Major Players Of The International Food Trade And The-Free PDF

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Colloque SFER 2014 Agriculture et g opolitique, 2 Leadership on international food markets and responsibility over world food security. framing the subject through an historical vision 1945 1994. After 1945 following two world wars and a very severe economic crisis food markets were mostly organized on. a national basis At that time food security was considered to depend on national self sufficiency and regulation. of domestic prices Some exchanges between countries however took place Europe being the main importing. region Because of the omnipresence of public institutions administrating foreign trade the corresponding. international markets were characterized by an oligopolistic structure of nation states In many of these. oligopolies a leading country acted as a residual supplier taking over a large part of world stocks and trying to. stabilize international prices The USA played such a role on the cereal and oilseeds markets Beside commercial. transaction an important amount of concessional trade took place in the form of food aid in particular for. cereals organizing the transfer of surpluses from the USA and later the EU to food deficit like India or later. 2 1 The post war II international food security regime under US leadership. The first globalization period of international food markets took place from 1850s It is characterized by the. emergence global markets for a series of commodities and the creation of an international division of labor. Some countries specialized in agricultural export and others in manufacturing exports importing the majority of. their food Europe was clearly the masterpiece of international food markets accounting for 72 of world food. imports UK is the best illustration of such a strategy of food dependence In 1913 it imported 81 of its. wheat consumption and 42 of its meat and alone accounted for 25 of the world food imports Perren 1995. World War I brutally put an end to this equilibrium For the European nations it was a decisive experience Food. blockages and naval wars demonstrated the danger of being dependent on long distance trade to guarantee food. security From then on they were convinced that total war Shaw 1988 required economically self sufficient. nations and the mobilization of public resources to that end In agriculture it meant applying protective trade. measures and adopting domestic support measures A new stage was reached with the 1929 depression By then. food surplus had been accumulated in many countries and international prices brutally fell In reaction a whole. range of state interventions aimed at further controlling foreign trade and the domestic market including by. increasing customs duties see Perren 1995 for Britain Tracy 1989 for Europe Taylor Taylor et al 1943 and. Malenbaum 1953 for the rest of the world By favoring self centered growth a fair proportion of these measures. guaranteed not only national independence but also aimed at stabilizing domestic prices and producers incomes. Total war and over production kept being perceived as permanent threats until 1989 the short XXth century. according to Hobsbawm 1994 not only by European countries but also by many countries in the world. including of course the USA As a consequence those countries pursued a high degree of national self. sufficiency and actively supported their domestic prices and isolated them from international prices. However in developing countries Latin and South American countries first and then newly independent African. and Asian countries agricultural and trade policies differed from that of developed countries A large strand of. the literature starting with Lipton 1977 has identified an urban bias in those policies This bias is traduced by. the discriminatory macroeconomic sectoral and trade policies that increasingly favored urban consumers at the. expense of farms households taxing exportable crops in order to develop industries and setting low prices to. crops principally food crops in favor of urban consumers either explicitly or implicitly through exchange rate. distortions and marketing boards This anti agricultural bias of domestic policies included anti market bias that. has been measured by the recent research program on agricultural distortions of the World Bank confirming. earlier analyses of Krueger Schiff and Valdes 1988 and Lindert 1991. During this period international markets operated like canal locks between national markets handling the. transfer of products between countries with strong agricultural policies Johnson 1973 International food trade. did expand but lower than world production Feedstuffs played a major role in this dynamic with growing. imports first from Europe then from Japan and later from developing countries especially oil exporting. countries and socialist countries Beside cereals imports for human consumption increased at the beginning of. the 1960s because of the Asian deficit but the Green Revolution success slowed down this movement. International flows were characterized by a very specific organization in hierarchic and or co operative. oligopolies which explains that the international prices of most food products displayed a noticeable stability from. the end of the 1950s to 1972 in spite of the residual nature of trade Indeed the management of foreign trade. overseen and centralized at national level gave the countries the status of basic units on the international food. products markets Furthermore the mastery of foreign trade was accompanied by states taking control of stocks. Colloque SFER 2014 Agriculture et g opolitique, Market power hence switched from firms to states In this context practically all the international markets. assumed the structure of nation state oligopolies, In fact a number of initiatives emerged during the decade following the Korean War such as international. agreements on wheat sugar or coffee or the GATT General Agreement on Tariff s and Trade regulation on. dairy products These initiatives can be considered as co operation devices They were usually based on a solidly. established hierarchy between countries and the existence of an uncontested leader This these dominant. country countries guaranteed their stability by acting as residual supplier s i e limiting their export supplies. with the aim of supporting international prices It is the equivalent of the dominant firm price leadership found in. industrial organisation economics Scherer 1970 In international food markets this strategy can be detected. through the growing share of world stocks own by the countries following it As stated by McCall 1966 the. storage capacity and the willingness to hold stocks gave them additional market power in international food. During this whole period it is the USA that dominated the exports of wheat maize soybean and rice It played a. pivotal role by adopting residual suppliers strategies alone or in cooperation with one other country for grains. see Mitchell and Duncan 1987 for wheat see McCalla 1966 for corn see Bredahl and Green 1983 for rice Karp. and Perloff 1989 In the mid 1960s the USA controlled 70 of world stocks for corn 65 for soybean and. 33 for wheat, Among initiatives to manage international markets beside those related to commercial transactions several. formally established food aid as a mean to dispose of surplus such as the Food and Agriculture Organization. FAO Consultative Sub Committee on Surplus Disposal or the Food Aid Convention The USA played an. important role by providing very large amount of food aid through its Commodity Credit Corporation still. influential today especially in wheat rice and vegetable oil At the beginning of the 1960s food aid accounted. for 55 of developing countries cereal imports and 80 to 100 for Taiwan South Korea India Iran Pakistan. Egypt and Tunisia Hopkins and Puchala 1980, 2 2 The destabilization of the international food markets the short lived food security momentum and.
