Transcript Trade Liberalization and Food Security in the ECO Region

TRADE LIBERALIZATION
AND FOOD SECURITY IN
THE ECO REGION
PAKISTAN INSTITUTE OF DEVELOPMENT ECONOMICS
INTRODUCTION
• Food is essential for the productivity of an individual,
economic growth and sustenance of life while
malnutrition affects these factors adversely.
• Unfortunately, food security has become a major
challenge especially in developing countries.
• Food security is a complex phenomenon,
attributable to range of factors that vary across the
regions, countries and social groups.
INTRODUCTION (CONT.)
• These factors can be grouped in five areas i.e.
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availability,
accessibility,
affordability,
adequate storage facilities and
nutritional value of the food
• Increasing trade liberalization as a result of the WTO
agreements and unilateral trade liberalization have
posed serious challenges for food security
INTRODUCTION (CONT.)
• In recent years, world agricultural prices have been
on a rising trend due mainly to increase demand in
the emerging economies including India and
China.
• While higher prices have proved to be boon for
farmers, these prices have adversely impacted the
consumers especially the urban poor.
• These consumer groups are especially vulnerable in
countries that already have a significant number of
poor living in urban areas.
INTRODUCTION (CONT.)
• As in other developing economies, food security is
an important issue in the ECO region.
• A majority of the ECO countries are still far from
being self-sufficient in food production and are net
food importers.
• It is, therefore, imperative to study the implications
of trade liberalization for food security in the ECO
region.
RECENT FOOD PRICE INCREASE - A
GLOBAL PHENOMENON
• FAO food price index average growth over previous period:
• 8 percent in 2006
• 24 percent in 2007
• 53 percent in first three months of 2008
• Continuing surge in prices led by
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vegetable oils more than 97 percent
grains with 87 percent
dairy products with 58 percent
rice with 46 percent.
Sugar and meat product prices also rose, but not to the same
extent.
• These large increases in some commodity prices also point to
increased volatility and uncertainty in the current market
environment.
MAJOR REASONS FOR THE GLOBAL FOOD
CRISES
• On the supply side
• Weather-related production shortfalls
• Stock levels depletion as demand outstrips supply
• Increasing fuel costs that have raised the cost of
agricultural production
• On the demand side
• Biofuels and agricultural commodities
• Changing structure of household demand.
• Other relevant factors
• Operations on financial markets:
• Short-term policy actions and exchange rate
swings
CAUSES OF FOOD PRICE INCREASE
1.
2.
3.
structural and cyclical factors
supply and demand
relationship between international and domestic
markets.
AND THE CAUSES OF THE CURRENT
CRISES
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Energy and bio-fuels
Income and population growth
Agricultural production
Market and trade policy
Speculation and market fundamentals
IFPRI PRESCRIPTION TO ADDRESS
THE GLOBAL CRISES
The Emergency Package
1. expand emergency responses and humanitarian assistance
to food-insecure people and people threatening government
legitimacy
2. eliminate agricultural export bans and export restrictions
3. undertake fast-impact food production programs in key
areas, and
4. change bio-fuel policies
The resilience package
1. calm markets with the use of market-oriented regulation of
speculation, shared public grain stocks, strengthened foodimport financing, and reliable food aid
2. invest in social protection
3. scale up investments for sustained agricultural growth
4 an emergency package—consists of steps that can yield
immediate impact:. complete the Doha Round of World Trade
Organization (WTO) negotiations.
OBJECTIVES AND METHODOLOGY
• The study shall carry out an in-depth review of the food
security situation in the ECO region, emphasizing the
causes of food security.
• In doing so, it will examine the trends in the production
and consumption of food products.
• It will review the impact of food crises on poor,
agricultural households, and most vulnerable
households.
• An econometric model shall be developed to estimate
the relationship between trade liberalization and food
security in the ECO region.
• Based on the analysis, the study will suggest some policy
measure to address food security in the ECO region.
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