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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 l.jpg

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


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This presentation Exploring the Linkages

  • What’s the problem?

    • Rural poverty

    • Hunger

  • What’s the way forward?

    • Trade policy

    • Behind the border


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Why is agriculture so important for Exploring the Linkagesdeveloping 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


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Poverty is disproportionately rural Exploring the Linkages

Poverty Rates from PRSPs


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Hunger is a Continuing Problem Exploring the LinkagesNumber 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


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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


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Trade liberalization enhances food security through many channels

  • Increases rural growth and reduces rural poverty


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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


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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




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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


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Actions by international donors and financial institutions insecurity

  • 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


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Agricultural Trade Reform and the Doha Development Agenda insecurity

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