Farm subsidies won’t be ‘repurposed’
Lamy
Farm subsidies won’t be “repurposed” to be used for other programs such as agricultural research and equipping the lowest income countries to import and export more easily because the biggest subsidizers are now China and India, Pascal Lamy, a former head of the World Trade Organization, said Thursday at a Washington conference sponsored by the International Food Policy Research Institute.
Speaking at a conference titled “Understanding the New Dynamics of Agri-Food Trade,” former USDA Chief Economist Joe Glauber said, “Repurposing is the new buzz word but least developed countries have less to repurpose.”
Glauber asked whether the developed countries could shift some of their commodity support to helping developing countries to develop “orphan crops” such as teff and sorghum on which much less has been spent on research than on corn and soybeans. Glauber, who is now a senior research fellow at IFPRI, also noted that developing countries need help with trade facilitation.
But Lamy, who is now the IFPRI board chair, said “repurposing was an issue when we were in a North-South fight,” referring to an earlier era when the United States and the European Union were the biggest subsidizers of agriculture.
But the issue of subsidies is no longer a North-South issue, Lamy said, because China is now the biggest subsidizer, followed by India, with the United States in the No. 3 position and the European Union No. 4.
In more general remarks, Lamy said that agricultural trade is “a specific kind of trade” because “for a lot of people getting food is the most important part of their lives and sometimes their survival.”
About one in five calories consumed around the world comes from food products that cross borders, Lamy said.
Despite the challenges of COVID and the Russian invasion of Ukraine, trade has been “doing the job, serving its purpose, bringing food where it is needed,” Lamy said.
But he added that there are still obstacles and frictions in trade that can “have negative consequences” for the poorest people in the world.
Lamy summarized those issues as food security, environmental sustainability and health-related cautionary standards.
“I discount the narrative about food sovereignty,” Lamy said, noting that even in his native France it has become an issue.
The decision to try to achieve “zero emissions” in carbon on a national basis also threatens trade, he said.
“There is a trade-environment nexus rather than trade-development nexus,” he said, noting the controversy in the European Union about whether palm oil should be imported and how deforestation should be taken into consideration.
On health-related issues, Lamy said he sees more protection coming.
He also said he sees developing country exporters being subjected more to “private standards” than to public standards.
Some action should be taken on private standards “at the global level,” he said.
Market concentration is also an issue because concentrated markets are less shock resistant, he said.
Lamy stressed that the biggest issues are in Africa, which is the continent most dependent on imported food.
“Africa, Africa, Africa — there is more attention to Africa than others in CGIAR. This remains the absolute priority,” he said.
In response, Mari Elka Pangestu, a former Indonesian government and World Bank official now at the Peterson Institute, said that developing countries need a “sustainable production policy” involving less water, less fertilizer, less pesticide and better seeds.
Mary Lovely of the Peterson Institute noted that the U.S.-China trade conflict has changed world trade flows. China imports a lot of food, but in China food imports are seen “as a source of food insecurity,” Lovely said.
China is increasing its food imports from Brazil but also wants to increase its food imports from the “Belt and Road countries” in which it is building infrastructure, Lovely noted.
The United States, she noted, has integrated more with Canada and Mexico. (The Agriculture Department announced this week that China has dropped to third place after Mexico and Canada as an export market for U.S. agriculture.)
Anabel González of the Inter-American Development Bank said that the World Trade Organization needs reforms throughout the system, not just in the dispute settlement process.
Sherman Robinson of the Peterson Institute said that the United States is “not present” at the WTO and is not engaged in other trade negotiations. But he noted that other countries have not been following the United States and are conducting negotiations.
