Trade and food security - OECD.org

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Dec 2, 2014 - 1500. 1989. 1993. 1997. 2001. 2005. 2009. 2013. Consumer Oriented. Bulk. Intermediate ... Growth, and good
Trade and food security Jared Greenville, Senior Agricultural Policy Analyst, OECD Global Forum on Agriculture Paris, 2 December 2014

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Outline of the presentation 1. 2. 3.

The role that trade has played in food security Future challenges Long term Implications for food security

www.oecd.org/tad Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD)

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Trade is important in global food supply Proportion of global grain and oilseed production traded globally Corn

Soybean

Rice

Wheat



Trade volumes for most ag. products have increased



10% or less for Rice and Corn



Fluctuating around 20% for Wheat



Highest and rising for soybean

45 40 35 30 25 20 15 10 5 0 1960/61 1966/67 1972/73 1978/79 1984/85 1990/91 1996/97 2002/03 2008/09 2014/15 Source: USDA data

www.oecd.org/tad Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD)

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And in food supply diversity Growth in value of agricultural trade by broad groupings (100=1989 nominal USD value) 1500



All groups have seen strong growth in nominal values



Growth in consumer oriented products fastest – greater diversity of product offerings



Growth in bulk (grains and other raw) slowest

1300 1100 900 700

500 300

100 1989

1993

1997 Consumer Oriented

Source: USDA data

2001

2005 Bulk

Intermediate

2009

2013

www.oecd.org/tad Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD)

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Accessibility and real food prices: the long and short FAO Real Food Price Index 1961-2014 Base 2004-06

180

160

140

120

100

80

60 1961

1965

1969

1973

1977

1981

1985

1989

1993

1997

2001

2005

2009

2013

Source: FAOSTAT www.oecd.org/tad Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD)

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Food share of total merchandise import costs falling Share of agricultural imports in total merchandise imports (nominal per cent) World

LDCs

LIFDCs

NFIDCs



Agricultural products cost share in total merchandise imports have been falling



Pattern consistent across most country groups



Recent price changes have moderated trends

30 25 20 15 10 5 0 1961 Source: FAO STAT

1971

1981

1991

2001

2011

www.oecd.org/tad Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD)

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Increased reliance on world markets for some 1961-2011 USD billions

LDCs

LIFDCs

NFIDCs

SIDSs

,20



A shift for some to greater reliance on world food markets



Trade increasing in importance for food security

,10 ,0 -,10 -,20 -,30 -,40 -,50 1961

1966

1971

1976

1981

1986

1991

1996

2001

2006

2011

Source: FAOSTAT www.oecd.org/tad Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD)

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Changes in net food trade status and progress on food security

www.oecd.org/tad Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD)

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Future challenges for food security Two main factors  Demography and prosperity  Rising demand  Further changes in relative demands  Productivity and technological change in agriculture  Climate change  Altered production patterns  Increased variability

www.oecd.org/tad Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD)

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Trade will be important for food security in the long term The stabilising and balancing role of trade will become more important  More frequent shocks due to climate change  Permanent shifts in comparative advantage  Trade openness can help secure supplies from wider set of suppliers  Prosperity increasing the level and diversity of demand  Trade openness facilitates participation in GVCs

www.oecd.org/tad Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD)

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Trade will be important for food security in the long term Ultimately trade is important for growth  Greater participation in global and regional markets increases opportunity for growth  Growth, and good domestic policy setting provide best opportunity to reduce poverty – the most important driver of improved food security

www.oecd.org/tad Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD)

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But questions remain Positives  Increased international trade  Moderating but sustained higher prices: second round effects But risks  Damaging impacts of some trade polices ( for example, export restrictions/taxes/subsidies)  Current lack of safety nets/hedge products to provide policy alternatives  Other domestic policy settings can be counter-productive (stockholding generated by market price support)

www.oecd.org/tad Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD)

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Discussion points for the forum  How can trade policy rules be crafted to help improve global food security?  What are the priority areas that need attention with respect to current trading rules?  How can the trade distorting impacts of domestic policies such as stockholding be minimised while also providing countries or regions with flexibility to hold stocks to manage transitory food security risks?

www.oecd.org/tad Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD)