By Rashid S. Kaukab

Regional Meeting Climate Change and Food Security

27 June ,2011Dhaka, Bangladesh

Introduction to SAARC

SAARC: Climate Change-Food Security-Trade Linkages

• Trade-Food Security link

• Trade-Climate Change Link

• Climate Change-Food Security Link

• Climate Change-Food Security-Trade Link

Capacity Building Needs

Proposed Regional Programme

2

Countries Contribution of Ag. to GDP (%)

Ag. labour force as % of total labour force

Poverty headcount ratio at $2 a day (PPP) (%)

% of undernourished population

Afghanistan 40 59.8 na naBangladesh 19.1 45.21 81.33 27Bhutan 21.9 96.71 49.49 NaIndia 19.0 55.75 75.59 21Maldives 6 15.33 na naNepal 32.9 87.73 77.57 16Pakistan 20.4 41.33 60.31 26Sri Lanka 13.2 47.27 39.74 19Total - 53.7 73.40 -

Economic Overview Agriculture holds a central place in all South Asian economies,

except for Maldives Moreover, this sector employs more than half of the labour force

in SAARC countries, reaching 97% in Bhutan

3

SAARC Food Imports and Exports

There is a growing dependence on cereal imports, particularly

for India

The same trend can be obvserved for Live Animals and Meat,

and Marine Products

 Marine Products

Live animals, Meat and Meat Products

Cereals

  Exports Imports exports imports Exports Imports

  2005 2009 2005 2009 2005 2009 2005 2009 2005 2009 2005 2009

Afghanistan         - - - -  -  -  -  -

Bangladesh 407'948 482'869 2'497 18'977 22 116 6'728 7'659 10'526  4’750 402'324 762'836

Bhutan - - 1'322 2'396 0 1 5'694 7'706 51  183 11'871 17'037

India 1466 662 1'412'386 19'960 38'625 586'196 1'196'615 2'349 10'434 1'915'272  2’986’630

2'729 12'952

Maldives 84'115 67'217 3'001 7'677 0 0 8'829 18'518  0  0  6772 14'116

Nepal - 3 - 2'477 531 1'885 4'771 6'808   17'155   28'432

Pakistan 146'657 192'909 1'678 972 22'218 95'061 5'369 11'004 1'100'585  1’823’217

 161370 330'869

Sri Lanka 103 442 179'206 47'401 89'969 355 1'014 4'215 2'581 4'182  5’041  198047 305'696

Total 2'208'824 2'334'590 75'859 '161093 609'322 1'294'692 37'955 64'710 3'030'616 17'155 416'924 1'471'938

4

Intra-SAARC Food Trade

Despite two decades of efforts at regional economic

integration, South Asia is one of the least-integrated

regions in the world

Intra-SAARC trade in Food is very marginalFood Exports in 2009 Food Imports in 2009

Share in Total Exports (%)

Exports to SAARC (%)

Share in Total Imports (%)

Imports from SAARC (%)

Afghanistan 55.51 - 7.7 -

Bangladesh 3.38 - 17.85 -

Bhutan 5.97 0.17 14.16 97.39

India 6.12 5.56 3.72 2.1

Maldives 96.51 0.08 20.09 37.25

Nepal 22.57 0.98 11.44 34.8

Pakistan 16.46 0.71 9.42 6.36

Sri Lanka 23.94 0.52 14.23 19.57

Total 7.41 8.02 5.5 5.245

Relevant Policies

Agreement on the South Asian Free Trade Area (SAFTA) (2006). While this is a good step, all member countries maintain a sensitive list of products with no tariff concessions.

SAARC Regional Strategy and Regional Programme for Food Security (2008)

Action Plan on Climate Change (2009-2011). Prioritized regional issues related to food security such as over exploitation and degradation of natural resources. SAARC is transitioning from a declaratory to implementation phase, envisaging itself to play more enabling roles in addressing climate change.

The Thimpu Statement on Climate Change (2010) proposes an action-oriented programme

6

Climate Change-Food Security Link

The expected impacts of Climate change on food security include:

NEGATIVE

Impact on coastal economic activities: Increased land salinity and land loss in coastal areas, displacing several million people and severely impacting coastal economic activities including fisheries

Impact on cereal productivity: 15 to 30% decline of cereal productivity on average across the region by the middle of the century and a rise of food prices by 94 to 111% for wheat, and by 32 to 37% for rice.

Water stress: 2 to 4% rise in temperature will expose up to 924 million people to water stress

7

Trade-Food Security Link

Because of agricultural production shortages, these countries are heavily dependent on food imports, which are not sourced in South Asia because of a number of trade barriers and supply-side constraints.

POSITIVE Trade offers the possibility to stabilize domestic prices, to

balance food deficiency and to harness comparative advantage

Trade can enhance food security by increasing livelihood opportunities directly through improved profitability and spin-off and multiplier effects.

NEGATIVE However, it also exposes a country to prices volatility on

international markets which can threaten food security. Moreover, the current WTO agreements allow distortive practices (e.g. subsidies, export restrictions)

8

Trade-Climate Change Link

Climate change may significantly alter trade flows.

Climate change could exert significant impacts on trade flows, given its expected impacts on agricultural yield.

Climate change can alter existing patterns of comparative advantage in trade, e.g a sudden increase in price will shift production patterns as farmers are driven by higher returns.

Trade can affect the environment in both positive and negative manners.

