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20080717 food crisis_session 2_wto rule contribution to food security_peters



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  • 1. United Nations Conference on Trade and Development How can WTO rules and regulations contribute to food security? Geneva, July 2008 Ralf Peters Trade Negotiations and Commercial Diplomacy Branch Division on International Trade UNCTAD,
  • 2. Annual price movements 300 250 200 Meat Dairy 150 Cereals Oils 100 Sugar 50 0 2000 2001 2002 2003 2004 2005 2006 2007Source: David Vanzetti and Ralf Peters, UNCTAD estimates with ATPSM
  • 3. 2007/08 rice prices 1000 900 800 700 600 500 400 300 200 100 0 Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June JulySource: USDA. Thai grade B
  • 4. Contributing factors to food crisis• Short term factors – Rising oil prices – Increase of bio-fuels – Supply shortages: drought – Speculation – Export restrictions – Lack of market structures that ensure fair competition• Medium/long term factors – Population growth – Changing diet in emerging countries – Falling stocks – Weak agricultural sector in developing c. and LDCs
  • 5. Impacts• Net seller or buyer – Poor spend large share of income on food and are often net buyers – Risng food prices increases poverty (WB 2008) – Food bill doubled in low income food deficit DCs
  • 6. LDC food imports ~40% increase 30100 25100 20100 2007 $m 15100 2008 10100 5100 100 al r y ls t ils ea ga ir ea t O To Da M Su er le C ab t ge VeSource: FAO
  • 7. WTO provisions and food security• Tariffs• Export restrictions• Special products• Safeguards• Domestic Support
  • 8. Can Doha solve the crisis?• Liberalization of agricultural sector• Rising world prices• Domestic prices may fall (not LDCs)• Shift in production to developing countries
  • 9. Change in production Full liberalisation 10.00 5.00 0.00 Change in % World Po at O ds, e d O ar , ra w ce vin ck ilk ltry at Su gar e p. ds p. Developed W . c z e he ro e e em on Bo esto n Ri Su ai -5.00 em u e e re fi ,t , M ,c t Developing v Li M g LDC i ls -10.00 ils -15.00 -20.00Source: David Vanzetti and Ralf Peters, UNCTAD estimates with ATPSM
  • 10. Change in global production Full liberalisation World 1.00 0.50 0.00 Change in % t ed w e k try at ze ea p. p. -0.50 c. Bo toc c ra he ro em on fin Ri ai ul em ,t es r, M Po W ,c re ,t ga vin ds v il k -1.00 ds r, Li Su ee ga M ee i ls Su ils O -1.50 O -2.00 -2.50Source: David Vanzetti and Ralf Peters, UNCTAD estimates with ATPSM
  • 11. Results• Change in Production – Production in developed countries mostly falling – Production in developing countries mostly increasing; but e.g. in case of wheat from low base – World production increasing or slightly decreasing; but changes small• Self sufficiency increasing in DCs but world production not always increasing – But scenario too ambitious – Doha mostly about squeezing out the water (tariffs in DCs and DS in developed)
  • 12. Recommendation• Doha contribution limited – But should continue• Developing countries – Investment in agriculture to increase productivity – Research and development – Temporarily subsidising inputs to increase production• Developed countries – Reduce or eliminate trade distorting subsidies – Careful with bio-fuels – Technology transfer – Support DCs (ODA for Agriculture dropped by 65% in 20 years)
  • 13. Note: This publication has been made available by CSEND with the agrement of the author. The Centre for Socio-Eco-Nomic Development (CSEND) aims atpromoting equitable, sustainable and integrated development through dialogue andinstitutional learning. Dialogue is a branch of the Centre for Socio-Eco-Nomic Development(CSEND), a non-profit R&D organization based in Geneva, Switzerland since 1993.