Fixing the Global Food Crisis

Fixing the Global Food Crisis Item #6:  Break Down Trade Barriers

“Having looked at the various factors that influence [agricultural] production and consumption, we must now turn to what it is that links them. At the global level, the link is established through international trade. Trade becomes the transmission belt through which supply adjusts to demand. It allows food to travel from the land of the plenty to the land of the few. When that transmission belt is disrupted through trade barriers; unexpected turbulence arises on the market.” —World Trade Organization Director-General Pascal Lamy, January 2011

Promoting global and regional trade in agriculture is essential to enhancing food security and to sustainably meeting the demand of a growing, increasingly affluent population, projected to surpass 9 billion by mid century. Almost one-fourth of global food and agricultural production enters international commerce, and enhancing the ability to trade these products across borders will promote global food security, helping to alleviate production shortfalls by facilitating movement of products from surplus areas to deficit areas. Increasing urbanization, changing weather patterns and limited water availability will increase the importance of global and regional agricultural trade issues as the century progresses. 1

The Trump administration has vigorously promoted an anti-free trade platform. Trump has said that the North American Free Trade Agreement is “the worst trade deal maybe ever signed anywhere” On January 23, just after the inauguration, he signed the order to withdraw from Trans-Pacific Partnership (TPP).

This article appeared in USNews.com almost a decade ago and is even more timely in today’s political climate.1

Politics often kicks into high gear in times of crisis. That’s what happened when India, Egypt, and dozens of other countries dropped their tariffs and taxes on imported foodstuffs to get cheap food as fast as possible. Doing so, they accomplished in just the past few months what over six years of trade negotiations, called the Doha Round, could not. “Imports have been liberalized in a way that not even the wildest trade enthusiasts would have imagined,” says Arvind Subramanian, senior fellow at the Peterson Institute for International Economics.

But another major goal of Doha remains elusive—reducing the massive subsidies for domestic agriculture in the United States and Europe. Third World farmers can’t compete with the artificially low prices of the subsidized crops from wealthy countries. It’s a burden that, according to the World Bank’s development report, amounts to $17 billion a year, or five times the level of foreign development aid going to those countries. “The U.S. and E.U. have been unfair competitors in agricultural markets,” says Gawain Kripke, policy director at Oxfam America.

Another issue: Numerous countries, from Argentina to Russia, have erected export barriers to try to shore up domestic food supply. India, for example, in March slapped minimum price levels on exports of nonbasmati rice, ramping up rice prices in neighboring Bangladesh. One ray of hope: Ukraine lifted its export ban on grain at the end of last month. That may become a trend, predicts Dani Rodrik of Harvard University’s Kennedy School of Government. “I think exporters will manage to bring those down.”

“Having looked at the various factors that influence [agricultural] production and consumption, we must now turn to what it is that links them. At the global level, the link is established through international trade. Trade becomes the transmission belt through which supply adjusts to demand. It allows food to travel from the land of the plenty to the land of the few. When that transmission belt is disrupted through trade barriers; unexpected turbulence arises on the market.” —World Trade Organization Director-General Pascal Lamy, January 2011

Promoting global and regional trade in agriculture is essential to enhancing food security and to sustainably meeting the demand of a growing, increasingly affluent population, projected to surpass 9 billion by mid century. Almost one-fourth of global food and agricultural production enters international commerce, and enhancing the ability to trade these products across borders will promote global food security, helping to alleviate production shortfalls by facilitating movement of products from surplus areas to deficit areas. Increasing urbanization, changing weather patterns and limited water availability will increase the importance of global and regional agricultural trade issues as the century progresses. 2

1 Global Harvest Initiative

2 8 Ways to Fix the Global Food Crisis