Dr. Ekaterina Krivonos
Trade and food security; Trade agreements
Ekaterina Krivonos is an Economist in the Trade and Markets Division of the Food and Agriculture Organization of the United Nations (FAO) in Rome, Italy. Her work is focused on analyzing trade policy issues in relation to agricultural markets and food security, including multilateral and regional trade negotiations. After finishing her Ph.D. in Agricultural Economics from University of Maryland, Ekaterina also worked in the UN Regional Economic Commission for Latin America and the Caribbean (ECLAC), the World Bank and the Inter-American Development Bank, where she supported countries and regions with the analysis of agricultural markets and formulation and implementation of trade and regional integration strategies.
Within its Strategic Objective 4 “Efficient and Inclusive Agricultural and Food Systems”, FAO supports countries’ effective engagement in the formulation of trade agreements that are conducive to improved food security. It does so by strengthening evidence on the implications of changes in trade policies, providing capacity development in the use of this evidence, and facilitating neutral dialogue on trade. At the national level, FAO supports governments in mainstreaming trade and agricultural policies and, more concretely, in the analysis of the possible implications of trade reforms for the agricultural sector.
Dr. Ekaterina Krivonos
I would like to respond to Christian Häberli. Certainly one can be too diplomatic, in part that comes from the experience of dealing with sometimes very sensitive issues through interaction with governments. In that context, how you phrase things becomes quite important. In this particular case, however, I was not trying to reconcile irreconcilable trade stances, but merely pointing out that trade can be beneficial for food security, but not trade alone: A lot of the work has to be done at the country level first.
The "holistic food value chain approach" was borrowed from the commentary by Dennis, who advocated addressing the multiple challenges that farmers face as part of a value chain. He has a very strong point. If governments (but also international organizations, donors, NGOs) focus only on production – which in fact occurs in many projects – ignoring marketing and logistics bottlenecks, these investments would be lost or could even make matters worse locally (consider local prices dropping in case of oversupply if farmers are given seeds and technology to produce more than usual and without a proper outlet to other markets).
At the other extreme, introducing trade reforms, or changes in the way market functions (e.g. withdrawal from state trading or changing the rules for domestic marketing or export procedures), or, say, assisting cooperatives in setting up export operations – all that without having the necessary volumes of production or products of certain quality – is also a completely lost effort. I have seen this in many countries, and I am sure you have too. Hence, very loosely, I called it a “holistic” approach, meaning that if we want the agricultural sector (or food security, not the same thing, sure) to benefit from trade, the whole chain needs to be considered.
Dr. Ekaterina Krivonos
Dear participants, I read with great interest all your contributions and would like to thank you for this rich discussion with many (often polarized) views.
As Susan pointed out, most of you are skeptical about the contributions that trade can make to food security. Concerns that many of you have with trade (and opening up markets) include the vulnerability of the local food systems, competition from outside displacing small farmers, selling outside the community that could leave the local population with less or more expensive food. You also mention the detrimental effects to the environment from switching to larger agriculture (an example with soy production in Argentina was mentioned by Ricardo). Others highlighted that trade can improve food availability, but could negatively affect utilization and stability if it introduces phytosanitary or other risks (Abdybek from Kyrgyzstan and Moises from the Dominican Republic both mentioned that). The issue of inferior nutritional quality of food that is imported at a cheaper price was raised by Ghose from China. Jean-Marc wrote that getting the price expectations right is not an easy task for farmers, and this creates price volatility, which in turn diminishes the incentives to investment. In terms of benefits to producers that could potentially engage in trader, many mentioned that small farmers not able to comply with strict technical and SPS standards in the export markets.
Dennis from AfriGrains highlighted a major shortcoming that is a systematic “blockage” to food systems caused by inadequate attention to storage, transport and marketing. These weaknesses are often ignored by policy makers, leading to a failure by farmers to produce sufficient quantities of food and constraining the flow of food from farms to consumers. This leads us to believe that a whole lot more needs to be done to develop domestic markets and logistics, and more importantly, to ensure that farmers are supported with proper instruments to overcome these constrains.
Many point out that the interaction between trade and food security varies greatly depending on the country’s situation with producing own food, market structure, share of small farmers, government policies etc. As Sally points out, often small farmers lose from greater trade, while the middle sized to large farms stand to gain. Uneven/unfair distribution of benefits from trade is perhaps the theme that is mentioned as one of the main concerns in this discussion.
