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STILL HUNGRY!What's wrong in the food market and food production?Sostenibilit, commercio equo, comunicazione Monica Di Sisto vice presidente
Some evidences of the food crisis and moreAt the World Food Summit in 1996, when there were an estimated 830 million hungry people, governments pledged to halve the number by 2015. Many now predict that the number will instead increase by 50% to 1.2 billion threatened by 4 crises: environmental, financial, economic and social crisis.Fao (Sofa 2008) says that The real food price index began rising in 2002, after four decades of predominantly declining trends, and spiked sharply upwards in 2006 and 2007. By mid-2008, real food prices were 64 percent above the levels of 2002.Vegetable oil prices have risen twice as fast as average incomes since 2000, and other commodity prices have also risen substantially relative to incomes: wheat by 61 percent, maize by 32 percent and rice by 29 percent. These rapid increases have led to a substantial loss of purchasing power.
The food production is growing worldwide
The food production is growing worldwide/2
What about trade?Global food-import expenditures, in value terms, are forecast to reach US$1 035 billion dollars in 2008, 26% higher than the previous peak in 2007.The bulk of the anticipated growth in the world food import bill would come from higher expenditures on rice (77 percent), wheat (60 percent) and vegetable oils (60 percent).
Import bills for livestock products are expected to register smaller increases, owing to moderate rises in global prices together with subdued trade.Higher international commodity prices are responsible for most of the increase, but freight costs, which have almost doubled for many routes, also contribute.
Among economic groups, the most economically vulnerable countries are set to bear the highest burden in the cost of importing food, with total expenditures by least-developed countries and low-income food-deficit countries expected to climb 37 percent and 40 percent, respectively, from 2007, after having risen almost as much in the previous year. The sustained rise in imported food expenditures for these vulnerable country groups is such that, on current expectations, by the end of 2008 their annual food import basket could cost four times as much as it did in 2000.
Export: still a dream for LDCs
Imports: still growing for LDCs
A fairy tale: the International Trade Organisation The World Bank and the International Monetary Fund (IMF) were set up at a meeting of 43 winner countries of the II World War held in Bretton Woods, New Hampshire, USA in July 1944. Their aims were to help rebuild the shattered postwar economy and to promote international economic cooperation. The original Bretton Woods agreement also included plans for an International Trade Organisation (ITO).. The Ito has been ratified in 1948 during the United Nation Conference in LAvana participated by 56 countries (32 were poor countries). The Charter provided for the establishment of the ITO, and set out the basic rules for international trade and other international economic matters. The ITO Charter, however, never entered into force; while repeatedly submitted to the US Congress, it was never approved.John Maynard Keynes and Harry Dexter White at the Bretton Woods Conference
The Gatt and thenOn December 6, 1950 President Truman announced that he would no longer seek Congressional approval of the ITO Charter. In the absence of an international organization for trade, a General Agreement on Trade and Tariffs (GATT) reduced trade barriers through progressive rounds of negotiations till 1995.The 40 years GATT agreement reduced tariffs, introduced anti-dumping policies, tackled non trade barriers (as quality standards). The protections go down by 40%. The GATT still exists as the WTO's umbrella treaty for trade in goods. In fact, the agreements fall into a simple structure with six main parts: an umbrella agreement (the Agreement Establishing the WTO); agreements for each of the three broad areas of trade that the WTO covers: goods and investment (the Multilateral Agreements on Trade in Goods including the GATT 1994 and the TRIMS), services (GATS), and intellectual property (TRIPS); dispute settlement (DSU); and reviews of governments' trade policies (TPRM).
