Global Food Systems: Fit for the Future?

Global Food Systems

Global food systems perform well overall, and today provide more safe, nutritious, and affordable food per capita than ever before. At the same time, over 800 million people are undernourished and a higher number are overweight. Food, agriculture and fisheries production draw heavily on the world’s natural resources, while agriculture and land use change are major contributors to greenhouse gas (GSG) emissions.

Many small and resource poor farmers and fishers face growing pressure on their already low household incomes, and in less developed economies the sector can account for as much as 50% of total employment. Labor disruptions, from planting to processing, as a result of government responses to COVID-19 illustrate the need to strengthen the resilience of local, regional and international segments of food supply chains.

Feeding the world, sustaining the environment, and enabling livelihoods involve a myriad of social, environmental, economic and policy interactions within, but also well beyond, the food, agriculture and fisheries sector itself. There are important trade-offs inherent in pursuing these multiple objectives, and not all governments and societies have the same preferences. The United Nations Food Systems Summit 2021 is a unique opportunity to explore how best to address these vital issues. As stated by UN Secretary-General Antonio Guterres, “Transforming food systems is crucial for delivering all the Sustainable Development Goals.”

Many existing policies are not fit for purpose

The food, agriculture and fisheries sector has not been neglected by policy makers; on the contrary, in many countries the sector has arguably suffered from too much attention. Government involvement in the sector, via both domestic support and trade restrictive measures, is exceptionally high and is grounded in policy instruments that were developed decades ago when social, environmental and economic conditions were very different than they are today.

According to OECD estimates, support to agriculture during 2017-19 averaged USD 708 billion annually, of which USD 536 billion was provided to individual producers (18% of gross farm receipts for the 54 countries monitored); support to fisheries during 2016-18 averaged USD 9.4 billion per year (10% of the value of landings for the 39 countries monitored).

Most of this support is directly linked to farming and fishing input use and output quantities, distorting both production decisions and subsequent trade flows. Because much of this support is provided by higher income countries, it disadvantages developing country farmers and fishers unable to compete with subsidized production on international markets. Production and price-based support benefits large operators much more than smaller ones, imposes a high burden on industrial and household consumers, and can harm the environment. Across all countries, average tariffs applied to agriculture are almost double those applied to industrial goods.

New policy approaches are needed to address current realities

Updated sector-specific policies that target today’s priorities, not yesterday’s, can be more effective and less costly than many current policies. The policy recipe needs to address the specificities of the food, agriculture and fisheries sector in individual countries and regions, but the main ingredients are common to all:

  • Focus on people: education, skill development, and training and extension services enable more people to benefit from evolving income and employment opportunities, within but also outside the sector
  • Invest more in innovation, science, R&D, and technology adoption: increasing productivity (i.e. output per unit of water, land, biodiversity, and energy input) contributes to feeding the world, sustainably, and increases farm incomes
  • Invest in essential physical and digital infrastructure: improving transport and logistics services reduces food loss & waste and increases incomes, while new digital applications enable improved environmental outcomes
  • Align regulatory incentives with environmental priorities: for example, by prohibiting excessive input use, incorporating agriculture in schemes to mitigate GHG emissions, and ensuring scientific data underpin sustainable fisheries management regimes
  • Support risk management and mitigation efforts for shocks that are beyond the control of individual farmers and fishers, via market-based initiatives and social safety nets.

Economy-wide measures also play an important role in underpinning global food systems.

Hundreds of millions of people remain undernourished even as sufficient food is available to feed them. The underlying problem is not food supply, it is poverty; too many people have inadequate income to feed their families. And in some parts of the world this fundamental problem is compounded by conflict. Food policies cannot address this reality - comprehensive economic and social policies are needed, in some cases involving development within the sector, but always looking at wider development opportunities.

Obesity and associated health risks sit uncomfortably alongside global hunger. A range of policy measures have been explored to contribute to better health outcomes, but this is an area that warrants more attention. Education and information schemes and regulations governing product labelling and advertising have had some success in contributing to better informed food choices. Experiences with measures that increase the price of “unhealthy foods” are more mixed, and there is concern that they act as regressive taxes while having little impact on consumer behavior.

Resilient global food systems require open and fair trade

Strengthening resilience across essential supply chains, including for food, is a widely shared interest driven in part by recent disruptions related to COVID-19. How this is best achieved is actively debated internationally. Policies that aim to force re-shoring of selected supply chains are costly and unlikely to improve stability of supply; alternatively, international economic cooperation, and further public-private cooperation, could do much to build more resilient global value chains.

Feeding the world, sustaining the environment, and enabling livelihoods cannot happen without international trade – that is, without enabling farmers and fishers to produce where it is most economically, environmentally, and socially sensible to do so, and to ship where food is needed. Globally, 20% of calories consumed are traded, and in some regions the share is 50%; with climate change, the reliance on trade to feed the world, and to do so sustainably, will only increase. International markets also help buffer supply and price volatility, as domestic shocks are more frequent and severe. Cross-country cooperative initiatives, such as the G20-inspired Agriculture Market Information System, contribute further to predictable and reliable global markets.

An open and fairer international trading system is a key element in building global food systems that are fit for the future. The Twelfth World Trade Organisation (WTO) Ministerial Conference (2021) offers yet another opportunity to deliver this outcome. WTO Deputy Director-General Alan Wolff recently urged governments to translate their statements on reform to global trade rules into formal proposals and concrete requests at the WTO.

Let’s hope that governments are listening and start now to move towards policies that are better fit for the future; well-functioning global food systems depend on it.

Ken Ash is an Independent Consultant, IIT Visiting Fellow, and former OECD Director of Trade and Agriculture.

The views expressed here are the author’s, and may not necessarily represent the views of the Institute for International Trade.

Photo credit: Tomas Hertogh on Unsplash

Tagged in Opinions, Featured, Global Value Chains, World Trade System, World Trade Organisation, Australia, China, Asia Pacific, Sub-Saharan Africa, Southeast Asia, Central Asia

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