of the main elements of the AoA “architecture”: market access, export subsidies and domestic subsidies. Any tightening of rules in these three areas will tend to cause concern in different groups of States. These are set out analytically in Table 2.

Table 2. Potential areas of concern over new agricultural trade rules

Rules on:	Potential legitimate concerns in:
Lowering import controls	Countries aiming to increase domestic agricultural production Food-importing countries
Reducing export subsidies	Food-importing countries
Reducing domestic subsidies	Countries aiming to increase domestic production

Market access

The interests of food insecure developing countries concerning market access will be largely focused on any obligations they accept in relation to their own barriers against imports. Many insecure countries either export primary commodities that face low barriers in OECD markets or else have preferential access to protected markets. For those exporting non-sensitive products, OECD liberalization is unlikely to result in any significant change (and, arguably, developing country liberalization is likely to be less important in stimulating world demand for their exports than is developing country growth). For countries with preferential access for sensitive products, preference erosion is likely to affect trade entitlements, but the main arena in which the pace of erosion is set is that of the importing countries rather than WTO. Although multilateral liberalization will erode (and eventually remove) preferences, it is unlikely that the current WTO Round will take more than one, modest step in this direction.

There are strong views about the desirability or otherwise of developing countries’ liberalizing their import regimes. But this brings us back to the central question posed earlier, which is whether WTO’s rule-making or its liberalizing mission should take precedence when the two cannot easily be advanced simultaneously. Even among those who favour a broadly liberal trade policy for developing countries, there is a recognition that the agricultural sector of some developing countries has been artificially depressed by previous policies (including, above all, neglect) and that increasing agricultural production is a high priority. There could be a case, therefore, for allowing poor countries with large agricultural sectors some relief on liberalization in order to allow for greater incentives to domestic production.

Countries in which food imports represent a significant element in total supply but with fragile trade entitlements will also have an indirect interest in liberalization of market access. To the extent that it contributes to a decline in production in the most heavily protected markets (mainly those of OECD), it will tend to increase world prices.

Export subsidies

An increase in world prices following cut-backs in OECD production will tend to result in an adverse movement in the terms of trade of food-importing developing countries which may have an impact on food security for those with limited opportunities to boost exports or to increase domestic production. Such countries will be affected more directly by curbs on the export subsidies currently provided by a small number of OECD countries. Such curbs are likely to have an immediate impact on world prices, at least until the exports of non-subsidisers bounce back from their current, artificially depressed, levels to take advantage of the new opportunities.

Moreover, there may be longer-term effects. To the extent that exports from subsidisers are replaced by exports from non-subsidisers, there could be a reduction in the availability of imports to very poor countries even if world prices do not rise. This could occur if poor countries currently receive food aid or so-called “grey” imports (that do not qualify as food aid, but are sold at below market prices) from a subsidising country. There is no reason to suppose that the increase in exports from non-subsidisers will be made available to the same poor countries and on the same terms as the concessional exports that they replace.

Domestic subsidies

Countries in which there is an objective need to boost domestic agricultural production will also be concerned by any new WTO rules that limit the scope for domestic subsidies. It has been well remarked that few developing countries are able (or willing) to provide subsidies for agriculture that come anywhere close to the current limits. But a further tightening of such limits might cause difficulties in some instances.

4. Identifying and applying indicators

There are thus two categories of (possibly overlapping) countries that might be affected in different ways by change to the three principal elements of the current AoA architecture. These are:

• countries aiming to boost domestic agricultural production that may wish to increase incentives to farmers by keeping import prices high and increasing domestic subsidies;
• food-importing countries with weak trade entitlements that may be concerned about their capacity to import sufficient food in future.

Relevant indicators

What indicators exist to identify the countries that would be most vulnerable to such changes? At present there exist the LDC group, which may equate to the first category, and the NFIDC group, which is focused on the concerns of the second category. But are these sufficient?

An analysis of the types of indicator that might be relevant is provided in Table 3. This takes the two categories of countries identified in Table 2 and lists for each some illustrative indicators. One group consists of those countries in which agriculture is an important source of livelihoods but production is low (where a legitimate emphasis of policy is to boost agricultural production - a task that might be made more difficult by curbs on import controls or domestic subsidies). The other consists of those countries that are dependent on imports for a significant part of domestic consumption but have weak trade entitlements (and which would be vulnerable, therefore, to sudden increases in world prices).

