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Centad: The current WTO and multilateral system has
been widely criticised for its failure to avert global crisis
whether it is food or financial crisis. Can multilateral
institutions solve these crises and do they have the
mandate?
Jonathan Hepburn: Global challenges are going to
require collective action to address them. In this sense,
the multilateral system arguably has an important role to
play. However, the WTO’s expertise relates to trade; other
multilateral institutions need to be engaged, or lead on, both
the food crisis and the financial crisis.
Centad: How far do you believe the food crises that have
arisen are linked to the trade policies at the global, regional
and national level?
Jonathan Hepburn: Decades of developed country
subsidies have led to farm products being systematically
dumped on global markets, undermining developing
countries’ productive capacities and deterring public and
private investment in this area. Developed country barriers to
imports, particularly for certain ‘sensitive’ farm products, have
also played a role. While several factors have contributed to
recent price volatility - harvest failures, changing oil prices,
poorly-designed biofuel policies and imbalances in supply
and demand - there’s a clear need for trade policies to be
reformed so that they do support long-term food security in
both developed and developing countries.
Centad: Subsidies have been portrayed as a trade-distorting
instrument but at the same time these instruments provide
food at lower costs. With diametric opposite effects, who do we
envisage an orderly trade rules which foster the needs of all?
Jonathan Hepburn: While subsidies do lower world prices,
often benefiting net food consumers such as poor people in
towns, this has to be weighed against the costs to producers
in rural areas that could potentially benefit from higher
prices. Economists also generally argue that subsidies lead
to an inefficient allocation of resources, and insulate farmers
from market signals. Current price volatility underscores the
need for governments to find durable solutions that support
broader development objectives.
Centad: There has been much debate on building a global
food reserve to mitigate the global food instability. Do you
see it worthwhile to usher in a better food access or it would
just fall apart as any other global initiatives?
Jonathan Hepburn: One of the factors exacerbating recent
price instability has been the reduction in food stocks
following successive years of production shortfalls, at a
time of constantly increasing demand. Rebuilding reserves,
whether national, regional or global, may be a good way to
cushion the impact of future shocks.
Centad: There has been a drawdown in food aid mechanisms,
and increasing the vulnerability of the countries at the same
time. The controversy of aid in kind and cash has stormed the
talks, bringing sharp differences in the negotiations. How should
one go about dispensing aid in the current framework?
Jonathan Hepburn: The reduction in food aid just at the time
when it is most needed demonstrates the extent to which the
current framework is about the disposal of surplus production
rather than about genuinely addressing humanitarian needs.
The new food aid rules under negotiation at the WTO, while
not perfect, would arguably be a step forward in establishing
new disciplines in this area. However, the food price spikes
this year have also demonstrated the inadequacy of existing
aid mechanisms for addressing food shortfalls in importing
countries in a reliable and effi cient manner.
Centad: With climate change and environment fanning
considerable development debate, do you see food trade
diminish in the days to come?
Jonathan Hepburn: Climate change is likely to have
complex and profound implications for agricultural
production and trade, not least for developing countries.
While average global temperatures are expected to
increase, and weather patterns become more volatile,
the exact impact on different countries and regions is
likely to vary significantly across the globe. However, as
a general rule, tropical regions are likely to become drier,
with corresponding decline in agricultural productivity.
Some temperate regions may see productivity increase,
if temperature rises are limited. Traditional rain-fed
agriculture, such as that practised in much of Sub-Saharan
Africa, may be particularly vulnerable to climate change,
while some agricultural exporters such as Australia may
also suffer. Patterns of trade may change, therefore, as
production and consumptions patterns change, water
scarcity increases, and some regions experience rapid
population growth. However, food trade will not necessarily
diminish overall.
Jonathan Hepburn is an Agriculture Programme Officer
at ICTSD, Geneva and can be contacted at
jhepburn@ictsd.ch.
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