Crisis puts free trade in food on the ropes
June 20, 2008
By Alison Fitzgerald and Mark Drajem
Washington - Free trade policies that have long been advanced by World Bank president Robert Zoellick and US President George W Bush are losing favour as countries in Africa, Asia and Latin America find they cannot buy enough food to feed their people.
Global food prices have spiked 60 percent since the beginning of last year, sparking riots in more than 30 countries that depend on imported food.
The surge in prices threatens to push the number of malnourished people in the world from 860 million to about 1 billion, according to the UN World Food Programme in Rome.
Leaders of developing nations, including the Philippines, Gambia and El Salvador, say the only way to nourish their people is to grow more food themselves, rather than rely on cheap imports.
The backlash may sink global trade talks, reduce the almost $1 trillion (R8 trillion) in annual food trade and lead to the return of high agricultural tariffs and subsidies around the world.
Arvind Subramanian, a senior fellow at the Peterson Institute for International Economics in Washington, said: "Trade as the route to food security - that idea is on the ropes. If the guy who is selling it does not want to sell it overseas, then the guy at the other end is terribly exposed."
In dozens of speeches at the UN Food and Agriculture Organisation's conference in Rome on the food crisis this month, officials from developing countries, farmers and leaders of non-governmental organisations said that food self-sufficiency was the new goal for many poor nations.
Grain exporters such as Argentina and Vietnam have restricted their shipments, driving global prices higher and leaving nations that depend on imports searching for adequate supplies.
The Philippines has embarked on a search for additional food supplies to build stockpiles and ensure the country can feed its people.
The surging costs of rice, other grains and fuel have stoked inflation and triggered concern about civil unrest, according to the International Monetary Fund.
Philippines President Gloria Macapagal Arroyo said her country would try to become self-sufficient in food by 2010.
"For a long time, it made sense to buy food from the international market," said Arthur Yap, the Philippines agriculture minister. "The situation has changed."
The rift between developing countries and wealthy nations on food trade was apparent at the Rome conference.
The US, the EU and the World Bank all pushed for a new global trade agreement to cut subsidies and import duties in countries such as India and South Africa.
The latest round of World Trade Organisation negotiations was launched in 2001 in Doha, Qatar. The goal was to cut subsidies in rich nations and tariffs in poor nations, allowing the most efficient producers to sell to the world.
Bush said last month: "The reason why getting a Doha round done is important is it'll end up reducing the cost of food, importing food."
The US and Europe continue to subsidise the production of grains and other commodities, enabling their farmers to undercut the prices of competitors in developing countries.
The current crisis has shown the limits of free trade to provide food, say analysts.
"Agriculture markets are notoriously volatile, and all countries really do have to make sure that they have at a minimum systems that don't let their people go hungry," said Sandra Polaski, a former trade official in the US.
|
|
