Foro Global sobre Seguridad Alimentaria y Nutrición (Foro FSN)

Ascertaining the Impact of WTO Agreement on Agriculture on Regional FSN

The importance of the subject is timely enough to tempt one to answer the three questions FSN Forum has raised without giving much thought to the standards against which the above impact could be justifiably ascertained. These comments are restricted to suggesting such a standard intended to render such an assessment as holistic as possible.

In the context of global FSN, that of Sub-Saharan Africa represents one of its regional components. However, whether it is global, regional or local (national in this context), the possible variations in the impact of WTO agreement on agriculture are only a question of degree with respect to the state of public nutrition and food security. So irrespective of the locale, it is the yardstick one ought to use when considering those questions.

Thus before proceeding, one needs to seek some consensus on as to what may justifiably constitute the state of public nutrition and food security. It would be reasonable to suggest that the adequacy of the former represents how many individuals in a given group are appropriately nourished and how many are not. Such a group may be the population in a part of a country, or in a nation or a group of them.

Those who are not appropriately nourished suffer from its ill effects owing to (availability) the lack of food needed for a a varied, wholesome and balanced diet or it being not affordable, or secondly, because of people’s lack of relevant dietary competence even when suitable food is available and affordable. The second is an important cause of the increasing incidence of obesity among the affluent throughout the world.

In order to pre-empt the possible objections to terms ‘varied’ and ‘wholesome’, it would be salutary to note that during last six millennia, people everywhere have applied a great deal of ingenuity to vary and enhance the dietary enjoyment of their meals by preparing even their staple food in huge number of ways. What to use and how to do so constitute a major part of human food culture, a priceless common heritage not to be just dismissed by advocating the injestion of packets of a fortified powdered algae, or some Ersatz stuff yielding X calories and containing y% of all the needed nutrients per 100 grammes.

As for what is wholesome is obvious, nevertheless it may be defined as a food is wholesome when it is free of known toxic substances as well as chemical additives that are not found in food coming from plants and animals, spices, herbes and condiments of natural origin. It is often claimed that ‘precaution is better than cure’, while in industrialised countries where content of additives in various food stuffs is high, one has observed a declining human fertility, higher incidence of allegies, etc. Hence, developing countries would do well not to tread the same dangerous path.

Meanwhile, food security implies having a sustainable adequate supply of varied and wholesome food needed for a balanced diet. Its sustainability depends on the sustainability of the ecosystem dservices on which agriculture, animal husbandry and food harvesting (fishing etc.) intimately depend. Irrigation, use of fertilizers and biocides merely represent a technically sophisticated supplementation of those services that should be used with caution in order to avoid disastrous consequences (Aral Sea disaster, aftermath of the ‘green revolution’ of the 70-ies, etc.).

Sustainability of those ecosystem services depends on the well-being of our environment. The latter in turn, depends on the biodiversity indigenous to a locale and the sustainable population of each individual species there. This applies with equal force to man as well as to the Water Hycinth that clogs many a stream and irrigation canal.

So much for the availability and sustainability and now one runs into the thorny problem of affordability. Stating the obvious, the availability of a sustainable supply of varied and wholesome food would be of little use, unless it is affordable to all and the people knew how to make use of it, which requires them to have sufficient dietary competence.

Therefore, it would be reasonable to postulate that irrespective of the level involved, an adequate state of nutrition and food security requires that the following obtain:

1. Restoration of weakened ecosystem services by regeneration and preservation of the area’s environment. This requires restoration of the local indigenous bio-diversity as much as possible and undertaking to build-up or reduce its individual populations as is necessary. Actions that have the opposite effect threaten sustainability in ways too well-known to be noted. Such undesirable actions include:

1. Utilising the ecosystem services at a rate in excess of the rate they are replenished (intensive irrigation).
2. Excessive removal of earth’s green cover through deforestation and ploughing up of grasslands.
3.  Over and/or non-selective exploitation of  sea, lake and river fisheries by foreign and local harvesters.
4. Diminution of the area’s agro-biodiversity through monoculture and by introducing methods that  deprecate its food culture.
5. Use of energy and capital-intensive methods in food production and harvesting it from the environment, and in improvements in infra-structure (especially transport and housing) when proven more energy-efficient and labour-intensive alternatives are available.

