Global trade policies have the potential to significantly impact food security, for better or for worse. With the ninth WTO Ministerial Conference upcoming in Bali in December, some developing country leaders are pressing negotiators to keep this connection in mind and fast-track talks on proposed changes that would give developing countries greater flexibility in following the new WTO agricultural trade rules. A proposal put forth in 2012 by the G-33 – a coalition of 46 developing countries with large populations of smallholder farmers – highlights three major changes that the group says would help developing countries protect the food security of their citizens, as well as help advance Doha Round negotiations, which have been at an impasse since 2011. A new information note from the International Centre for Trade and Sustainable Development (ICTSD) and FAO examines the proposal’s potential effects and cautions that the proposed changes need to be carefully and fully considered to ensure that they will actually deliver on their promise of improved food security.
The draft Doha Agreement, which has been under negotiation since 2001, aims to reduce global trade distortions by placing limits on countries’ distortionary domestic support policies. But many developing countries have long argued that the new rules are unfairly biased against them, and the G-33 believes three proposed changes would help to reduce this bias:
- Expand the current general services category of the “green box” – the collection of policies that create only minimal trade distortions – to include more policies related to farmer settlement, land reform, and rural development;
- Exclude from the aggregate measure of support, or AMS – the level of distortionary support policies that countries have pledged not to exceed – any purchase of staple food products for food stock programs made with the aim of supporting low-income or resource-poor producers by paying above-market prices; and
- Exclude from the AMS any purchase of staple food products for food stock programs from low-income, resource-poor producers made with the aim of providing domestic food aid and alleviating hunger.
However, the ICTSD-FAO paper points out that while the proposed changes may seem like straightforward ways to ensure food security, their potential impacts are in fact quite complex, due in large part to the simple fact that not all smallholders are the same. For example, while government food procurement programs that pay higher prices may benefit low-income producers who sell more food than they purchase, other poor producers are still net food purchasers, buying more food than they produce. This latter group will be hurt if procurement schemes lead to a rise in local market prices, which can happen if governments don’t properly plan for the release of the purchased food. Similarly, procurement schemes aimed at encouraging farmers to increase production may exclude those smallholders who lack access to resources, financing, or infrastructure.
The complexity of these issues has played a major role in the Doha Round deadlock, and could continue to pose challenges for the upcoming Bali talks. While the G-33 wants WTO negotiators to come to an agreement on the three proposed changes prior to the Bali meeting, the paper’s authors caution that negotiators and member countries need to be realistic about just how much can be achieved in the run-up to the next round of talks. An overly ambitious agenda could lead to the kind of impasse we’ve seen since 2011, while too little ambition could lead to an agreement that is more symbolic than effective. The authors conclude that fast-tracking these food security issues may not be the answer; rather, negotiators need to look carefully and specifically at how new market rules, including the proposed changes for developing countries’ rules, will impact food security worldwide. This will mean engaging in a broader, more long-term discussion of food security issues, both leading up to the Bali talks and as part of the post-Bali agenda.