Trade, food security and sustainable agriculture

Goal 2 of the 2030 Agenda sets out to “End hunger, achieve food security and improved nutrition and promote sustainable agriculture”. As with other SDGsSustainable Development Goal, realizing this goal will require a multifaceted approach. To ensure that markets around the world have access to nutritious food requires international trade and cross-border cooperation. With climate change threatening predictability of harvests and the sustainability of many regional crops, the importance of trade in food commodities may well increase rather than diminish.

Two means of implementation targets for SDGSustainable Development Goal 2 refer to the proper functioning of food markets. Target 2.c is to limit or reduce price volatility through better access to market information. Target 2.b is to avoid market distortions by eliminating export subsidiesExport subsidies refer to the granting of support by governments to some beneficiary entity or entities to achieve export objectives. Export subsidiesmay involve direct payments to a firm, industry, producers of a certain agricultural product etc. to achieve some type of export performance. In addition, export subsidies may include low-cost export loans, rebates on imported raw materials and tax benefits such as duty-free imports of raw material. They can also take the form of government financed marketing. Most subsidies have existed in agriculture -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. and equivalent measures, as defined in the Doha Development RoundAlso called the Doha Development Agenda is a round of trade negotiations among WTO members launched in 2001 at the WTO’s Fourth Ministerial Conference in Doha, Qatar. A fundamental objective of the Doha round is to improve the trading prospects of developing economies. -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. A well-functioning global market for food plays a role in alleviating hunger, complementing other efforts, such as, increasing ODAOfficial Development Assistance (ODA) are resource flows to countries and territories which are: (a) undertaken by the official sector; (b) with promotion of economic development and welfare as the main objective; (c) at concessional financial terms (implying a minimum grant element depending on the recipient country and the type of loan). In addition to financial flows, technical co-operation is also included -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. and OOFsOther official flows (OOF) are transactions by the official sector with countries and territories which do not meet the conditions for eligibility as ODA, either because they are not primarily aimed at development or because they do not meet the minimum grant element requirement -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. to the agricultural sector (see Official support for sustainable development).

The goal to end hunger is falling behind schedule

World hunger can be estimated in several ways. Based on average dietary intake per person and its variation in a country, FAOFood and Agriculture Organization of the United Nations estimates the prevalence of undernourishmentFor the purposes of SDG Indicator 2.1.1, [glossray-ignore]undernourishment[/glossray-ignore] is defined as a dietary energy intake that is below what is needed to retain a minimum acceptable BMI at low physical activity. The prevalence of undernourishment in a population is estimated based on mean and variation of consumption in calories in that population -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. was one in ten of the world’s population. That is, 768 million people were undernourished in 2020. Survey data on experienced food insecurityFood insecurity is a situation where and individual cannot reliably access or afford healthy food. The FAO describes a moderately food insecure person as someone who cannot afford a healthy diet. has experienced uncertainty about the ability to access food and is likely to skip meals occasionally because of lack of resources. A severely food insecure person has at times run out of food and has during the last year gone a whole day without food. For SDG indicator 2.1.2, food insecurity is estimated based on survey data using the Food Insecurity Experience Scale developed by FAO. It consists of eight questions pertaining to whether the respondents or their families have reduced the quantity or quality of consumed food over the last 12 months because of lack of resources. -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-, available from 2014 onward, show that 11.9 per cent of the world’s population experienced severe food insecurity in 2020 and an additional 18.5 per cent experienced moderate food insecurity. These numbers are all a clear increase from 2019 (see figure 1). Food insecurity is also more prevalent among women – an inequality that grew from 2019 to 2020 -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. In 2020, people were displaced by worsening conflicts and weather extremes spoiled crops and killed livestock. As the COVID-19COVID-19 is an infectious disease caused by the strain of coronavirus SARS-CoV-2 discovered in December 2019. Coronaviruses are a large family of viruses which may cause illness in animals or humans. In humans, several coronaviruses are known to cause respiratory infections ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). The most recently discovered coronavirus causes coronavirus disease COVID-19 -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. pandemicCommonly described by the WHO as ‘the worldwide spread of a new disease’, no strict definition is provided. In 2009, they set out the basic requirements for a pandemic: • New virus emerges in humans
• Minimal or no population immunity
• Causes serious illness; high morbidity/mortality
• Spreads easily from person to person
• Global outbreak of disease.
The US Centre for Disease Control uses a similar approach, but with a reduced set of criteria. It is very difficult to gauge whether the spread of a disease should be termed an outbreak, epidemic or pandemic. In other words, when to declare a pandemic isn’t a black and white decision -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. surged, governments acted, largely successfully, to keep food supply chains functioning -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—- but the economic impact disrupted the livelihoods of many and thereby put nutritious food beyond what many poor households could afford -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-.

