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FAO SYMPOSIUM ON AGRICULTURE, TRADE AND FOOD SECURITY: ISSUES AND OPTIONS IN THE FORTHCOMING WTO NEGOTIATIONS FROM THE PERSPECTIVE OF DEVELOPING COUNTRIES |
Geneva, 23-24 September 1999 |
SESSION III:
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The paper has been prepared by a consultant, Mr T.J. Aldington, for this Symposium. It represents the views of its author and not necessarily those of FAO or its Member governments.
Commodity Policy and Projections Service
Commodities and Trade Division
The paper sets out to identify the key issues relating to food security raised by the outcome of the World Food Summit (WFS) held in November 1996, in relation to the forthcoming trade negotiations of the World Trade Organization (WTO). The World Food Summit's Plan of Action contains seven commitments, three of which bear directly on the food security - international trade interface. These commitments relate to food, agricultural and overall trade policies; sustainable food and agricultural production and practices; and improving physical and economic access by all, at all time, to food. The multifunctional character of agriculture which relates to non-trade concerns and which is noted in the Summit's Plan of Action, is also discussed.
1. The purpose of this paper is to present and discuss in the context of the forthcoming trade negotiations the key issues arising from the outcome of the WFS, held in Rome in November 1996. It is not its intent to take a position on any of these issues. As will be recalled, Article 20 of the Agreement on Agriculture (AoA), states that the reform process will take into account inter alia non-trade concerns. Such concerns were addressed in the preamble to the AoA as including food security and the need to protect the environment, and taking into account the possible negative effects of the implementation of the reform process on the least-developed and net food-importing developing countries. Food security was the focus of the WFS, particularly relating to the contexts of the developing and least-developed countries1. The WFS also gave due attention to environmental protection as underpinning the longer-term sustainability of food production systems.
2. The next section recalls the outcome of the WFS and discusses briefly the complex, multifaceted issue that is food security, which the WFS addressed. As will be seen as the discussion below unfolds, this opening up of food security leads one into addressing issues such as market access and food quality and safety as well as sanitary requirements which, strictly speaking, are trade rather than non-trade concerns. The intention is to separate out the food security - trade concerns in a broad sense from the Summit's outcome. The WFS also defined agriculture broadly to include fisheries and forestry. However, without discussing classification issues, this paper focuses mainly on land-based food production systems.
3. The main achievement of the 186 heads of state or governments or their representatives attending the WFS was their approval on 13 November 1996, by consensus, of the Rome Declaration on World Food Security and the World Food Summit Plan of Action (WFS-PoA). In order that the draft text of the WFS-POA could be adopted by consensus, 15 delegations made reservations and/or interpretative statements on the Declaration and WFS-PoA, which are recorded in the Summit's report. However, these do not substantively change the thrust of the Summit's outcome. The Declaration, which notes the agreement of participating governments that trade is a key element in achieving food security, concludes with a list of seven commitments covering the key components of a food security strategy: an enabling political, social and economic environment; access to food; sustainable food production; food, agricultural trade and overall trade policies; preparedness for natural disasters and man-made emergencies; investment; and implementation, monitoring and follow-up (see Box 1).2 These commitments together with an elaboration of a 'basis for action' and a series of 'objectives and actions' for each of them, form the WFS-PoA.
4. Of the seven commitments, those concerning access, sustainable food production and trade are of greatest relevance for the present discussion. They will be reviewed in the next session in more detail. But before doing so, some further points should be noted.
5. Firstly, the WFS-PoA builds on a prior definition of food security (see Box 2). It states that: "Food security exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life." To achieve food security, concerted action is required at all levels - the individual, household, national, regional and global. It is the totality of this 'concerted action' which the WFS-PoA addresses.
6. Secondly, while the Rome Declaration on WFS reaffirms the "right of everyone to have access to safe and nutritious food, consistent with the right to adequate food and the fundamental right of everyone to be free from hunger", the WFS-PoA is not an elaboration of the right to food. However, Objective 7.4 of the WFS-PoA sets out to clarify the content of the right to adequate food and the fundamental right of everyone to be free from hunger. It emphasises the full and progressive realisation of this right as a means to achieving food security for all.