the trade liberalization project, In the early 1970s bad climatic conditions led to the reduction of global cereal production International food. price soared ignited by massive soviet purchases of cereals in the context of decreasing world stocks The fear. of those rising food prices together with the drought induced hunger in Sahel created a momentum for an array. of international initiatives on food security This food crisis was the first signal that the post WWII food. security regime was coming to an end, In 1974 the United Nations World Food conference recognized for the first time that food security was a global. concern and proposed the establishment of several new institutions of which the Committee on Food Security. CFS and the International Fund for Agricultural Development IFAD Despite an increasing recognition of. Sen s argumentation putting the access dimension forward in research food security were mostly seen by actors. as an availability problem with complex logistical dimension needed to be resolved in the case of emergency. food aid interventions Simon 2012 But many components of this project lost momentum before they had any. significant impact on global food security in the following years. Indeed after 1982 the economic downturn created by the U turn in monetary policy of the USA and the. following debt crisis initiated a brand new situation on international food markets The brutal demand. contraction from developing and socialist countries generated a fierce competition between suppliers in a context. where new exporters were emerging The dominant position of the USA was progressively eroded by new. competitors of which the major and most dangerous was the EU Benefitting from an equivalent level of. financial and institutional resources than the USA the EU was able to compete with the USA on a peer to peer. basis Some fast rising developing countries also gradually became serious competitors of the USA such as. Brazil and later Argentina on soybean Indonesia and Malaysia on vegetable oil or Thailand on rice. International prices reflected this new situation immediately They fell sharply on a scale unequalled since the. depression of the 1930s The effect of the fall in international prices for the developed countries and their. domestic agricultural market systems resulted automatically in the rocketing of the cost of support testing the. limitations the model In developing countries with no financial reserves the price fall of export products caused. the bankruptcy of numerous state marketing boards and initiated the wane of state interventionism. The multiplication of trade conflicts between food exporting countries was increasingly seen as the major. problem to be solved to the extent that it was agreed to tackle the issue for the first time in a GATT negotiations. Colloque SFER 2014 Agriculture et g opolitique, The Uruguay Round negotiations started in 1985 marked the end of the agricultural exception It brought about. the biggest reform of the food trading system since GATT was created at the end of the Second World War. Indeed with the successful conclusion of the Uruguay Round in 1994 the World Trade Organization was. established and the Agreement on Agriculture AoA signed For the first time negotiated international rules. started applying to international trade of agricultural products and more importantly to agricultural domestic. policies The content of the negotiations was profoundly influenced by the situation of structural overproduction. in developed countries One of the main issues under negotiations was the ability of countries to define and. control exports subsidies in agriculture It was the first attempt to try and ban exports subsidies The main. objective pursued being to guarantee fairness of competition between suppliers and market access for exporters. The most important and long lasting consequence of the Uruguay Round remains the influence of the. classification system of the various components of agricultural policies trade control measures direct payments. research grants loan programs storage programs etc The Round established three pillars for basis of the. negotiations market access export subsidies and domestic support They have only marginally evolved in the. current Doha Round discussions, i The market access provisions required among other things tariffication that is all non tariff trade. barriers had to be replaced by tariffs and bounds were set upon those tariffs with a commitment to reduce them. Tariffication clearly called into question the watertightness of national markets which enabled countries to. disconnect domestic and international price variations Even if domestic prices remained distinctly higher than. international prices they were now supposed to vary in line with world prices The EU price of wheat. exemplifies this change A first step was therefore taken towards a certain reunification of the world market. ii The export subsidy provisions established maximum ceilings on the trade quantity and budgetary. expenditures for export subsidies and implemented reductions in those ceilings over time. iii Another innovative feature of the Agreement was to set rules and commitments on all the other aspects. of domestic agricultural policies The domestic support provisions outlined various types of support classified. them according to their considered trade effects and limited those measures deemed the most trade distorting. All measures considered as minimally trade distorting belong to the Green Box with specific guidelines for. the structure of such programs but no limits on program expenditures by member countries Blue Box. At the beginning of the 1960s food aid accounted for 55 of developing countries cereal imports and 80 to 100 for Taiwan South Korea India Iran Pakistan Egypt and Tunisia Hopkins and Puchala 1980 2 2 The destabilization of the international food markets the short lived food security momentum and the trade liberalization project

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