A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
Focus on issues

Trade and food security

Bipul Chatterjee (CUTS CITEE) and Sophia Murphy (IATP)

The E15 Initiative: strengthening the multilateral trading system,
ICTSD, World Economic Forum

Failure in Bali will not prevent WTO hierarchs from continuing to work on Agriculture and Food Security. However, it is clear that the Ministerial Conference is neither committed to major changes nor has it initiated a new impetus to international trade.

Because the evidence is: the virtues of globalization currently are under attack. If world agricultural markets have drastically changed since the food crisis of 2007/2008, the rules governing international trade have not and have proved to be obsolete and inadequate faced with new challenges such as tackling agricultural price volatility.

We recommend reading this excerpt from the report “The E15 Initiative”
1 launched in 2011 and aimed at providing a critical look at the WTO so as to prevent it from eventually becoming an empty shell. Bipul Chatterjee (CUTS CITED) and Sophia Murphy (IATP), the authors of this article, re-examine the deep and complex interconnection that have linked food security and trade since the soaring food prices in 2007/2008 and their consequences. In the current context, the two researchers recommend the implementation of a strong international regulatory system that will ensure a viable future for food security.

momagri Editorial Board

The 2007-2008 food price spike ushered in an era of higher, more volatile food commodity prices. There are many reasons for the shift—some were directly linked to the price crisis itself, while other factors were already underway, part of the slow shift from apparent abundance in international supply (and trade rules directed towards managing oversupply), to a better understanding of environmental limits and fears of shortages. In truth, there is not so much a crisis now as a new understanding that we must regulate markets in the face of scarcity, and that the interconnected markets created by globalization have created not just important new strengths but also weaknesses that have jeopardized food security. Higher and more volatile food prices in international markets are part of what now needs better regulation. Restoring confidence in international trade will require reforms that redress those weaknesses and better protect the human right to food.

The factors that have reshaped food security and agriculture, including agricultural trade, include:
    • Higher energy prices: Energy is a central factor in the cost of production for industrial agricultural systems. Energy prices are also increasingly linked to agricultural commodity prices, through commodity index funds and the very rapid growth of biofuels for use in transportation fuels.

    • Decreasing agricultural productivity growth: green revolution technologies no longer provide new productivity growth while genetic engineering is still in its infancy, and faces a variety of political, technical and regulatory complications.

    • Climate change: Production faces increasing uncertainty as as weather patterns change in unpredictable ways. The incidence of droughts and floods has increased markedly in the last decade.

    • Increased demand in international markets: increased meat consumption has increased the demand for feed grains, while significant subsidies and other policies to protect biofuels production and distribution has also increased commodity use dramatically.

    • Poor regulation of commodity futures markets : large volumes of speculative transactions (now larger than the hedging contracts that were originally the purpose of the exchanges) have raised the costs of using the commodity markets for hedgers and complicated the task of buyers who may not have the tools (or the resources) to second guess where prices are headed in the medium and long term.
At the heart of the loss of confidence in the international system was the decision of food exporting countries to limit exports with restrictions and bans. Poor countries also reported that grain companies did not honour contracts to deliver food but instead returned payments and sold their grain to customers able to afford the rapidly rising prices. As prices rose and exporters responded with taxes and bans, a number of importing governments panicked. Particularly rice importing countries tendered contracts for more grain than they needed, which fuelled price rises and panic. Traders hoarded rice in the hope prices would just keep rising.

The specific problem of the lack of confidence that exporters will continue to provide international markets even in crisis, and the more general challenge to globalization that the market does not discriminate need from demand, leaving people’s right to food unmet without public intervention, are two areas that we consider further below. Food security demands a robust and well-regulated international trading system that strengthens national food security policies and that allows public policy objectives to over-ride commerce where necessary.

1 The entire report is available from http://ictsd.org/downloads/2014/02/e15-agriculture-and-food-security-group-proposals-and-analysis.pdf
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Paris, 19 December 2018