rural poverty, food security, and trade liberalization: exploring the linkages wto symposium on...
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Rural Poverty, Food Security, and Rural Poverty, Food Security, and Trade Liberalization: Exploring the Trade Liberalization: Exploring the
LinkagesLinkages
WTO Symposium on Trade and Sustainable WTO Symposium on Trade and Sustainable DevelopmentDevelopment
10- 11 October, 200510- 11 October, 2005
John NashJohn NashAgriculture & Rural Development Dept / Trade DeptAgriculture & Rural Development Dept / Trade Dept
The World BankThe World Bank
This presentationThis presentation
What’s the problem?What’s the problem? Rural povertyRural poverty HungerHunger
What’s the way forward?What’s the way forward? Trade policyTrade policy Behind the borderBehind the border
Why is agriculture so important for Why is agriculture so important for
developing countries and the rural developing countries and the rural poor?poor?
63 percent63 percent of population live in of population live in rural areasrural areas
73 percent73 percent of poor live in rural of poor live in rural areas, and most depend on areas, and most depend on agriculture as producers or agriculture as producers or workersworkers
Agriculture and agro-Agriculture and agro-processing account for processing account for 30-60 30-60 percentpercent of GDP in developing of GDP in developing countries, and an even larger countries, and an even larger share ofshare of
Even with rapid urbanization, Even with rapid urbanization, more than 50%more than 50% of the poor will of the poor will be in rural areas by 2035, and be in rural areas by 2035, and depend significantly on depend significantly on agricultureagriculture
Poverty is disproportionately Poverty is disproportionately ruralrural
Burk
ina
Uga
nda
Mau
ritan
iTa
nzan
iaM
ozam
biq
Nig
erZa
mbi
aG
ambi
aEt
hiop
iaG
hana
Mal
awi
Cam
bodi
aVi
etna
mM
ongo
liaKy
gyz
Geo
rgia
Hon
dura
sN
icar
agu
Yem
enN
epal
Sri L
anka
Rural 51 46 68 50 71 66 80 61 47 34 67 40 57 33 70 10 51 69 45 44 27
Urban 17 16 25 24 62 52 56 48 37 27 55 21 26 39 49 12 57 31 31 23 15Difference 34 30 43 26 9 14 24 13 10 7 12 19 31 -6 21 -2 -6 38 14 21 12
Poverty Rates
Poverty Rates from PRSPs
West Africa
Southern AfricaEast Africa
Central AfricaNorth AfricaNear East
South AmericaCaribbean
Central AmericaNorth America
Other South AsiaIndia
Southeast Asia
China*Other East Asia
Proportion of Undernourished (%) Number of Undernourished (millions)
60 50 40 30 20 10 0 0 50 100 150 200 250
*includes Taiwan Province of China
Hunger is a Continuing ProblemHunger is a Continuing Problem
Number and Proportion of Undernourished, 1999-2001
Source: FAO
Improving Improving food food security security and and reducing reducing rural rural poverty poverty are closely are closely related related goalsgoals
Food AvailabilityFood Availability Depends on Depends on globalglobal agricultural productivity agricultural productivity International and national market and distribution systemsInternational and national market and distribution systems International and national trade policy: make sure food International and national trade policy: make sure food
is available to all at a reasonable costis available to all at a reasonable cost
Food AccessFood Access Poverty reduction: hunger is a result of poverty, so Poverty reduction: hunger is a result of poverty, so
whatever reduces poverty reduces hungerwhatever reduces poverty reduces hunger Food (processing and storage) marketsFood (processing and storage) markets
Food UtilizationFood Utilization Nutrition education (promotion of breast feeding in women, Nutrition education (promotion of breast feeding in women,
child care, sanitary conditions, child care time to free child care, sanitary conditions, child care time to free women’s time)women’s time)
Nutrition interventions to supplement food (vitamin A,Nutrition interventions to supplement food (vitamin A, iodine, iron, etc), or provide food supplements (for calories, iodine, iron, etc), or provide food supplements (for calories, protein)protein)
Health careHealth care Safe water provisionSafe water provision SanitationSanitation
Trade liberalization enhances Trade liberalization enhances food security through many food security through many
channelschannels
Increases rural growth and reduces rural Increases rural growth and reduces rural povertypoverty
Increased Trade is the Best Increased Trade is the Best Lever for Enhancing Lever for Enhancing Agricultural GrowthAgricultural Growth