2. All are end-users of food, but most of us cannot be totally self-sufficient enough in food to secure for ourselves a varied and a wholesome balanced diet. So, the majority is compelled to procure at least some of their food by purchase, hence the need for a decent livelihood (not to mention the other needs). But a large number of people in both urban and rural areas of the developing countries are unemployed (particularly the youth) or under-employed. A fair number of those, after a relatively short training appropriate in the context, may earn a decent living in agriculture, food harvesting, and suitable related pursuits. If the environment remains felicitous, apart from the shortage of requisite competence and the initial cost of making and implementing the plans needed to remedy the situation, the greatest obstacles to this approach are the following:

1. Use of development approaches that depend on energy- and capital-intensive solutions, whose notion of effectivity is highest possible yield/profit at the least possible expense, i.e., less human labour. Any policy on industry and development embodying those would only exacerbate the situation.
2. Trade policies that permit the following:

A. Establishment of high capacity locally or foreign-owned food packing/processing installations at a few locations whose products are principally for export. Not only does this ignore to address the employment issue, but it may often reduce the food availability for local consumption.

B. Trade policies that permit the export of local foods for cash when malnutrition exists in a country or would lead to it.

C. Trade policies that permit the establishment and manufacture or import and distribution of industrial foods and beverages that are outside a country’s food culture or known to promote obesity.

D. Any trade policy that promotes the establishment of near monopolies or a limited number of large concerns to engage in food production, processing and storage, transport and sales (chains of outlet) that creates more and more unemployment, hence fewer and fewer people able to afford the available food.

E. Any trade policy that enable vested interests either to infringe on the current laws on land tenure, or prevent their just adjustment towards a fairer sharing of world resources.

F. Trade policies that promote the exploitation of, or the export of materials that will directly or indirectly have an adverse effects on a country’s food production.

G. All trade policies that entail ‘labour efficiency’ in countries where unemployment is a major issue.

H. Any labour policy that deprecates or is inimical to the  traditional co-operative movement in food production, preservation, storage and distribution to end-users.

I. Trade policies that do not provide real incentives to family farms, small to medium sized processing units, sales outlets, family-run restaurants, etc., all run on a cooperative basis.

L. Any trade policy that entails even the smallest environmental degradation, for at present, such changes can have unpredictably serious consequences for food production.

It is hoped that those who are versed in the trade agreement in question will trouble to ascertain whether any one or more of its provisions in real life terms will permit A to J above. If any one of those are permitted, the trade policy that embody such a permission will have an inevitable adverse effect on a country’s state of nutrition and food security, not to mention the civil instability that often follows in the wake of persistant high unemployment. At a mere policy-level, permitting A-J will result in a national trade policy that can neither be in harmony within, nor yet with any humane and responsible health, education, security, etc., policies.

Best wishes!

Lal Manavado.

In your opinion, do export restrictions enhance or undermine food security in African countries? Should the WTO disciplines on export restrictions be stricter or allow greater flexibility?

Export restrictions, in the long run, generally have a negative impact on food security even in the producing country. When governments impose export restrictions, it limits market access for the producers. this in most cases leads to lower prices at the domestic level and can subsequently lead to reduced investment in production. This ultimately leads to reduced food availability and also accessibility. If these policies are implemented upharzardly, they lead to uncertainity and consequently instability in both availability and accessibility to food. For the importing countries the impact of export restriction is that there is continued inadequate availability of the food stuffs which tends to keep the prices high. Thus such a policy seriously undermines both the availability and accessibility pillars of food security in the importing country. Export restrictions can contribute to promoting informal cross-border trade. Due to the relatively higher prices in the importing country, traders in the country with export restrictions sell their wares to traders in the importing country without passing through the formal channels.

