Preamble
Recognizing the access to adequate food sources as a fundamental requirement for human security and national security, we, the 2010 PECC Youth Delegation have compiled the following report in the hope that it may inform discussions within PECC in regards to the issue of food security.
Introduction
Recent food price hikes have drawn the attention of the world’s policy-makers and news media to food security. But what is “food security” and how can it be measured? For the purpose of this report we have adopted the definition of food security, as defined in the UN Food and Agriculture Organization’s 1996 Declaration on World Food Security:
Food security exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life. This widely accepted definition points to the following dimensions of food security: (1) Availability; (2) Accessibility; (3) Stability and utilization.
The FAO definition provides a useful goal towards which the world should strive. However, the issue here is whether the widely accepted FAO definition on food security are useful for effective policy-making and problem-solving. And if not, whether there is a need to further dis-aggregate the concept into sub-categories depending on the nature and severity of the problem and the type of solutions required.
The inclusion of “safe and nutritious” in the FAO definition serves to emphasize food safety and nutritional composition. In addition, the mentioning of “food preferences” expands the concept of food security from mere physical access to adequate nutrition, to a broader understanding of “access” which respects cultural and individual preferences for food choices. Such encompassing definition implies a pluralist approach to food security, that there are different levels and aspects of food insecurity to be considered.
One key aspect of food security concerns with the effective distribution of resources between economies, so that basic food needs are met. Trade, in particular trade liberalization, has been a key driver for increasingly effective resource distribution and efficient food production worldwide through the utilization of comparative advantage. The information in Appendix One below demonstrates the importance of trade within the context of PECC. Appendix Two contains a schematic of the various comparative advantages and the implicit benefits of interdependency arising from the comparative advantage among PECC members.
However, taking the above definition, food security is also complicated by the forces of globalization and the associated dynamics of increasing trade and trade liberalization. There are a number of broad factors that need to be taken into consideration in regards to food security for all economies:
1) Dietary Transition – this refers to changes in diet associated with economic development and industrialization, rising per capita incomes and the deepening of globalization. The rise of middle class and urbanization in emerging economies has contributed to an increase in demand for more agricultural-resource-intensive calories, including meat, milk, eggs, fats and oils, fruits and vegetables.
2) Climate Change – frequent and extreme weather events, changing temperatures and precipitation will affect agricultural and fishery production, as well as distribution channels, which will have an impact on food availability, food accessibility, food utilization and food system stability. Furthermore, changes in climate will have implications for crop selection, resulting in vulnerability for societies or economies that are culturally or socio-economically dependent on certain types of food sources. In addition, impacts of climate change on foreign exchange earnings will affect not only market flows but also purchasing power. The problem of food scarcity due to climate change and extreme weather events is compounded by spikes in price of fossil fuel which can further complicate food security by adding to price fluctuations.
3) Demographic change – demographic change refers to both the age structure of the population and a society’s transition from rural to urban lifestyles. As a society matures and becomes more urban, its labour force structure transforms as a result. This will have repercussions for the human resources available for farming, fishing and other aspects of food production. This will require significant advancements in farming techniques to meet domestic and global food demand. Another critical consequence brought about by demographic change is the changing pattern of land and water use from agricultural to industrial and other uses. Moreover, worldwide population growth within the next 20 to 30 years also places additional pressure on the food system.
4) Free trade, specialization and globalization – on top of the above factors we see an interesting dynamic where trade liberalization provides opportunities for increasing food production efficiency, which has a positive impact on food security. However on the other hand, social instability derived from adjustments to globalization, climate change, and traditional security challenges potentially undermines food supply. This is particularly true where economies are interdependently linked in a food trading system where specialization is becoming the norm. A local crisis in one area of the world that is responsible for a certain food product could have serious regional or global knock-on effects – which in itself could be a driver of social instability in other societies. We also note that food price fluctuations such as seen in the last two years may also have the same impact. Below is a graphical summary of the factors mentioned above, as well as many others that may need to be considered on top of the major factors discussed above.
Source: FAO 2009 Profile for Climate Change
Appendix Three provides a brief summary of some of the political, economic and cultural challenges faced by China, Korea and Japan in terms of food security and social stability related to trade liberalization. This provides some concrete points of references when considering the interaction between trade, social evolution, and food security.
