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Some issues relating to food security in the context of the WTO negotiations on agriculture[1]

1. Introduction

This note highlights some salient issues for consideration in the context of the WTO negotiations on agriculture in relation to incorporating food security concerns in a revised WTO Agreement on Agriculture. It presents recent data on the state of food insecurity, the basic objective and requirements for enhancing food security in those parts of the world (countries) with large proportions of food insecure people, and discusses the requirements for enhancing food security in relation to the WTO Agreement on Agriculture.

Food security as defined by the 1996 World Food Summit is a situation in which all people at all times have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life. Indicators of food security can be defined at different levels - for the world as a whole, for individual countries, or for households. Ultimately, however, food security concerns the individual and its principal determinant is the individual’s entitlement to food - ability to produce and/or purchase food.

At the national level, adequate food availability means that on average sufficient food supplies are available, from domestic production and/or imports, to meet the consumption needs of all in the country. Similarly, as in the case of individuals, purchasing power at the national level - the amount of foreign exchange available to pay for food imports - is a determinant of national food security.

The opposite to food security is food insecurity. Food insecurity can be transitory (when it occurs in times of crisis), seasonal or chronic (when it occurs on a continuing basis). A person can be vulnerable to hunger even though he or she is not actually hungry at a given point in time.[2]

2. The state of food insecurity

An indication of the absolute and relative number of people living with hunger and fear of starvation (chronic food insecurity) in developing countries is presented in Table 1. The data, which are based on the latest estimates of undernourishment (as an indicator of chronic food insecurity) around the world by the Inter-Agency Working Group on Food Insecurity and Vulnerability Information and Mapping System (FIVIMS), indicate that 792 million people in 98 developing countries were not getting enough food to lead a normal, healthy and active life.

Another 34 million people in the industrialized countries and especially in countries in transition also suffer from chronic food insecurity. Overall, the bulk of the chronically food insecure people (undernourished) live in countries with very low per capita incomes, with countries in sub-Saharan Africa and South Asia having the highest proportion of undernourished.

3. The link between food security and poverty

The common bond of undernourished and vulnerable people is poverty. Their incomes are too low to provide adequate nutrition.

Table 1 also provides information on the proportion of people, by country, living on less than $2 a day, a benchmark defined by the World Bank as the upper poverty line.[3] As will be noticed, there is a high degree of correspondence between the proportion of people below the poverty line and the proportion of undernourished people across countries.

Similar information is also provided in Table 2, by region, on the number of people living on less than $1 a day, which is the World Bank’s lower poverty line. In 1998, about 1.2 billion people were below this lower poverty line, 98 percent of whom were in developing countries. Sub-Saharan Africa and South Asia had the highest proportion of poor people, respectively 46 percent and 40 percent of their populations.

4. Policy priorities for countering chronic food insecurity

To combat hunger and food insecurity at the national, as well as the global level, the ultimate solution is to provide undernourished people with opportunities to earn adequate incomes and to assure an abundant supply of food from either domestic production or imports, or both.

With 70 percent of the world’s extremely poor and food insecure people living in rural areas, the role of agriculture, which is the predominant economic activity in rural areas, is crucial in the eradication of poverty and food insecurity. The rural poor depend on agriculture for both their incomes and their food entitlements. More generally, in most countries with a high incidence of food insecurity, agriculture is the mainstay of the economy. It accounts for a large share of gross domestic product (GDP), employs a large proportion of the economically active population, represents a major source of foreign exchange and supplies the bulk of basic foods (see Table 3).

Thus chronic food insecurity can only be addressed effectively through policies that accelerate agricultural productivity growth and food production - the rapid development of agricultural potential.

The contribution of food imports to food availability at the national level is limited by the foreign exchange earning capacity of the country. Thus, closing the widening food gap through commercial imports is not a realistic possibility for most countries that have poor prospects for substantial increases in foreign exchange earnings and/or already face heavy external debt burdens.

As the information provided in Table 3 indicates, for some countries, food imports accounted for more than 50 percent of total export earnings, minus debt servicing. Food aid, which has been in the past used in some cases to meet uncovered market demands as well as to feed hungry people directly, has been on the decline and in any case is not a sustainable solution.