WTO disciplines on export restrictions should be stricter so as not to unnecessarily distort trade. Any country intending to impose export restrictions should seek permission from thr WTO and present satisfactory reasons as to why it intends to impose the export restriction.

Bonjour chers tous, 

je vous fait parvenir ci-joint un article susceptible d'enrichir les discussions en cours.  Cet article traite notamment de l'interaction entre l' Accord sur l'agriculture de l'OMC et la  sécurité alimentaire en Afrique.

Impact of import surges on   regional/national food secuity needs to be closely monitored and evidence-based informed policy choices be explored, to avail policy spaces including iner alia safeguards unde WTO Ageements.At the same time, poficiency in competitiveness needs to be developed, by investing/specialization  in areas of comparative advantage, diversification of production & trade base, and standards' economy.  Alongside these, value chain development & management and Sanitary & Phytosanitary (SPS) compliance can  help  leverage  both tading opportunities alongside attainment of food security and thus  SDGs.

English translation below 

La concession accordée aux PMA de ne pas avoir à réduire leurs droits de douane – que les politiques d’ajustement structurel les empêchaient en réalité déjà d’augmenter – et permettant que leurs exportations ne soient pas taxées dans la plupart des pays développés et émergents a été un cadeau empoisonné. À la suite de l’initiative « Tout sauf les armes » (TSA) de l’UE ouvrant son marché sans droits de douane ni quotas à leurs exportations, Via Campesina et le Réseau des organisations paysannes et des producteurs agricoles d’Afrique de l’Ouest (ROPPA) ont souligné dans un communiqué commun du 13 mai 2001 que « les priorités des paysans et de leurs familles dans les PMA est d’abord de pouvoir produire pour leur famille, puis d’avoir accès au marché intérieur, bien avant d’exporter. La décision européenne ne va au contraire que renforcer les bénéfices des grandes firmes utilisant les ressources et la main d’œuvre des PMA pour les cultures d’exportation vers l’UE […] augmentant ainsi l’insécurité alimentaire ». De fait, selon les chiffres de la CNUCED, les exportations des PMA d’Afrique ont bien moins augmenté vers l’UE28 que vers le monde entier de 2001 à 2016 : 38,5 % de moins pour l’ensemble des produits et 43,6 % de moins pour les produits alimentaires, malgré le programme TSA. Et la part des produits manufacturés dans leurs exportations totales vers l’UE28 est passée de 34 % en 2001 à 20 % en 2016. Toutes les ressources mobilisées pour ces exportations ont réduit celles disponibles pour l’autosuffisance alimentaire. Ainsi, le déficit alimentaire des PMA a augmenté de 12,5 % par an de 1995 à 2016, puisque leurs importations ont augmenté de 9 % et les exportations de 6,6 %.

Or, l’UE impose aux PMA des pays ACP (Afrique-Caraïbes-Pacifique) de réduire de 80 % leurs droits de douane sur ses exportations dans le cadre des accords de partenariat économique (APE) régionaux, violant par là même sa Déclaration « Tout sauf les armes ». L’APE conclu avec l’Afrique de l’Ouest pourrait ainsi réduire les recettes douanières – droits de douane plus taxe sur la valeur ajoutée (TVA) à l’importation – cumulées de ces pays de 32,2 milliards d’euros entre 2020 et 2035, dont 15,5 milliards d’euros pour les PMA, et parmi lesquels 3,9 milliards d’euros sur les produits agricoles.

