Food Sovereignty and the WTO

1. Food Sovereignty and the WTO Harmon C. Thomas Chief Commodity Policy and Projections Service Commodities and Trade Division FAO, Rome

2. Outline of Presentation I. Comparison of food policy concepts • Food Security • Right to food • Food Sovereignty II. MDG challenge: reducing poverty & hunger by half by 2015 III. WTO rules and food policies • WTO Agreement on Agriculture (AoA) – focus and objectives • Current renegotiation of the AoA and food policy issues

3. I. Comparison of food policy concepts • Food Security - a technical concept • Right to food - a legal concept • Food Sovereignty - a political concept scope of the three terms is not strictly comparable because of their different natures !

4. Food Security I Final Goal: “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” World Food Summit, 1996

5. Food Security II FSN Access Utilization Availability Stability

6. Right to food I • Legal foundation: Universal Declaration of Human Rights (Article 25), International Covenant on Economic, Social and Cultural Rights (Article 11) • Interpretation: General Comment No. 12 by CESCR • Operationalization: Voluntary Guidelines

7. Right to food II Ultimate Goal: “The right to adequate food is realized when every man, woman and child, alone or in community with others, has physical and economic access at all times to adequate food or means for its procurement” CESCR, General Comment No. 12, para 6 FoodSecurity = Right to food?

8. Food Sovereignty I Definition: “…the right of peoples, communities, and countries to define their own agricultural, labor, fishing, food and land policies which are ecologically, socially, economically and culturally appropriate to their unique circumstances. It includes the true right to food and to produce food, which means that all people have the right to safe, nutritious and culturally appropriate food and to food-producing resources and the ability to sustain themselves and their societies.

9. Food Sovereignty II Food sovereignty means the primacy of people’s and community’s rights to food and food production, over trade concerns. This entails the support and promotion of local markets and producers over production for export and food imports.” NGO/CSO Forum’s Statement Food Sovereignty: A Right for All, 2002

10. Outline of Presentation I. Comparison of food policy concepts • Food Security • Right to food • Food Sovereignty II. MDG challenge: reducing poverty & hunger by half by 2015 III. WTO rules and food policies • WTO Agreement on Agriculture (AoA) – focus and objectives • Current renegotiation of the AoA and food policy issues

11. III. MDG challenge: reducing poverty & hunger by half by 2015 • Scope of the problem • Poverty • 1.1 billion people live on less than $1 a day • 2.7 billion people – on less than $2 a day • Hunger • 815 million people go the bed every night hungry • Of 94 developing countries for which info is available - in 28 of them, 20 – 34 % of pop undernourished • In another 18 countries, the proportion is more than 35%

12. III. MDG challenge: reducing poverty & hunger by half by 2015 • Role of agriculture in reducing poverty and hunger • Most of the world’s poor and food insecure people live in rural areas of developing countries - on average 70% of pop live in rural areas • . . . . .and depend on agriculture for their livelihoods. • Agricultural sector therefore crucial for their immediate welfare and for their future prospects. • Food and agricultural production, and trade, are vital for food security, poverty alleviation and economic growth. • Few countries have developed economically without first developing their agricultural sector • Considerable un-utilized agricultural potential exists in many developing countries to meet the twin challenges of hunger and poverty. • However, the potential is under-exploited. Why?

13. Why is the agricultural potential underexploited in developing countries? • Domestic factors • Low investment and utilization of modern technology • Ineffective domestic policy frameworks • External factors • distorted international markets and the challenges arising from integrating into such markets

14. Government expenditure on agriculture as a share of total expenditure Source: FAO (2003)

15. Annual and accumulatedTotal support to agriculture in OECD countries1980 - 2002 US$ bil. 2336 US$ bil. 1938 US$ bil. 2208

16. Policy developments and responses • At the national level • Reactions to BOP crises • Policy objectives - food security, livelihood security, poverty reduction - food self-sufficiency vs. food self-reliance • At the international level • Agricultural reform process in the WTO

17. III. WTO rules and food policies WTO Agreement on Agriculture (AoA) • Focus: trade (commercial) interests • Objectives: • “to establisih a fair and market-oriented agricultural trading system” • “to provide for substantial progressive reductions in agricultrual support and protection...resulting in correcting and preventing restrictions and distortions in world agricutral markets”

18. III. WTO rules and food policies Relevant issues in the current renegotiation of the AoA • Doha Declaration • July 2004 Framework agreement • Where we are now - 14 days to Hong Kong – areas of convergence and divergence

19. Policy changes under consideration in the negotiations Market Access The basic objective 1. ‘substantial improvements in market access .. for all products (thru a ‘single approach’) Additional objectives 2. progressivity (deeper cuts in higher tariffs) 3. flexibility • sensitive products • special products

20. Policy changes under consideration in the negotiations Market Access Mechanisms for addressing sensitivities • Sensitive products • selection: by self-designation, but no. of tariff lines to be negotiated • treatment: flexibility to achieve improvement in MA thru combination of TRQ commitments and tariff reduction • Special products • selection: self-designation based on criteria of food security, livelihood security and rural development – to be negotiated • treatment: more flexible treatment to be negotiated

21. Policy changes under consideration in the negotiations Market Access Special and differential treatment for developing countries • proportionality to be achieved through lesser: • tariff reduction commitments, or • TRQ commitments • SSM for use by DC members • fullest liberalization of trade in tropical products • preference erosion will be addressed (how?) • LDCs • no reduction commitment required • duty-free and quota-free MA should be provided by DD and DCs (in a position to do so)

22. Policy changes under consideration in the negotiations Domestic Support 1. TDS = AMS +DM + BB • Formula for cutting final bound total AMS • Overall reduction in TDS • Product-specific AMS caps • De Minimis • Blue box criteria 2. Green box

23. Policy changes under consideration in the negotiations Export Competition 1. All forms of export subsidies - parallel elimination • scheduled export subsidies • export credits (etc) exceeding 180 days • STEs – subsidies, gov’t financing & underwriting of losses • food aid – not in conformity with disciplines to be agreed

24. Policy changes under consideration in the negotiations Export Competition 2.Export measures with equivalent effects - parallel elimination • export credits (etc) of 180 days or less • STEs - practices to be disciplined - monopoly status • food aid - rules to prevent commercial displacement - exemption of food aid in emergency situations - other issues: aid in fully grant form, in-kind aid, monetization

25. Policy changes under consideration in the negotiations Export Competition 3. ‘Credible end date’ and implementation path • 5 yrs, 10 yrs after agreement come into effect ? • equal annual phase-out • down-payment? • back-loading will be permitted?

26. . Thank you