Ruminations over Bali

Trade ministers will have an opportunity to update global rules affecting food security when they meet at the WTO’s upcoming conference in Bali, Indonesia, this December.

However, not only will negotiators need to craft changes carefully if both poor producers and poor consumers are to benefit, they will also need to ensure that the conversation on trade and food security continues once ministers have returned home.

In the run-up to the talks, officials have been debating a proposal to allow developing countries more leeway to buy food at administered prices when building public stocks or providing domestic food aid.

Many large developing countries argue that food bought at administered prices from poor farmers should be exempt from subsidy ceilings at the WTO because price inflation has steadily eroded the value of benchmarks used to calculate support to producers.

Other countries are, meanwhile, anxious to avoid worsening trade distortions on global markets, with the governments of some developing countries fearing that proposed changes could exacerbate food insecurity among their own urban or rural poor.

While subsidised government procurement schemes can help to lift producers out of poverty, they do not guarantee a boost in small farmers' production or an increase in their incomes.

Managing schemes

Further, food stockpiling programmes can also affect poor producers and consumers in other countries, including the most vulnerable among them.

Trade officials will have to consider how these schemes can affect groups both at home and abroad if an accord in this area is to deliver improvements to poor people's lives.

New analysis from the Food and Agriculture Organisation (FAO) and the International Centre for Trade and Sustainable Development (ICTSD) shows that food security can be affected by the design and management of these schemes. The scale and timing of stock acquisitions, holding and release are among the critical factors — along with the degree of transparency around government interventions — that determine how well markets are working, and the nature of poor producers’ participation in these markets.

Both global rules and national policies must be designed with care to ensure that such schemes improve food security.

More needs to be done

Negotiators are now exploring whether a deal at Bali could commit countries to refrain from initiating legal disputes on this question, subject to certain safeguards in return. While a ‘peace clause’ of this sort could be a helpful first step, more will have to be done if WTO members are to agree a lasting solution in this area.

More importantly, the debate on public food stockholding is only the start of a much bigger conversation that needs to be held over how best to ensure trade rules contribute to improving food security.

With the WTO’s long-running Doha talks in an impasse, and new trends affecting trade in food and agriculture, there’s an urgent need to ensure that trade rules enable poor people to overcome today’s and tomorrow’s food security challenges.

Clear and equitable rules on public food stocks are an important contribution that the global trading system can make to improving food security.

However, trade ministers must ensure that the Bali conference is the start of a meaningful conversation in this area, and not the end.

(Morrison is a senior economist with the FAO, Rome. Hepburn is agriculture programme manager with the ICTSD, Geneva. The views are personal.)

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