Table 3. Relevant indicators for SDT

Characteristics of country	Indicator
Agriculture is important source of livelihoods but production is low	High share of agriculture in GDP Low per capita calorie supply
Import dependence with weak trade entitlements	High food imports as share of GDP High vulnerability Low per capita calorie supply

In both cases, it is a combination of characteristics that indicates particular vulnerability. For the first group of countries a necessary condition is that agriculture should represent a relatively high proportion of gross domestic product (GDP). But this would include wealthy countries or those with sufficient non-agricultural production for them easily to ensure the food security of their populations. An additional criterion, therefore, is that average per capita calorie supply should be low.

Similarly, a high share of food imports in GDP is a necessary criterion for establishing import dependency, but not a sufficient one. Low per capita calorie supply will indicate which among such countries have substantial vulnerable populations. On top of these, some indicator is required of a country’s weak trade entitlements. The indicator suggested in Table 3 is the composite vulnerability index compiled under the auspices of the Commonwealth Secretariat (Commonwealth Secretariat/World Bank 1999).

Calorie supply: the basic indicator

To what extent do these criteria overlap, either with each other or with the existing LDC and NFIDC groups? Tables 4 and 5 show what happens when an attempt is made to identify a coherent group of countries which have the optimum combination of characteristics. Table 4 starts with per capita calorie supply. The FAO/WHO-recommended minimum level is 2 300 calories per day. Since there will be substantial variations between consumption levels within a country it is unrealistic to characterise as low calorie availability only those countries with an average per capita supply below this minimum level. On the other hand, it would be inappropriate for WTO rules to give special consideration to countries just because they have highly unequal consumption patterns. A threshold of an average per capita calorie supply of 2 500 per day has been taken as an initial indicator to illustrate the range of countries that would be brought in by such a threshold. It allows for a limited degree of unequal calorie availability within a country.

Table 4 presents the 72 countries for which data are available that have an average per capita daily calorie supply of less than 2 000 in ascending order of calories. It also indicates whether or not the countries fall within the group of LDCs or NFIDCs.

It is evident that the LDC and NFIDC categories cover some but not all of the countries. Twenty-five of them are in neither category. Moreover, a further four are classified as LDCs but have a per capita daily calorie supply in excess of 2 500 (and range from Mauritania with 2 622 to Cape Verde with 3 015). Ten NFIDCs have a daily supply in excess of 2 500, (as high as 3 287 for Egypt). Hence the LDC and NFIDC categories combined cannot be used as an adequate indicator of food insecurity.

Table 4. Average daily per capita calorie supply in LDCs, NFIDCs and other vulnerable countries

Country	Daily per capita calorie supply a 1997	Status (LDC or NFIDC)b
Eritrea	1 622	LDC
Burundi	1 685	LDC
Dem. Rep. of the Congo	1 755	LDC
Mozambique	1 832	LDC
Comoros	1 858	LDC
Ethiopia	1 858	LDC
Haiti	1 869	LDC
Angola	1 903	LDC
Mongolia	1 917
Zambia	1 970	LDC
Kenya	1 976	NFIDC
Tanzania, United Rep. of	1 995	LDC
Tajikistan	2 001
Central African Rep.	2 016	LDC
Madagascar	2 021	LDC
Mali	2 029	LDC
Chad	2 032	LDC
Sierra Leone	2 035	LDC
Malawi	2 043	LDC
Cambodia	2 048	LDC
Yemen	2 051	LDC
Rwanda	2 056	LDC
Djibouti	2 084	LDC
Bangladesh	2 085	LDC
Uganda	2 085	LDC
Niger	2 097	LDC
Lao PDR	2 108	LDC
Cameroon	2 111
Burkina Faso	2 121	LDC
Solomon Islands	2 122	LDC
SaoTome and Principe	2 138	LDC
Congo	2 143
Zimbabwe	2 145
Bolivia	2 174
Namibia	2 183
Botswana	2 183
Nicaragua	2 186
Papua New Guinea	2 224
Guinea	2 231	LDC
Azerbaijan	2 236
Lesotho	2 243	LDC
Dominican Rep.	2 288	NFIDC
Peru	2 302	NFIDC
Sri Lanka	2 302	NFIDC
Turkmenistan	2 306
Venezuela	2 321	NFIDC
Guatemala	2 339
Gambia	2 350	LDC
Thailand	2 360
Antigua/Barbuda	2 365
Philippines	2 366
Nepal	2 366	LDC
Armenia	2 371
Sudan	2 395	LDC
Honduras	2 403	NFIDC
Senegal	2 418	LDC
Guinea-Bissau	2 430	LDC
Panama	2 430
Uzbekistan	2 433
Bahamas	2 443
Croatia	2 445
Kyrgyzstan	2 447
Togo	2 469	LDC
St Vincent	2 472	NFIDC
Pakistan	2 476	NFIDC
Cuba	2 480	NFIDC
Swaziland	2 483
Viet Nam	2 484
Maldives	2 485	LDC
Benin	2 487	LDC
Seychelles	2 487
India	2 496