7. Thirdly, the WFS-PoA reflects the evolution in thinking at the global level - reflecting the views of both the industrialised and developing countries - about the process of development. The environment - development - food security nexus had been explored in the annual sessions of the Commission for Sustainable Development (CSD) established by the UN Conference on the Environment and Development (UNCED), held in Rio di Janeiro in June 1992. The WFS and its PoA, however, focussed on the food and agricultural, rural development perspective.
i) Commitment 4: food, agricultural trade and overall trade policies
8. This commitment is taken first because it has the most obvious relevance to the subject in hand. The 'basis for action' under this commitment begins with the statement that "Trade is a key element in achieving world food security." Note that 'trade' here is not confined to food and agricultural trade and therefore implies trade in all products. The WFS-PoA states that overall trade contributes to food security by stimulating economic growth, critical to improving food security; and again, trade has a major bearing on access to food through its positive effect on economic growth, income and employment. Yet the WFS-PoA also recognises that such benefits might not reach the poorest. Therefore the PoA calls for: "Appropriate domestic economic and social policies" to "ensure that all, including the poor, benefit from economic growth" stimulated by a more liberal trade regime.
9. With regard to food and agricultural trade, while stating that trade "allows food consumption to exceed food production" the WFS-PoA implicitly recognises that trade also allows food (and agricultural non-food) production to exceed consumption, leading to the well-known 'vent for surplus' argument explaining the role of agricultural trade in economic development. Hence, food trade not only improves the physical and economic access to food, on the side of supply, by increasing food availability which also contributes to lower consumer prices for food at the national level, but also promotes, on the side of demand, the exchange of surplus food and agricultural products. That is, it improves entitlements through exchange and, in so doing, widens the range of food available for consumption, improving diets and satisfying food preferences. But food and agricultural trade may also have, through the effects of competition, harmful effects on traditional food production systems and those involved in them. In this context, the WFS-PoA specifically refers inter alia to seeking to avoid the adverse trade-induced impacts" on women's new and traditional economic activities towards food security."
10. The WFS-PoA also expresses a concern about the possible antagonism between trade and environmental policies by urging the "mutual supportiveness of trade and environment policies in support (sic) of sustainable food security." The provisions of the Ministerial Decision on Trade and Environment in the Uruguay Round (UR) Agreement represent a shift in perspective, towards ensuring that environmental measures do not unfairly affect market access on the part of developing countries' food and agricultural exports, including fish and fishery products. These two concerns are separate, with the first relating to the longer term sustainability of food security with the needed conservation of the integrity of the underpinning natural resources, together with the human resources - knowledge and experience - required to manage them. Further discussion of this important issue will be deferred until Commitment 3 is considered below. The second concern relates to market access needed to exploit the income earning potential to be derived from the 'vent for surplus' argument. Improved food security may indeed result from such unimpeded market access.
11. Two further concerns addressed by Commitment 4, and also linked to Commitment 3, relate to food safety and sanitary requirements where the WFS-PoA committed the international community to continue to assist countries to "adjust their institutions and standards" to such requirements. The issue of food safety, has taken on particular significance in recent years with the outbreak of Bovine Spongiform Encephalitis (BSE) in cattle (mad cow disease) with its believed transmittal to humans and, very recently, the dioxin allegedly found in some traded animal products in Europe, traced to contaminated feeds. The food safety issue was even addressed at the G7 (Group of Seven Most Highly Industrialised Countries) meeting in Cologne in June 1999. Food safety including, from the consumer point of view, the issue of genetically modified organisms (GMOs) constitutes, as an issue, the major challenge to the proponents of a more liberalized food and agricultural trading regime. The existing Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) aimed at furthering the use of harmonised measures on the basis of international standards, guidelines and recommendations, appears to fail to prevent faulty domestic control of standards from affecting the quality of exported food products, particularly those with a longer production-processing chain typical for animal food products.3 In this regard, FAO has developed a draft Code of Practice for Good Animal Feeding, through the Codex Alimentarius Commission, but all such codes need the appropriate national monitoring and control measures to be effective. If the recent, most publicised international food safety scares are a correct indication of the actual situation in hand, assistance to countries to "adjust their institutions and standards ...to food safety and sanitary requirements" as called for in Commitment 4 of the WFS-PoA, need to be strongly underlined.4
12. International trade in food not only permits food consumption to exceed production at the national level (a country need not have self-sufficiency in food) but also offers a means (which is likely to be less costly than holding strategic reserves of food) to even out fluctuations in its domestic supplies even when self-sufficiency is broadly achieved. Such generalisations have been supported during the past half century or more by the secular decline in the prices of traded food products relative to the prices of manufactured products on world markets and lower transport and port handling costs. All of this is largely self-evident but the key issue remains the reliability of supply of key food commodities, and hence their prices, on world markets. Memories of the World Food Crisis of 1973-74 linger on as well as the spectre of food embargoes.
13. The WFS-PoA recognises this issue under Commitment 4 (Objective 4.2) which is "To meet essential food import needs in all countries, considering world price and supply fluctuations and taking especially into account food consumption of vulnerable groups in developing countries." The admonitions of the WFS-PoA that food exporting countries should act as reliable sources of supplies to their trading partners and administer all export-related trade policies and programme responsibly are consistent with existing "WTO-compatible options...to safeguard the ability of importing developing countries...to purchase adequate supplies of basic foodstuffs from external sources on reasonable terms and conditions." Measures to assist the least-developed and net food-importing developing countries to finance essential food imports through international financial institutions, mainly the International Monetary Fund (IMF), already exist although they are not automatically accessible. It is possible, perhaps desirable, that such issues should receive attention under Article 20 of the AoA, with the continuing negotiations taking into account the experience to date from implementing the reduction commitments and the effect of such commitments on world trade in agriculture. It is hoped that what should be included in such 'experience' is not defined too narrowly to cover only the application of the reduction commitments alone. It should also include other events that may have had a negative impact on the reliability of trade as a support to improved food security and which may be susceptible to changes in trade policy of exporting countries.
14. The WFS-PoA recalls Article 12 (Disciplines on Export Prohibitions and Restrictions) of the AoA which refers to such restrictions or inhibitions in the context of domestic supply shortfalls in the exporting country rather than the application of trade embargoes for political or military motives. There is however the plea of the WFS's Rome Declaration that "Food should not be used as an instrument for political or economic pressure" and of "the necessity to refrain from unilateral measures not in accordance with international law and the Charter of the United Nations and that endanger food security".
ii) Commitment 3: Sustainable food and agricultural production policies and practices
15. Commitment 3: relating to Sustainable Food and Agricultural Development Policies and Practices5 is a key commitment of the WFS-PoA because it is concerned with the means to expand food production (and hence with the issue of a certain degree of self-sufficiency in food), with sustainability (and hence with the natural resource use aspects of food production), and it specifically mentions the multifunctional character of agriculture but without explicitly stating what this is. These issues, along with those raised when one considers Commitment 2 relating to the access to food, lie at the core of the debate on non-trade concerns (NTCs) which the Summit itself, probably deliberately, did not enter into. We cannot avoid the NTC issue here. In this connection it is useful to consider what is meant by the multifunctional character of agriculture (see Box 3).
16. WFS-PoA Commitment 3 is based more on the typical food-deficit, developing country situation where expanding food production is one of the primary means to increase the availability of food and income for those living in poverty. The issue of food self-sufficiency is not directly addressed, and rightly so. The approach is linked to improving access to food through raising effective demand and is linked to rural development: stimulating production and promoting economic diversification. It is also particularly concerned with protecting fragile environments and on the sustainable management of natural resources. In this, the links between the concept of sustainable agricultural and rural development (SARD) and food security-focused development of the WFS-PoA, are clear6. Key phrases used in 'Objectives and Actions' of Commitment 3 are:
� "To pursue, through participatory means, sustainable, intensified and diversified food production, ....taking fully into account the need to sustain natural resource."
