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Globalization, public goods and trade


As globalization has unfolded in recent years, there has not only been more emphasis on international trade in food and agricultural products but also an increased awareness of the importance of ensuring an adequate supply of global public goods to safeguard long-term global food security and the sustainable use of natural resources. As far as food and agriculture are concerned, there is recognition of the added need to conserve and use more sustainably such global common goods as genetic resources for food and agriculture and oceanic fish stocks as well as to address the interdependence between agriculture and climate change.


The genetic resources for food and agriculture, despite their vital importance for human survival, are being lost at an increasingly alarming rate, drastically reducing the capacity of present and future generations to cope with unpredictable environmental shocks and the changing needs of the world's population. No country is self-sufficient with respect to genetic resources for food and agriculture. While the industrialized world has developed legal-economic mechanisms such as intellectual property rights to provide incentives for the development of new biotechnologies and to compensate their inventors, there are still no effective economic or legal mechanisms to compensate or provide incentives for the traditional farmers in developing countries who are the developers of the genetic resources, i.e. the raw materials of these biotechnologies.


Since the World Food Summit, governments, through the FAO Commission on Genetic Resources for Food and Agriculture (CGRFA), have taken a major step forward in the management of genetic resources, by adopting the new, binding, International Treaty on Plant Genetic Resources for Food and Agriculture in November 2001. This is the culmination of seven years of negotiations for the revision of the International Undertaking, in harmony with the Convention on Biological Diversity.


The Treaty covers all plant genetic resources for food and agriculture. It provides an internationally agreed framework for their conservation and sustainable use, which aims at ensuring that the inherited capital they represent is conserved and continues to supply the flow of services on which food security and agricultural development depend. The Treaty establishes a Multilateral System of Facilitated Access and Benefit-sharing for a number of crops crucial for food security and interdependence, and representing more than 80 percent of the world's calorie intake. These are managed in many ways as a global public good.


For the first time a binding international agreement provides that those who have access to commonly managed resources, and who derive commercial benefits from their use, shall, under agreed conditions, pay an equitable royalty to a funding mechanism that aims at ensuring their conservation and sustainable use.


The Treaty recognizes Farmers' Rights, and recognizes the farmers' role in creating and conserving agricultural biodiversity over the ages, i.e. their past, present and future contributions to conserving, improving and making available these resources. Provision is made for Farmers' Rights to be operationalized through national legislation. The importance of the ex situ collections of plant genetic resources for food and agriculture held in trust by the international agricultural research centres of the Consultative Group on International Agricultural Research (CGIAR) is recognized, and arrangements are made for these collections to be made available within the Multilateral System.


The Treaty benefits not only farmers, but also consumers and society in general, and underwrites a continued supply of diverse foods and consumer choice. The seed industry and food producers will also benefit from clear, agreed international arrangements to access the genetic raw material they need to face rapidly changing environmental and climatic conditions, and evolving human needs.


Since the World Food Summit, the Commission has also begun the country-driven process of developing the first Report on the State of the World's Animal Genetic Resources for Food and Agriculture. This will include a comprehensive inventory of the resources and an analysis of their present and future status, and will analyse their contribution to sustainable development and food security. The coming livestock revolution, driven by rising incomes and increasing urbanization in many developing countries - where, for example, per capita meat production is expected to double between 1993 and 2020 - offers strong potential for economic growth. But major changes in animal production systems will both depend upon the availability of adapted animal genetic resources and put those very resources at risk, unless the international community and individual countries strengthen and further develop conservation and sustainable management. The Report on the State of the World's Animal Genetic Resources is expected to be adopted by governments in the Commission in 2005.


Other complementary activities of the CGRFA include a Code of Conduct on Collection and Transfer of Plant Germplasm, which was adopted by the FAO Conference of 1993, a Code of Conduct on Biotechnology, still under negotiation, and the development of a global strategy on animal genetic resources. An additional example of the Organization's contribution to the conservation and sustainable use of global public goods is the Code of Conduct on Responsible Fisheries, adopted by the FAO Conference in 1995.