Trade liberalization and foreign direct investment may bring in new techniques of production that are more energy efficient.

However, trade itself will lead to more GHGs given increased transportation and greater distances.

9

Climate Change-Food Security-Trade Linkages

A positive food security-trade linkage to face climate change challenge can be established through:

clearly aligning trade, environment, and agricultural policies;

understanding the particular food security needs and the impact of climate change on food security in a country;

targeting trade policy and its instruments to ensure steady imports in the case of structurally food-deficient countries;

improving export performance to garner resources to pay for needed food imports; and

adjustment of production and trade patterns according to climate change adaptation and mitigation plans. 10

An Endowment-Entitlement Framework for Climate Change-Food Security-Trade Linkages

Endowment-Entitlement Equation: A small piece of land, good rainfall, and access to inputs may comprise the endowment set of a small rice farmer in Bangladesh. She uses these endowments to get her entitlements for livelihoods. This is her endowment-entitlement equation.

Impact of Climate Change: Climate change will introduce shocks like variations in rainfall, temperature, flooding etc. into the equation and change it. For example, either less or much rainfall may render her plot of land incapable for rice production and thus reduce the set of her endowments. Even if she continues to have that plot of land and access to rice market, she may not be in a position to transfer that ‘endowment’ to her ‘entitlement’ due to inability to produce rice.

Impact of Trade: The linkage between endowment and entitlement will also depend on other factors and here trade can play an important role. For example, trade can offer another set of endowment (e.g., increased opportunities in manufacturing through Duty-Free-Quota-Free market access for Bangladeshi manufactured exports) to compensate for the loss of earlier set of endowment of the farmer or use her given set of endowment to convert into entitlements through a different utilization, e.g., producing crops that are suited to the changed climatic conditions with a market in the region.

Application of Framework: Application of this framework in a regional programme will allow for robust and evidence-based research, focussed and targeted advocacy, and contribution to appropriate and integrated policies and action plans related to climate change, food security, and trade that target these linkages to improve endowment-entitlement equations.

11

Capacity needs and recommendations for the way forward

Capacity needs of SAARC stakeholders can be categorized into the following broad categories:Research to fill the existing gaps in the knowledge and understanding of climate change-food security-trade linkagesKnowledge and expertise development to establish and implement holistic trade, food security, and climate change mitigation and adaptation policies and responsesAwareness-raising and advocacy to widely and effectively disseminate the relevant information about the imminent challenges, climate change-food security-trade linkages, and the need for adequate responses.A forum that brings together the sets of actors dealing with climate change adaptation, export promotion and agricultural production to share perspectives and identify integrated responses.

12

Main ObjectiveTo build the capacity of stakeholders in the SAARC region to better understand the climate change-food security-trade linkages and design and implement mitigation and adaptation responses that use trade to improve food security in the face of climate change challenges. The focus will be on shielding the poor and marginalized from the worst effects of climate change on food security.

Specific Objectives

Increasing knowledge on climate change-food security-trade linkages in the region

Increasing capacity of the stakeholders to take advantage of the positive linkages and develop adequate policies and strategies to deal with the negative linkages

Increasing interaction among relevant stakeholders from the region on these issues to facilitate integrated and coordinated responses

13

Methodology

Collaborative and evidence-based research involving partners in Norway as well as in project countries to improve the understanding of climate change-food security-trade linkages

Building regional, multi-stakeholder networks to pool knowledge and expertise and to develop integrated policy and programme responses

Maximizing synergies by establishing partnerships with other relevant organizations, particularly FAO, UNEP, and WMO

Emphasizing the regional dimension including of the problems and their solutions

Empowering the poor and marginalized through awareness-raising and advocacy activities

14

Activities and OutputsOrganically linked Research-Advocacy-Networking (RAN) activities for:

Identification of climate change-food security-trade issues affecting the region

Building knowledge base on identified issues through research and pooling of experiences

Utilizing knowledge for policy and programme development and appropriate legislation

Feeding of information and lessons into other important processes in the region

Utilizing the information and lessons to inform negotiating positions of SAARC countries in the WTO and other relevant international fore, e.g. climate change negotiations

Providing information and lessons to policy makers and local communities as well as international agencies like FAO, UNEP, WMO

15

Expected Outcomes

Expanded body of knowledge on issues related to climate change, food security and trade

Improved understanding among stakeholders in the region of the climate change-food security-trade linkages

Greater involvement of relevant stakeholders in related policy making and implementation

16

Activity Outputs Relevant Project Outcomes Relevant Project Objectives

Research Publications Expanded body of knowledge

Improved understanding of stakeholders

Increased knowledge on climate change-food security-trade linkages

Increased capacity of stakeholders

Development and implementation of relevant policies by the countries

Networking Project inception meeting

Annual Regional Meetings

Regional E-networks Country National

Reference Groups

Greater involvement of relevant stakeholders

Improved understanding of stakeholders

Increased capacity of stakeholders

Increased interaction among relevant stakeholders from the region

Better means for the implementation of relevant policies by the national governments17

Activity Outputs Relevant Project Outcomes

Relevant Project Objectives

Advocacy and awareness-raising

Advocacy documents

Web site Media releases Annual Regional

Meetings

Improved understanding of stakeholders

Greater involvement of relevant stakeholders

Increased knowledge on climate change-food security-trade linkages

Increased capacity of stakeholders

Conducive environment for the implementation of relevant policies by the national governments

18

19