Director-General of WTO criticises export restrictions
31 March 2012
Addressing an international conference, ‘Feeding the World’, organised in Geneva by the Economist, WTO Director-General Pascal Lamy claimed in February 2012 that ‘starve-thy-neighbour food export restrictions can bring importing countries to their knees’. He maintained that such restrictions were at the heart of the 2008 food price spike, particularly in the rice sector ‘where only 7% of global production gets traded’. He pointed out that constraining exports on thin international markets can lead to ‘copycat measures’ and ‘panic buying and hoarding’, which fuel price rises. He implied that this was an area where the international rule-book needed to be revised, alongside the rules of trade-distorting subsidies and ‘some extraordinary’ tariff peaks.
Director-General of FAO, Jose Graziano da Silva, said that ‘unequal access to food –rather than inadequate production at the global level – was the root cause of hunger’. In January 2012, the FAO food price index rose a further 2%, the first such increase since July 2011. However prices were still lower than peaks reached in 2011 and in 2008. FAO analysts suggested that price developments highlighted ‘the unpredictability prevailing in global food markets’.
Editorial comment
Access to food at household level is undoubtedly a critical factor in hunger and food insecurity. However, this raises the question of the role of national trade policy measures in ensuring supplies of basic commodities on national markets at reasonable prices.
In terms of the price and trade effects of the use of export bans, a distinction can be made between the market effects that stem from their use by major exporting countries, and their use by drought-prone, traditionally food-insecure countries.
The introduction of an export ban by Malawi needs to be seen in the context of regional developments (e.g. the rapid increase in maize prices in South Africa following high export levels and the initiation of South African maize imports from the region) and earlier Malawian experiences of famines.
Recent developments suggest a need for greater regional coordination of food reserve programmes aimed at maintaining affordable access to basic commodities (not just addressing severe emergency situations), as well as a need for closer harmonisation of regional cereals sector policies.
Looking beyond regional specificities, the issue of how to manage food commodity markets in an era of heightened price volatility is an increasingly important policy focus. In the EU this has given rise to the sophisticated use of a differentiated tariff policy for cereals and a growing focus on establishing effective producer safety nets.