� "To combat environmental threats to food security, ....erosion of biological resources....to achieve greater production."
� "To promote sound policies and programmes on transfer and use of technologies....compatible with sustainable development..."
� "....to strengthen and broaden research and scientific cooperation...to increase productive potential and maintain the natural resource base...to eradicate poverty and promote food security."
� "To formulate and implement integrated rural development strategies....that promote rural employment, skill formation,.....that reinforce the local productive capacity of farmers, fishers and foresters.....including members of vulnerable and disadvantaged groups, women and indigenous people....that ensure their effective participation."
17. This is a complex agenda because it is a statement on human-centred, gender-sensitive, participatory, resource conserving, small-scale, local knowledge using, bottom-up agricultural and rural development into which food security is woven as an integral part. It may be contrasted with an efficiency seeking, large-scale, technology and profit driven, top-down development where food security may well improve but not necessarily equitably so, either spatially (i.e. between rural and urban areas or between richly endowed regions and marginal ones) or within the society (essentially the poor and less well-off compared to the affluent). Perhaps unjustly, liberalized food and agricultural trade has come to be associated with the second rather than the first development paradigm. Of course it can be argued that even if this latter link is true, then less optimal or desirable situations that emerge can and should be corrected by domestic food and agricultural and rural development policies rather than by international trade policies.
18. Within Commitment 3, unlike the NTC approach, food security and environmental concerns and objectives are interwoven and considered in a holistic way. Promoting the conservation and sustainable use of biological diversity in general and plant genetic resources in particular, receive focused attention mainly because the WFS-PoA's vision of agricultural development is one where farmer-developed land and traditional varieties of major crops continue to provide the core food production systems, with modern introduced varieties broadening but not replacing indigenous cultivated plant germplasm. Nevertheless, a utilitarian approach is fostered in Commitment 3 through integrating conservation and sustainable utilisation of plant genetic resources for food and agriculture, by appropriate in situ and ex situ approaches. Conservation through in situ approaches is particularly important because the aim is to conserve the diversity of cultivated plants while using them, along with their wild relatives, within productive landscapes to maintain evolutionary processes. Ex situ conservation cannot replicate these processes. Much of this thinking derives from the Fourth International Technical Conference on Plant Genetic Resources, held in Leipzig in June 1996.7 There are similar concerns relating to animal genetic resources although the problems naturally differ and formal intergovernmental discussion of them has only recently got under way.8
19. These issues have direct bearing on the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) which the WFS-PoA, again probably deliberately, does not directly refer to. The TRIPS Agreement is apart from the AoA itself and is following its own review process.9 The key issue here is how to confer adequate plant variety protection (PVP) so as not to inhibit the transfer of needed plant germplasm while protecting local and possibly vulnerable farming systems. While the review process is underway, states can continue to avail themselves of Article 27.3(b) of the TRIPS which allows for the exclusion from patentability of plants and animals, other than micro-organisms. However, PVP itself has to be provided for either by patents or by an effective sui generis system or by any combination of them. It has been observed that the terms used in Article 27.3(b) are not defined and are open to varying interpretations.10
iii) Commitment 2: Improving physical and economic access by all, at all times, to food
20. This commitment is mentioned because it emphasises the human-centred, gender-sensitive approach of the WFS-PoA. The issue of physical access to food and the role of trade in this connection was discussed above under Commitment 4. This Commitment broadens the scope to focus additionally on economic access to food and hence the need for "secure and gainful employment" as well as "equitable and equal access to productive resources such as land, water and credit...." Underlying this concern is the need to focus attention on "vulnerable and disadvantaged individuals, households and groups" among which women predominate. Such focused attention raises at least two issues relating to trade. Firstly, imported food products are accessible to different groups of people compared to food domestically produced and, especially, through self-provisioning. Secondly, the gender issue in this context underlines that proceeds from traded food products, and particularly those more high value products aimed at export markets, may not accrue to the women in poor households and thereby may not contribute to improved food security. Indeed women's scarce time may be diverted from self-provisioning activities to producing such traded products. Such issues were alluded to under Commitment 3 and are only flagged again here.