In sum, policies that raise incomes of the poor, accelerate agricultural productivity and food production and enhance the ability of the country to import food (by strengthening its export earning possibilities) are crucial for confronting food insecurity in many developing countries.

5. The WTO Agreement on Agriculture and food security

The focus of the WTO Agreement on Agriculture (AoA) is not food security. Its objective is to establish “a fair and market-oriented agricultural trading system” through “reductions in agricultural support and protection”. The expectation is that this would result in “correcting and preventing restrictions and distortions in world agricultural markets”. As is well known, the focus of the framers of the AoA was a perceived need to correct a situation of mounting production surpluses in a number of food products produced in a number of developed countries through rising levels of budgetary support and import protection. The most direct trade-distorting aspect of this situation was the escalating use of export subsidies (subsidy “wars”) to dispose of these mounting surpluses on world agricultural markets.

On the other hand, for the vast majority of developing countries the situation was different. Rather than excessive support and rising production surpluses, their situation was one of inadequate production and insufficient support to raise agricultural productivity and food production in line with their food needs and agricultural potential. Hence, the situation of many food insecure countries is fundamentally different, and, accordingly, requires a different approach from that of reducing support to agriculture.

6. Lessons from the history of agricultural development

Several lessons from the history of agricultural development, in different parts of the world, are worthy of note. First, hardly any country has been able to initiate and sustain modern economic growth without first exploiting and developing its agricultural potential. The initial effects were to raise rural income, assure a growing food supply and increase the national standard of living through reductions in poverty and food insecurity (undernourishment).

Secondly, a successful take-off to sustained agricultural growth was achieved through a judicious mix of subsidies (e.g. inputs and water management subsidies), pricing polices and border measures, as well as other institutional and infrastructural support measures (agricultural credits, extension services, land reform as needed, seed banks, crop insurance, storage facilities, road and transport, market and distribution systems) which provided the incentives and the means for peasant farmers to produce and innovate, albeit on a limited scale initially.

Thirdly, if the goal of agricultural policy is to raise agricultural productivity and production (e.g. in the case of a developing economy), then “coupled” rather than “decoupled” policies are the most effective for providing rapidly the intended results. For example, one dollar spent on coupled policies would produce more outputs than the same dollar spent on decoupled measures.

7. The relative effects of policies and countries on distortion in world agricultural markets

A related relevant issue is the relative contribution of various policy measures and countries to distortions in world agricultural markets. The “policy criteria” approach, which implicitly was used in the Agreement on Agriculture, is to classify policy measures into boxes (“amber”, “green”, “blue”) based on a pre-assignment as to their minimal or otherwise trade distorting nature. Another approach is to focus on the policy impacts of individual countries on markets.

The policy classification approach, because it is not based on actual policy impacts, can lead to anomalies. For example, some countries can technically be in compliance with their commitments under the AoA by shifting, i.e. re-instrumenting, their support from the amber to the green box with basically the same effects on markets. On the other hand, some other countries, because of their negligible size in world agricultural markets, either as exporters or as importers, could utilize policies classified as highly trade-distorting without creating any discernible distortion of world agricultural markets. This raises the question of the best approach to reducing distortions while allowing non-“offending” countries to continue to have policy flexibility.

In any event, even if a relatively large food insecure developing country does create a discernible distortion of world agricultural markets, there needs to be an evaluation of the trade-off between this minimal degree of distortion and the enhanced food security of several hundred million people.

8. Policy implications in the context of the WTO negotiations on agriculture

As has been seen, there are large differences in food insecurity between richer WTO members and poorer ones. Given the extent of food insecurity in the poorer countries, there is a need for increased, rather than decreased, support to agriculture in these countries in order to accelerate agricultural productivity and production growth. Increased support in these countries would in all probability have negligible effects on “distortions in world agricultural markets”. In any case, the benefits of improvement in living standards and reduction in food insecurity (undernourishment) are likely to far outweigh the cost of any distortion in world agricultural markets.

Accordingly, food insecure countries (i.e. those with a high proportion of undernourished population and/or people living in households that consume less than US$1 or US$2 per day) should be exempted, as currently are LDCs, from reduction commitments under a revised Agreement on Agriculture. Their policy flexibility should be unconstrained, unless it can be demonstrated, on a country-specific basis, that the use of otherwise prohibited policies have led to their obtaining an increased share in world trade, in a particular product, above a defined de minimis level.

