Leveraging trade to end hunger
FAO Director-General & Professor Jeffrey Sachs joined discussion on ways to overcome trade-offs on the path to achieving SDG 2
7 December 2020, Rome – FAO’s Committee on Commodity Problems (CCP) today organized a special event to discuss the importance of food & agricultural trade for ending global hunger, seeking to identify critical trade-offs associated with different policy measures & possible priorities for action.
“We are only nine seasons away from 2030,” said the FAO Director-General, QU Dongyu, in his keynote remarks, alluding to Sustainable Development Goal 2 (ending hunger by 2030).
“Trade is a powerful tool,” he emphasized, pointing to three cardinal ways to put that power to use: avoid raising trade barriers, especially in periods of crisis; formulate coherent & aligned policies to address trade-offs; & harness the power of digital solutions & innovation.
Innovation can solve contradictions that affect the dynamics of any single commodity, he said. “Coherent, complementary production systems are the key to agri-food system transformation.”
The CCP tracks agricultural commodity markets & related policy issues. Established in 1949, it is FAO’s oldest technical committee & consists of 110 FAO Members along with observers, tasked with reviewing commodity problems of an international character affecting production, trade, distribution & consumption, & suggesting policy options.
“Trade is both vital & complicated, as we need responsible trade & sustainable trade – we have lacked that concept adequately in the past & will need it in the future,” Professor Jeffrey Sachs, Director of the Center for Sustainable Development at Columbia University in the United States of America, said in his keynote speech.
Today, emerging digital technologies, including tools such as FAO’s Hand-in-Hand Geospatial Platform, can finally provide ways for trading rules & agri-food systems to address holistically the complex dimensions linked to environmental & social sustainability, he noted.
Such issues should move to the top of the international agenda as they represent significant choices that the world’s smallholder farmers will need to make in the next 10 to 20 years, Sachs added.
The CCP works for “more transparent & inclusive agricultural markets,” said Ambassador Esti Andayani, Permanent Representative of the Republic of Indonesia to FAO, speaking on behalf of the CCP Bureau.
Trade-offs & multiple goals
Today’s discussion was facilitated by a new FAO report, Trade & Sustainable Development Goal 2 – Policy options & their trade-offs, that assesses pathways to achieve the five targets set out by SDG 2: ending hunger; ending all forms of malnutrition; doubling the agricultural productivity & incomes of small-scale food producers; ensuring sustainable food production systems; & maintaining genetic diversity.
Trade is often a policy priority area for FAO Members & is also a “means of implementation” for achieving the SDGs, the report states. While SDG 2 commits countries to “correct & prevent trade restrictions & distortions in world agricultural markets”, harnessing international trade to achieve the SDG agenda requires addressing the trade-offs between economic, social & environmental outcomes. Government interventions may be required to address market failures, for example to protect biodiversity, minimize damage to the climate or achieve certain social outcomes, according to the report.
To ensure progress towards SDG2, “governments will need to go beyond a narrow focus on the elimination of agricultural export subsidies, & take a broader approach to indicators of progress that encompasses the range of measures that affect trade & markets in the global food system,” Boubaker Ben-Belhassen, Secretary of the CCP & Director of FAO’s Markets & Trade Division, said.
The value of global agricultural trade has increased enormously in the past two decades, & its structure & patterns have evolved & will continue to do so. Significantly, emerging economies account for an increasing share of global exports, while South-South ties have deepened, with more than half of all the agricultural imports of middle- & low-income countries now sourced from within this group.
National measures restricting food exports to protect domestic food security have often led to adverse outcomes, such as favouring urban non-poor households & food processing businesses at the expense of farmers, many of whom are poor, as well as creating uncertainty in world markets. At the same time, the report notes that subsidy schemes may have effects beyond trade & impact the environment or climate trends – considerations that could enrich multilateral negotiations such as those conducted under the aegis of the World Trade Organization (WTO).
Today’s event also featured a panel discussion between senior representatives of the WTO, the UN Development Programme (UNDP) & the International Institute for Sustainable Development (IISD).
“We should not be afraid of global value chains – on the contrary, we must make them inclusive for smallholders,” so that trade can contribute to the struggle against inequality as well as poverty & hunger, said FAO Chief Economist Maximo Torero, who moderated the event. What is critical is to achieve policy coherence & the alignment of incentives to incorporate trade-offs & the true cost of trade, he said.
The CCP’s 73rd (Extraordinary) Session is on 22 January & the 74th Session on 10-12 March 2021.