An increase in global agriculture trading through freer trading regulations could increase the worldwide benefits by $165 billion a year
Speaking at the recent UK National Farmers' Union annual conference in Birmingham, Harsha Varshana Singh, the deputy director general of the World Trade Organisation outlined the scenario to show that market forces are not just related to the domestic market.
"There is an important contribution also of international trade fostering agriculture and improving food security," he told the delegates.
He added that while agriculture covers more than trade for international trade acts as a conveyor belt linking up the two sides of the market - supply and demand.
He said that it is essential to have a stable and sustainable trading environment with a predictable system that allows growth through market forces.
"Therefore, we need to maintain and strengthen a system, which imparts stability and predictability to the trading system," said Mr Singh.
"The WTO is such a system, and the Doha Round is and effort to improve the system further.
"A focus on maintaining and strengthening the multilateral trading system of WTO should be an important point of the agenda for agriculture."
He said that under the WTO, trade for agriculture is to be opened up but within a regulatory framework, which allows the achievement of domestic objectives.
Support for Non-distorting Subsidies
He added that the vision of the WTO does not do away with support or subsidies to farmers.
"WTO members allow subsidies or government support, but work on curbing trade distorting support, and aim to stop severely trade distorting measures such as export subsidies," Mr Singh told the delegates.
"WTO does not in any way restrict green subsidies, i.e. subsidies which do not distort trade."
He pointed out that the European Union has now altered its support policies to embrace green subsidies.
The deputy director general added that the WTO also allows policies that cater for consumer health and safety and other non-trade concerns, but it does not recognise their policies if they are put in place for protectionist reasons.
The policies can be instituted to achieve domestic objectives such as bringing quality products to the market, caring for the countryside and caring for the welfare of animals.
He stressed that in the current political and economic situation the WTO needs to ensure that countries do not adopt isolationist and "beggar thy neighbour" policies.
"We need to work on cooperative mechanisms, because that is the only way to deal with global concerns, as today we live in an era of multiple global concerns," he said.
Agricultural Production Growing
Looking to the medium term, figures from the United Nations Food and Agricultural Organisation show that commodity prices will stay above the level that has prevailed for the last decade.
"Experts have concluded that world agricultural production can grow in line with demand, provided that the necessary national and international policies to promote agriculture are put in place," he said.
New markets are expected to develop in developing countries and production and consumption is growing faster in these countries than in many developed nations. Net cereal deficits for developing countries could rise to 265 million tonnes by 2030 he said.
"The OECD countries will continue to dominate exports of wheat, coarse grain, pork and all dairy products. And of course, markets will keep increasing for all agricultural products."
It is forecast that with the expected growth in large developing country markets, there will also be an increase in demand for processed agricultural products.
One of these growing markets is the new bioenergy and biofuels market.
"A multipronged approach is needed, including research and development for the new generation of bioenergy products, seeking greater market access and a more level playing field," Mr Singh said.
"Positive results in negotiations on environmental goods and services in the Doha Round can play a useful role in this context."
He added that science and technology will play an important role in the international agricultural agenda as the trade talks and markets open up, but growth will also come through the potential to open up land for cereal crops, while issues of forest cover and the protection of the forests will grow in importance as climate change plays an ever more significant part.
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