Un autre scandale réside dans l’importance des subventions aux produits agricoles exportés par les pays développés, notamment par les Etats membres de l’UE, qui refusent de prendre en compte les subventions internes, jamais traitées dans les accords de libre-échange, en particulier les APE, sous prétexte que les règles les concernant sont de la compétence exclusive de l’OMC. Or l’UE y a refusé un débat sur la boîte verte, au titre de laquelle elle notifie ses subventions découplées – 38,3 milliards d’euros en 2015 – et ne tient pas compte des subventions aux aliments du bétail pour ses produits animaux exportés. Ainsi les subventions de l’UE28 à ses exportations mondiales de produits laitiers ont atteint 2 milliards d’euros en 2016, au taux de dumping de 13,2 %. Sur ce total, les subventions à l’Afrique de l’Ouest ont été de 168,6 millions d’euros, au taux de dumping de 20,8 %. De même, les 59,3 Mt de céréales exportées par l’UE28 en 2016 ont été subventionnées à hauteur de 3,585 milliards d’euros (60,4 euros/tonne), au taux de dumping de 34,4 % sur les céréales brutes. Sur ce total, les 3,4 Mt de céréales exportées en Afrique de l’Ouest ont bénéficié de 215 millions d’euros de subventions. Là encore la finalisation de l’APE régional augmenterait fortement ce dumping puisque le droit de douane sur les céréales, hors riz, passerait de 5 à 0 %, ce qui va déjà se passer pour les APE intérimaires de Côte d’Ivoire et du Ghana.

Il est urgent de refonder radicalement les politiques agricoles de l’UE et des pays en développement, dont l’Afrique subsaharienne, sur la souveraineté alimentaire afin d'atteindre le deuxième des ODD sur la sécurité alimentaire. Pour assurer un développement agricole durable, les pays d’Afrique subsaharienne doivent en effet modifier radicalement leurs politiques agricoles en assurant des prix stables et rémunérateurs aux agriculteurs. Cela implique que les communautés économiques régionales comme la Cedeao et la CAE deviennent membres à part entière de l’OMC, au même titre que l’UE. Elles bénéficieront alors de droits de douane consolidés car leurs tarifs extérieurs communs (TEC) ne portent que sur les droits de douane appliqués. Elles pourront alors refonder leurs TEC sur des prélèvements variables – si efficaces pour développer la production agricole de l’UE avant l’OMC – tant que l’équivalent ad valorem des prélèvements variables ne dépasse pas le droit consolidé.

Pour que le relèvement des prix agricoles ne pénalise pas les consommateurs pauvres, ces communautés économiques régionales mettraient en œuvre une aide alimentaire intérieure massive en produits vivriers régionaux, comme le font l’Inde et les Etats-Unis, financée par la coopération internationale, notamment par des prêts à très long terme de l’Association internationale de développement (AID), filiale de la Banque mondiale. Cela serait une composante d’un « plan Marshall » pour l’Afrique subsaharienne, à côté d’une composante « infrastructures » pour les échanges intérieurs, d’une composante « transformation des produits vivriers locaux » pour se substituer aux importations de blé et d’une composante « emplois non agricoles » en relevant les droits de douane sur la filière textile-habillement afin d’assurer des débouchés rémunérateurs au coton africain. Cela suppose que l’UE cesse de s’aligner sur les Etats-Unis pour trouver à l’OMC une solution permanente aux règles sur les stocks publics de sécurité alimentaire.

The concession granted to the LDCs of not having to reduce the customs tariffs, -- given  that the structural adjustment policies in reality already prevented them from being  increased -- and allowing  for their exports  not to be taxed in the majority of developed and emerging countries, has been a poisoned chalice. Following the EU Everything but Arms (EBA) initiative opening its markets without customs taxes or quotas on their exports, Via Campesina and  the Réseau des organisations paysannes et des producteurs agricoles d'Afrique de l'Ouest [West Africa Network of Peasants and Agricultural Producers] (ROPPA) underlined in a joint communication of 13th May 2001 that "the priorities of the peasants and their families in the LDCs is firstly to be able to produce for their family, then to have access to the domestic market, much before exporting. The European decision on the contrary only goes to strengthen the profits of the large companies using LDCs' resources and labor to export crops towards the EU … thus increasing food insecurity."  Indeed, according to UNCTAD data, exports from African LDCs have increased much less towards the EU28 than to the rest of the world, from 2001 to 2016: 38.5% less for all products combined and 43.6% less for food products, despite the EBA program. And the manufactured products share of their total exports towards the UE28 has passed from 34% in 2001 to 20% in 2016. All the resources mobilized for these exports have reduced those available for food self-sufficiency. In this respect, the food deficit of the LDCs has increased by 12.5% per year from 1995 to 2016, because their imports have increased 9% and their exports 6.6%.

