Agricultural Trade Policies and the Food Crisis: Will They Help or Hurt?

Successful global agricultural trade hinges on open, secure agricultural markets. Such markets provide risk management by allowing for inter-regional diversification of crops and food products and by reducing price differences through market integration. In other words, secure, well-functioning markets can balance one country’s food deficit with another’s surplus, and vice versa. In this way, global trade can support global price stability and food security.

However, certain agricultural trade policies can hurt global price stability. This occurs when protectionist policies, such as agricultural tariffs and export restrictions, are enacted to try to insulate a country’s domestic prices from world market fluctuations. Such policies can actually amplify natural fluctuations in world prices because of their unilateral, uncooperative nature. While they may be domestically politically expedient, protectionist policies often exacerbate existing price volatility and can lead to an increase in food insecurity, particularly for vulnerable developing nations.

With the world once again facing the specter of a global food crisis, efforts to limit and regulate such unilateral policies are more important than ever before. IFPRI Research Fellow David Laborde has extensively studied such efforts, with particular focus on the ongoing Doha Development Round. His research provides important recommendations for stabilizing both world and domestic prices, including instituting an export restriction permit system similar to that seen for pollution/emissions permits.

Video: Global Trade and Food Security

Files:

• DiscussionPaper_OnTheRoleOfExportTaxes.pdf
• DiscussionPaper_OnTheRoleOfTariffBinding.pdf
• Slides_OnFoodSecurityAndTrade.pdf
• DiscussionPaper_OnTheStateOfImportTariffs.pdf