Director-General  QU Dongyu
A statement by FAO Director-General QU Dongyu

LAUNCH OF THE STATE OF AGRICULTURAL COMMODITY MARKETS (SOCO) 2022 

“The Geography of Food and Agricultural Trade: Policy approaches for sustainable development”

Statement

By

Dr QU Dongyu, FAO Director-General 

As prepared

28 June 2022

 

Excellences,

Ladies and Gentlemen,

1.         With the increasingly complex challenges that we face – from the climate crisis to conflicts and economic shocks - we find ourselves having to respond to the overlapping impacts of multiple crises.

2.         This is threatening global food security in numerous ways, including through the disruptions to global production, supply and markets.

3.         The latest edition of The State of Agricultural Commodity Markets (SOCO) 2022 is very timely.

4.         Under the theme of The Geography of Food and Agricultural Trade, the report examines policy approaches to address current and future challenges.

5.         SOCO shows that global agrifood markets are more integrated today than ever before, and that they have expanded since 1995,

6.         And our attention must be to safeguard the essential and beneficial functions of these markets.

7.         We know that export restrictions and bans, particularly in times of crises, can add to price spikes and price volatility, and harm those that depend on global supplies of production and trade for their food security.

8.         In this context, efficient trade can promote world food security and better nutrition.

9.         Trade can also help global agrifood systems use scarce natural resources, such as land and water, more effectively and sustainably,

10.       And to diffuse modern technologies worldwide.

11.       FAO welcomes the outcomes of the recent WTO Ministerial Conference regarding food security, fisheries subsidies, and the exemption from export restrictions for WFP food procurements.

12.       SOCO provides insights on the resilience of global agrifood markets to shocks, including the war in Ukraine and other pressing conflicts around the world, and their implications for food security and livelihood.

13.       All nations have strengthened their participation in global markets, and emerging economies and developing countries are playing a growing role.

14.       Still, the geography of trade highlights the significant gaps that exist across countries.

15.       Global wealth has grown, yet the share of low-income countries in this wealth has remained unchanged.

16.       The agricultural productivity gap is also wide.

17.       The top 10% richest countries produce about 70 times as much agricultural value added per worker as countries in the bottom 10% of the income distribution.

18.       Other factors such as the farm size and limited access to insurance, credit and education, especially for women, lead to lower agricultural productivity in the developing world.

Dear Colleagues,

19.       Trade can also be costly.

20.       Tariffs, non-tariff measures, transport and other logistics costs  all add to product prices,

21.       Especially in low-income countries, where trade costs can add up to 400% to a product’s price, as the SOCO report shows.

22.       Trade facilitation can help reduce trade costs, enhance the export competitiveness of value chains, and contribute to overall growth.

23.       The geographic lens of the SOCO report also reveals the uneven distribution of natural resources.

24.       Land and water are critical factors of production, and they contribute to shaping comparative advantage.

25.       Trade helps regions with low natural resources, such as water-stressed countries, to guarantee the food security of their populations.

26.       But this can also affect the environment.

27.       Food is being increasingly consumed far from where it was produced, resulting in negative environmental or social outcomes,

28.       Such as deforestation and greenhouse gas emissions,

29.       And cheaper food imports could leave smallholder farmers in developing countries unable to survive.

30.       Women farmers with limited access to resources, capital and inputs could be affected the most.

Dear Colleagues,

31.       The 2022 edition of SOCO underlines how mutually reinforcing multilateral and regional efforts can promote trade and sustainable development.

32.       Multilateral trade rules provide important pillars of global agrifood trade.

33.       And deeper and more extensive regional trade agreements, built on the multilateral framework, promote further trade integration.

34.       Trade policies alone cannot, and should not, be expected to fully address the trade-offs among economic, environmental and social objectives.

35.       They must be complemented by other more targeted measures.

36.       The 2030 Agenda for Sustainable Development recognizes international trade as an engine for inclusive economic growth and poverty reduction, and key to achieve the SDGs.

37.       Global markets improve efficiency in agrifood systems and offer consumers a wider choice of food at more affordable prices.

38.       We need to continue working together in an efficient, effective and coherent manner to ensure that the SOCO 2022 findings translate into concrete actions on the ground.

39.       The FAO Strategic Framework 2022-31 seeks to support the 2030 Agenda through the transformation to MORE efficient, inclusive, resilient and sustainable agri-food systems for better production, better nutrition, a better environment, and a better life, leaving no one behind.

40.       Thank you.

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