SUMMARY *

1. INTRODUCTION *

AGRICULTURAL PRODUCTION *

4. POSSIBLE THREATS TO NATIONAL FOOD SECURITY *

5. THE ROLE OF DOMESTIC PRODUCTION *

6. IMPLICATIONS FOR THE MULTILATERAL TRADING SYSTEM *

1. Food security is a non-trade concern to be taken into account in the continuation of the WTO agricultural reform process. Market mechanisms alone are not sufficient with regard to ensuring long-term food security, in particular the certainty of having enough food of adequate quality in the future. Food security has important public good aspects, the provision of which may require government intervention. Both domestic production and a predictable and stable trading system are central elements in global and national food security. However, as restrictions on production policies may result from the WTO agricultural reform process, this paper focuses on the role of domestic agricultural production in ensuring food security.
2. During the last 50 years, a number of international legal instruments relating to the right to food and nutritional concerns have been developed. The 1996 World Food Summit reiterated this right. While specific policy instruments to achieve food security are not prescribed, the individual States should be given flexibility to optimise the combination of different measures and methods available. In our view, this state flexibility should be considered an important element in the multilateral policy reform process in agriculture to ensure that governments have room for manoeuvre to pursue legitimate food security objectives.
3. The complexity of agricultural production calls for a long-term perspective in food security planning. The long-term nature of the agricultural sector relate to the fact that agricultural production (i) is generally biological and based on the harvesting of natural resources; (ii) is site-specific and requires locally adapted know-how and competence; (iii) is based on heavy infrastructure investments; and (iv) has a large number of units and depends on specific agrarian structures. Should the agricultural production be drastically reduced for a longer time period, it may take several decades to restore productivity and overall production.
4. At present, food insecurity in developing countries, both at household and national levels, generally relates to a lack of access to the food that is available. The key to increased access may lie in a combination of policies that includes increased local production. In relation to a number of different political, economic and ecologically related crisis scenarios, there is a potential risk of a future disrupture, or decreased availability, of international supplies of adequate food, with consequent threats to food security in both developed and developing countries, particularly those which are net-food importers. In light of the long-term nature of agricultural production, and the very essential role that food plays in every society, together with the far-reaching consequences should such crises materialise, government policies to respond to such concerns are fully legitimate. Combined with a well-functioning world market, a decentralised production structure would allow food-importing countries to make up for shortfalls in domestic production through supplies from a range of sources.
5. Trade policies conducive to food security must allow room for manoeuvre to foster domestic production in net-food importing countries. In certain low-potential areas, the costs of production may be several times higher than the world average, and an optimal policy mix must ensure that production remains sustainable. As a possible guideline for the up-coming negotiations on agriculture, policy measures targeted at food production to safeguard national food security should in general be allowed, subject to certain mutually agreed principles. Moreover, it seems that special and differential treatment, in particular in favour of least-developed countries, should continue to evolve, for instance in the area of market access.