21. The safety of food and its 'appropriateness' also come to the fore in Commitment 2 ("..ensure that food supplies are safe, appropriate and adequate to meet the needs...of the population" and again "Encourage...the production and use of culturally appropriate, traditional and under-utilised food crops..." as well as under-utilised fish resources.) Specific reference is made to the Agreement on the Application of Sanitary and Phytosanitary Measures and "other relevant international agreements that ensure the quality and safety of food..."
22. The issue of food quality, particularly in the context of international food trade, is a challenge that has to be met. That of the interaction between such trade and the use of culturally "appropriate, traditional and under-utilised food crops" and fish products, does not appear to have received due attention in the AoA.
23. From the above discussion, there appear to be the following key issues relating to food security in the context of the forthcoming trade negotiations. They may be divided into what may be termed 'general' and 'specific' issues. First the general ones:
� What is the net impact of the further liberalization of food and agricultural trade - set within the broader context of globalisation and considering the wide range of situations found in developing countries - on global goals such as the WFS target of halving the number of undernourished people in the world by 2015?
� To what extent can domestic economic and social policies - and in this case, food, agricultural and rural development policies - offset the diverse (and possibly negative) impacts of international policies such as those relating to international trade?
24. These are indeed wide ranging issues, so to conclude with the more specific issues relating to food security which arise from an analysis of the WFS-PoA itself:
� How to ensure that the overall economic gains from trade benefit the poorest people - those who are most likely to be suffering from food insecurity. Can we rely on trickle down of these gains to enhance economic access to food by the poor?
� How to ensure that trade improves physical access to food by all. Imported food may ensure food supplies for urban people, but it may not be distributed adequately to undernourished rural people whose greater need may be to produce more food for themselves through improved access to resources.
� How to ensure that food and agricultural production and trade do not contribute to the over exploitation of natural resources which may jeopardise domestic food security in the long term.
� How to ensure that food trade flows are not subject to supply disruptions such as embargoes or similar restrictions; i.e. that they are reliable.
� How to ensure that imported food products are of acceptable quality and are safe to eat.
25. Finally, to note that the trade-food security interface as revealed by an analysis of the WFS-PoA and in the context of international law, is not limited to the AoA alone but also involves other parts of the UR Agreements such as the TRIPS Agreement.
Box 1 The Seven WFS Commitments 1....ensure an enabling political, social and economic environment designed to create the best conditions for the eradication of poverty and for durable peace, based on full and equal participation of women and men, which is most conducive to achieving sustainable food security for all; 2... implement policies aimed at eradicating poverty and inequality and improving physical and economic access by all, at all times, to sufficient, nutritionally adequate and safe food and its effective utilisation; 3. pursue participatory and sustainable food, agriculture. fisheries, forestry and rural development policies and practices in high and low potential areas, which are essential to adequate and reliable food supplies at the household, national, regional and global levels, and combat pests, drought and desertification, considering the multifunctional character of agriculture; 4.... strive to ensure that food, agricultural trade and overall trade policies are conducive to fostering food security for all through a fair and market-oriented world trade system; 5.... endeavour to prevent and be prepared for natural disasters and man-made emergencies and to meet transitory and emergency food requirements in ways that encourage recovery, rehabilitation, development and a capacity to satisfy future needs; 6. promote optimal allocation and use of public and private investments to foster human resources, sustainable food, agriculture, fisheries and forestry systems, and rural development, in high and low potential areas; 7.... implement, monitor and follow-up this Plan of Action at all levels in cooperation with the international community. |
