Trade policy and food security: improving access to food in Developing Countries in the wake of high world prices
Based on forecasts of global population growth, food security will remain an important economic development issue over the next several decades. Real food prices have risen in recent years after decades of decline, bringing the issue of food security even further into the public spotlight. However, there is no global shortage of food; the problem is one of moving food, often across borders, from areas with a production surplus to those with a deficit, and doing so at prices that low-income consumers in developing countries can afford. Many countries restrict imports of food and discourage exports to keep domestic markets isolated from international price changes. As a result, food commodity markets often remain highly distorted despite the wave of liberalization that has swept world trade since the 1980s. In fact, trade can be an excellent buffer for domestic fluctuations in food supply. Worldwide output of a given food commodity varies much less than does output on a country-by-country basis, so increased trade integration holds considerable potential to stabilize food prices, boost returns to farmers, and reduce the prices faced by consumers. Trade liberalization ultimately protects national food markets against domestic shocks by allowing more food to be imported in times of shortage and exported in times of plenty. In addition to examining the determinants of recent food price spikes, Trade Policy and Food Security explores the impact of food prices on economic welfare, and how the effect of price changes on food insecurity in developing countries can be mitigated through appropriate policies. The book highlights the importance of extending existing World Trade Organization disciplines on trade-distorting agricultural policies. Doing so serves as a key resolution to the collective action problem witnessed during the recent food price spikes, whereby unilateral border policies—especially export controls—simply exacerbated the initial price increases.