The Right to Food and the WTO

IMGXYZ1212IMGZYXThe recent food crisis and the issue of world hunger are often characterized as problems of availability:  there is not a sufficient supply of food—or there will not be at some point in the near future—unless we increase the efficiency of agricultural production and markets. 

However Professor Olivier De Schutter, UN Special Rapporteur on the right to food, argued recently that an equal or greater cause of hunger is the problem of access to food:  too many people are too poor to buy the minimum amount of food they need to prevent hunger.  Even if food supply is sufficient, we will continue to have hungry people unless policy makers address the problem of access to food and make changes in income distribution and trade policies that are needed to ensure that the human right to adequate food is realized in practice.  A focus solely on increasing the supply of food could lead to policy choices that make hunger worse.

Professor De Schutter presented his analysis at Carnegie, with comments by Steven Schonberger, Lead Operations Officer for Rural Development in the East Asia and Pacific Region of the World Bank, and Gawain Kripke, Senior Policy Advisor on international trade issues with Oxfam America.  Carnegie’s Sandra Polaski moderated.

Relationship Between Trade and Hunger
The mainstream conception of food insecurity is that the world’s population is growing at a rate that outstrips advances in food production.  Climate change, diminishing agricultural productivity growth, and competing demand for food as a source of bio-energy are all cited as causes.  However, this conventional view, while not wrong, is incomplete and misses a significant cause of food insecurity, De Schutter argued. 

The hungry are typically poor and disempowered, lacking the purchasing power to procure food even during times of overall surplus.  The majority of the one billion hungry people in the world are food producers, such as land-less laborers or small farm holders.  Yet they remain hungry because they have neither sufficient land to produce enough food for their households nor sufficient income to purchase food to make up the deficit. 

Among the factors that contribute to this paradox of hungry farmers is the agricultural trading system, according to De Schutter, which encourages a supply of low cost food on global markets.  He said that trade tends to benefit the 1 percent of farms larger than 100 hectares, while harming the 85 percent of farms with less than 2 hectares.  Low food prices reduce the incomes of poor farmers, leading to more hunger.  He argued that trade liberalization constrains the policy space of governments to react to hunger while it enlarges the scope of action of the private sector.  He said this can be particularly significant in concentrated markets, which characterize some agricultural subsectors.

Although the current WTO round of negotiations is termed the “development round,” liberalized trade would not automatically benefit developing countries or their small holder farmers, who are uncompetitive on world markets due to small plots of land, limited technology and weak access to credit.  To give them time to become competitive, De Schutter urged that developing countries should be allowed to shield their agricultural sectors from low-priced import surges, for example through a special safeguard mechanism that would allow them to raise tariffs in the face of large world price swings.  This would also allow vulnerable countries to avoid excessive reliance on international markets for food, which he noted can be unreliable. 

Even those developing countries that are able to successfully specialize in agriculture in a more liberalized global economy might find that this draws resources away from fledgling manufacturing and services sectors, which might offer greater value-added and lower price volatility than the agricultural sector. 

De Schutter concluded by arguing that when food is viewed as a basic human right, as recognized under international law, trade agreements can be approached in a balanced fashion, with the ultimate goal being not an increase in overall trade volumes but a set of policies that enhance the welfare of the most vulnerable, including small-scale farmers and the hungry. 

Would Trade Barriers Protect the Hungry?
Steven Schonberger of the World Bank argued for a more positive assessment of the global agricultural trading system, pointing to concurrent decreases in world poverty and increases in world trade over the past half decade.  He noted that even food producers are often net food consumers, purchasing food for three to six months a year after they have exhausted their own harvests.  Liberalization offers the hungry imported food at lower costs than would be the case with higher tariffs, he noted.

Further, he questioned whether flexibility to use tariffs and other border measures to protect farmers would be used to benefit the most food insecure.  Governments must decide which industries to shelter when using trade limiting policies, a process which can be captured by elites.  A government which ignores the poor in its domestic policy decisions may be unlikely to favor them when enacting trade policies.

Schonberger advocated instead for protection of small landholders’ property rights and strengthening of justice systems.  He also encouraged policies that increase the productivity of small holders, including through channels such as education and the empowerment of women.

Food As a Human Right
Gawain Kripke of Oxfam noted approvingly that Professor De Schutter had titled his talk “From Malthus to Sen” and associated himself with Amartya Sen’s view that hunger is a result of disempowerment rather than shortage.  He suggested that policies be evaluated by whether they allow poor people to better assert their right to food. 

He then turned to a discussion of upcoming opportunities to inform and influence the food policy of the new Obama administration in the US.  First, he noted that an effort by President Obama to gain trade negotiating authority from Congress could open a discussion on the right to food in US trade strategy.  Second, Kripke pointed to the “Hunger Roadmap,” a coordinated push by several NGOs to advance greater and more comprehensive US involvement in global food security issues.  Finally, he expressed hope that the ongoing debates about development aid reform would result in greater cohesion between agencies that are involved with food security and an embrace of the food rights approach by all donors.

Question & Answer
In response to a question about whether trade barriers were the best way to protect the hungry, De Schutter answered that mechanisms such as safeguards might be necessary to protect poor farmers from low world food prices that could depress their incomes and increase hunger.  However he also noted that other mechanisms were necessary, including social safety nets that were targeted at the poor and hungry.  He acknowledged that trade can contribute to hunger reduction when a domestic harvest is bad, allowing countries to import food from elsewhere; however, he noted the equal possibility of bad harvests abroad and cautioned against excessive reliance on food imports.

De Schutter also highlighted the role that speculation on commodities futures markets and other food-related financial activities have played in recent food price volatility.  He advocated for policies that require commodities trading to be more transparent and better regulated.  He also encouraged the creation of food reserves that can be used to smooth global prices and avoid the sharp price spikes experienced during 2008.