Box 2 Defining food security The WFS-PoA built on the definition of food security endorsed by the FAO/WHO International Conference on Nutrition held in Rome in December 1992, namely: "access for all people at all times to enough food for an active, healthy life." The WFS-PoA elaborated on this definition by adding the ideas of having both physical and economic access rather than just 'access'; having both safe and nutritious as well as sufficient food; and such adequacy of food should meet people's dietary needs as well as their food preferences for an active and healthy life. The WFS-PoA is devoted to operationalising this definition. The immediate points of contact between trade with these definitions are through 'access' and 'sufficiency'. An alternative approach to defining what is food security is that of 'entitlements' to food, developed by A.K. Sen1. Each person has an entitlement to food derived from his or her own production, from exchange through barter, markets or working in non-food production activities, or from transfer (of food) either from the family, the community, civil society or the state. A failure of a person's main food entitlement would threaten his or her food security; a failure in all of them would lead to complete deprivation of food. The immediate link between trade and this approach is through the entitlement of exchange. __________________________ Hunger and Entitlements, World Institute for Development Economics Research, Helsinki, 1987 |
Box 3 The Multifunctional Character of Agriculture The issue at hand is that agricultural activities, apart from producing food and fibre etc for which there is a market and which therefore have a monetary value, also involve externalities for which there are no identified markets: i.e. they are subject to market failure. Such externalities may be positive or negative. Agriculture is not alone in this respect, of course, with all economic activities to some degree sharing this characteristic although it seems that agriculture is unique in the range of externalities ascribed to it. Such externalities also may be termed public goods (or public bads if negative) as opposed to private goods.1 This is important in so much as public goods (or bads) and their associated market failures may justify government intervention to ensure or control their supply through subsidies or regulation or taxation. In practice what happens is that agriculture is often ascribed as producing a public good, which strictly speaking, it is not, in order to justify continued intervention by the state. Until relatively recently, it is agriculture's negative environmental externalities - pollution of surface and ground water and air, loss of habitats and biodiversity, soil erosion etc - which have received most attention from policy makers involving taxes or regulations to correct for market failures. Now it is being increasingly argued that agriculture also produces positive externalities, alternatively known as multiple functions, the related market failures of which merit policy interventions such as subsidies or other means of agricultural support to ensure their continued 'production'. There is a broad consensus on what these multiple functions are although there is a variety of taxonomies by which they are organized. The main point is that they should be genuine externalities and not simply extensions of agriculture's economic prime function of producing food, fibre etc, although they may be in joint supply with them. If this strict definition is applied, the following is a shortlist of functions: Food security, including nutritional and food safety aspects, sometimes termed 'strategic'. Environmental - protection of natural resources including natural habitats and biodiversity and so contributing to the sustainability of food production systems, disaster prevention (floods and landslides), protecting rural landscapes. Social and cultural, linked to employment and income generation in rural areas, hence sustaining the viability of rural communities and maintaining rural society. Some of these functions are interrelated or synergistic. For example, protecting rural landscapes may promote tourism and hence generate employment and so maintain rural communities. Some observers contend that agriculture's multiple functions cannot be separated and therefore must be produced "on the same spot". Allowing this point would rule out the use of tradable permits between agricultural regions. These positive externalities or multiple functions have also become known, within international trade jargon, as non-trade concerns or NTCs, as mentioned in Article 20 of the WTO-AoA. However, as has been seen, when the multifaceted issue of food security is opened up, as was done by the WFS-PoA, there are several clear links between trade and food security. Setting such semantic considerations aside, the next step is to examine what are the concerns (NTCs) commonly quoted under the three headings above - food security, environment and social - and relate them to the WFS-PoA and particularly its Commitment 3 which, as noted above, sets out to pursue, inter alia, sustainable food and agricultural policies and practices, considering the multifunctional character of agriculture. A pertinent observation at this point is that some of the main proponents of NTCs are primarily industrialised countries, in particular with what may be termed 'difficult' agricultural production environments (harsh climate, mountainous terrain etc), and with an enduring rural tradition and concern for the conservation of rural landscapes. They also possess the financial means to subsidise their agricultural sectors and their populations generally spend a small share of their disposable income on food. Food security. This objective or function receives high priority by several