These are all very real and valid concerns and we do need some serious thinking on how to address them. In your comments you offer solutions to overcoming some of these weaknesses. Personally I don’t consider the suggestions to eliminate trade (banning exports and/or imports) and having each country produce all the food they consume as a viable one. Relying on own production only (even leaving aside the efficiency arguments where one country that is more efficient at producing certain products – say wheat in Argentina – can produce the godo at a lower cost, implying a lower price to poor consumers), implies greater risks of disruptions in supplies due to weather-related emergencies, wars and other failures. I am not familiar with any evidence showing that moving towards this model (in essence, isolation) has produced positive results in terms of food security. North Korea comes to mind as an example of the opposite. But if anyone is aware of any positive cases, it would be beneficial to share them.
The more balanced approach (offered for example by Dennis Bennett) is that there are often unintended negative effects from greater trade openness and these need to be dealt with ex-ante. Dennis mentions that trade agreements need to be evaluated for their effectiveness in supporting food security and development of value chains. I would only add that, from a national priorities perspective, food security would not be the only goal (although certainly one of the central ones), but there would also be other aspects of economic and social development to concider, including poverty reduction, better health and education systems etc.
Some of the solutions listed by the participants include:
- Greater participation of farmers in trade negotiations to ensure that their views are incorporated;
- Safety nets to accompany trade agreements (to solve the issue of uneven distribution of gains);
- Attention to local food security value chains, addressing the issues in a “bottom-up” fashion and an integrated approach to developing comprehensive food systems, including all stages of production and marketing .This includes solving the problems with storage/marketing/transport/creation of markets;
- Technological innovations (which need appropriate investment) and support programs to improve the access of small to finance and technical assistance;
- Inclusive business models.
Many coincide that trade can enhance food security, but certain conditions must be met (ensuring food safety and crop diversity was mentioned by Vijay, for example). On a global scale, the interests of the poorer countries should be considered as the first priority when negotiating trade agreements.
These are certainly valuable ideas, and I hope this holistic approach to ensure that farmers benefit from participation in markets – be it local, national or global – will gain more ground.
One thing is emerging rather clearly: Subsistence farmers are at greatest risk from open trade, it does not seem to be a viable strategy to simply open up markets without taking care of the weaknesses outline above first. Substantial assistance is needed to give a boost to domestic production, to ensure that smaller farmers advance to a more competitive position before opening up for trade. That is the path many developed economies with advanced agricultural sectors have taken in the past.
However, Christian Haberli also has a point when he says that “farmer security is not food security”. While border protection and farm support would clearly benefit producers but whether or not it is the best strategy for national food security (and the global food security) is a different question. Let us not forget about the consumers in this discussion.
It is not easy to draw any conclusions from all this. I am perhaps repeating what I put in the introductory comments, but trade ALONE cannot solve food security or poverty problems. I don’t think anybody can reasonably suggest that opening up for trade would be the solution to these serious issues.
The more practical and relevant questions could be: First, would countries be better off in a closed economy, relying only on own production? I have yet to see any evidence of that. Second, as most of us agree, trade has advantages and disadvantages, sometimes severe, and there are certainly people who would lose from trade, as from any other major reforms. So, who should we prioritize? Farmers? Consumers? All population? And what are we trying to achieve? Poverty reduction? Food security? Increased farm incomes? Greater social expenditure (for safety nets, education etc)? Unfortunately, all at once is not really possible. And if so, what degree of protectionism (or conversely, trade liberalization) would be adequate, given these priorities? One interesting piece of evidence can be found in this recent paper: http://www3.lei.wur.nl/FoodSecurePublications/25_Salvatici_et_al_Agtrade-policies-FNS.pdf Third, let us say we have established what is our ideal rate of protection is under given circumstances of a country and the national priorities. How do we make sure that the benefits are maximized? What is need to be done at the national level? I think here the holistic food value chain approach suggested by Dennis would be very useful.
Dr. Ekaterina Krivonos
Dear Dennis, thank you very much for such a detailed and thoughtful post. Many excellent points here.
Dr. Ekaterina Krivonos
Dear participants, I would like to welcome you to the discussion: “Examining the linkages between trade and food security: What is your experience?” I hope that we will have a very fruitful and interesting debate. This is not an easy topic, and country experiences with trade in relation to food security objectives vary a lot. But that is precisely why it is important to have the different views heard and use the rich experience in the countries (both positive and negative) to develop viable proposals that governments can take into consideration when designing public policy.
Trade and trade policy affect the four pillars of food security in a very direct way as they affect food availability and the relative prices of goods and factors of production. But trade in itself is neither a threat no a panacea when it comes to food security, but it certainly poses challenges and even risks that need to be considered in a debate, supported by proper analysis.
Food security is high on the political agenda these days, not only at the national level, but also in global processes, such as WTO negotiations, G-20, development of Sustainable Development Goals. The moment is therefore ripe for having this discussion on the implications of trade and trade policy for food security, and I am looking forward to hearing your views. As a facilitator, I will do my best to provide relevant inputs and steer the discussion towards constructive outcomes.