WTO criticises current policies on food security

Reuters, Saturday 22 Jan 2011

Countries should find other ways than food export restrictions to secure domestic food supplies, says WTO head

World Trade Organisation (WTO) Director-General Pascal Lamy said that only a few years after the 2008 food crisis, rising prices were stoking global inflation and fomenting political unrest in several countries.

Two weeks ago, the United Nations Food and Agriculture Organisation (FAO) said its food price index reached a record high in 2010, exceeding 2008 levels when rising food prices prompted riots in a number of countries.

Lamy said that one factor was bad weather, for instance last year's drought in Russia and its Black Sea neighbours. But export restrictions played a major role in rising food crises, and some consider them the main cause of the 2008 price rise, he told a conference of agriculture ministers in Berlin. 

"Export restrictions lead to panic in markets when different actors see prices rising at stellar speed," Lamy said. For instance, there was no fundamental imbalance in the market for rice in 2007-2008 but international trade in the crop fell by seven per cent in 2008 from record 2007 levels largely because of export restrictions, he said.

Rising prices for cereals in 2010-2011 have much to do with export restrictions in Russia and Ukraine, imposed after both countries were hit by drought, Lamy said. Such restrictions hurt importing countries and can prevent the World Food Programme from acquiring the food it needs to help starving people.

Lamy said countries imposing restrictions were driven by the need to prevent their own populations from starving, but there were other ways of achieving this goal. "The answer to that question must reside in more food production globally, more social safety nets, and more food aid and possibly food reserves," he said.

"I would argue that what we must at least explore is the exemption of humanitarian food aid from export bans," Lamy added. WTO rules allow members to curb or ban food exports to ensure their own food supplies

Lamy said the long-running Doha round to free up world trade could help remove other barriers to commerce in food, for instance by reducing rich-world subsidies that have hurt poor countries' production capacity, banning export subsidies entirely, and bringing down some tariffs.

"Globally, what we would be likely to see as a result of Doha is more food being produced where this can be done more efficiently," he said.

WTO members have launched a renewed push to conclude the nine-year-old Doha round this year. In agriculture they spent last week looking at the technical issues needed to implement a deal, as well as new proposals on subsidies.

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