As the structure of the global trading system for food is a key factor in food security given the potential challenges to trading networks and supply, we propose that the overall goal of PECC economies should be to pursue trade liberalization and food production specialization in areas of primary comparative advantage to the point where said specialization does not undermine the ability of economies to substitute a given food product from multiple source economies. Essentially, work should be done in trying to identify the point where specialization in food production starts to undermine the ability for economies and societies to substitute food sources in the global trading system. A less careful approach to trade liberalization without considerations of the dangers of overspecialization in terms of specific food crops and/or the balance between primary, secondary and tertiary sectors, may also run up against cultural preferences as well as contribute to social instability in some countries. To achieve this goal of increasing food security while broadly still supporting a trade liberalization agenda, a number of other actions will need to be taken.
Policy recommendations
1) Economies should identify areas of both primary and secondary comparative advantage. While in a pure “free trade” world countries would specialize quite narrowly in their areas of primary comparative advantage, such a narrow focus, given the above challenges, may well lead to significant instability in food security and thus undermine the gains acquired from trade liberalization and specialization. Diversification of food sources in domestic economies should be kept in mind so an optimal solutions based on real world conditions and challenges can be found within the context of increasing trade liberalization in the areas of food and agriculture and more broadly;
2) economies should also increase their investment in science and technology, including green technologies that will enable increased food efficiencies while not leading to increases in unsustainability from an environmental point of view in terms of food production;
3) they should work collectively to ensure that investment in science and technology and in high value-added food production is not located in certain societies and economies – more precisely less developed economies should not be forever condemned to mass producing certain food crops at low margins;
4) they should also continue to push for the reduction and elimination of tariffs, quotas and export restrictions. While the above picture suggests a trade system based on overspecialization in food products is potential problematic, we also note that tariffs, quotas and export restrictions are not only from the point of economics a very distortionary trade barrier, they also do very little in terms of supporting food security both regionally and in terms of the global trading system; however
5) intelligent and directed government policy and partnerships with the private sector and civil society inside economies that target areas of secondary comparative advantages should be encouraged. This might include the revitalization of regional and local economies suffering from dietary transition and demographic challenges. Governments may have a role in supporting local economies and building sustainable and vibrant rural societies, through income supplementation policies, resources for up-skilling and retraining. They may also have a role in working with the private research sector in investment in science and technology and more efficient food production techniques. Overall such actions would allow for some degree of food security through diversification to exist inside economies, but would also add to more flexible food crop substitutability at the global level.
However, in order to achieve such goals, especially given some of the proposed actions may be considered non-tariff barriers to trade under WTO rules, there is a fundamental need for a multilateral framework for food security that would complement trade liberalization in the context of the main goal articulated above. That goal is to avoid overspecialization in the area of food production as suggested by the theoretical implication of the theory of comparative advantage that underpins free trade agendas. As supporting food security in the ways suggested above will require a delicate balancing act between overall trade liberalization dynamics and the needs of food security, a multilateral framework is essential to ensure that economies are not unfairly disadvantaged while others exploit rules and exceptions for their own benefit. This framework would be committed to:
1) Good faith negotiation of agreements for diversified sourcing of food for the purpose of alleviating risk from food security;
2) development of emergency mechanisms to deal with short-term food security shocks; and
3) information sharing in terms of science and technology, especially for lesser developed economies, so that they are not forever confined to producing food for more developed economies at low margins. This framework would be focused on the diversification of risk in the area of food security and it would work alongside and inform the trade liberalization agenda within the context of APEC.
Respectfully submitted
2010 PECC Youth Delegation (alphabetical order by economy)
Canada: Justine Chen;
China: Helen Hai;
Hong Kong: Aqua Kang Shu Chang, Shirley Tam Man Ying, Alan Yip Chi Chung, Bonnie Chiu Shun Yu, Hilary Hau Yung Yung, Russell Zhou, Chung Jah Ying, Kunal Parwani, William Chung;
Japan: Ryutaro Ichikawa, Takao Makijima, Yuki Ohbuchi, Manaka Nakamura, Shoya Hirose, Teppei Mizuashi, Ayumu Yamashita, Koki Nagayama, Yuko Saito, Yui Oshiro, Yasunori Okonogi, Masahiro Sato, Toshihiro Takagaki, Yumiko Sugiyama, Masataka Ito, Naoki Sakakida, Surina;
Korea: Hyunwoo Kim, Seokmin Hong, Nunsol Jang, Jihye Jung;
Malaysia: Calvin Ong Kah Yee, Juita Mohamad;
New Zealand: Corey Wallace;
Singapore: Lu Yi, Deng Qing, Cheng Liqi, Lau Hui Ning;
Chinese Taipei: Hector Lo.