The processes of globalization present both opportunities and risks for the agriculture sectors of developing countries. Given that agriculture remains the dominant sector and main source of exports in may developing countries, reductions in barriers to trade expand the opportunities for raising sectoral output. But globalization raises risks of marginalization for countries which, because of their resource endowment, location, size or lack of skills and infrastructure, remain uncompetitive in world markets and unable to attract investment. Globalization also brings with it the risk, very evident in the years following the World Food Summit, that instability in the international financing systems and fluctuations in the performance of the major world economies have knock-on effects in countries that have become heavily dependent on external trade and investment. Countries that are dependent on the export of a narrow range of commodities are particularly vulnerable to such shocks, which can have major repercussions on the livelihoods and food security of their farming populations.


The past six years have seen the partial implementation of the Uruguay Round Agreements, which for the first time brought agriculture within the framework of the General Agreement on Tariffs and Trade/World Trade Organization (GATT/WTO). The experience has been mixed: while the Agreement on Agriculture has contributed to the reinstrumentation of domestic and trade policies, actual changes in the levels of support and protection have not been deep enough for the Agreement to have tangible impacts on global trade and incomes. Thus, total support of the Organisation for Economic Co-operation and Development (OECD) countries to their farmers amounted to some US$327 billion in 2000 alone.17 Agricultural tariffs in OECD countries remain high, especially for temperate-zone horticulture, sugar, cereals, dairy products and meat, and tariff escalation continues to give particular protection to processed foods, notably the value-added forms of coffee, cocoa and oilseeds, in importing countries. Moreover, the complexity of import regimes and of accessing tariff rate quotas as well as the costs of complying with sanitary and phytosanitary standards and technical barriers to trade continue to create obstacles to market expansion that may be insurmountable, especially for small economies. The continued large-scale protection of agriculture by developed countries undoubtedly limits agricultural growth opportunities for developing countries.18


The extent to which developing countries are able to take advantage of new market opportunities emerging from globalization ultimately depends on their competitiveness and their capacity to increase the production of goods that are in demand. This may require substantial investments in infrastructure, technology and communications aimed at reducing costs and speeding up transport. But it also calls for the development of institutional capacities to set and enforce standards and for training of farmers in the production of marketable products of a high quality. Bulking up supplies and ensuring a consistent flow of products will depend on collective action by farmers, usually tied to enhanced linkages with the private sector such as through contract farming schemes.


Anticipating that trade liberalization would create transitional problems for some food-importing developing countries, compensatory measures were envisaged under the Marrakech Decision on Measures Concerning the Possible Negative Effects of the Reform Process on the Least-Developed and Net Food-Importing Developing Countries. The failure to make the Marrakech Decision effective could undermine confidence in the fairness of the international trading system, especially within those developing countries that have taken steps to liberalize their trade regimes. FAO has recently proposed options for making the Decision effective.19


The important contribution that expanded trading opportunities can make to the economic development of least developed countries (LDCs) has been given priority attention by the European Union (EU)20 which hosted the Third United Nations Conference on the LDCs (UNLDC III) in Brussels in May 2001.21 As part of UNLDC III, FAO organized a special thematic session on the agriculture sector and food security. The recent decision by the EU to extend duty-free and quota-free access to all products originating in the LDCs, except arms and ammunition, is a tangible move towards the implementation of the EU's new development policies. Canada, New Zealand and Norway have also announced similar actions in favour of LDCs.22 At the fourth WTO Ministerial Conference, held in Doha, Qatar, from 9 to 14 November 2001, the WTO members also made a commitment to the objective of duty-free and quota-free market access for products originating in LDCs.


The main issue relating to globalization and liberalization concerns the distribution of the aggregate benefits that will be generated. Reductions in farm subsidies and market protection on the part of developed countries and in restrictions on the international movement of labour, combined with purposive sharing of advances in information and communication technologies, could do much to ensure that globalization contributes to the more equitable world which has been envisaged in the Millennium Declaration23 and to the achievement, in particular, of the World Food Summit goal.


