AMID a strong global push towards self-sufficiency, economics is clearly showing one of the most immediate ways to enhance food security is more open agricultural trade policies.
Removal of the trade distortions that remain would reduce global poverty and income inequality, according to one of the country’s leading professors of economics, Kym Anderson, from the Australian National University and the University of Adelaide.
Prof Anderson presented an overview of trade related policy trends at this year’s Australian Bureau of Agriculture Resource Economics and Sciences Outlook conference in Canberra, which showed the world is still a long way from being free of trade distortion in agriculture.
Nominal rate of assistance (NRA) - the percentage by which price of a farm product in the domestic market exceeds that in the global market - is still widespread throughout both high income and developing countries.
There is also wide cross-product dispersion of NRAs within each country’s agriculture sector, including persistent anti-trade bias, Prof Anderson said.
His presentation began with the question: Can we feed the world’s forecast 8.5 billion people in 2030, of which 3.2b will be middle income Asians demanding higher protein diets, and at the same time reduce malnutrition and eliminate hunger worldwide?
Keep in mind the number of undernourished people in Africa south of the Sahara and in southern Asia is not yet even in decline.
“To achieve this, we’d require increased productivity of resources employed in agriculture,” Prof Anderson said.
Yet public investment in agriculture research is not growing.
In fact it is falling as a percentage of agriculture gross domestic product globally, from .9pc in 2000 to .75pc in 2011.
At the same time, climate change is reducing global agricultural land productivity, Prof Anderson said.
Prof Anderson said continued economic growth in Asia would not starve the rest of the world.
“It will boost imports of minerals and energy much more than food, because of supply responses,” he said.
Under a more open model, international prices of primary products by 2030 would be similar to today.
This happened in the 19th Century with the first industrial revolution, which greatly benefitted countries exporting primary goods, Prof Anderson said.
The big thing to watch would be to what extent China, India and Indonesia copy North East Asia’s agri protection path as incomes rise.
If China banned imports of rice, wheat, meat and milk to boost self sufficiency, its agricultural imports in 2030 would be a third lower, falling from 13 to 10pc of its total imports, according to Prof Anderson.
“That would require huge increases in tariffs and breach China’s World Trade Organisation commitments,” he said.
On beef and sheepmeat, the import tariff percentage to ensure self sufficiency would be a massive 255pc.
Prof Anderson said Singapore and Hong Kong were proof that greater import dependency clearly did not mean less national food security.
Meeting goals of more self reliance would be better served by investment in agriculture abroad, as China was indeed doing, he said.
Being more open to agriculture trade also did not mean greater domestic food price fluctuations, Prof Anderson argued.
If all large countries were open, it would “thicken” international food markets, which would be even more valuable as climate change brings more extreme weather events, he said.
Given the United States and Europe are struggling to get political support for agri trade reforms, it may be Asia’s time to step up, Prof Anderson said.
The signs of that happening, however, were not good so far.