Strengthening food security through trade policy
Rising world hunger, the Russian invasion of Ukraine and soaring food prices have put food security on top of the international agenda. How important are well-functioning global markets and trade for food security against this backdrop?
The short answer is more important than ever. Moving food from surplus to deficit areas and transmitting price signals to farmers are perhaps the most obvious roles from a market perspective. But governments can do more, not only to alleviate the most immediate crisis, but also in the longer run, by applying sound trade policy measures that contribute to strengthened, sustainable food security.
Food security was one of the global challenges addressed at the recently concluded 12th Ministerial Conference of the World Trade Organization. The result? A declaration on trade and food security as well as a decision to exempt food purchased by the UN World Food Programme from export restrictions. In the declaration on food security, the ministers send a clear message that they will cooperate to alleviate the food crisis and underline the important role of trade in its solution. They also highlight important principles for sustainable trade: to keep trade open, to apply export restrictions with caution, to share information about policies affecting trade and to cooperate by enhancing productivity in food production.
However, further action is needed. Stricter disciplines for trade-distorting farm support create a fairer trading system and better incentives for food production in many developing countries. The discussions in the WTO are important and will continue, but they are also without a deadline. In parallel, we propose the following action to further strengthen food security.
- Use trade policy to reduce costs for new technologies: Key issues for long-term global security are productivity growth and more sustainable agricultural practices. Trade policy can, for example, be used to lower the cost for new technologies, digital tools and renewable energy technology by reducing custom duties and other trade barriers on equipment and input goods used in the agricultural sector. This could be a theme to address in the Trade and Environment Sustainability Structured Discussions currently engaging more than 70 WTO members.
- Discourage export restrictions: Export restrictions distort trade, create incentives for corruption and limit the supply of scarce resources. Despite pledges to avoid export restrictions in response to high food prices, more than 20 countries currently use them. In order to discourage export restrictions, policy-makers should provide evidence-based facts on their impact in the countries that use them. While most people accept that export restrictions are detrimental to global food security, arguments that speak to the self-interest of countries that impose them are less well-known.
- More attention to the impact on sustainable development in developing countries: An important dimension of food security is having enough money to buy food. Trade has a role to play, as it can contribute to employment, increased household income and women’s economic empowerment. From a food-security perspective, it is crucial that developed countries consider the impact on exports from developing countries when drafting new regulations that affect market access. This is a clear-cut sustainability issue that deserves more attention, for example within the EU.
The end of the food crisis seems not to be in sight yet but there are several actions that can be taken to lessen its global impact. Trade policy is among the keys to strengthen food security.
Subscribe to Trade Policy Insights
This article is part of a series of commentaries – Trade Policy Insights – connecting world trade issues with evidence-based analyses. Do not miss any new posts. Sign up to get email updates when there is a new Trade Policy Insight.