Trading Food: Food security policies in Latin America, Southeast Asia and Southern Africa and their implications for trade and regional integration

While international trade is only one of many factors affecting food security, its importance for the ability of many countries to achieve their food security objectives is increasing due to the rapid growth of the global food trade.

Trade and trade policies influence not only food availability at the global level, but also food production and food imports, including food aid, at the national level. Increasingly, world markets are becoming an important source of food for many developing countries. This is particularly true in countries where food production is constrained by natural and other factors.

This synthesis report draws on three regional policy reports prepared for the Trade Knowledge Network's project on Food Security and Trade, which describe and analyze the policy responses adopted by countries and (less often) regional organizations to deal with the 2006-2008 food prices crisis. These policy responses are assessed in terms of their economic sustainability and their impacts on trade and regional integration.

Key points:

• Concerns over food security are not easily dealt with by a trade agenda oriented towards liberalizing trade and investment flows and reducing distortions caused by protectionist and subsidy-intensive policies.

• If policy-makers consider the origin of the risk of food insecurity to be associated with international phenomena such as the volatility of global markets, it is highly likely that—attentive to the mood swings of their national constituencies—they will adopt measures to curb these threats that will reduce the interaction (which occurs mainly through trade and investment flows) between the national economy and its external environment.

• The presence of extensive production subsidies in the world's richer countries, the lack of mechanisms to reduce food vulnerability in least-developed countries, the sensitivity of agricultural prices to speculative activities in the world commodities exchanges and the feebleness of regional cooperation mechanisms in this area make agriculture a fertile policy arena for the dissemination of unilateral or bilateral initiatives that result in state management of international trade and investment flows.

Key recommendations:

• What is required in order to develop a method of dealing with the food security issue that is compatible with trade and investment liberalization objectives is a "new agricultural deal" at the global level that promotes fair trade rules, contributes to lower price volatility in the international market and facilitates more investment in agriculture.

• From the perspective of the reformulation of trade rules, the basic guiding principle should be that developing and developed countries should be treated differently according to their different needs.

• Reconciling trade and food security depends mainly on negotiations and agreements at the multilateral level, but the regional dimension of cooperation can play a role in reducing uncertainty and costs faced by developing countries in periods of crisis that challenge economic security in any of its dimensions (food, energy, etc.).

• The institutional strengthening of regional (or subregional) agreements through the setting of rules and the establishment of disciplines that foster cooperative behaviour among developing countries is a prerequisite for making these agreements more credible and ensuring that they play a more relevant role as a crisis management instrument.