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Global Forum on Food Security and Nutrition • FSN Forum

Re: Examining the linkages between trade and food security: What is your experience?

Ekaterina Krivonos

Dear participants, I read with great interest all your contributions and would like to thank you for this rich discussion with many (often polarized) views.

As Susan pointed out, most of you are skeptical about the contributions that trade can make to food security. Concerns that many of you have with trade (and opening up markets) include the vulnerability of the local food systems, competition from outside displacing small farmers, selling outside the community that could leave the local population with less or more expensive food. You also mention the detrimental effects to the environment from switching to larger agriculture (an example with soy production in Argentina was mentioned by Ricardo). Others highlighted that trade can improve food availability, but could negatively affect utilization and stability if it introduces phytosanitary or other risks (Abdybek from Kyrgyzstan and Moises from the Dominican Republic both mentioned that). The issue of inferior nutritional quality of food that is imported at a cheaper price was raised by Ghose from China. Jean-Marc wrote that getting the price expectations right is not an easy task for farmers, and this creates price volatility, which in turn diminishes the incentives to investment.  In terms of benefits to producers that could potentially engage in trader, many mentioned that small farmers not able to comply with strict technical and SPS standards in the export markets.

Dennis from AfriGrains highlighted a major shortcoming that is a systematic “blockage” to food systems caused by inadequate attention to storage, transport and marketing. These weaknesses are often ignored by policy makers, leading to a failure by farmers to produce sufficient quantities of food and constraining the flow of food from farms to consumers. This leads us to believe that a whole lot more needs to be done to develop domestic markets and logistics, and more importantly, to ensure that farmers are supported with proper instruments to overcome these constrains.

Many point out that the interaction between trade and food security varies greatly depending on the country’s situation with producing own food, market structure, share of small farmers, government policies etc. As Sally points out, often small farmers lose from greater trade, while the middle sized to large farms stand to gain. Uneven/unfair distribution of benefits from trade is perhaps the theme that is mentioned as one of the main concerns in this discussion.

These are all very real and valid concerns and we do need some serious thinking on how to address them. In your comments you offer solutions to overcoming some of these weaknesses. Personally I don’t consider the suggestions to eliminate trade (banning exports and/or imports) and having each country produce all the food they consume as a viable one. Relying on own production only (even leaving aside the efficiency arguments where one country that is more efficient at producing certain products – say wheat in Argentina – can produce the godo at a lower cost, implying a lower price to poor consumers), implies greater risks of disruptions in supplies due to weather-related emergencies, wars and other failures. I am not familiar with any evidence showing that moving towards this model (in essence, isolation) has produced positive results in terms of food security. North Korea comes to mind as an example of the opposite. But if anyone is aware of any positive cases, it would be beneficial to share them.

The more balanced approach (offered for example by Dennis Bennett) is that there are often unintended negative effects from greater trade openness and these need to be dealt with ex-ante. Dennis mentions that trade agreements need to be evaluated for their effectiveness in supporting food security and development of value chains. I would only add that, from a national priorities perspective, food security would not be the only goal (although certainly one of the central ones), but there would also be other aspects of economic and social development to concider, including poverty reduction, better health and education systems etc.

Some of the solutions listed by the participants include:

- Greater participation of farmers in trade negotiations to ensure that their views are incorporated;

- Safety nets to accompany trade agreements (to solve the issue of uneven distribution of gains);

- Attention to local food security value chains, addressing the issues in a “bottom-up” fashion and an integrated approach to developing comprehensive food systems, including all stages of production and marketing .This includes solving the problems with storage/marketing/transport/creation of markets;

- Technological innovations (which need appropriate investment) and support programs to improve the access of small to finance and technical assistance;

- Inclusive business models.

Many coincide that trade can enhance food security, but certain conditions must be met (ensuring food safety and crop diversity was mentioned by Vijay, for example). On a global scale, the interests of the poorer countries should be considered as the first priority when negotiating trade agreements.

These are certainly valuable ideas, and I hope this holistic approach to ensure that farmers benefit from participation in markets – be it local, national or global – will gain more ground.

One thing is emerging rather clearly: Subsistence farmers are at greatest risk from open trade, it does not seem to be a viable strategy to simply open up markets without taking care of the weaknesses outline above first. Substantial assistance is needed to give a boost to domestic production, to ensure that smaller farmers advance to a more competitive position before opening up for trade. That is the path many developed economies with advanced agricultural sectors have taken in the past.

However, Christian Haberli also has a point when he says that “farmer security is not food security”. While border protection and farm support would clearly benefit producers but whether or not it is the best strategy for national food security (and the global food security) is a different question. Let us not forget about the consumers in this discussion.

It is not easy to draw any conclusions from all this. I am perhaps repeating what I put in the introductory comments, but trade ALONE cannot solve food security or poverty problems. I don’t think anybody can reasonably suggest that opening up for trade would be the solution to these serious issues.

The more practical and relevant questions could be: First, would countries be better off in a closed economy, relying only on own production? I have yet to see any evidence of that.  Second, as most of us agree, trade has advantages and disadvantages, sometimes severe, and there are certainly people who would lose from trade, as from any other major reforms. So, who should we prioritize? Farmers? Consumers? All population? And what are we trying to achieve? Poverty reduction? Food security? Increased farm incomes? Greater social expenditure (for safety nets, education etc)? Unfortunately, all at once is not really possible. And if so, what degree of protectionism (or conversely, trade liberalization) would be adequate, given these priorities? One interesting piece of evidence can be found in this recent paper: Third, let us say we have established what is our ideal rate of protection is under given circumstances of a country and the national priorities. How do we make sure that the benefits are maximized? What is need to be done at the national level? I think here the holistic food value chain approach suggested by Dennis would be very useful.