1. INTRODUCTION

1. Food security exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life. Availability and access constitute two central elements of food security. Food must be available, at global, national and local levels, and countries, as well as households, must have the means to access the food that is available. The definition above also points to the importance of food to cover nutritional needs and to be safe (i.e. free of toxic factors and contaminants) and culturally acceptable. The adequacy of food is therefore another important element of food security.
2. While food for all is a fundamental goal for all countries, food insecurity continues to prevail in many areas. FAO reports that the number of chronically hungry people in the world has increased since the early 1990s, after declining steadily during the previous two decades. Currently, more than 800 million people, or 19 % of the world population, are reported to be undernourished. According to the FAO, the largest absolute numbers of undernourished people are in Asia, while the largest proportion of the population that is undernourished is in Africa, south of the Sahara.
3. Poverty has been identified as a major cause of present food insecurity problems. In addition, substantial changes in supply and demand may further exacerbate the problems of undernourishment. Therefore, possible future crisis situations, such as war, embargoes, social instability, natural disasters or environmentally or safety related crises, also need to be taken into account, as they may pose a threat to countries, areas or population groups that, at present, are not experiencing food insecurity.
4. Food security concerns are also explicitly referred to in the WTO Agreement on Agriculture as one of the non-trade concerns (NTCs) to be taken into account in the continuation of the reform process. Such concerns should therefore have a prominent place in the future multilateral policy reform of the agricultural sector.
5. The agricultural sector supplies around 99% of world food consumption, while the remaining 1% is made up of fish products, measured on a calorie basis. Fish products, however, represents an important source of protein in many countries, including Norway. Moreover, aquaculture is one of the world’s fastest-growing food production sectors, providing an important substitute for stagnating yields from wild fish stocks. According to the Kyoto Declaration, the world society will work to ensure that trade in fish and fishery products promotes food security. Nevertheless, given the important role of the agricultural sector in ensuring food security and the fact that the Agreement on Agriculture does not cover fish and fish products, this paper focuses on agriculture.
6. A citizen can buy his/her daily bread in the market. Food itself is therefore basically a private good. However, market mechanisms alone are not sufficient with regard to ensuring long-term food security, in particular the certainty of having enough food of adequate quality in the future. Therefore, food security has important public good aspects, the provision of which may require government intervention. Public policy in the area of food security can be regarded as a risk insurance requiring a collective effort due to well-known problems of free-riding.
7. Food can, broadly speaking, either be domestically produced or imported. Trade has several important positive effects on food security, such as reducing supply variability for individual countries, making more efficient use of world resources, fostering economic growth, allowing for cheaper domestic consumer food prices and increasing consumer choice. For developing countries, increased market access can lead to increased economic welfare, and may thus reduce poverty, food insecurity and hunger. A predictable and stable trading system is therefore a central element in global and national food security.
8. However, based on historic experience and due to the uncertainty associated with future international supplies, domestic production has been, and always will be, a central element in national food security policy. As a difficult supply situation may persist, national stocking can only partly compensate for this risk. Domestic production should also be brought into focus because the WTO agricultural reform process may result in restrictions on production policies.
9. Therefore, this paper focuses on the role of domestic production in ensuring food security. The next section discusses the right to food and the role of the state. In order to pursue food security objectives, governments need flexibility and room for manoeuvre. Section Three studies the complexity of agricultural production and the long-term characteristics of the agricultural sector. Section Four explores present threats to food security in developing countries and possible future crisis situations relevant to all countries that may be taken into account when a country designs its agricultural and food security policies. Section Five analyses the importance of domestic production, while Section Six makes a first attempt to review the implications of a food security perspective for the multilateral trade policy reform in agriculture. It should be made clear that the paper does not analyse all elements that affect food security, but seeks to concentrate on certain aspects that are considered most relevant to the WTO agricultural reform process.

2. FOOD SECURITY POLICIES AND GOVERNMENTS’ NEED FOR FLEXIBILITY AND ROOM FOR MANOEUVRE

1. During the last 50 years, a number of international legal instruments relating to the right to food and nutritional concerns have been developed. Several international declarations and covenants confirm that the ensurance of access to adequate food is the responsibility of the state. The fundamental right of everyone to be free from hunger is recognised. In addition, the problems of both food-importing and food-exporting countries should be taken into account, "to ensure an equitable distribution of world food supplies in relation to need" In our view, in order to assume this responsibility and pursue food security objectives, governments need flexibility and room for manoeuvre.
2. In 1948, the United Nations adopted the Universal Declaration of Human Rights which in Article 25-1 states that everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food. The International Covenant on Economic, Social and Cultural Rights (ICESCR), adopted by the UN in 1966, further develops the various rights expressed in Article 25. Article 11.1 of the Covenant reads:

The States Parties to the present Covenant recognize the right of everyone to an adequate standard of living for himself and his family, including adequate food ... The States Parties will take appropriate steps to ensure the realization of this right, recognizing to this effect the essential importance of international co-operation based on free consent.

3. The 1996 World Food Summit emphasised that access to sufficient and adequate food is a right applying to everyone. Objective 7.4 of the Plan of Action adopted by consensus at the Summit reads:

To clarify the content of the right to adequate food and the fundamental right of everyone to be free from hunger, as stated in the International Covenant on Economic, Social and Cultural Rights and other relevant international and regional instruments, and to give particular attention to implementation and full and progressive realization of this right as a means of achieving food security for all. To this end, governments, in partnership with all actors of civil society, will, as appropriate:

(a) Make every effort to implement the provisions of Article 11 of the International Covenant on Economic, Social and Cultural Rights (the Covenant) and relevant provisions of other international and regional instruments;