Table 1. Indicators of hunger and poverty for selected WTO members

Region/Country

Number of
under-nourished
people a
1996-98

Share of
under-nourished
in total
population a
1996-98

People living on less
than $2 a day b

(million)

(percent)

(percent of
population)

(year)

Africa

146.5




Angola

5.0

43

...


Benin

0.8

14



Botswana

0.4

27

61.4

1985-86

Burkina Faso

3.5

32

85.8

1994

Burundi

4.3

68

...


Cameroon

4.1

29



Central African Republic

1.4

41

84.0

1993

Chad

2.7

38



Congo

0.9

32

...


Côte d’Ivoire

1.9

14

49.4

1995

Dem. Rep. of the Congo

29.3

61

...


Egypt

2.6

4

52.7

1995

Gabon

0.1

8

...


Gambia

0.2

16

...


Ghana

1.9

10

...


Guinea

2.1

29

...


Kenya

12.2

43

62.3

1994

Lesotho

0.6

29

65.7

1993

Madagascar

5.8

40

88.8

1993

Malawi

3.2

32

...


Mali

3.4

32

90.6

1994

Mauritania

0.3

13

22.1

1995

Mauritius

0.1

6

...


Morocco

1.4

5

7.5

1990-91

Mozambique

10.7

58

78.4

1996

Namibia

0.5

31

55.8

1993

Niger

4.5

46

85.3

1995

Nigeria

8.6

8

90.8

1997

Rwanda

2.3

39

84.6

1983-85

Senegal

2.0

23

67.8

1995

Sierra Leone

1.9

43

74.5

1989

Swaziland

0.1

14

...


Tanzania, United Rep. of

12.7

41

59.7

1993

Togo

0.8

18

...


Tunisia

0.1

*

11.6

1990

Uganda

6.0

30

77.2

1992

Zambia

3.9

45

91.7

1996

Zimbabwe

4.2

37

64.2

1990-91

Asia

334.3




Bangladesh

46.8

38

77.8

1996

India

207.6

21

86.2

1997

Indonesia

12.3

6

66.1

1999

Jordan

0.2

5

7.4

1997

Korea, Republic of

0.5

*

<2

1993

Kuwait

0.1

4

...


Malaysia

0.5

*

...


Mongolia

1.1

45

50.0

1995

Myanmar

3.1

7

...


Pakistan

28.9

20

84.7

1996

Papua New Guinea

1.3

29

...


Philippines

15.2

21

...


Sri Lanka

4.5

25

45.4

1995

Thailand

12.2

21

28.2

1998

United Arab Emirates

0.0

*

...


Latin America and the Caribbean

54.6




Argentina

0.4

*

...


Bolivia

1.8

23

38.6

1990

Brazil

15.9

10

17.4

1997

Chile

0.6

4

20.3

1994

Colombia

5.2

13

28.7

1996

Costa Rica

0.2

6

26.3

1996

Cuba

2.1

19

...


Dominican Republic

2.2

28

16.0

1996

Ecuador

0.5

5

52.3

1995

El Salvador

0.6

11

51.9

1996

Guatemala

2.5

24

64.3

1989

Guyana

0.2

18

...


Haiti

4.8

62

...


Honduras

1.3

22

68.8

1996

Jamaica

0.2

10

25.2

1996

Mexico

5.1

5

42.5

1995

Nicaragua

1.5

31

...


Panama

0.4

16

25.1

1997

Paraguay

0.7

13

38.5

1995

Peru

4.4

18

41.1

1996

Suriname

0.0

10

...


Trinidad and Tobago

0.2

13

...


Uruguay

0.1

4

6.6

1989

Venezuela

3.7

16

36.4

1996

Eastern Europe and Central Asia

5.7




Albania

0.1

3

...


Bulgaria

1.1

13

7.8

1995

Croatia

0.5

12

...


Estonia

0.1

6

17.7

1995

Georgia

1.2

23

...


Kyrgyzstan

0.8

17

...


Latvia

0.1

4

8.3

1998

Poland

0.3

*

10.5

1993

Romania

0.3

*

27.5

1994

Turkey

1.2

*

18.0

1994






Memo item:





Non-WTO members

275.8




Afghanistan

14.6

70

...


Algeria

1.4

5

15.1

1995

Cambodia

3.4

33

...