At the Fourth WTO Ministerial Conference, members agreed to launch a new round of multilateral trade negotiations, to be concluded by 1 January 2005. In addition to the talks on agriculture and services that have been under way since early 2000, the new round will cover other sectors of the global economy as well as a range of implementation issues. The round will have important implications for agriculture, fisheries and forestry. The Ministers made a commitment to provide special and differential treatment for developing countries, including duty-free and quota-free market access for LDCs as noted above. The technical cooperation and capacity-building needs of small, vulnerable and low-income transition economies were also recognized, and the need for delivery of technical assistance was emphasized. Modalities for the further trade reform commitments in agriculture are to be established by 31 March 2003 and comprehensive draft implementation schedules are to be submitted by the Fifth WTO Ministerial Conference, which must be held before the end of 2003.


FAO has a long history of engagement in issues relating to trade in agricultural products and inputs, reporting to the Committee on Commodity Problems and its subsidiary Intergovernmental Groups. In line with Commitment Four of the World Food Summit Plan of Action, however, the Organization has stepped up its assistance to developing countries in "preparing for multilateral trade negotiations including in agriculture, fisheries and forestry inter alia through studies, analysis and training". The Organization has published various assessments of the impact of the Uruguay Round on agricultural markets and food security, as well as a report on developing countries' experiences in implementing the WTO Agreement on Agriculture. It continues to provide intergovernmental fora for the discussion of relevant instruments concerned especially with standard setting: these include the Codex Alimentarius Commission (food quality and safety standards) and the International Plant Protection Convention (IPPC) (phytosanitary standards). Concerning the IPPC, the Organization has established an intergovernmental forum and a standard-setting mechanism and procedure in response to the development of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement). In addition, the Organization has mounted an expanded technical assistance and training programme to build capacity in member countries to meet their WTO obligations and to participate in agricultural trade negotiations as well-informed and equal partners. Regional strategies for food security, prepared by FAO with the secretariats of regional economic groupings, have focused on the creation of a legal and regulatory framework and the building of institutions and scientific capacities to adopt and implement Codex Alimentarius and IPPC standards under the SPS Agreement.

Food safety


Food safety is inherent to the concept of food security. It touches on many aspects of agricultural production technologies, food handling and processing, trade and distribution as well as human nutrition. The causes and categories of food safety hazards are many. They include those of microbiological origin, contaminants entering the food chain and the residues of inputs used in agricultural production and processing systems. Of particular concern are food-borne diseases of microbiological origin because of their high prevalence and possibly increasing incidence: they arise at all stages of the food chain, and methods for assessing and managing the associated risks are in need of improvement.


In the five years since the World Food Summit, public awareness of food safety issues has increased dramatically, especially in developed countries. This greater awareness has been led by concern about BSE, reports of antibiotic-resistant micro-organisms in foods, the dioxin crisis of 1999, numerous outbreaks of food-borne illnesses resulting from microbial contamination of foods, and the appearance in human food of a genetically modified maize approved only for animal feeding. The common attribute in many of these crises has been the public perception that the measures in place are ineffective or inefficiently applied, or that they are applied only in the interest of increased trade and benefits to producers or industry, and not necessarily in the interest of consumers.


In developing countries, consumer lobbies tend to be less vocal and regulatory systems less effective. Where hygiene is poor, often because of a lack of access to clean water, microbial contamination of food and drink is commonplace and is a major source of illness and mortality, especially among children. Misuse of pesticides leads to residues that are not acceptable under Codex standards and most national legislation. The joint FAO/ WHO Meetings on Pesticide Residues are continuously evaluating the pesticides proposed by the industry and making recommendations on Maximum Residue Limits in Food to member countries and to the Codex Alimentarius Commission. Similarly, the Joint FAO/WHO Expert Committee on Food Additives is continuously evaluating food additives, veterinary drugs and environmental contaminants and providing recommendations on the safe levels of these compounds in food.


Improved food safety management procedures, based on principles developed by the Codex Alimentarius Commission, are being applied to reduce microbiological hazards. FAO/WHO expert panels have provided scientific advice that has improved the prospects of managing certain environmental contaminants in foods, particularly aflatoxins. Effective recall procedures minimized the impact and the duration of the dioxin crisis and are also being applied in the case of the genetically modified maize for animal feed. A near consensus has also been reached by the Commission on the general principles to be applied to ensure food safety in relation to biotechnology applications in agriculture and the food industry, and the question of the possible transfer of allergenicity to genetically modified plant varieties is receiving special attention.