The Global Network against Food Crises finds that the number of people in an acute food crisis has increased several years in a row and did so again in 2021 -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. In 2021, increasing food prices are making food unaffordable for many people. This started before the war in Ukraine which created another major wave of displacement as well as considerable uncertainty over the global market for cereals and vegetable oils -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-.

Globally, in pure calorie terms, there is enough food to feed the world. The average person on earth (considering all ages) needs a minimum of 1830 kcal per day to avoid undernourishment and about 2350 kcal per day for optimal health. The food available per person in 2019 amounted to 2950 kcal per day, up from 2830 kcal in 2010 -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-.

Imported food is an important part of many economies’ food supply

Several factors affect food production over time and location, which means there are benefits of a diversified global market for food. Trade between regions and across borders may help adjust to changing conditions affecting food production as result of climate change -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. A well-functioning global value chain across agro-food sectors also opens up opportunities for producers in developing economies to contribute to economic development in their local community -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. The International Covenant on Economic, Social and Cultural Rights -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—- recognizes freedom from hunger as a fundamental right and states that the parties to the Covenant shall take measures to ensure that right, including by equitably distributing the world’s food supply.

Trade is part of a global food system that depends on diverse local food systems. The complex task of these food systems is to feed the world and provide livelihoods to farmers and workers in food related industries and to do this in an environmentally sustainable manner -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. In the lead up to the Twelfth WTOWorld Trade Organization Ministerial Conference in June 2022 -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-, UNCTAD recommends that the international trade architecture be enhanced in such a way that international trade can do its part in increasing food security -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. These recommendations include counteracting export restrictions of essential food, supporting resource-poor agricultural producers, finding permanent solutions regarding public stockholding for food security, and scaling up financial and technical support to agricultural production in the LDCsLeast developed country and net food-importing developing economies. As the pressure on international food commodity markets was increasing in 2022, the UN Global Crisis Response GroupOn 14 March 2022, UN Secretary-General António Guterres established of a Global Crisis Response Group on Food, Energy and Finance (GCRG) to coordinate the global response to the widespread impacts of the war in Ukraine. on Food, Energy and Finance, coordinated by UNCTAD jointly with FAO and IEAInternational Energy Agency, urged all countries to encourage proper functioning of international markets and to avoid ad-hoc policy responses, hoarding and panic buying of food and, furthermore, to exempt food purchases by WFPWorld Food Programme from any food export restrictions -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-.

From 2016 to 2020, among economies with recorded data, as a median, 11 per cent of merchandise imports were basic food¹. However, the importance of food to individual economies’ import basket varies considerably across countries. At one extreme, in Haiti food comprised 43 per cent of the total value of merchandise imports. Calculations based on UNCTADstat -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—- show that the share of basic food in merchandise imports exceeded 30 per cent also in Benin, Eritrea, Somalia, Yemen, American Samoa, Guinea-Bissau, and Wallis and Futuna Islands.

Seven in ten economies import more food than they export. After subtracting exports from imports, the median net imports of basic food were 4.3 per cent of total merchandise imports for the period 2016 – 2020. South America is home to several net food-exporting countries while many net-importing countries are found in the Middle East and Africa (see map 1). Another prominent group of net food importers are the SIDSSmall island developing states (SIDS) were recognized as a distinct group of developing countries at the Earth Summit in Rio de Janeiro in June 1992. More information on UNCTAD official page.. Half of the 20 economies with highest relative net food imports are SIDS. At the same time, many islands and other economies with access to oceans are net exporters of basic food – in the Falkland Islands (Malvinas) an estimated share as high as two thirds of all exports in 2020 were crustaceans, mollusks and aquatic invertebrates -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-.

Cereals and preparations of cereals make up only 15 per cent of the exported food in value terms but they account for 44 per cent of the calories available to the world’s population. Meat and especially fish constitute far smaller parts of the dietary energy supply but play a similar role to cereals in international trade of food (see figure 2).

For many economies, imported cereals make up a substantial part of the food supply. In Yemen, two thirds of the calories supplied come from cereals and only a tenth of that is domestically supplied. This means that 59 per cent of the supplied calories are imported cereals (see figure 3). An additional consideration (not reflected in figure 3) is that Yemen is one of the many countries where total food supply does not exceed that needed for good health outcomes.

Economies where much of the food supply comes from cereals, and little of these cereals are domestically produced, are particularly vulnerable to price increases in cereals. Over the first quarter of 2022, cereal prices rose by 20 per cent to an all-time high. Prices for vegetable oils grew even faster -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-.