^a Amount available for human consumption. Per capita supply represents the average supply available for the population as a whole and does not necessarily indicate what is actually consumed by individuals. Source: UNDP, Human Development Report 2000, Table 23.

^b For NFIDCs the definition is that of WTO.

To identify those countries in which the food insecurity may be agriculture-related, Table 5 brings together information on agricultural value added as a share of GDP. It shows the share of agriculture in GDP for all of the countries with a per capita daily calorie supply of under 2 500 (excluding six for which data are unavailable) and also for any other developing country where agriculture accounts for more than 20 percent of GDP. Those countries in the table in which average calorie supply exceeds 2 500 are indicated in italics. Once again, an indication is also given as to whether each country is a LDC or a NFIDC.

The LDC and NFIDC categories appear to overlap only partially with these other criteria of vulnerability. No less than 31 of the 76 countries in the table do not belong to either the LDC or the NFIDC category, and 19 of these have an agricultural sector that accounts for over 20 percent of GDP. The countries that would be excluded if only the criteria of calorie supply or LDC states were taken into account include Albania, Côte d’Ivoire, Guyana, Nigeria, Moldova, Georgia, Paraguay and Dominican Republic (using 20 percent as the agricultural cut-off point).

Table 5. Agricultural dependence and low-calorie status in LDCs, NFIDCs and other vulnerable countries

Country	Daily per capita calorie supply a (1997)	Percentage share of agric. value added in GDP b (1998)	Status (LDC or NFIDC)c
Guinea-Bissau	2 430	62.4	LDC
Albania	2 961	54.4
Burundi	1 685	54.2	LDC
Myanmar	2 862	53.2	LDC
Lao PDR	2 108	52.6	LDC
Central African Rep.	2 016	52.6	LDC
Cambodia	2 048	50.6	LDC
Ethiopia	1 858	49.8	LDC
Rwanda	2 056	47.4	LDC
Mali	2 029	47.0	LDC
Kyrgyzstan	2 447	46.0
Tanzania, United Rep. of	1 995	45.7	LDC
Uganda	2 085	44.6	LDC
Sierra Leone	2 035	44.2	LDC
Cameroon	2 111	42.4
Togo	2 469	42.1	LDC
Niger	2 097	41.4	LDC
Nepal	2 366	40.5	LDC
Chad	2 032	39.8	LDC
Sudan	2 395	39.3	LDC
Comoros	1 858	38.7	LDC
Benin	2 487	38.6	LDC
Malawi	2 043	35.9	LDC
Guyana	2 530	34.7
Mozambique	1 832	34.3	LDC
Nicaragua	2 186	34.1
Burkina Faso	2 121	33.3	LDC
Armenia	2 371	32.9
Mongolia	1 917	32.8
Nigeria	2 735	31.7
Uzbekistan	2 433	31.2
Madagascar	2 021	30.6	LDC
Haiti	1 869	30.4	LDC
India	2 496	29.3
Moldova	2 567	28.9
Gambia	2 350	27.4	LDC
Pakistan	2 476	26.4	NIFDC
Kenya	1 976	26.1	NIFDC
Georgia	2 614	26.0
Côte d’Ivoire	2 610	26.0	NIFDC
Viet Nam	2 484	25.8
Paraguay	2 566	24.9
Mauritania	2 622	24.8	LDC
Turkmenistan	2 306	24.6
Papua New Guinea	2 224	24.4
Guatemala	2 339	23.3
Guinea	2 231	22.4	LDC
Bangladesh	2 085	22.2	LDC
Sao Tome and Principe	2 138	21.3	LDC
Sri Lanka	2 302	21.1	NIFDC
Azerbaijan	2 236	20.3
Honduras	2 403	20.3	NIFDC
Dominica	3 059	20.3
Zimbabwe	2 145	19.5
Yemen	2 051	17.6	LDC
Senegal	2 418	17.4	LDC
Zambia	1 970	17.3	LDC
Philippines	2 366	16.9
Maldives	2 485	16.4	LDC
Swaziland	2 483	16.0
Bolivia	2 174	15.4
Angola	1 903	12.3	LDC
Dominican Rep.	2 288	11.7	NIFDC
Congo	2 143	11.5
Lesotho	2 243	11.5	LDC
Thailand	2 360	11.2
St Vincent	2 472	10.9
Namibia	2 183	10.0
Croatia	2 445	8.9
Panama	2 430	7.9
Peru	2 302	7.1
Tajikistan	2 001	5.7
Venezuela	2 321	5.0
Seychelles	2 487	4.1
Antigua/Barbuda	2 365	4.0
Botswana	2 183	3.6

