Global Agriculture

Leveraging Trade To End Hunger

7 December 2020, Rome:  FAO’s Committee on Commodity Problems (CCP) today organized a special event to discuss the importance of food and agricultural trade for ending global hunger, seeking to identify critical trade-offs associated with different policy measures and possible priorities for action.

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“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 and aligned policies to address trade-offs; and harness the power of digital solutions and 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 and related policy issues. Established in 1949, it is FAO’s oldest technical committee and consists of 110 FAO Members along with observers, tasked with reviewing commodity problems of an international character affecting production, trade, distribution and consumption, and suggesting policy options.

“Trade is both vital and complicated, as we need responsible trade and sustainable trade – we have lacked that concept adequately in the past and 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 and agri-food systems to address holistically the complex dimensions linked to environmental and 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 and 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 and multiple goals

Today’s discussion was facilitated by a new FAO report, Trade and Sustainable Development Goal 2 – Policy options and their trade-offsthat assesses pathways to achieve the five targets set out by SDG 2: ending hunger; ending all forms of malnutrition; doubling the agricultural productivity and incomes of small-scale food producers; ensuring sustainable food production systems; and maintaining genetic diversity. 

Trade is often a policy priority area for FAO Members and is also a “means of implementation” for achieving the SDGs, the report states. While SDG 2 commits countries to “correct and prevent trade restrictions and distortions in world agricultural markets”, harnessing international trade to achieve the SDG agenda requires addressing the trade-offs between economic, social and 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, and take a broader approach to indicators of progress that encompasses the range of measures that affect trade and markets in the global food system,” Boubaker Ben-Belhassen, Secretary of the CCP and Director of FAO’s Markets and Trade Division, said.

The value of global agricultural trade has increased enormously in the past two decades, and its structure and patterns have evolved and 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- and 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 and 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 and 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) and 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 and hunger, said FAO Chief Economist Maximo Torero, who moderated the event. What is critical is to achieve policy coherence and the alignment of incentives to incorporate trade-offs and the true cost of trade, he said.

The CCP’s 73rd (Extraordinary) Session is on 22 January and the 74th Session on 10-12 March 2021.