Rapidly increasing food prices threaten food security

Like other commodities, the price of food has increased over the last two decades. Stable increases in prices give consumers and producers a theoretical chance to budget and plan, whereas volatile prices are more disruptive to the livelihoods of people on both sides of the market. There is a strong correlation between food prices and commodity prices generally, though food prices have tended to be less volatile than, for example, non-edible agricultural raw materials or metals (see figure 4). However, sharp rises in food prices between 2007 and 2008 and again in 2011 highlighted the need to develop methods to track price volatility as advance warnings of food crises -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. Since spring 2021, the year-on-year price increase of food has been above 10 per cent with a peak of 27 per cent in May 2021 (see figure 4). The prices continued to rise in the first quarter of 2022 due to the war in Ukraine. Not only did the war disturb grain exports from Ukraine, it also threatened to increase production cost of agricultural products via fuel and fertilizers putting even more pressure on food prices. From March 2020 to March 2022 the food subindex of UCPI increased by 38 per cent.

Spikes in food prices can deny low-income families access to sufficient nutritious food. Abnormalities in food prices are in themselves strong indicators of potential threats to food security and provide valuable warning signs, signaling the need for action. Prices carry broad information about recent changes in supply and demand as well as signals about expectations and risks for future food markets. They can be observed easily and frequently -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. Episodes of rapid changes in food prices are sometimes induced by climate events. These episodes are expected to become more frequent with the rising number of extreme climate-related events -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-.

The methodology for the SDG indicator of food price anomaliesFood price anomalies refer to abnormally high or low market prices for food commodities. The indicator relies on a weighted compound growth rate that accounts for both within-year and across-year price growth. The indicator directly evaluates growth in prices over a particular month over many years, taking into account seasonality in agricultural markets and inflation, allowing to answer the question of whether or not a change in price is abnormal for any particular period. The method is applied both to individual food commodities and to a basket of food items. It is measured by SDG indicator 2.c.1 -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. (SDG 2.c.1) relies on identifying food prices with growth rates that differ from the historical average -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. This method is applied both to individual food commodities and to the consumer food price index of an economy. In 2020, one in five economies experienced abnormally quick growth of consumer food prices (defined as Indicator of Food Price Anomalies with a value over 1, see figure 5). These economies were in all geographic regions and were of all sizes of population and GDPGross domestic product (GDP) is an aggregate measure of production, income and expenditure of an economy. As a production measure, it represents the gross value added, i.e., the output net of intermediate consumption, achieved by all resident units engaged in production, plus any taxes less subsidies on products not included in the value of output. As an income measure, it represents the sum of primary incomes (gross wages and entrepreneurial income) distributed by resident producers, plus taxes less subsidies on production and imports. As an expenditure measure, it depicts the sum of expenditure on final consumption, gross capital formation (i.e., investment, changes in inventories, and acquisitions less disposals of valuables) and exports after deduction of imports -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-..

International trade in open and transparent markets may alleviate the effects of external shocks. UNCTAD has long called for increased transparency and tighter regulation of commodity markets to help avoid speculative bubbles -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. Applying these initiatives in food markets can contribute to food security.

Agricultural export subsidies are vanishing, but production is still supported

Agricultural subsidies were originally intended to aid domestic producers and farmers in areas where agricultural production costs were high and to ensure the production of enough food to meet domestic needs. Agricultural export subsidies are a form of government intervention to modify a country’s terms of trade. They protect producers from international market competition; i.e., economies where the costs of production, such as labour or land, are lower. As such, subsidies may have many spillover effects for the global economy where they can exacerbate volatility and food price spikes. They allow exporters to gain market share without the efficiencies that should accompany such growth. The harmful effects on international trade were already noted in GATTThe General Agreement on Tariffs and Trade (GATT) is a multilateral agreement, originally negotiated in 1947 in Geneva among 23 countries, to reduce tariffs and other trade barriers. It provides a framework for periodic multilateral negotiations on trade liberalisation -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. 1947 -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-.

The WTO Agreement on Agriculture, which came into force in 1995 -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-, placed limits on export subsidies that distort agricultural trade in order to prevent the disposal or dumping of surplus commodities on global agricultural markets. Following the 2015 Nairobi Ministerial Conference, WTO members have taken steps to phase out export subsidies to level the playing field between developed and developing economies. Apart from a few selected agricultural products, developed countries agreed to remove export subsidies with immediate effect, and most developing countries agreed to do so by 2018. However, developing countries will retain the flexibility to cover marketing and transport costs for agriculture exports until the end of 2023, while the poorest and food-import dependent developing countries will be granted more time to reduce export subsidies -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-.

