Trade Rather Than Aid

Trade Rather Than Aid

At APEC Food Security Meeting, IFAD Calls For Wealth Creation

Rome, 14 October 2010 – Yukiko Omura, Vice President of the International Fund for Agricultural Development (IFAD) will attend the Asia-Pacific Economic Cooperation (APEC) Ministerial Meeting on Food Security. “The best way to overcome poverty is not charity but economic growth; trade rather than aid. That is why East Asia has raised its living standards so much”, Omura said prior to leaving for Niigata, Japan, where APEC country ministers are gathering from October 16 to 17, for discussions on expanding trade opportunities in the Asia-Pacific region.

The meeting will address the sustainable development of the agricultural sector, the facilitation of investment, trade and access to markets and how to ensure the availability of food with a view to strengthening food security in the region.

The 2008 food security crisis put agriculture at the centre of macroeconomic policy making, as well as on the global policy agenda. Food security is an integral part of national security, of macroeconomic and trade policy making, and of global stability. The recent crisis has underscored the long-run inadequacy of investment in agriculture and the impact of farm-sector protective measures in developed countries.

Many Asia-Pacific countries are still predominantly rural. Food security is a key challenge for the APEC economies. Hunger remains widespread in the region which is home to the largest number of undernourished people in the world - 578 million people or 62% of the global total. Billions are still vulnerable to dramatic spikes in food prices, which indicates that there are deep structural problems in the region’s food supply chain.

Thomas Elhaut, IFAD Director of the Asia and the Pacific Division, who is also attending the meeting, said: “The crisis has also highlighted the need for trade policy continuity, with further liberalisation, and enhancing the enabling environment for investment, such as contract enforcement. APEC economies need to confront the issue of how to meet the growing food consumption needs of an expanding and more prosperous population by expanding food supply by promoting investment in agriculture”.

Feeding the world’s poor and hungry is the challenge of our time. Agriculture is a key driving force of poverty and hunger-reducing economic growth - without investment in agriculture there can be no food security. At the same time, agricultural investment must be responsible investment”, said Omura.

The global costs of current trade policies are expected to reach as much as US$300 billion per year by 2015, two-thirds of which comes from agricultural tariffs and subsidies. Developed country agriculture policies cost developing countries US$17 billion per year, or five times the amount of aid to the sector. This impacts GDP by as much as 3-5% in countries like Thailand and Viet Nam.

“It is hoped that the findings which emerge out of the Ministerial Meeting will help leverage additional resources and bring further trade and agricultural investment into the region. Well-functioning agricultural markets are essential for rural growth and poverty reduction. And they, in turn, rely heavily on well-functioning agricultural markets. Enabling agricultural policies are part of the equation if we need to produce 70% more food to feed the world in 2050”, the IFAD Vice President concluded.

More than 30 per cent of IFAD’s portfolio is in the Asia-Pacific region. Since 1978, IFAD has financed 185 loan initiatives in 21 countries in the Asia and the Pacific region, for a total of US$3.0 billion focusing on rural smallholder farmers which is IFAD’s focus. Supporting rural smallholder farmers is essential for the goal of providing global food security since they comprise 46.2 % of the population in Asia and 25.7 % globally.

ENDS

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