Nevertheless, there are calls for food safety measures to be based on a wider range of factors than simply the scientific evaluation of risks to human health. In view of the perception that food control systems are unable to provide adequate assurances of safety, additional measures are being proposed that would ensure a continuous chain of documentation of the origin and nature of every food commodity and ingredient. Such measures could raise the costs of food transactions and could have repercussions on international trade, effectively excluding countries which are unable to put in place the necessary tracking systems.


Efforts are being made at the international level to bring food safety issues into clearer focus, with an emphasis on the scientific basis of decision-making and the exercise of prudence when the scientific base is inadequate. Jointly with WHO and the International Office of Epizootics (OIE), FAO is organizing an international expert consultation on "BSE and its Risks: Animal and Public Health, International Trade". In collaboration with WHO, FAO has organized the First Global Forum on Food Safety Regulators (Marrakesh, January 2002) and the Pan-European Conference on Food Safety and Quality (Budapest, February 2002). These intergovernmental conferences discussed the issues of science-based decision-making and agreed to promote the exchange of information on the management of food safety risks. Regional and international rapid alert systems have been or are being developed to contain and minimize the impact of future food safety crises.

The right to food


All the issues which have been reviewed above have a fundamental bearing on the world's capacity to meet the food needs of its peoples and to maintain its natural resources in good condition for future generations. The fact that more than 800 million people in the world remain chronically hungry in spite of the success of farmers in generating enough food to meet everyone's needs, and that there is widespread evidence of farmland degradation, implies that there are serious imperfections in the way we are handling our responsibilities and exercising our stewardship of global resources. Inequity in access to food and technology, the damage to natural resources associated with some farming methods and scientific advances, the erosion of biodiversity, threats to the sustainability of ocean fisheries and trade restrictions which prevent countries from exercising and benefiting from their comparative advantages, all have important ethical dimensions. Looking at these issues from an ethical and human rights standpoint may contribute to the development of a consensus on how they can be better addressed in the common interest of humanity, capturing important considerations that may not be given sufficient weight when decisions are either taken principally on scientific, technical or economic grounds or left to market forces alone.


One of the consequences of the World Food Summit has been the intense consideration in recent years of the implications of the right to food, which is a recognized human right under international law, as set out in the International Covenant on Economic, Social and Cultural Rights. The right to food implies the right of every human being to the means of production or procurement of food of sufficient quantity and quality, free from adverse substances and culturally acceptable.24 A series of consultations has been conducted by the UN High Commissioner for Human Rights and with the participation of FAO, with the objective of clarifying the content of this right and exploring how it can be better implemented. These consultations have led to a growing appreciation of the respective roles of individuals, their families and communities and various levels of the state in realizing the right to food.25 A number of countries have taken steps towards operationalizing the right to food in their agricultural and food management policies and programmes, generating experiences that other countries may wish to emulate in their attempts to achieve the World Food Summit goal. At the international level, NGOs are calling on FAO to start negotiations for a code of conduct, or voluntary guidelines on the right to food.


In order to improve its capacity to address ethical issues, in 2000 FAO created an independent Panel of Eminent Experts on Ethics in Food and Agriculture, composed of eight internationally recognized members. The Panel has started to analyse a range of ethical issues arising from food production and consumption practices and agricultural development, including forestry and fisheries, in the context of food security and sustainable rural development and in an environment of rapid global change. As part of this process, in 2001 the Organization launched the FAO Ethics Series, of which the first two titles are Ethical issues in food and agriculture and Genetically modified organisms, consumers, food safety and the environment.26The overall aim is to contribute to an informed public debate and transparent decision-making process in an objective manner, as well as to provide a forum for debate of complex and often controversial issues.27

Concluding observations


It is abundantly evident from this rapid overview that agriculture and food security, locally and globally, are subject to enormous and often unpredictable risks. The perceived risks are probably magnified as agriculture intensifies to meet growing demand, as food systems adjust to respond to rapid urbanization and as the world becomes increasingly interconnected with the gathering pace of globalization. At the same time, however, globalization and the rapid contemporary advances in technology and communications, if responsibly managed, can open up new opportunities for economic development and for the emergence of a more equitable world.