Notes:

^a Amount available for human consumption. Per capita supply represents the average supply available for the population as a whole and does not necessarily indicate what is actually consumed by individuals. Source: UNDP, Human Development Report 2000: Table 23.

^b Source: World Bank, World Development Indicators database website.

^c For NFIDCs the definition is that of WTO.

How “dangerous” would it be to the international trade system if such countries were relieved of obligations in respect of import controls and domestic subsidies for agriculture? How likely is it that such relief would result in disruption to world trade? Two indicators are provided in Table 6. This takes the countries listed in Table 5[96] and shows for each the share of agricultural exports in GDP and the country’s share of world agricultural trade. These indicators are used on the assumption that the principal “danger” for other WTO members is that, sheltering behind high import barriers and benefiting from substantial subsidies, some of these countries might boost substantially their agricultural exports, in competition with those of other WTO members. (Arguably, another concern is that SDT will result in lower imports by these countries and hence in lower exports by other WTO members. But, given that all the countries covered by Table 5 are ones with low calorie availability, it can be inferred reasonably that any effect on global demand will be minimal.)

The countries in Table 6 are listed in descending order of their agricultural exports as a share of world exports. Only two countries - Thailand and India - account for over 1 percent of world agricultural exports, and only seven account for over 0.25 percent. Of these, only one (Côte d’Ivoire) has a per capita calorie supply exceeding the 2 500 threshold (although a further three - India, Viet Nam and Pakistan - come close).