4. In Objective 7.4.e) of the Plan of Action, the UN High Commissioner for Human Rights, in consultation and co-operation with relevant bodies and agencies, is invited to better define the rights related to food in Article 11 of the ICESCR and propose ways of implementation, possibly including voluntary guidelines. As part of this work, the UN Committee on Economic, Social and Cultural Rights adopted in May this year a General Comment on Article 11 in order to assist State parties in their interpretation and implementation of the provisions of the right to adequate food.
5. The right to food is universal; i.e. it applies to all world citizens, in both developing and developed countries. Large population groups in developing countries, as well as certain vulnerable groups in most developed countries, still do not enjoy essential economic and social rights, such as the right to food. Moreover, extensive precaution is required in all countries as regards possible future threats to the right to food that may emerge as a result of economic, ecological and political changes, at a global and national level.
6. Regarding the right to food, the exact obligations of States remain to be clarified. Nevertheless, governments, within the resource constraints that they are facing, are required to gradually take the steps necessary to meet relevant food-related obligations. Regarding state involvement, there is an emerging consensus that States have a four-fold obligation to respect, protect, facilitate and fulfil the right to food.
7. To conclude, the government commitments relating to the right to food are basically result-oriented, and the international conventions do not prescribe any specific policy instruments. However, based on the analysis in this Section, it seems clear that each State should be given flexibility to optimise the combination of different measures and methods that are available to achieve food security in the best way. In our view, this state flexibility should be considered an important element in the multilateral policy reform process in agriculture to ensure that governments have room for manoeuvre to pursue legitimate food security objectives.

1. THE COMPLEX AND LONG-TERM NATURE OF AGRICULTURAL PRODUCTION

1. Food for all at all times, as endorsed by the World Food Summit, requires agricultural policies to be designed and implemented within a long-term framework of food security strategies. Domestic agricultural production plays an important role in the food security of most countries, and the complex and long-term nature typical of such production, is a useful indicator of the extraordinary long-term perspective that is needed for food security planning.
2. Empirical studies seem only to a limited extent to have analysed the long-term characteristics of the agricultural sector and their implications for the capacity of the sector to respond to changing demand. However, the slow responsiveness that characterises the agricultural sector and the problems that a country would face were it, for instance, to attempt to revitalise its agricultural sector, should not be underestimated.
3. Broadly speaking, the long-term characteristics of the agricultural sector relate to four features of the agricultural production system. Agricultural production (i) is biological and based on harvesting of natural resources; (ii) is mostly site-specific, i.e. it is closely linked to the resource base and requires locally adapted know-how and competence; (iii) is often based on a complex infrastructure requiring heavy investments; and (iv) has a large number of units, and is related to the specific agrarian structure that exists in each country. In many countries, agricultural land is dispersed, owned by a large number of farmers and subject to a complex system of property rights.

Agriculture is a biological production

4. Agricultural production is characterised by seasonality and life cycles and constrained by the limits that exist for reproductive growth. The establishment and expansion of such biological production is therefore complex and would often take several years. While certain plant productions may be expanded relatively quickly if seeds are available, for instance through a national seed bank, the expansion of animal production may take considerably more time. If particular varieties are required, or should a crisis restrict the availability of breeding animals on the world market, it may take decades to establish and expand the domestic animal population to levels required to broadly satisfy domestic demand.

Site-specificity requires locally adapted know-how and competence

5. The biological aspects of agricultural production call for specific know-how and competence that is generally different from other sectors. More importantly, as agricultural production takes place under different natural conditions, subject to, inter alia, varying microclimates, soils, pests and diseases, site-specific and locally adapted know-how is required in order to manage the production. The need for such locally adapted competence is probably even higher in marginal and disfavoured areas. If the agricultural sector has been partly abandoned and the agricultural regions partly depopulated for some time, such site-specific competence gets lost, and substantial efforts and time may be required to restore it.

Agricultural production often relies on heavy infrastructure and investments

6. Obviously, agricultural production depends on arable land, and if agricultural production is abandoned for a longer period, arable land is gradually lost. When arable land is used for different human development purposes, such as roads, buildings, houses, etc., the loss or damage may be irreversible. If land is left to nature for some time, land reclamation in order to bring the land under cultivation again may be both costly and time-consuming. The land must be cleared, terraces rebuilt and the drainage system renewed. In addition, several years of cultivation may in certain cases be required in order to restore soil quality.
7. Moreover, agricultural production depends on a host of other elements of infrastructure, such as irrigation, roads, buildings etc., the restoration of which is likely to be costly and time-consuming.

