The implications of the WTO Agreement on Agriculture (AoA) for consumers will hinge on changes in developing countries' capacity to import food, as well as on their domestic production and distribution of food commodities.
Although foreign exchange earnings could rise as a result of the improvements in market access, the effect could be limited in the short to medium term, unless there is an effective supply response. More importantly, the response in production will depend upon the overall policy environment in particular developing countries. The focus of the AoA, however, is on temperate products produced primarily by developed countries, and price increases are concentrated on these products, for which developing countries have a 10 per cent share of world exports, alongside a 40 per cent share of imports (see Konandreas et al, "Overview of the Impact of the Uruguay Round Agreements", in Part 2 of this volume). For Low Income Food Deficit countries, therefore, the international price effect is likely to have negative consequences, and the ability of developing countries to make adequate gains via export earnings to meet the increase in food import bills may be limited: in sub-Saharan Africa, where per capita food availability is low, the rise in the import bill is unlikely to be offset by gains in other sectors.
The likelihood of these negative effects was acknowledged during the Uruguay Round (UR) negotiations. As a result the "Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least Developed and Net Food-Importing Developing Countries" was included in the AoA. It attempts to address issues related to the adverse effects on food security by augmenting the provision of food aid.
This and other measures have the objective of alleviating the burden on the food import bill and balance of payments, but the Decision does not provide concrete measures with regard to implementation. While the Committee on Agriculture will estimate the cost of the negative effects of reforms, and subsequently make recommendations for additional aid, the WTO does not have aid funds directly to support such assistance. Thus, although the Decision compensates for the increased food import bill by accommodating the need for greater food aid, it is unlikely to affect the provision of food aid directly, and the reduction in export subsidies and other price support in developed countries is likely to reduce the level of cereal stocks which were in many cases used to fulfil food aid requirements.
The short-term effects for many countries, therefore, may result in increased hardship for net food consumers. In the medium to longer term, the combination of a changing international market environment and domestic reform economic reform programmes, may result in increased incentives, higher levels of domestic food production, and lower real food prices, but in the short-term many governments in the SADC Region may find it appropriate to take ameliorative measures to relieve the burden on the poorest households.
It is important to distinguish between short-term "safety-net" measures,1 and medium-term initiatives to tackle food insecurity through raising the productivity of small-scale farmers. Many of the food-insecure are net food producers, marketing primarily a distress surplus, and these will benefit from higher prices providing that their terms of trade improve as a result.2 Mechanisms to enable these farmers to benefit more fully from higher output prices will improve food security in their case, but the effects of such interventions (such as infrastructure development) will take time to have any effect. Many rural households will be net food consumers, however, as will many poor urban households, and it is to ameliorate their position that safety-nets are appropriate.
1 Safety-nets can be defined as interventions "designed to help those who are unable to take advantage of opportunities presented by growth...or those who suffer temporary setbacks owing to seasonal fluctuations in income....famine or macro-economic shocks" (WB. 1996:23)
2 This may not happen. In the first place, transmission effects between international prices and small-scale farmers are extremely weak; and secondly, higher prices for household necessities or farm inputs can easily erode the benefits of higher producer prices.
There will be a trade-off, nevertheless, between short- and medium-term measures. Both are necessary. This paper is primarily concerned with safety-net measures, but it makes little sense to discuss these without extensive reference to the longer-term productivity-raising policies which are (optimistically) designed to ensure that safety-nets are mainly a current phenomenon and can be scaled down in the future.
The following section briefly reviews the different implications of structural and transitory food insecurity. Next, an organising framework is provided and the problems of identifying target groups are reviewed. The core pan of the paper is contained in the following five sections which review in turn the alternative policy approaches to household food insecurity, drawing where possible on the experience gained in the Region. The medium-term productivity-raising approaches are reviewed first, although a greater focus is placed on the safety-net measures associated with employment creation, subsidies and transfers. Finally, the conclusion attempts to highlight the main issues, and provide a cohesive overview.