Table 6. Trade share of vulnerable countries

Country	Agricultural exports as a percentage share of:
	GDP (1999)	World agricultural exports (2000)
Thailand	5.8	1.76
India	1.0	1.20
Viet Nam	8.5	0.53
Côte d’Ivoire	21.2	0.46
Guatemala	8.2	0.38
Philippines	1.8	0.37
Pakistan	2.0	0.26
Kenya	9.7	0.25
Uzbekistan	na	0.24
Sri Lanka	na	0.23
Zimbabwe	14.5	0.20
Peru	1.3	0.17
Cuba	na	0.16
Paraguay	7.5	0.15
Honduras	8.3	0.14
Cameroon	5.2	0.12
Nigeria	1.3	0.12
Uganda	6.9	0.11
Bolivia	4.4	0.10
Ethiopia	6.3	0.10
Papua New Guinea	12.0	0.10
Croatia	na	0.09
Malawi	20.0	0.09
Sudan	na	0.09
Dominican Rep.	1.9	0.08
Nicaragua	13.6	0.08
Panama	3.2	0.08
Swaziland	28.5	0.08
Tanzania, United Rep. of	3.5	0.08
Moldova	27.7	0.07
Venezuela	0.4	0.07
Mali	9.0	0.06
Myanmar	na	0.06
Guyana	32.0	0.05
Kyrgyzstan	na	0.04
Senegal	2.3	0.04
Bangladesh	0.3	0.03
Benin	5.7	0.03
Burkina Faso	5.1	0.03
Namibia	4.0	0.03
Niger	5.5	0.03
Tajikistan	n	0.03
Togo	8.3	0.03
Turkmenistan	na	0.03
Albania	na	0.02
Azerbaijan	2.0	0.02
Botswana	1.7	0.02
Chad	5.7	0.02
Georgia	1.3	0.02
Guinea-Bissau	23.3	0.02
Madagascar	2.2	0.02
Mongolia	10.1	0.02
Nepal	1.6	0.02
Yemen	0.9	0.02
Zambia	1.9	0.02
Bahamas	na	0.01
Burundi	7.7	0.01
Cambodia	1.5	0.01
Central African Rep.	2.7	0.01
Dem. Rep. of the Congo	na	0.01
Djibouti	na	0.01
Dominican Republic	na	0.01
Gambia	9.3	0.01
Guinea	1.0	0.01
Haiti	na	0.01
Lao PDR	2.2	0.01
Mauritania	3.6	0.01
Mozambique	0.8	0.01
Rwanda	2.4	0.01
Solomon Islands	na	0.01
St Vincent	na	0.01
Congo	0.8	0.01
Armenia	1.0	0.004
Comoros	3.4	0.002
Lesotho	0.8	0.002
Sierra Leone	1.2	0.002
Angola	0.1	0.001
Eritrea	0.5	0.001
Sao Tome and Principe	10.6	0.001
Seychelles	0.3	0.001
Antigua/Barbuda	na	0.0001
Maldives	na	0.00002

Sources: World Bank, World Development Indicators database website (GDP); FAO Statistical Databases website (agricultural export values).

• daily per capita calorie supply of under 2 500; and/or
• agriculture accounting for over 20 percent of GDP; and
• 0.25 percent or less of world agricultural exports.

Import dependency

It was suggested in Table 2 that poor countries, dependent upon agricultural imports and with weak trade entitlements, might legitimately be concerned about industrialised country actions that would tend to increase the price, or otherwise reduce the availability, of food imports. The appropriate SDT in such cases would not be relief from tougher rules governing their own trade and production policies, but compensatory action (either within WTO or by prior agreement via other institutions) to help them to adjust to such change.

One key issue for the Doha Round is how such compensating action is to be enforced; this falls outside the scope of the present study. Another is whether a better categorization of such countries can be obtained. The aim of the LDC and NFIDC categories combined is to identify such countries, but one may question how well this is achieved.

Table 7 provides an illustration of the inadequacy of the existing categories. The table shows calorie availability, the vulnerability index, agricultural imports as a share of GDP, and LDC/NFIDC status for:

• all the countries with a daily per capita calorie supply of under 2 500 (except 14 for which vulnerability data are not available) and
• any country with greater vulnerability (higher index number) than the mean for states registering under 2 500 calories (in italics in the table).

The countries are listed in descending order of agricultural imports as a share of GDP.

