The Trade and Markets Division keeps under review global issues that affect trade in agriculture, provides analytical and policy relevant information, maintains a comprehensive market intelligence service of the main agricultural commodities, houses the Secretariats of the Committee on Commodity Problems (CCP), nine Intergovernmental Commodity Groups (IGGs) and of the Agricultural Market Information System (AMIS), and is responsible for servicing the arrangements for early warnings on food shortfalls.
The Division serves as the Secretariat to the Committee on Commodity Problems (CCP), as well as to nine Intergovernmental Commodity Groups (IGGs) which report to the CCP. The responsibility of the CCP (a standing committee of the FAO Council) is to keep under review global issues that affect the production, trade, distribution and consumption of agricultural products and to prepare a factual and interpretive survey of the world commodity economy. It identifies specific commodity problems and proposes international action to mitigate them.
Agricultural Market Information System (AMIS)
The G20 Ministers of Agriculture, recognizing the importance of timely, accurate and transparent information in addressing food price volatility, launched in 2011 the Agricultural Market Information System (AMIS). AMIS is managed by a joint Secretariat composed of ten international organizations (FAO, IFAD, OECD, UNCTAD, WFP, the World Bank, the WTO, IFPRI, UN HLTF and the International Grains Council). The Secretariat, hosted by FAO, develops appropriate methodologies and comprehensive indicators to reflect food market developments, and disseminates information on current and future food market situations and food policies.
Smallholder market participation
The work of the Division in relation to smallholders and small family farms is based on the premise that the extent to which they are able to participate in agricultural input and output markets, and the functionality of those markets, is a key determinant of their willingness and ability to increase marketable surpluses.
The Division works to improve the knowledge base on the patterns and determinants of market participation and on the constraints faced by different categories of smallholder producers in accessing alternative market outlets, as a basis for informing the design of appropriate policy interventions and institutional improvements supportive of inclusive market and value chain development. The Division supports national and regional organizations in appreciating the importance of smallholder market participation and the approaches to enhancing participation, with particular attention to the role of public-private partnerships and producer associations and cooperatives.
The Division is responsible for the operation of the Global Information and Early Warning System on Food and Agriculture (GIEWS). Established in the wake of the world food crisis of the early 1970s, GIEWS continuously monitors the world supply/demand outlook for basic foods and is the leading source of information on food production and food security for every country in the world through its publication Crop Prospects and Food Situation, Special Reports on Crop and Food Security Assessment Missions, and continually updated Country Briefs. Since the soaring food price crisis of 2007-08, GIEWS established an online Food Price Data and Analysis Tool currently covering domestic prices of staple foods in 82 countries, as well as international cereal export prices. GIEWS provides a comprehensive market intelligence service on agricultural commodities, and supports national- and regional-level initiatives to enhance early warning systems. The System has become a worldwide network which includes 119 countries, 61 NGOs and numerous trade, research and media organizations.
Global food and agriculture situation and medium term outlook reports
The Division maintains a constant watch on the world market situation and outlook for all the main agricultural commodities, including basic foodstuffs, tropical products and raw materials. A strict schedule is followed for the production of regular publications: the monthly Global Food Price Monitor, the bi-annual Food Outlook, the quarterly Crop Prospects and Food Situation reports, and the annual OECD/FAO Agricultural Outlook. In the latter, a joint econometric modeling exercise run by experts from both organizations forms the basis for medium-term projections of global agriculture.
Price swings represent a threat to food security. They affect consumers, producers and governments. The Division is concerned about the impact of price volatility on international and domestic markets, and on the capacity of countries to cope with an increasingly unpredictable environment and still ensure the food security of their populations. Recognizing that devising and implementing appropriate and effective policies require a deep understanding of the nature, causes and effects of price volatility, the Division gives priority to the analysis of market volatility and its impacts and to policy guidance. The Division’s work includes organizing expert meetings and special events, conducting and publishing analytical studies on volatility and intensifying its focus on market monitoring and issuing of market information and assessments.
Climate change is expected to significantly alter food production patterns, productivity and crop yields, resulting in far reaching impacts on future global food security. As a result, there is strong and urgent need to gain better understanding of the economic and social impacts of climate change on food and agricultural markets. The Division is developing tools and methodologies centered around economic and social impact analyses of climate change, with the aim to enhance developing countries’ capacity to integrate climate-smart policies into agricultural development and to promote sustainable economic opportunities for smallholders. These methodologies are being developed in a number of country-level market-focused pilot projects in Morocco, Kenya, and several countries in West Africa. At global level, the Division carries out analyses and studies for better understanding the linkages between climate change policies, food security, and trade.
Investments in agriculture
Foreign direct investment (FDI) is seen by many developing countries as a potentially important contributor to filling the investment gap. FDI has the potential for providing developmental benefits, for example through technology transfer, employment creation and infrastructure development. Whether these potential developmental benefits are actually likely to be realized is a key concern, as FDI has also the potential to harm host countries. The Division provides developing and developed countries with objective information on the trends and impacts of FDI in agriculture. It promotes responsible investment in the sector, in particular through building international consensus on principles for responsible agricultural investment.
Public Private Partnerships
The Division has engaged in partnerships with the private sector to foster trade in sustainable agricultural products. It supports public-private alliances that aim to make production and trade more sustainable in various sectors such as Bananas and Tropical Fruits. For example, the Division facilitates the World Banana Forum, a public-private partnership of key stakeholders that seeks to enhance the sustainability of production and trade. The Division provides technical and logistical support to the Forum’s Steering Committee and specialized working groups. These working groups produce technical recommendations and best practices for the industry in the areas of sustainable production methods, distribution of value along the marketing chain and workplace conditions.
FAO's work on agricultural trade policy and related capacity-development activities evolved in relation to actual demands for such assistance and in collaboration with bilateral partners and other international organizations. Overall, the range of trade-related policy work of the Organization can be divided into normative, i.e. the analytical policy work taking place at Headquarters in Rome, and operational, i.e. the trade-related capacity-building activities at the regional, sub-regional and country level. These complementary activities establish links and feedback mechanisms between the work at Headquarters and the needs of practitioners in the field, including those of country missions in Geneva that are engaged in negotiations on agriculture at the WTO.