industrialised countries, mainly for strategic reasons because their food security as such, in normal conditions, is hardly in question. For example, Norway recognises that due to high food production costs, it would be most cost-efficient for several countries, including Norway, under ordinary circumstances, to rely entirely on world markets for their food supplies.2 However, based on historic experience and due to the uncertainty associated with future international supplies, national production policies have been and will always be (author's highlighting) a central element in Norway's food security policy. National stocking of food can only partly compensate for the risk that a tight international food supply situation may be long-term. This risk has its source not only to a situation of war but also to peacetime crises such as plant and animal diseases, extensive radioactive fallout, or major shifts in global demand and supply. Food security policies based on a minimum level of self-sufficiency, by preserving the capacity to produce, can be regarded as a risk insurance with the public costs involved related to the population's risk aversion and its willingness to pay for that insurance. _______________________ It is not appropriate here to attempt to go into the definition of public goods except to state that they are non-rival in consumption and non-excludable - if the 'good' is produced, nobody can be prevented from consuming or otherwise benefiting from it; i.e. it is consumed collectively and a market for it does not exist. The source of this is Paul Samuelsen in his publications beginning from the mid 1950s. 2 See Non-Trade Concerns in a Multifunctional Agriculture - Implications for Agricultural Policy and the Multilateral Trade System, paper presented by Norway, 2 June 1998. There are four components to Norway's food security policy: firstly the need to protect arable land from degradation and alternative use; secondly to maintain food self-sufficiency from domestic production, measured as calories, at the minimum current level of 50 percent (the level is 57 percent including fish products); thirdly to maintain a "fairly sizeable", well trained and experienced farming population; and fourthly to maintain a decentralised food production structure as being less vulnerable in times of crises. The question may be posed: does food security increase with the level of self-sufficiency? In fact, it can be argued that a policy of self-sufficiency is likely to make domestic food prices more rather than less unstable. Also, by promoting food self-sufficiency, the agricultural sector is likely to become more dependent on inputs which may have a high import content, particularly with regard to energy. In turn, energy, i.e. fuel, is more likely than food commodities to be subject to effective trade embargoes or sudden rises in its price. Yet political support for a food self-sufficiency policy still remains strong in some countries. However, the government response could be a more rational food security policy based on a range of options. Such a policy would be based on an assessment of the main sources of food supply uncertainty: firstly, unforeseen variations in supply caused by natural events - adverse weather or outbreaks of pests and diseases of important food crops in major producing countries; secondly, man-made events such as hostilities or disasters (another Chernobyl) of a sufficient magnitude to affect trade flows; and thirdly, political interventions short of war such as trade embargoes. In the face of such uncertainties, there is a range of policy interventions available to governments, other than only promoting self-sufficiency, relating to consumption (e.g. promoting the substitution between foods), to production (e.g. making it more responsive to a sudden need to increase supply), to storage and to marketing (strengthening supplier-importer links). Such policies need not be discussed further here. The environmental function. The perception of the potential for agriculture to yield environmental services is now widely accepted among the OECD countries. Thus a recent OECD paper states: "The provision of environmental benefits and amenities is increasingly seen as an element of the 'multifunctionality' of the (agricultural) sector."1 The word 'amenities' is significant because it differentiates the industrialised and developing country concerns, with those of the former focusing primarily on protecting agricultural landscapes, and those of the latter focusing on the resource protecting services - prevention of soil erosion and watershed protection, for example - without which food security may be threatened. Indeed, Commitment 3 of the WFS-PoA refers to the need "To combat environmental threats to food security....erosion of biological diversity and degradation of land and aquatic based natural resources .....to achieve greater production."2 The Commitment does not, however, explicitly ascribe these needs to the multifunctionality of agriculture. The socio-cultural function. Again the respective industrialised - developing country interpretations of this function are nuanced differently. The former are primarily concerned with avoiding the depopulation of the countryside which uncontrolled social and economic forces