FAO, OECD: Food Security Key to G-20 Growth Goals

8 May 2014

A joint agency report is set to urge G-20 members to tackle food security if they are to succeed in boosting growth and creating jobs, according to a draft version seen by Bridges.


The paper was prepared by the UN Food and Agriculture Organization (FAO) and the Organisation for Economic Co-operation and Development (OECD), and is set to be discussed at the G-20’s Development Working Group meeting today and tomorrow in Hobart, Australia.


The paper argues that improved food security is critical to the G-20’s growth agenda under the Australian presidency in 2014, which seeks to consolidate economic recovery in the wake of the 2008 global slowdown. (See Bridges Weekly, 17 April 2014)


However, policies on economic growth must also be inclusive if they are to tackle hunger and malnutrition effectively, the draft says. “It is through those growth linkages that the G-20 can deliver on food security,” one source familiar with the paper told Bridges.


Poverty and inequality


The G-20 needs to take “concrete actions that address the underlying cause of food insecurity – poverty,” the draft says.


Strong growth in many developing countries has not always translated into reductions in poverty and improved food security, the agencies note.


In particular, unequal distribution of assets – such as land, water, capital, education, and health – have often prevented the poor from benefiting from economic growth, and have slowed progress in tackling malnutrition.


“About half of the world’s undernourished are in G-20 countries,” explained one source familiar with the draft. More inclusive growth could therefore be a significant step towards improving global food security.


Rural investment needed


The authors cite evidence suggesting that improving agricultural growth in low income countries is three times as effective in reducing extreme poverty – where people live on less than one dollar a day – than growth increases in other sectors.


The paper also presents research by the International Food Policy Research Institute (IFPRI), which looked at options for all countries and regions to achieve, by 2020, the G-20 target of two percent additional GDP growth. G-20 leaders are set to release in November their national plans for achieving this goal for their own members within five years. (See Bridges Weekly, 27 February 2014)


IFPRI found that investments in rural infrastructure would have the biggest impact on rural value added and rural wages, especially in Africa, the paper says.


However, some fear that G-20 discussions on investment and infrastructure have so far largely disregarded food security considerations – and might therefore not fully capitalise on growth potential in the countryside.


“They don’t consider rural areas,” one source noted. “Food security has been left off.”


Tackling inequality must complement trade opening


“The adoption of more coherent agricultural, trade, and development policies could deliver important gains for the world’s poor and vulnerable,” the agencies are expected to argue.


But while more open food and agricultural trade policies can reinforce growth, employment, and food security, they also need to be matched by complementary measures, the draft says.


Countries need to invest in the supply of food and farm goods, the agencies argue, such as by raising productivity levels. However, they also need to set in place “social safety nets” to help producers who cannot respond effectively to new market opportunities.


In Africa, transport costs account for 50 to 60 percent of total marketing costs, the report notes. “Export bans, unnecessary permits and licences, costly document requirements, and conflicting standards can all raise transaction costs,” the agencies will say.


Concrete initiatives


G-20 members need to concentrate on concrete initiatives that deliver results, the agencies will urge.


The draft paper points to progress in improving market transparency as an example of what the G-20 can achieve. The Agricultural Market Information System, or AMIS, is singled out for particular praise.


In 2012, when global maize prices reacted to a severe drought in the US, AMIS helped prevent policies from being introduced “that would add to the nervousness of the market,” the agencies will recall. (See Bridges Weekly, 24 October 2012)


The draft paper also commends a G-20 deal three years ago to exempt humanitarian food aid purchases from farm export restrictions, when food price spikes threatened the ability of UN agencies to respond to emergencies. (See Bridges Weekly, 9 November 2011)


“G-20 countries could play a leadership role” on this issue, a source familiar with the draft told Bridges.


Undermining credibility


However, the agencies will warn that failure to follow through in relevant forums on G-20 decisions “undermines the G-20’s credibility in the longer term.”


The draft notes that the G-20 deal on exempting humanitarian food aid from export restrictions was not ultimately adopted at the WTO, despite a push to do so ahead of the global trade body’s 2011 ministerial conference.


At the time, some developing countries such as India expressed reservations about adopting the G-20 commitment in the WTO.


The draft suggests that “concerted political efforts” to support initiatives such as the food aid agreement are likely to be more effective than “blanket expressions of support” for the WTO’s Doha Round.


Doha: “laudable aim”


However, another source familiar with the draft told Bridges that concluding the Doha Round negotiations could still play an important role in improving food security. WTO members are currently in the process of elaborating a “work programme” for resolving the multilateral trade talks, now in their thirteenth year.


“Just because something’s difficult, that doesn’t mean it shouldn’t be done,” the source observed.


The agencies’ draft acknowledges that concluding Doha is a “laudable aim,” but urges G-20 members to focus their efforts on measures where the group can “add value according to its comparative advantage.”


It cautioned against duplicating work in areas covered by other organisations – including the WTO.


The Asian Development Bank, the International Fund for Agricultural Development (IFAD), the International Labour Organization (ILO), IFPRI, and the WTO are listed as having provided inputs on the paper. In 2011, as many as ten international agencies collaborated on a similar report. (See Bridges Weekly, 11 May 2011)


The road from Hobart


The draft is now likely to be revised further following discussion among government officials in the Development Working Group in Hobart.


Sources familiar with the process told Bridges that much depends on the extent to which the G-20 decides to address food security in an integrated manner in the group’s wider agenda, or whether it will leave the issue to be discussed in the Development Working Group.


“The most important thing would be to mainstream food security across the pillars,” one source familiar with the process told Bridges.


The report is due to be finalised at a subsequent meeting in July. Sherpas will then consider the report’s recommendations in the run-up to the G-20 leaders’ meeting, scheduled for 15-16 November in Brisbane.


A separate meeting of G-20 trade ministers is also planned for 19 July in Sydney.


ICTSD reporting.

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