Furthermore, the EU obliges LDCs of the ACP (Africa, Caribbean and Pacific) to reduce by 80% their custom tariffs on their exports in the framework of regional Economic Partnership Agreements (EPA), violating in this way its Declaration "Everything but Arms."  The EPA combined with West Africa could therefore see a reduction in the customs receipts - custom tariffs plus VAT on imports - accumulated for these countries of 32.2 billion euros between 2020 and 2035, of which 15.5 billion euros for the LDCs, and among these 3.9 billion euros on agricultural products.

Another scandal arises in the importance of subsidies to agricultural products exported by the developed countries, in particular the members of the EU, who refuse to take into account the internal subsidies, never considered in the free trade agreements, in particular the EPAs, under the pretext that the rules concerning them are the exclusive competence of the WTO. Yet, the EU has refused a debate on the green box, under which title they notify the detached subsidies - 38.3 billion euros in 2015 - and which does  not take into account subsides on animal food in exported animal products. Thus, the EU28 subsidies to its world exports of dairy products has reached 2 billion euros in 2016, with a dumping rate of 13.2%. On this total, the subsidies to West Africa were 168.6 million euros, with a 20.8% dumping rate. Likewise, the 59.3 Mt of cereals exported by the EU28 in 2016 were subsided by 3.585 billion euros (60.4 euros/ton), a rate of dumping of 34.4% on bulk grain. Of this total, the 3.4 Mt of cereals exported to West Africa have benefited from subsidies of 215 million euros. There again ,the completion of the regional EPA will strongly increase this dumping because the customs tariffs on cereals, other than rice, will go from 5 to 0%, which will already happen for the interim EPAs  of Ivory Coast and Ghana.

It is urgent to radically reform the EU agricultural policies, and those of developing countries including South Saharan Africa, in respect of food sovereignty so as to achieve the second of the SDGs on food security. To ensure a sustainable agricultural development, the Sub-Saharan African countries must modify radically their agricultural policies by ensuring stable and remunerative prices to farmers. That means that the regional economic communities like ECOWAS and EAC become complete members of the WTO, in the same way as the EU. They will benefit from consolidated customs tariffs because their common external tariffs (CET) only affect the customs duties applied. They could then reform their CETs on variable levies - so efficient for the EU to develop agricultural production before the WTO - so that the ad valorem equivalent of variable levies does not exceed the consolidated duty.

So that the levies on agricultural prices do not penalize the poor consumers, these regional economic communities will implement a large scale domestic food aid program, in the form of regional food products, as is done in India and the USA, funded by international cooperation, in particular, long term loans from the International Development Association (IDA), subsidiary of the World Bank. That would be one element of a” Marshall plan” for Sub-Saharan Africa, besides an infrastructure component for the domestic exchanges,  a component for the transformation of local food products to substitute imports of wheat and a component for  non-agricultural employment by lifting the customs duties on the textile-clothing sector to ensure profitable outlets for African cotton. This assumes that the EU stops aligning itself with the USA in order to find within the WTO a permanent solution to the rules on public stocks of food security.

Boosting intra-African trade in agricultural commodities and services, when properly handled to reap the benefits of comparative advantage in agricultural production, tends to be a good idea. However, various rules and regulations under the WTO regime do not mean much on the ground. This is because of lack of transparent and accountable mechanisms and enforcement of rules at different levels. Various provisions may remain on paper rather than enhance trade and food security. Given the limited total market power of the region for trade volume there should be little surprise that the mechanisms cannot contribute to effective agricultural transformation. 