Notifications of agricultural export subsidies were between US$ three and four trillion in the early years of the 2000s with the majority provided by the EUEuropean Union. Subsidies by the EU have since ceased, and the total has decreased substantially. The 2015 Nairobi packageThe Nairobi Package is a series of Ministerial Decisions adopted at the WTO’s Ministerial Conference in Nairobi, 2015. The issues covered relate to agriculture, cotton and LDCs -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. has further strengthened WTO members’ commitment to abolish trade-distorting subsidies in agricultural markets. In 2019, only five economies notified WTO about agricultural export subsidies to a total value of US$58 million (see figure 6).

However, export subsidies are dwarfed by the total support that governments provide to agricultural producers that amount to a market price support, either though licenses, tariffsTariffs “are customs duties on merchandise imports, levied either on an ad valorem basis (percentage of value) or on a specific basis (e.g. $7 per 100 kg). Tariffs can be used to create a price advantage for similar locally produced goods and for raising government revenues. Trade remedy measures and taxes are not considered to be tariffs.” -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—- or other measures that raise domestic market prices or though budgetary expenditures benefitting the agricultural sector -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. In OECDOrganization for Economic Cooperation and Development countries, these forms of support summed to about US$238 billion in 2020, which accounts for about 18 per cent of gross farm receipts. This support too has decreased over time. In 2000, this figure was 30 per cent -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-. Agricultural markets are further supported by budgetary transfers to consumers and by general service supports that are not paid directly to producers but has the agricultural sector as its main beneficiary. A report by the Food and Land Use Coalition -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—- estimates that, globally, the agricultural sector is supported to the tune of US$700 billion per year. These forms of support differ in the degree they give recipients a competitive advantage that distorts global food markets. Support has been moving in the direction of less distortion by decoupling support that incentivize production towards good use of existing land. It is also recognized that changing support for food exports may change market conditions for net-food importing developing countries and that this needs to be compensated by ensuring that food aid is not hindered and by promoting agricultural productivity in these countries though technical and financial assistance (-—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-; see also Official support for sustainable development).

The report of the -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—- found that much of the current use of agricultural subsidies leads to inefficient land use and that there are huge opportunities in reorienting subsidies away from high carbon-emitting production and incentives for deforestation and redirecting them towards more sustainable practices. The positive effects would be manifold, including improving global health and combatting climate change. Especially among OECD economies there is a push towards payments to producers that are conditional on production practices that preserve public goods, such as, biodiversity. Even as export subsidies are being phased out, policies for agricultural trade and support remain key factors in building sustainable food systems -—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—--—
– ‒
- –
—-

Notes

1. Basic food refers here to a category of food products that excludes beverages and tobacco, tropical beverages (such as coffee and tea) and spices. When SITC codes are used, the included codes are 0 - Food and live animals, 22 - Oil seeds and oleaginous fruits, 4 - Animal and vegetable oils, fats and waxes with the exclusion of 07 - Coffee, tea, cocoa, spices, and manufactures thereof. In the HSThe Harmonized System (HS) is an international nomenclature developed by the World Customs Organization, which is arranged in six-digit codes allowing all participating countries to classify traded goods on a common basis. Beyond the six-digit level, countries are free to introduce national distinctions for tariffs and many other purposes. classification a comparable set of products would be included in chapters 1-24 excluding 05 - Products of animal origin, not elsewhere specified or included, 06 - Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage, 09 - Coffee, tea, mate and spices, 13 - Lac; gums, resins and other vegetable saps and extracts, 14 - Vegetable plaiting materials; vegetable products not elsewhere specified or included, 22 - Beverages, spirits and vinegar, and 24 - Tobacco and manufactured tobacco substitute.

References

Lorem ipsum dolor sit amet, consectetur adipiscing elit.
Donec tincidunt vel mauris a dignissim. Curabitur sodales nunc id vestibulum tempor. Nunc tortor orci, sodales nec eros eget.
Lorem ipsum dolor sit amet, consectetur adipiscing elit.
Donec tincidunt vel mauris a dignissim. Curabitur sodales nunc id vestibulum tempor. Nunc tortor orci, sodales nec eros eget.
Lorem ipsum dolor sit amet, consectetur adipiscing elit.
Donec tincidunt vel mauris a dignissim. Curabitur sodales nunc id vestibulum tempor. Nunc tortor orci, sodales nec eros eget.
Lorem ipsum dolor sit amet, consectetur adipiscing elit.
Donec tincidunt vel mauris a dignissim. Curabitur sodales nunc id vestibulum tempor. Nunc tortor orci, sodales nec eros eget.
Lorem ipsum dolor sit amet, consectetur adipiscing elit.
Donec tincidunt vel mauris a dignissim. Curabitur sodales nunc id vestibulum tempor. Nunc tortor orci, sodales nec eros eget.