The Case for a Food Security Box in the AoA

ODI seminar, 27June 2001 Duncan Green, CAFOD dgreen@cafod.org.uk

But first, an urgent plea for help

South Centre needs (unpaid) help on input to phase 2 of AoA talks September: Rural Development, Green Box, Blue Box, Geographical Indicators December: Food Aid, Environment, Trade Preferences, Consumer information and labelling Need to be familiar with WTO and the issue

The WTO System

Most Favoured Nation National Treatment Dispute Settlement Mechanism Consensus Decision-Making Free market theory v mercantilist practice 15 agreements in 1995, including ag for first time

The Agreement on Agriculture

3 Pillars
Market Access (increase) Domestic Support (reduce) Export Subsidies (reduce) And several boxes.

Implementation Period
5 years for developed countries (2000) 9 years for developing countries (2004) increase/reduction commitments do not apply to 43 Least Developed Countries New round of talks to begin in early 2000 (now under way in Geneva)

Special and Differential Treatment

Longer implementation periods LDCs exempt Compensation promised for higher food prices Exemptions for developing country investment subsidies (if available to all) and for input subsidies to small farmers

Why are developing countries unhappy?

US domestic support has increased EU export subsidies have increased import surges following liberalisation tariff peaks, tariff escalation and non-tariff barriers/ trade harassment have stopped them exporting Marrakech decision never implemented

What needs to change: Developed Country end

Reduce tariff peaks and escalation Reduce use of non-tariff barriers and trade harassment Reduce blanket support to farmers, or accept compensatory export taxes to ensure fair world prices Implement Marrakech Decision

Household Food Security and the WTO

Production: restrictions on government support to small farmers Trade (Producers): import surges and price falls, further tariff reductions likely; northern protectionism Trade (Consumers): liberalisation hasnt always led to price falls to consumers competition issues

Household Food Security and the WTO (contd)

Labour: hit by same probs as domestic production, plus northern barriers to agroexports Transfers: Governments have lost tariff revenue, plus restrictions eg on food aid purchases

Features of a Development Box

Whats in a name? Development v Food Security Different rules for small farmers (precedent exists in the AoA) Different rules for food security crops
crops which are either staple foods, or which are the main sources of livelihood for lowincome and resource-poor (LI/RP) farmers.

Why small farmers?

The most ignored at WTO level (eg Brazil and the Philippines are in the Cairns Group!) Often the main staple food producers Among the poorest Least able to benefit from export openings Historically, they have played a central role in equitable development paths

Why food security crops?

Developing countries now in food deficit Food demand increase in next 20 years will be in developing countries Export weakness means dependence on imported food increases FX constraints Food production generates more jobs than agroexports

Why food security crops? (contd)

Food aid is conditional and comes at the wrong time Countries should be able to protect culturally significant crops Domestic production can maintain biodiversity

The Development Box

A lot of jargon which boils down to:
Greater flexibility on government support for small farmers and food security crops Greater flexibility for government protection against import surges of food security crops Allow governments to purchase food security crops for local distribution at stable, abovemarket prices link liberalisation commitments to reduction in northern protection and subsidy

Why Does the Development Box matter?

At a national level, SAPs and RTAs have greater policy impact but AoA brings greater lock-in further negotiations could start to bite WTO has important agenda-setting role Development Box challenges WTO assumption of liberalisation as end in itself Part of general demand for enhanced S&D