would probably bring about. They are also concerned with maintaining populated rural landscapes and viable rural communities for tourism purposes while also noting that an agrarian structure based on many relatively small, owner-occupied family farms is more conducive to social stability and cultural preservation than one dominated by relatively few large holdings. Food security also is thought to be promoted by a decentralised, evenly distributed production structure. The developing countries and many developed countries tend to refer to agriculture as being a traditional 'way of life' which has cultural and societal connotations. Rapid rural-urban migration is also cited as a potential disruptive force to a developing country society, contributing to urban unemployment, crime etc. Increasingly, discussions on the multifunctionality of agriculture have come to take on a 'normative' stance. They do so by implying that there is some desirable typology of agriculture or agricultural and rural development paradigm that would maximise these functions or positive externalities. This typology has become known as 'multifunctional agriculture' or MFA. We cannot here investigate these issues too closely: the WFS-PoA itself only 'considered' the multifunctional character of agriculture in passing, probably not wishing to get involved in the MFA-NTC debate. However, it is pertinent to ask, while not denying the validity of certain of the MFA arguments, what is the appropriate area of policy to achieve the benefits or services sought: food, agricultural, rural, social, regional? In all of these areas of policy, international trade has a bearing of course.3 Another issue is: Are all of the functions listed under MFA in joint supply with agriculture's prime function, the production of food, fibre etc. In other words, is it necessary to produce these products to achieve the externalities sought? Not always. Furthermore, we must recall that there is the "necessity test". That is, should a policy measure designed to promote the positive externality be challenged as being inconsistent under the GATT. Article XX of the GATT requires that not only must the measure in question be allowable under the exceptions relating to the protection of the environment and human health, but also be necessary to fulfil the policy objective. Thus far, no dispute panel has accepted the necessity of a measure inconsistent with other provisions of the GATT even if the objective of the policy complied with the allowable exceptions. Hence, the potential importance of the NTC arguments for those industrialised countries seeking to protect their agricultural sectors. Of course, under the WTO-AoA developing countries and particularly the least developed amongst them, are allowed varying latitude on their policy support measures to agriculture, as shown in Article 15 of the AoA. ____________________ 1Agricultural Policy: the Need for Further Reform, Meeting of the Committee for Agriculture at Ministerial Level, 5-6 March 1998, OECD Discussion paper AGR/CA7MIN(98)2. 2Objective 3.2. 3FAO and the Government of the Netherlands are sponsoring an international Conference on the Multifunctional Character of Agriculture and Land, September 12-17 1999, in Maastricht. For details and documents see: www.fao.org/mfcal. |
1 Food issues including those relating more to developed country situations, were addressed at the FAO/WHO International Conference on Nutrition (ICN), held in Rome in December 1992.
2 The text of each Commitment was carefully elaborated by the Summit and is reproduced in Box 1. The short descriptions of the substance of each Commitment referenced here are unofficial are aimed at giving a quick sense of the main object, without restricting in any way the complete formulation provided in Box 1.
3 The SPS Agreement stresses the rights of WTO Members to protect human, animal and plant life and health. In the dioxin case, as compared with the earlier BSE case, many countries exercised their rights quickly and responsibly once the initial facts were known. Thus, despite the failure of the production and processing system in one country, the SPS Agreement (especially the emergency provisions of Article 5.7) was protective of food quality and safety in those countries that decided to prohibit the import of potentially affected products.
4 Objective 4.1 (d). In fact this paragraph does not specifically refer to developing countries only although it does by implication and with regard to other paragraphs.
5 Including fisheries, forestry and rural development policies and practices.
6 The SARD concept stems from Chapter 14 (SARD), Agenda 21 of UNCED.
7 The outcome of this conference was the Global Plan of Action for the Conservation and Sustainable Utilization of Plant Genetic Resources.
8 Animal genetic resource issues were discussed at the Eighth Regular Session of the Commission on Genetic Resources for Food and Agriculture (CGRFA) in April 1999.
9 The review process for Article 27.3 (b) is scheduled to begin in 1999; that for the TRIPS is set for 2000.
10 An excellent discussion of the key issues and options for the 1999 review of Article 27.3(b) is contained in Trade, Intellectual Property, Food and Biodiversity, Geoff Tansey, Quaker Peace and Service, London, February 1999.
