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FAO and WTO Directors-General meet

No food crisis, but vigilance needed
Photo: ©FAO/Giulio Napolitano
13 September 2012, Rome - The Director-General of FAO, José Graziano da Silva, and the Director-General of the World Trade Organization (WTO), Pascal Lamy, agreed this week that currently high international food prices do not amount to a crisis, but that continued vigilance is needed given existing tight markets.

At an hour-long meeting at FAO Headquarters, both Directors-General noted that the world is now better equipped to cope with higher food prices than during the crisis of 2007-2008. One important reason is the creation last year of the G20's Agricultural Market Information System (AMIS), which has increased market transparency, and of the Rapid Reaction Forum (RRF), which makes it possible for countries to respond faster in volatile food price situations.

Graziano da Silva and Lamy urged countries to use these instruments of international coordination and refrain from unilateral action such as panic buying or export restrictions, which often result in driving world prices higher.   They also emphasized the role of open trade in ensuring food security, with trade being the vehicle that allows food supply to meet demand across the globe. They stressed the need for deeper agricultural markets, with thinly traded commodities being amongst the most price-volatile.

Non-tariff measures

They discussed the importance of harmonizing non-tariff measures applied to agricultural and especially food trade as a mean to improve global market access and food security. They concurred on the need to strengthen global public standards, especially the Codex Alimentarius, which sets international food safety and quality standards to promote safer and more nutritious food for consumers worldwide. Both organizations will cooperate on studies and enhance the exchange of information and knowledge in this field, and will continue to liaise on the ability of developing countries to participate effectively in the work of food standardizing bodies.

They also agreed that the implementation of the Marrakesh Decision is important for net food importing countries as one of the means to address the difficulties faced in securing supplies from the world market at reasonable cost.

Food Price Index

Fears of a food crisis were voiced after the FAO Food Price Index, which measures the prices of internationally-traded commodities, surged 6 percent in July. The Index was unchanged last month, however.

Both Directors-General also expressed concern at the possible impact of high food prices on poor countries and on the need for increased social protection, support to local crops production and the strengthening of regional markets. In this context they also stressed the importance for the international community to maintain support to the most vulnerable countries, include through the WTO Aid-for-Trade initiative that improves agricultural infrastructure, thereby translating market access opportunities into actual trade flows.

They expressed their resolve to promote increased cooperation between FAO and the WTO.
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