Table 7. Trade vulnerability and low-calorie status

Country	Daily per capita calorie supply a (1997)	Composite vulnerability index b	Agric. imports: as share of GDP c in 1999 (percent)	Status (LDC or NFIDC)
Gambia	2 350	9.331	27.87	LDC
Sao Tome and Principe	2 138	7.69	19.98	LDC
Sierra Leone	2 035	5.06	19.51	LDC
Mauritania	2 622	6.068	19.40	LDC
Lesotho	2 243	5.985	18.68	LDC
Swaziland	2 483	9.633	17.76
Comoros	1 858	5.425	14.26	LDC
Nicaragua	2 186	4.92	13.50
Yemen	2 051	5.259	11.46	LDC
St Lucia	2 734	7.449	10.68	NFIDC
Senegal	2 418	5.026	10.40	LDC
Seychelles	2 487	6.375	9.01
Guyana	2 530	7.953	8.31
Honduras	2 403	5.373	8.07	NFIDC
Mauritius	2 917	6.51	7.37	NFIDC
St Kitts/Nevis	2 771	6.362	7.01	NFIDC
Angola	1 903	6.282	6.80	LDC
Niger	2 097	4.957	6.70	LDC
Fiji	2 865	8.888	6.55
Jamaica	2 553	7.484	6.46	NFIDC
Belize	2 907	6.652	6.39
Botswana	2 183	10.158	6.15	NFIDC
Benin	2 487	5.06	6.00	LDC
Papua New Guinea	2 224	6.308	5.93
Togo	2 469	5.248	5.47	LDC
Nepal	2 366	5.173	5.20	LDC
Malaysia	2 977	5.903	5.00
Burkina Faso	2 121	4.923	4.65	LDC
Mozambique	1 832	4.907	4.55	LDC
Bangladesh	2 085	4.744	4.51	LDC
Congo	2 143	5.961	4.49
Panama	2 430	4.995	4.16
Pakistan	2 476	4.795	3.95	NFIDC
Uganda	2 085	4.876	3.77	LDC
Philippines	2 366	4.595	3.51
Mali	2 029	5.083	3.48	LDC
Guinea	2 231	5.282	3.71	LDC
Rwanda	2 056	4.797	3.63	LDC
Central African Rep.	2 016	4.802	3.37	LDC
Guatemala	2 339	4.431	3.33
Namibia	2 183	6.527	3.31
Dominican Rep.	2 288	4.858	3.21	NFIDC
Kenya	1 976	4.935	3.12	NFIDC
Zimbabwe	2 145	4.969	2.97
Tanzania, United Rep. of	1 995	5.035	2.96	LDC
Zambia	1 970	5.549	2.80	LDC
Ethiopia	1 858	4.786	2.55	LDC
Malawi	2 043	5.200	2.44	LDC
Bolivia	2 174	4.691	2.37
Chad	2 032	5.120	2.24	LDC
Burundi	1 685	4.929	2.11	LDC
Madagascar	2 021	4.785	1.90	LDC
Peru	2 302	4.461	1.88	NFIDC
Thailand	2 360	4.264	1.87
Cameroon	2 111	4.952	1.60
Venezuela	2 321	4.887	1.37	NFIDC
India	2 496	3.782	0.86
Antigua/Barbuda	2 365	11.246	na
Bahamas	2 443	10.433	na
Dem. Rep. of the Congo	1 755	5.186	na	LDC
Djibouti	2 084	7.932	na	LDC
Dominica	3 059	8.122	na
Gabon	2 556	6.229	na
Grenada	2 768	7.848	na
Haiti	1 869	4.474	na	LDC
Maldives	2 485	8.654	na	LDC
Solomon Islands	2 122	8.398	na	LDC
Sri Lanka	2 302	5.076	na	NFIDC
St Vincent/Grenadines	2 472	6.563	na	NFIDC
Sudan	2 395	4 655	na	LDC
Vanuatu	2 700	13.295	na	LDC

Notes:

^a Amount available for human consumption. Per capita supply represents the average supply available for the population as a whole and does not necessarily indicate what is actually consumed by individuals. Source: UNDP, Human Development Report 2000: Table 23.

^b Commonwealth Secretariat/Word Bank, 1999.

^c World Bank, World Development Indicators database website (GDP); FAO Statistical Databases website (agricultural import values).

At the same time, six of the 20 NFIDCs[97] and five LDCs[98] do not appear in the table at all, indicating that they have over 2 500 calories per capita plus either a lower trade vulnerability and/or agricultural import dependence. Since the source of most compensatory assistance will probably be the main aid donors (regardless of the institutional route through which it is provided), and given that they recognise the LDC group as one for special aid attention, the absence of some LDCs from Table 7 is probably not serious. If one identified as the countries requiring special concern all LDCs plus non-LDCs that have low calorie availability, high trade vulnerability, and significant proportionate food imports, then coverage would be reasonably good.