The World Trade OrganisationBefore GATT's 40th anniversary, its members concluded that the GATT system was straining to adapt to a new globalizing world economy. In response to the problems identified in the 1982 Ministerial Declaration (structural deficiencies, spill-over impacts of certain countries' policies on world trade GATT could not manage etc.), the eighth GATT round known as the Uruguay Round was launched in September 1986, in Punta del Este, Uruguay.It was the biggest negotiating mandate on trade ever agreed: the talks were going to extend the trading system into several new areas, notably trade in services and intellectual property, and to reform trade in the sensitive sectors of agriculture and textiles; all the original GATT articles were up for review.The round was supposed to end in December 1990, but the US and EU disagreed on how to reform agricultural trade and decided to extend the talks. Finally, In November 1992, the US and EU settled most of their differences in a deal known informally as "the Blair House accord", and on April 15 1994, the deal was signed by ministers from most of the 123 participating governments at a meeting in Marrakesh, Morocco.The agreement, driven by Clinton think thanks, established the World Trade Organization, which came into being upon its entry into force on January 1, 1995, and replaced GATT as an international organization. It is widely regarded as the most profound institutional reform of the world trading system.
Trade in agriculture is growingSpurred by a 14 per cent growth in prices, agricultural exports in 2007 expanded by 19.5 per cent in dollar terms in 2007, the highest growth rate since 2000. Europe, which accounts fr 46 per cent of world exports of agricultural products, boosted exports by 19 per cent. Asia, the second-largest supplier with a share of 19 per cent, increased its exports of agricultural products by 20 per cent, a rate unmatched since 2000. Exports from North America, the third-largest supplier, rose by 17 per cent. Its share of world trade has been progressively declining, from 21 per cent in 2000 to 16 per cent in 2007, due to the below world average export growth during this period (6 per cent against 11 per cent for the world). South and Central America registered its highest growth rate since 2000 (23.4 per cent).Africa?
Trade is growing more than production
But what are wetalking about?The Wto is trying to apply to agricultural products that are mainly traded in internal markets, rules designed by a so called international market
Share of agricultural products in world tradeFruit and Vegetables: 1.4%Cereals and preparation: 1.1%Oilseeds, veg. oil, and oil cakes:1.0%Meat and preparation:0.8%Coffee, tea, cocoa, and spices: 0.6%Milk and products and eggs: 0.5%
FAO explain trade myts: free trade=fair tradeBetween 1999 and 2002 FAO undertook a series of 23 country case studies to evaluate the impact of the WTO Agreement on Agriculture (AoA) on agricultural trade and food security in developing countries.The objectives of these studies were to assess the extent to which the AoA commitments had led to changes in domestic agricultural policy, to evaluate the impact on trade flows (imports and exports) of developing countries and to assess whether implementing the AoA commitments had had any impact on food security. An important finding was that for most of the countries in the sample, the implementation of AoA commitments did not imply any major change to domestic agricultural policy, including trade policy. The main reason was that most of the countries had implemented during the 1980s and early 1990s unilateral reforms including the liberalization of international trade, often as part of the conditionality of IMF/WB adjustment loans. Some of these were bound as part of their multilateral commitments in WTO Uruguay Round.
Different countries similar experiencesThe 15 countries selected are representative of different regions of the world and different stages of development, with the main concentration on low-income countries that are likely to be at greater risk of food insecurity. They range from developing countries with large economies (e.g. China and India) to those that are amongst the smallest (e.g. Guyana). Eleven of the countries remain at a per capita income of less than $1 000/year, many significantly (e.g. Malawi). Over the period of reforms, per capita GDP has fallen in seven of the countries (all African) and increased in the remaining countries, particularly so in the selected Asian and Latin American countries.The agricultural share of GDP in these countries ranges from under 10 percent (Chile, Peru) to over 40 percent (Cameroon, Tanzania). Whereas this share would be expected to decrease as an economy develops, it has increased in five of the selected countries. In some, this has been the result of relatively high agricultural growth rates and relatively weak growth in other sectors; while in others, growth in all sectors has been disappointing. Sometimes agriculture has grown rapidly (Chile in the 1980s, Malawi and Guyana in the 1990s); at others, it has cushioned an otherwise declining economy (Nigeria, Guyana and Peru in the 1980s; Cameroon in the 1990s). The sample also shows that sustained rapid growth in agriculture is possible, if not typical. Of the 30 observations (two time periods and fifteen countries), in six cas