China (incl. Taiwan Province)

140.1

11

53.7

1998

Eritrea

2.2

65

...


Ethiopia

28.4

49

76.4

1995

Iran, Islamic Rep. of

4.1

6

...


Iraq

3.5

17

...


Korea, Dem. People’s Rep.

13.2

57

...


Lao PDR

1.5

29

...


Lebanon

0.1

*

...


Liberia

1.1

46

...


Libyan Arab Jam.

0.0

*

...


Nepal

6.2

28

83

1995

Saudi Arabia

0.6

3

...


Somalia

6.6

75

...


Sudan

5.1

18

...


Syrian Arab Rep.

0.2

*

...


Viet Nam

16.5

22

...


Yemen

5.7

35

35.5

1998

Yugoslavia

0.3

3

...


Armenia

0.7

21

...


Azerbaijan

2.4

32

...


Belarus

0.1

*

<2

1998

Bosnia Herzegovina

0.4

10

...


Kazakhstan

0.7

5

15.3

1996

Moldova Rep.

0.5

11

32

1992

Russian Fed.

8.6

6

25.1

1998

Tajikistan

1.9

32

...


Turkmenistan

0.4

10

59

1993

Ukraine

2.6

5

77.2

1992

Uzbekistan

2.6

11

26.5

1993

Developing countries

791.9

18

...



Notes:

a The term “undernourished” in the context of the World Food Summit 1996 refers to persons whose food consumption level is inadequate in terms of calories consumed relative to requirements on a continuing basis.

b $2 a day refers to the upper poverty line as defined by the World Bank (2001), World Development Report 2000/2001.

* - less than 2.5%

... - data unavailable

Source: FAO (2000), The State of Food Insecurity in the World 2000, Rome: FAO, Table 1; World Bank (2001), World Development Report 2000/2001: Attacking Poverty, Table 4.

Table 2. Estimates of poverty, by region, 1998

Region

Number of people
living on less than $1 a
day in 1998
(million)

Share in total
population
(percent)

East Asia

278.3

15.3

Eastern Europe and Central Asia

24.0

5.1

Latin America and the Caribbean

78.2

15.6

Middle East and North Africa

5.6

1.9

South Asia

522.0

40.0

Sub-Saharan Africa

290.9

46.3

Total

1 198.9

24

Source: World Bank (2001), World Development Report 2000/2001: Attacking Poverty (New York: Oxford University Press), Table 1.1.
Table 3. Relative importance of agriculture in selected WTO member countries, 1999

Region/Country

Share of
agriculture in
GDP
(percent)

Agricultural
population as
% of total
population

Food imports as
a percentage of
total export
earnings minus
debt service

Africa




Angola

12.3

72.1

9.2

Benin

38.6

55.0

21.0

Botswana

3.6

44.7

9.8

Burkina Faso

33.3

92.2

27.7

Burundi

54.2

90.4

26.1

Cameroon

42.4

60.6

5.9

Central African Republic

52.6

73.5

10.1

Chad

39.8

76.1

7.8

Congo, Rep.

11.5

41.5

6.6

Côte d’Ivoire

26.0

50.3

5.3

Dem. Rep. of the Congo,

57.9

63.7

6.3

Djibouti

3.6

na

39.7

Egypt

17.5

34.0

19.5

Gabon

7.3

39.2

3.1

Gambia

27.4

79.2

41.8

Ghana

10.4

57.1

14.6

Guinea

22.4

84.2

19.5

Guinea-Bissau

62.4

83.1

49.7

Kenya

26.1

75.9

11.8

Lesotho

11.5

38.2

44.0

Madagascar

30.6

74.7

na

Malawi

35.9

83.3

18.7

Mali

46.9

81.5

11.8

Mauritania

24.8

53.0

56.4

Mauritius

8.6

12.2

7.4

Morocco

16.6

36.9

26.6

Mozambique

34.3

80.8

46.7

Namibia

10.0

42.1

2.7

Niger

41.4

88.1

27.2

Nigeria

31.7

34.2

13.3

Rwanda

47.4

90.5

55.7

Senegal

17.4

74.0

28.9

Sierra Leone

44.2

62.7

80.3

South Africa

4.0

9.9

1.9

Swaziland

16.0

34.3

6.4

Tanzania, Un. Rep. of

45.7

80.9

18.6

Togo

42.1

60.3

14.4

Tunisia

12.4

25.0

6.3

Uganda

44.6

80.6

38.5

Zambia

17.3

69.9

8.5

Zimbabwe

19.5

63.2

na

Asia

Bangladesh

22.2

56.7

26.8

India

29.3

60.1

11.5

Indonesia

19.5

49.1

8.8

Jordan

3.0

11.7

18.9

Korea, Rep. of

4.9

10.6

2.3

Kuwait

0.4

1.1

5.0

Malaysia

13.2

19.4

2.4

Mongolia

32.8

24.9

5.5

Myanmar

53.2

70.5

na

Pakistan

26.4

47.5

19.7

Papua New Guinea

24.4

74.7

6.3

Philippines

16.9

40.2

4.9

Singapore

0.1

0.2

1.0

Sri Lanka

21.1

45.8

9.3

Thailand

11.2

57.2

1.2

United Arab Emirates

2.2

5.0

5.0

Latin America and the Caribbean

Argentina

5.7

10.0

3.6

Bolivia

15.4

44.5

5.9

Brazil

8.4

17.3

22.5

Chile

7.4

16.0

4.1

Colombia

13.5

21.0

7.1

Costa Rica

15.2

20.7

2.9

Cuba

na

14.5

na

Dominican Republic

11.6

17.4

7.4

Ecuador

12.9

26.5

4.6

El Salvador

12.1

29.7

10.7

Grenada

8.4

na

19.4

Guatemala

23.3

46.7

11.3

Guyana

34.7

18.3

6.3

Haiti

30.4

62.9

62.7

Honduras

20.3

32.6

na

Jamaica

8.0

21.0

10.4

Mexico

4.9

22.1

4.5

Nicaragua

34.1

20.8

33.8

Panama

7.9

20.8

7.6

Paraguay

24.9

34.8

2.1

Peru

7.1

30.7

13.7

Suriname

26.0

19.2

na

Trinidad and Tobago

1.8

9.0

7.1

Uruguay

8.5

12.8

3.0

Venezuela

5.0

8.4

5.7

Eastern Europe and Central Asia

Albania

54.4

48.9

58.6

Bulgaria

18.7

7.5

2.9

Croatia

8.9

9.1

4.2

Estonia

6.3

11.6

4.0

Georgia

26.0

20.5

na

Kyrgyzstan

46.0

26.3

14.5

Latvia

4.7

12.2

5.4

Lithuania

10.4

12.8

2.4

Poland

4.9

22.2

2.1

Romania

16.4

15.9

3.7

Turkey

17.6

46.9

2.5

Memo item:

Developed countries

Belgium

1.1

1.9

na

Canada

2.7

2.4

1.1

Czech Republic

4.2

8.5

1.0

Denmark

4.0

3.9

2.2

Finland

4.0

5.8

1.1

France

2.3

3.5

2.2

Germany

1.1

2.6

1.8

Hungary

6.0

11.1

1.1

Iceland

11.2

8.3

1.7

Ireland

5.6

10.6

1.9

Israel

na

2.8

2.5

Italy

2.6

5.6

3.0

Japan

1.7

4.3

2.9

Liechtenstein

na

na

na

Luxembourg

0.8

2.2

0.4

Malta

3.2

2.0

4.2

Netherlands

3.1

3.5

3.3

New Zealand

7.4

9.1

1.8

Norway

2.0

4.7

0.8

Portugal

3.9

13.2

5.2

Slovakia

4.4

9.3

1.7

Slovenia

4.0

2.2

2.1

Spain

3.5

7.7

2.5

Sweden

2.2

3.3

1.0

Switzerland

na

4.3

1.1

United Kingdom

1.8

1.8

2.5

United States

1.7

2.2

1.0


[1] Prepared for the FAO Geneva Round Table on Food Security in the Context of the WTO Negotiations on Agriculture, 20 July 2001.
[2] FAO (2000), The State of Food Insecurity in the World 2000, gives the example of Benin, where close to half the population is vulnerable to hunger whereas only one seventh of the population is undernourished, using the FAO estimate of undernourishment.
[3] World Bank, (2001), World Development Report 2000/2001: Attacking Poverty (New York: Oxford University Press), Table 4.

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