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Excessive reliance on agricultural commodities puts Sustainable Development Agenda at risk

FAO’s Director-General urges policy makers to promote diversification and healthier food systems

FAO Director-General José Graziano da Silva adressing the event in a video message today.

15 May 2019, New York - FAO Director-General José Graziano da Silva today urged countries to identify concrete solutions to help developing countries, especially those dependent on agricultural commodity-exports, to achieve a successful economic transformation and meet the Sustainable Development Goals (SDGs).

A holistic understanding of the numerous ways in which reliance on trade in commodities can affect their country’s economies -including terms of trade, export, revenues and investment flows- can help policy-makers reduce the vulnerability of their countries to shocks and foster inclusive and resilient economies, he said in a video message addressed to an informal interactive dialogue on commodity markets co-hosted by the President of the UN General Assembly, FAO and UNCTAD in New York. 

Commodities play a significant role in the economies of many developing countries. Nearly two-thirds of developing countries rely on primary commodity exports for more than 60 percent of their export earnings.

Agricultural commodity production and exports are also estimated to provide incomes and jobs for more than a billion people worldwide. However, declining commodity prices and frequent and excessive price fluctuations significantly affect economic growth, social development and food security.

Commodity dependence can affect the capacity of countries in implementing the 2030 Agenda for Sustainable Development, FAO Director-General said.

Food import dependence closely linked to increasing obesity

FAO Director-General also noted that excessive dependence on food imports can be associated to the increase of obesity in the populations of many developing countries.

“There is an extreme dependence on commodities for our food systems as 50 percent of our calories intake comes only from maize, wheat and rice,” he said.  “Today, trade regulation covers only food safety issues. There is also an urgent need to regulate trade of healthy food and healthy diets at national and international levels,” he added.

The joint FAO-UNCTAD report on Commodities and Development Report published in 2017 showed ways to find possible solutions for this problem.

“Sound policies can enhance the commodity sector’s contribution to sustainable growth including linkages with other sectors of the economy. Pursuing diversification away from primary agricultural commodity exports is also essential,” said Graziano da Silva. “This can significantly reduce the vulnerability of the national economy to price shocks and thus enhance its resilience”

The report also stressed the importance of effective institutions that can implement these policies.