Many of the challenges facing agriculture, forestry and fisheries have global dimensions. Pests and diseases cross national boundaries and oceans with ease; high-intensity livestock systems in one country or large-scale deforestation in another contribute to global climate change, while the pattern of an ocean current in the Pacific affects the onset and intensity of the monsoon in South Asia and of the rains in East Africa; non-compliance with international codes of conduct can harm the sustainability of global fisheries; and the subsidization of agriculture in one country can determine whether or not farmers in another have a profitable outlet for their produce. The nature and magnitude of these interactions and how they can be tamed or harnessed for the global good are only just beginning to be understood.


In addressing uncertainties and risks, preventive measures and the exercise of prudence are generally the preferable courses of action but, too often, such action is not taken in spite of the fact that the resulting economic costs - and human suffering - are clearly immense. If conflict can be prevented by negotiation, vulnerable populations be given more advanced warning of a cyclone, or the spread of a life-threatening disease prevented by control at its place of origin, then lives, suffering and costs can be saved.


Within their current capacities, governments and the international community, including FAO, are doing much towards the implementation of those World Food Summit commitments that are most relevant to the new challenges. There remains, however, ample room and strong social and economic justifications for improving response capacities. If all was well, we would not see huge populations brought to the brink of famine in the Horn of Africa, massive losses of life and assets in the wake of Hurricane Mitch in Central America, millions of livestock smouldering on pyres in Europe, or deprivation among West African cocoa farmers who bear the brunt of a collapse in international commodity prices.


The implication is that there is a need to examine carefully the adequacy of current institutional arrangements for international cooperation in addressing major global challenges to food security. In particular, account should be taken of their capacity to forestall crises, to react at the speed and scale necessary to limit potential damage and, when disaster strikes, to assist affected populations in restoring their livelihoods. There is also a longer-term dimension of timeliness that relates to the need to ensure that current research and knowledge generation efforts are sufficient - and appropriately oriented - to meet future global food demands in a sustainable manner, and that they are not driven solely by short-term market forces, which are insensitive to the needs of future generations.


Advances in surveillance and information and communication technology are opening up remarkable new opportunities for gathering, sharing, analysing and interpreting information as well as for accelerating decision-making. The scientific basis for justifying global actions - such as in addressing global warming or depletion of the ozone layer - is becoming stronger and there is an increasing body of legislation and instruments upon which to base mutually reinforcing international and national action to address global threats. At the same time, however, there has been a progressive reduction of the resources available internationally to enable a timely response to emerging threats and opportunities.


The underprovision of global public goods is an issue which has received considerable attention in relation to the management of the global environment through Agenda 21, and it has led to the creation of new instruments such as the Global Environment Facility. Currently, there is much public debate on global public goods in the health arena, particularly in relation to the lack of investment in the development of affordable technologies to reduce the growing incidence of and mortality attributable to HIV/AIDS, malaria and tuberculosis in developing countries, where private charity has felt compelled to come to the rescue of underfunded international programmes. The issue of global public goods supply also requires careful analysis in relation to the assurance of global food security (including food safety) and the long-term sustainability of agriculture, and it is highly relevant to the fulfilment of all seven commitments under the World Food Summit Plan of Action. It is therefore an issue on which the Organization will be focusing greater attention, in consultation with its Members and the other international agencies whose mandates include the provision of global public goods.


The sheer range, scale and costs of the fundamental issues now affecting agriculture, food security and food safety are daunting, and may compete with each other for political attention, both internationally and within countries. The fact that the international agenda is so crowded and that there has been a succession of emergencies demanding immediate interventions may help to explain why few countries - whether developed or developing - have approached the issue of chronic hunger with the determination and commitment required to achieve the World Food Summit goal. It is precisely because there are signs of public indifference and wavering commitment, reflected in a progressive reduction in the domestic and international resources allocated to agricultural development and food security, that the World Food Summit: five years later has been convened.


The more than 800 million people who are chronically undernourished do not make the headlines. They are voiceless and largely hidden in their own countries, and still more so in the international community. They are the poorest of the poor. But in 1996, almost every nation in the world committed itself to the target of halving the number of undernourished by 2015. That commitment still stands and must be honoured. The challenge facing us now is to decide how, in spite of the pressing demands of all the other critical problems facing agriculture worldwide, we can translate the commitment into reality.


