This document discusses how World Trade Organization rules and regulations can contribute to global food security. It provides data showing large increases in global food prices from 2000 to 2008 for various commodities like meat, dairy and cereals. Short term factors contributing to the recent food crisis include high oil prices, increased biofuel production, droughts and speculation. Long term factors include population growth, changing diets and falling global food stocks. Liberalizing agricultural trade under Doha could help raise global food production but may not lower domestic food prices in developing countries.

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, Geneva
ralf.peters@unctad.org

2. Annual price movements
300
250
200 Meat
Dairy
150 Cereals
Oils
100
Sugar
50
0
2000 2001 2002 2003 2004 2005 2006 2007
Source: 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 July
Source: 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
Ve
Source: 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
-20.00
Source: 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
-2.50
Source: 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.
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