Sustained trade reforms doubled growth in Sustained trade reforms doubled growth in agricultural sector (Michaely, Choksi, Papageorgiou)agricultural sector (Michaely, Choksi, Papageorgiou)
Agricultural trade liberalization gives much higher ag Agricultural trade liberalization gives much higher ag growth rate – 5.7% vs. 1.1% (Valdes)growth rate – 5.7% vs. 1.1% (Valdes)
SSA – countries with large improvement in macro/ SSA – countries with large improvement in macro/ trade policies had higher ag growth rate -- 3.5% vs. trade policies had higher ag growth rate -- 3.5% vs. 0.3% for those with deterioration (World Bank)0.3% for those with deterioration (World Bank)
Huge amount of evidence that global trade reforms Huge amount of evidence that global trade reforms can have big poverty-reduction effectscan have big poverty-reduction effects
Trade liberalization enhances Trade liberalization enhances food security through many food security through many
channelschannels
Increases rural growth and reduces rural Increases rural growth and reduces rural povertypoverty
Keeps food prices affordableKeeps food prices affordable
Improves access to imported agricultural Improves access to imported agricultural technology, mostly embedded in inputstechnology, mostly embedded in inputs
Provides cash to buy inputsProvides cash to buy inputs
Production of export and non-food Production of export and non-food crops can enhance food crops can enhance food
production…production…
Production Growth Rate , 1980- 2000Food vs. Non-Food
Low Income Countries with Agr/GDP > 20%
-1
0
1
2
3
4
5
6
7
-5 0 5 10 15 20Non-Food
Food
Y = 2.13 + 0.22 X
( t =3.66) R 2 = 0.46
Production of export and non-Production of export and non-food crops can enhance food food crops can enhance food
production…production…Production Growth Rate, 1980- 2000
Food vs. exports Countries with Agr/GDP > 20%
-1
0
1
2
3
4
5
6
7
-10 -5 0 5 10 15 20 25 30
Agr. Export Growth (Annual 1980-99)
Food Pro. Growth (Annual 1980-99)
Y = 2.58 + 0.14 X ( t =3.99) R2 =
National National policies to policies to reduce reduce rural rural poverty and poverty and food food insecurity insecurity
Incorporate policies on food security, Incorporate policies on food security, hunger and nutrition into PRSPshunger and nutrition into PRSPs
In countries where agriculture is In countries where agriculture is dominant, increase agricultural dominant, increase agricultural expenditure (from very low 1-4% of expenditure (from very low 1-4% of government spending in many government spending in many countries)countries)
Avoid policies which target self Avoid policies which target self sufficiency: trade and investment sufficiency: trade and investment policies should be aimed at raising policies should be aimed at raising rural incomes, not food productionrural incomes, not food production
Lower barriers to South-South tradeLower barriers to South-South trade Finance nutrition interventions explicitlyFinance nutrition interventions explicitly
Actions by Actions by international international donors and donors and financial financial institutionsinstitutions
Reform food aid mechanisms: Reform food aid mechanisms: make them quicker and less make them quicker and less disruptivedisruptive
Improve donor coordination of Improve donor coordination of agriculture, nutrition, and rural agriculture, nutrition, and rural development programs development programs
Reduce industrial country Reduce industrial country agricultural tariffs and subsidiesagricultural tariffs and subsidies
Pay more attention to closing Pay more attention to closing technology gap between technology gap between industrial countries / large industrial countries / large middle income countries and middle income countries and low income countrieslow income countries
Agricultural Trade Reform and Agricultural Trade Reform and the Doha Development Agendathe Doha Development Agenda
Kym Anderson and Will Martin (eds.),, Washington DC: Kym Anderson and Will Martin (eds.),, Washington DC: World Bank, forthcoming but chapters now available on World Bank, forthcoming but chapters now available on World Bank website at: World Bank website at:
http://web.worldbank.org/WBSITE/EXTERNAL/http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/TRADE/TOPICS/TRADE/0,,contentMDK:20366035~pagePK:210058~piP0,,contentMDK:20366035~pagePK:210058~piPK:210062~theSitePK:239071,00.htmlK:210062~theSitePK:239071,00.html