To help strengthen the resolve to take determined action, FAO has sought to focus attention on the two main challenges: fostering the political will and mobilizing the resources necessary to fight hunger.

1FAO. 1999. The Strategic Framework for FAO: 2000-2015. Rome.

2FAO. 1997. Rome Declaration on World Food Security and World Food Summit Plan of Action. Rome.

3 FAO. 2001. Ethical issues in food and agriculture, p.2. FAO Ethics Series No. 1. Rome.

4FAO, op. cit., footnote 1, p. 1.

5 FAO. 2000. Conflicts, agriculture and food security. In The State of Food and Agriculture 2000, p. 69-97. Rome.

6 1 billion is equivalent to 1 000 million.

7 FAO. 2001. Committee on Agriculture (16th session). Reducing agricultural vulnerability to storm-related disasters. Rome.

8 The Honduras case study is summarized in FAO/Department for International Development (DFID). 2001. Proceedings from the Forum on Operationalizing Sustainable Livelihoods Approaches. Pontignano, Italy, 7-11 March 2001.

9 FAO. 2000. The elimination of food insecurity in the Horn of Africa - A strategy for concerted government and UN agency action. Summary Report of the Inter-Agency Task Force on the UN Response to Long-Term Food Security, Agricultural Development and Related Aspects in the Horn of Africa. Rome.

10 FAO. 2001. Committee on Agriculture (16th session). Progress Report on Agenda 21: Highlights of FAO's Contribution. Rome.

11 International trade in cereals has risen from about 30 million tonnes prior to the Second World War to 225 million tonnes of grain per year in 2000.

12 See, for example, FAO. 2000. Agriculture towards 2015/30. Rome.

13 FAO. 2001. Committee on Agriculture (16th session). Report of the Interdepartmental Working Group on Organic Agriculture. Rome.

14 FAO. 1999. Committee on Agriculture (15th session). Biotechnology. Rome. The Joint FAO/IAEA Division of Nuclear Techniques in Food and Agriculture has been active in developing molecular characterization methods for crop improvement and in promoting the use of innovative livestock disease diagnostic tests (e.g. for rinderpest and foot-and-mouth disease).

15 See, in particular, FAO. 2001. Genetically modified organisms, consumers, food safety and the environment. FAO Ethics Series No. 2. Rome.

16 FAO. 2001. Committee on Agriculture (16th Session). Report of the Interdepartmental Working Group on Biotechnology. Rome.

17 OECD. 2001. Agricultural policies in OECD countries: monitoring and evaluation. Paris.

18 See IMF Survey, Vol. 30, No. 8, April 2001, quoting the IMF Managing Director's address to the Bundestag in Berlin: "It is political and economic madness for OECD countries to spend $360 billion a year on agricultural subsidies while poverty rages in developing countries, especially in the rural and farming regions".

19FAO. 2001. Towards making the Marrakech Decision more operationally effective. Rome.

20 EU. 2000. La politique de développement de la Communauté Européenne. Brussels.

21 For a comprehensive review of the issues posed to LDCs by globalization and liberalization, see UNCTAD. 2000. The Least Developed Countries 2000 Report. New York and Geneva.

22 Reference is also be made to the United States Africa Growth and Recovery Initiative, which is part of the United States Trade and Development Act of 2000, from which African LDCs would also benefit.

23 UN. 2000. United Nations Millennium Declaration. Resolution 55/2, adopted by the General Assembly in 2000. New York.

24 Committee on Economic, Social and Cultural Rights (20th session). General Comment 12 (E/C.12/1999/5), the right to adequate food (art. 11), 12 May 1999, paragraphs 6 and 8 in particular.

25 For a fuller consideration of issues relating to the right to food, see Chapter 2 of this publication, Fostering the political will to fight hunger.

26 FAO. 2001. Ethics Series Nos 1 and 2. Rome.

27 FAO. 2001. Report of the Panel of Eminent Experts on Ethics in Food and Agriculture, First Session, 26-28 September 2000, Rome.

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