Next steps

The principal focus of action for food insecure countries is to remove the causes of the insecurity, i.e. to address the problem of low domestic production and weak exports. Many of the more important measures fall well outside the ambit of WTO, but there is none the less scope for ample action within the Organization.

The minimum requirement is that nothing agreed in the AoA should make matters worse. This includes avoiding rule changes that might make it even more difficult than is currently the case for food insecure countries to pursue policies that have proved to be useful in supporting food security. These are described in Table 8, which identifies the area of WTO rules that might constrain government action, the AoA provisions available to developing countries and most widely used by them, the types of change that might be proposed in the current negotiations, and some potential alternative instruments.

But action can go further than this. For example, many WTO rule changes could have an effect on export diversification by food insecure countries - and this effect will not always be favourable. Such potential effects need to be identified, and the right recognized of food insecure countries to oppose them unless appropriate, actionable supporting measures are agreed.

Lobbying for such positive treatment is likely to cause friction if it is done on behalf of countries that have a significant effect on world trade and are not especially food insecure (even though they may import a lot of food). A major technical task is, therefore, to produce objective indicators of relative national food insecurity that could constitute a basis for group formation.

Table 8. Provisions relating to food security in the Agreement on Agriculture

Food security policies	Related WTO trade policy area	AoA provisions available to developing countries and widely used	Types of change that could affect food security	Potential alternative instruments
Input credits and subsidies; capital expenditure in agriculture; food price stabilization and subsidies	Domestic subsidies	SDT exemptions from cuts in agricultural investment and input subsidies for poor farmers 10 percent de minimis exemption LDCs exempt from any cuts	Erosion of SDT provisions on investment and input subsidies Cut in de minimis provisions	Recalculation of AMS Redesign of green box
All policies involving government expenditure; export development; protection to domestic farmers	Tariffs	High bound rates containing “water” Lower (for developing) and zero (for least developed) tariff -cutting obligations	Removal of “water” from tariffs before end of developed country subsidized production	Provision of SSGs Countervailing duties
Labour-intensive public works and targeted feeding programmes; food stamps	Export subsidies	Food aid exempt from developed country reduction commitments	Reduction of subsidized imports available to vulnerable countries and groups that is more rapid than feasible adjustment	Targeting of concessional food (possibly outside WTO framework)

Source: Adapted from Stevens et al. (2000).

Annex - Daily per capita supply of calories in 1997 in LDCs and NFIDCs and other vulnerable countries

