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Enhancing Food Security Through Trade Liberalization: Rural Poverty Challenges

This presentation explores the linkages between rural poverty, food security, and trade liberalization. It discusses the importance of agriculture for developing countries and the rural poor, highlighting statistics on poverty rates and hunger. The presentation emphasizes the role of trade policy in addressing food security and reducing rural poverty, with a focus on the impact of trade liberalization on agricultural growth. Recommendations for national policies and international actions to enhance food security and reduce rural poverty are also provided.

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Enhancing Food Security Through Trade Liberalization: Rural Poverty Challenges

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  1. Rural Poverty, Food Security, and Trade Liberalization: Exploring the Linkages WTO Symposium on Trade and Sustainable Development 10- 11 October, 2005 John Nash Agriculture & Rural Development Dept / Trade Dept The World Bank

  2. This presentation • What’s the problem? • Rural poverty • Hunger • What’s the way forward? • Trade policy • Behind the border

  3. Why is agriculture so important for developing countries and the rural poor? • 63 percent of population live in rural areas • 73 percent of poor live in rural areas, and most depend on agriculture as producers or workers • Agriculture and agro-processing account for 30-60 percent of GDP in developing countries, and an even larger share of • Even with rapid urbanization, more than 50% of the poor will be in rural areas by 2035, and depend significantly on agriculture

  4. Poverty is disproportionately rural Poverty Rates from PRSPs

  5. Hunger is a Continuing ProblemNumber and Proportion of Undernourished, 1999-2001 Proportion of Undernourished (%) Number of Undernourished (millions) China* Other East Asia Southeast Asia India Other South Asia North America Central America Caribbean South America Near East North Africa Central Africa East Africa *includes Taiwan Province of China Southern Africa West Africa 60 50 40 30 20 10 0 0 50 100 150 200 250 Source: FAO

  6. Improving food security and reducing rural poverty are closely related goals • Food Availability • Depends on global agricultural productivity • International and national market and distribution systems • International and national trade policy: make sure food is available to all at a reasonable cost • Food Access • Poverty reduction: hunger is a result of poverty, so whatever reduces poverty reduces hunger • Food (processing and storage) markets • Food Utilization • Nutrition education (promotion of breast feeding in women, child care, sanitary conditions, child care time to free women’s time) • Nutrition interventions to supplement food (vitamin A,iodine, iron, etc), or provide food supplements (for calories, protein) • Health care • Safe water provision • Sanitation

  7. Trade liberalization enhances food security through many channels • Increases rural growth and reduces rural poverty

  8. Increased Trade is the Best Lever for Enhancing Agricultural Growth • Sustained trade reforms doubled growth in agricultural sector (Michaely, Choksi, Papageorgiou) • Agricultural trade liberalization gives much higher ag growth rate – 5.7% vs. 1.1% (Valdes) • SSA – countries with large improvement in macro/ trade policies had higher ag growth rate -- 3.5% vs. 0.3% for those with deterioration (World Bank) • Huge amount of evidence that global trade reforms can have big poverty-reduction effects

  9. Trade liberalization enhances food security through many channels • Increases rural growth and reduces rural poverty • Keeps food prices affordable • Improves access to imported agricultural technology, mostly embedded in inputs • Provides cash to buy inputs

  10. Production of export and non-food crops can enhance food production…

  11. Production of export and non-food crops can enhance food production…

  12. National policies to reduce rural poverty and food insecurity • Incorporate policies on food security, hunger and nutrition into PRSPs • In countries where agriculture is dominant, increase agricultural expenditure (from very low 1-4% of government spending in many countries) • Avoid policies which target self sufficiency: trade and investment policies should be aimed at raising rural incomes, not food production • Lower barriers to South-South trade • Finance nutrition interventions explicitly

  13. Actions by international donors and financial institutions • Reform food aid mechanisms: make them quicker and less disruptive • Improve donor coordination of agriculture, nutrition, and rural development programs • Reduce industrial country agricultural tariffs and subsidies • Pay more attention to closing technology gap between industrial countries / large middle income countries and low income countries

  14. Agricultural Trade Reform and the Doha Development Agenda Kym Anderson and Will Martin (eds.),, Washington DC: World Bank, forthcoming but chapters now available on World Bank website at: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/TRADE/0,,contentMDK:20366035~pagePK:210058~piPK:210062~theSitePK:239071,00.html

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