Me, with Mr. Mohamed Aw-Dahir, would like to share our insights from the Near Eastern and North African Region below:
- From your knowledge and experience how have trade agreements and rules affected the 4 dimensions of food security (availability, access, utilization, stability)?
Trade agreements govern the ability to export-- the ability to earn foreign exchange which can be used to finance food imports-- and the ability to import. At global level, probably the most important contribution of the trade agreements and rules to food security is the increased access to markets (and thus, increased availability of food) through bilateral/regional/multilateral agreements. Agreements are designed to keep farm and non-farm trade barriers falling, to encourage the secure flow of international investments, which might in turn increase agricultural development and self-sufficiency. Another benefit of transparent global trade regime is the improved access to low cost food markets by the world’s poor.
The Near Eastern and North African (NENA) region which is highly dependent on international market imports for about 60 percent of its food needs to cover the domestic requirement/consumption needs. Most of the countries in the region are therefore vulnerable to food price shocks and projections indicate that their vulnerability will increase. Such vulnerability/their food security can be improved by more effectively mitigating the effects of cereal price and quantity risks which is dictated by international markets/trade agreements and rules. Market and trade agreements are therefore crucial to ease and to stabilize food import flows from net exporter countries to NENA region. It is very important to note that the interconnected markets created by global trade have created not just new strengths but also weaknesses that have jeopardized food security as in the case of global food price spikes (in 2007-08 and 2011). With the food price volatility at international markets, export bans, export taxes, domestic production subsidies and other forms of trade distortions the ability of the countries in the region to sustain food security through imports faced serious challenges, as witnessed during 2007-08 and lately in 2011 food price spikes. In North African countries, the wheat import bill has increased by 62 to 178 percent during 2006–08.
The trade barriers imposed by the net exporting countries affected all dimensions of food security, especially availability, access and stability at market and household levels. For instance, in 2007 the impact of price shocks on food security has been very negative for a number of countries in the Arab region. Food price inflation stemming from global commodity price shocks in 2007-08 has been associated with an additional 4 million undernourished people in this region. Similarly in the year leading up to the Arab Spring, food prices rose by an estimated 13 percent and 20 percent in Syria and Egypt, respectively. The cost of a typical household food basket in Egypt rose by almost 50 percent over the 2005-08 period leading to a lower living standard and increased poverty level. Food exporting countries reacted to seasonal shortages of production by issuing export bans, export taxes, domestic production subsidies and other forms of trade distortions to keep the available produce at home. For instance, the Russian Federation, one of the leading grain exporters to the NENA region, banned exports altogether when faced with shortages, leading to social unrest in selected NENA countries, as consumers could not afford higher food prices due to lack of supply in the global markets. More studies support the hypothesis that social unrests in NENA countries are due higher food prices when confronted with limited global supply (due distorted trade), rather than fuelled by political motives. These periods led some of the NENA countries to implement short term food security policies in uncoordinated manner. Some of these policies were however negating each other and were sometimes costly and to the expenses of the long term development/investment needed in food security.
2. What is your knowledge and experience with creating coherence between food security measures and trade rules? Can rights-based approaches play a role?
Trade rules set by WTO intended to facilitate negotiations for fair trade agreements. Given the prevalence of poverty and hunger, direct and well targeted safety nets and social protection programs based on legal guarantees and solid entitlement would improve food security. As a result of high food prices of the 2007-08 and 2011, the poor people in NENA region had an inadequate intake of essential nutrients which would seem to reinforce the deterioration of food insecurity. Given this dramatic experience, forthcoming trade rules are expected to be re-designed allowing enough flexibility and resilience to ‘right to food’ even under extreme market situations as in the case of 2007-08 crisis.
Any trade policy violating the right of food is expected not to be pursued both by the developed and less developed countries/regions of the world. With a common objective of maintaining their right to food, net food importing states, particularly in the NENA region, developed partnerships with other net food importing countries.
3. How can a food security strategy, including components that explicitly support small-scale farmers in agro-biodiverse settings, be implemented in ways that might be compatible with a global market-based approach to food security?
The foremost motivation for farmers to produce-- regardless of their scale of production-- is the existence of markets to sell their produce: Even if a local farmer is not selling its produce ‘literally’ in the global market place, his/her production may still be marketed in global terms, i.e., it can reach to consumers buying in foreign markets through the so called ‘intermediaries’ in the value chain. The rules governing the different aspects of value chain development are increasingly integrated in trade agreements, carrying implications for marketing opportunities and productivity in turn.
In order to diversify marketing opportunities for their produce, farmers need to adapt to specific requirements in different destination markets, generally reflected in the form of quality and safety standards. Smallholder productivity growth and increased market integration is critical to meeting increased demands; increased investment in food systems is crucial.
Sometimes, to optimize their earnings, farmers might find it rational to store and introduce their harvests later in markets. Improving the conditions of storage, distribution and transportation facilities, increasing compatibility of the product with destination market requirements (including the compatibility of post farm activities like packaging, labelling, etc.), can support building chains of supply that would sustain foreign exchange flows in the country, as well as increasing production and lowering prices for local consumption.
NENA region can be a well selected candidate for all the improvements in different parts of the supply chains stated in earlier paragraphs. According to FAO, the amount of food that is lost or wasted is almost 250 kg/ person per year in the NENA region. All food wasted/lost is a contribution towards more-defined food insecurity. The urgent need to consider small scale farmers’ welfare while defining the effects of global trade mechanisms on the economic environment is much more evident in the NENA region. In the region, an average of 73 percent of all farms are ‘small farms’, whereas the same share is only 32 percent in Europe.
Measures supporting food insecure countries needs to be adopted not only domestic but also at the global level to be effective-- Even if a country has taken all the domestic measures explained in the previous paragraphs and is able to increase its production, it might not attain a food secure-state if its farmers cannot compete in world markets given the financial ability of destination countries’ in supporting their own farmers-- resulting in a trade system which does not depend on comparative advantage, but the financial reserves of the country, thus, biased towards High Income Countries.
Dr. Isin Tellioglu