What remains more relevant in this context is the role of value chain approach to production, processing and export, within the region and outside - based on sustainable agriculture methods and focus on small farm innovations. Provision of self-enforcing incentive mechanisms (such as recognizing and supporting high productivity) could be useful. Inter-agency cooperative efforts (domestic and international) will be rewarding to the populations, in general.  Excessive expliotation of natural resources to maximize trade can be detrimental to sustainable production, trade and development. The focus needs to be more on the fulfillment of Sustainable Development Goals using pragmatic mechanisms in this context.

see also: P K Rao International Environmental Law and Economics (Blackwell)

                 P K Rao The World Trade Organization and the Environment  (Macmillan)

Agricultural trade and food security are two factors important for economic growth and development. They are concerned about public policy. That's why, through the 2014 Malabo Declaration, African governments made a specific and clear commitment to boosting intra-African trade in agricultural commodities and services, and to harnessing market and trade opportunities locally, regionally, and internationally. This is also why a place of choice has been given to the fight against hunger in the SDGs, especially the 2nd SDG, which aims to eliminate hunger, ensure food security, improve nutrition and promote sustainable agriculture. Unfortunately, the logic that governs agricultural trade is fundamentally different from that governing the achievement of food security for the population. While agricultural trade is governed by the economic rule of profit maximization, food security is governed by the social rule of justice and altruism for the production of sufficient human resources for development. It even happens that this contradiction of logic leads to what I called "perverse trade" in my article entitled “When Food Trade Threatens Food Security of Small Farmers in West Africa: the Perverse Food Trade”. This article is accessible on:

 https://www.researchgate.net/publication/318099303_

When_Food_Trade_Threatens_Food_Security_of_Small_Farmers_in

_West_Africa_the_Perverse_Food_Trade

This means that trade is not the right way to eradicate hunger by 2030 as the SDGs provide. Precise answers to the three questions of the discussion are provided below.

1. Do you think the provisions of the WTO Agreement on Agriculture (AoA) provide sufficient policy space for domestic support for countries in Africa? Why or why not?

The general approach of the Agreement on Agriculture with regard to domestic support is to allow unlimited support through policies. As far as I’m concerned, I think these provisions of the WTO Agreement on Agriculture (AoA) could provide surely sufficient policy space for domestic support for countries in Africa.  For, if properly applied, they can improve production, crop yield, product conservation and the limitation of food losses and waste. In short, they are provisions that will lead globally to abundant agricultural production. But, it should be emphasized that to be effective, the efforts must be centered on "staple crops". Effective promotion of the staple crops requires taking into account the different food systems at both national and intra-national levels in West Africa.

2. In your opinion, do export restrictions enhance or undermine food security in African countries? Should the WTO disciplines on export restrictions be stricter or allow greater flexibility?

Generally, export restrictions of agricultural products are not effective. Two reasons justify this phenomenon. First, export restrictions are never effective in the long run. They can only really be used in case of emergency to respond punctually to a random phenomenon that has negatively affected food availability (flood, drought, ...). The second reason is that trade is still essential for a proper distribution of agricultural products. As then, trade is a means of optimizing labor productivity among the countries in the West African sub-region. This is an economic theory already known and supported by the Economist David RICARDO; the theory of comparative advantage.   

3. What efforts can be made at the multilateral level, to complement regional integration efforts? In your opinion, are there some policy areas that are better addressed at the multilateral level, and others at the regional level?

Regional legal measures hardly succeed in West Africa. The success of decisions will not necessarily come from regional or multilateral measures, but from objective, realistic and inclusive national measures. For, corruption, language barriers, poor communication routes and poor physical security of people are often obstacles to compliance with regional legal provisions in Africa in general, and West Africa in particular.