Rank	Countrya	Status (LDC or NFIDC)b	Daily per capita supply of calories 1997c
1	Eritrea	LDC	1 622
2	Burundi	LDC	1 685
3	Dem. Rep. of the Congo	LDC	1 755
4	Mozambique	LDC	1 832
5	Comoros	LDC	1 858
6	Ethiopia	LDC	1 858
7	Haiti	LDC	1 869
8	Angola	LDC	1 903
9	Mongolia		1 917
10	Zambia	LDC	1 970
11	Kenya	NFIDC	1 976
12	Tanzania, United Rep. of	LDC	1 995
13	Tajikistan		2 001
14	Central African Republic	LDC	2 016
15	Madagascar	LDC	2 021
16	Mali	LDC	2 029
17	Chad	LDC	2 032
18	Sierra Leone	LDC	2 035
19	Malawi	LDC	2 043
20	Cambodia	LDC	2 048
21	Yemen	LDC	2 051
22	Rwanda	LDC	2 056
23	Djibouti	LDC	2 084
24	Bangladesh	LDC	2 085
25	Uganda	LDC	2 085
26	Niger	LDC	2 097
27	Lao PDR.	LDC	2 108
28	Cameroon		2 111
29	Burkina Faso	LDC	2 121
30	Solomon Islands	LDC	2 122
31	Sao Tome and Principe	LDC	2 138
32	Congo		2 143
33	Zimbabwe		2 145
34	Bolivia		2 174
35	Botswana	NFIDC	2 183
36	Namibia		2 183
37	Nicaragua		2 186
38	Papua New Guinea		2 224
39	Guinea	LDC	2 231
40	Azerbaijan		2 236
41	Lesotho	LDC	2 243
42	Dominican Republic	NFIDC	2 288
43	Peru	NFIDC	2 302
44	Sri Lanka	NFIDC	2 302
45	Turkmenistan		2 306
46	Venezuela	NFIDC	2 321
47	Guatemala		2 339
48	Gambia	LDC	2 350
49	Thailand		2 360
50	Antigua and Barbuda		2 365
51	Philippines		2 366
52	Nepal	LDC	2 366
53	Armenia		2 371
54	Sudan	LDC	2 395
55	Honduras	NFIDC	2 403
56	Senegal	LDC	2 418
57	Guinea-Bissau	LDC	2 430
58	Panama		2 430
59	Uzbekistan		2 433
60	Bahamas		2 443
61	Croatia		2 445
62	Kyrgyzstan		2 447
63	Togo	LDC	2 469
64	Saint Vincent and the Grenadines	NFIDC	2 472
65	Pakistan	NFIDC	2 476
66	Cuba	NFIDC	2 480
67	Swaziland		2 483
68	Viet Nam		2,484
69	Maldives	LDC	2 485
70	Benin	LDC	2 487
71	Seychelles		2 487
72	India		2 496
73	Guyana		2 530
74	Jamaica	NFIDC	2 553
75	Gabon		2 556
76	El Salvador		2 562
77	Paraguay		2 566
78	Moldova, Rep. of		2 567
79	Colombia		2 597
80	Côte d’Ivoire	NFIDC	2 610
81	Ghana		2 611
82	Georgia		2 614
83	Iraq		2 619
84	Mauritania	LDC	2 622
85	Costa Rica		2 649
86	Trinidad and Tobago	NFIDC	2 661
87	Macedonia, TFYR		2 664
88	Suriname		2 665
89	Ecuador		2 679
90	Bulgaria		2 686
91	Vanuatu	LDC	2 700
92	Saint Lucia	NFIDC	2 734
93	Nigeria		2 735
94	Grenada		2 768
95	Saint Kitts and Nevis	NFIDC	2 771
96	Saudi Arabia		2 783
97	Ukraine		2,795
98	Chile		2 796
99	Uruguay		2 816
100	Iran, Islamic Rep. of		2 836
101	Estonia		2 849
102	Algeria		2 853
103	Brunei Darussalam		2 857
104	Myanmar	LDC	2 862
105	Latvia		2 864
106	Fiji		2 865
107	Indonesia		2 886
108	China		2 897
109	Russian Federation		2 904
110	Belize		2 907
111	Mauritius	NFIDC	2 917
112	Japan		2 932
113	Albania		2 961
114	Brazil		2 974
115	Malaysia		2 977
116	Slovakia		2 984
117	South Africa		2 990
118	Jordan		3 014
119	Cape Verde	LDC	3 015
120	Dominica		3 059
121	Morocco	NFIDC	3 078
122	Kazakhstan		3 085
123	Argentina		3 093
124	Kuwait		3 096
125	Mexico		3 097
126	Finland		3 100
127	Slovenia		3 101
128	Iceland		3 117
129	Canada		3 119
130	Korea, Rep. of		3 155
131	Barbados	NFIDC	3 176
132	Sweden		3 194
133	Hong Kong, China (SAR)		3 206
134	Switzerland		3 223
135	Australia		3 224
136	Belarus		3 225
137	Czech Republic		3 244
138	Romania		3 253
139	Lithuania		3 261
140	United Kingdom		3 276
141	Lebanon		3 277
142	Israel		3 278
143	Tunisia	NFIDC	3 283
144	Netherlands		3 284
145	Egypt	NFIDC	3 287

Notes:

^a In ascending order of number of calories available for human consumption. The table includes all LDCs (other than Afghanistan, Bhutan, Equatorial Guinea, Kiribati, Liberia, Samoa, Somalia and Tuvalu, for which data were not available) and all NFIDCs, and all other countries lower ranked than the highest of these.

^b For NFIDCs the definition is that of WTO.

^c Amount available for human consumption. Per capita supply represents the average supply available for the population as a whole and does not necessarily indicate what is actually consumed by individuals. Source: FAO (1999), "Food Balance Sheets." (http://apps.fao.org).

Source: Derived from UNDP (2000), Table 23.

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