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Rural Poverty, Food Security, and Trade Liberalization: Exploring the Linkages

Rural Poverty, Food Security, and Trade Liberalization: Exploring the Linkages. WTO Symposium on Trade and Sustainable Development 10- 11 October, 2005 John Nash Agriculture & Rural Development Dept / Trade Dept The World Bank. This presentation. What’s the problem? Rural poverty Hunger

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Rural Poverty, Food Security, and Trade Liberalization: Exploring the Linkages

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  1. Rural Poverty, Food Security, and Trade Liberalization: Exploring the Linkages WTO Symposium on Trade and Sustainable Development 10- 11 October, 2005 John Nash Agriculture & Rural Development Dept / Trade Dept The World Bank

  2. This presentation • What’s the problem? • Rural poverty • Hunger • What’s the way forward? • Trade policy • Behind the border

  3. Why is agriculture so important for developing countries and the rural poor? • 63 percent of population live in rural areas • 73 percent of poor live in rural areas, and most depend on agriculture as producers or workers • Agriculture and agro-processing account for 30-60 percent of GDP in developing countries, and an even larger share of • Even with rapid urbanization, more than 50% of the poor will be in rural areas by 2035, and depend significantly on agriculture

  4. Poverty is disproportionately rural Poverty Rates from PRSPs

  5. Hunger is a Continuing ProblemNumber and Proportion of Undernourished, 1999-2001 Proportion of Undernourished (%) Number of Undernourished (millions) China* Other East Asia Southeast Asia India Other South Asia North America Central America Caribbean South America Near East North Africa Central Africa East Africa *includes Taiwan Province of China Southern Africa West Africa 60 50 40 30 20 10 0 0 50 100 150 200 250 Source: FAO

  6. Improving food security and reducing rural poverty are closely related goals • Food Availability • Depends on global agricultural productivity • International and national market and distribution systems • International and national trade policy: make sure food is available to all at a reasonable cost • Food Access • Poverty reduction: hunger is a result of poverty, so whatever reduces poverty reduces hunger • Food (processing and storage) markets • Food Utilization • Nutrition education (promotion of breast feeding in women, child care, sanitary conditions, child care time to free women’s time) • Nutrition interventions to supplement food (vitamin A,iodine, iron, etc), or provide food supplements (for calories, protein) • Health care • Safe water provision • Sanitation

  7. Trade liberalization enhances food security through many channels • Increases rural growth and reduces rural poverty

  8. Increased Trade is the Best Lever for Enhancing Agricultural Growth • Sustained trade reforms doubled growth in agricultural sector (Michaely, Choksi, Papageorgiou) • Agricultural trade liberalization gives much higher ag growth rate – 5.7% vs. 1.1% (Valdes) • SSA – countries with large improvement in macro/ trade policies had higher ag growth rate -- 3.5% vs. 0.3% for those with deterioration (World Bank) • Huge amount of evidence that global trade reforms can have big poverty-reduction effects

  9. Trade liberalization enhances food security through many channels • Increases rural growth and reduces rural poverty • Keeps food prices affordable • Improves access to imported agricultural technology, mostly embedded in inputs • Provides cash to buy inputs

  10. Production of export and non-food crops can enhance food production…

  11. Production of export and non-food crops can enhance food production…

  12. National policies to reduce rural poverty and food insecurity • Incorporate policies on food security, hunger and nutrition into PRSPs • In countries where agriculture is dominant, increase agricultural expenditure (from very low 1-4% of government spending in many countries) • Avoid policies which target self sufficiency: trade and investment policies should be aimed at raising rural incomes, not food production • Lower barriers to South-South trade • Finance nutrition interventions explicitly

  13. Actions by international donors and financial institutions • Reform food aid mechanisms: make them quicker and less disruptive • Improve donor coordination of agriculture, nutrition, and rural development programs • Reduce industrial country agricultural tariffs and subsidies • Pay more attention to closing technology gap between industrial countries / large middle income countries and low income countries

  14. Agricultural Trade Reform and the Doha Development Agenda Kym Anderson and Will Martin (eds.),, Washington DC: World Bank, forthcoming but chapters now available on World Bank website at: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/TRADE/0,,contentMDK:20366035~pagePK:210058~piPK:210062~theSitePK:239071,00.html

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