The small-scale structure of the agricultural production system

8. In general, the property system and agrarian structure of the agricultural sector differ from other sectors. The agricultural sector often consists of a relatively large number of holdings and farmers, and in many countries the sector does not easily lend itself to large-scale production. The large number of farming units and the abundant interlinkages between the farm and upstream and downstream activities, support services and other functions, clearly add to the overall complexity of the agricultural production system.
9. To conclude, based on the analysis in this Section, it seems that the agricultural production system is very complex with a number of long-term characteristics. Should the agricultural production be drastically reduced for a prolonged period, it may take several decades to restore productivity and overall production.

1. POSSIBLE THREATS TO NATIONAL FOOD SECURITY

1. Food insecurity problems are multidimensional, varying in time and from country to country. This Section makes a survey of possible threats to food security, examining both the present situation in many developing countries and possible crisis situations that may adversely affect future food security in all countries.

1. Lack of access to food

1. Broadly speaking, the food insecurity problems that developing countries are currently facing are often related to lack of access to food that is available. In general, the individual’s access to food may depend on a host of factors relating to, inter alia, access to production resources and markets, as well as institutional aspects. The work of Amartya Sen, the 1998 Nobel laureate in economics, on entitlement and access to food has added valuable thinking to the theories and practical implications of food security. Sen defined entitlement as the "…legitimate command over food and other commodities exercised by an individual or household (entity) given its endowment of resources and its opportunities to produce and trade." Sen pointed to the important fact that the availability of food at the market does not automatically give people access to consume this food.
2. In our view, increased access to food may often lie in a combination of policies that both stimulate local food production and enable households to undertake other income-generating activities that will enable it to buy food at the market. In general, policies that increase the allocative efficiency of the economy may be fundamental prerequisites to boost incomes and welfare and to reduce food insecurity. Increased market access for food-insecure developing countries, accompanied by appropriate domestic policies, may further stimulate economic growth and alleviate poverty.
3. The issue of access to food may also be analysed at the national level. Lack of foreign exchange may seriously reduce the import capacity of a country. LDCs and net-food-importing developing countries (NFIDCs) spend a substantial part of their foreign exchange on food imports. The ratio of food imports to total merchandise imports is much higher for these countries (20% for LDCs and 14% for NFIDCs in 1995, compared to 6% for the rest of the developing countries), and, in contrast to the situation in other developing countries, this ratio has been increasing since 1980.
4. The problems of limited foreign exchange reserves are further exacerbated in times of temporary price spikes. Cereals dominate the food import bills of LDCs and NFIDCs, accounting for roughly 40% of the total food import bill, followed by vegetable oils and oilseeds at about 20%. Therefore, the substantial increases in cereal prices that were experienced in 1995/96 caused particular concern in these countries:

Clearly, the high price year 1995/96 has been a shock for these countries. Taking the two years prior to 1995 as a benchmark (i.e. the average of the two marketing years 1993/94 and 1994/95) the increase in the cereal import bills in 1995/96 was over 60% for the two groups of countries taken together. Nearly all of this increase was due to increases in the per unit cost of imported cereals as volumes changed only marginally.

5. For these countries, the cereal import bills have continued to persist at relatively high levels, despite the substantial decline in nominal cereal prices since the 1995/96 price spike. According to the FAO, in addition to the increase in underlying cereal deficits, one of the main reasons is that the contribution of concessional imports, which played a major role in the past in meeting the cereal import needs of these countries, has substantially diminished in recent years. Food aid in cereals has been reduced dramatically, and a similar reduction has been seen for subsidised sales, which have virtually vanished since 1995/96. This has resulted in a much greater volume of cereals being imported by LDCs and NFIDCs under commercial terms, thus increasing the food import bills.

1. Possible constraints and crisis scenarios affecting availability

1. In relation to a number of different crisis scenarios, there is a potential risk of disrupture , or decreased availability, of international supplies of adequate food. If such crises take place in or near the globally most important production regions, world demand and supply may be negatively affected with consequent threats to food security in both developed and developing countries, in particular net-food-importing.
2. It is important to bear in mind that crisis scenarios are continuously changing, and crisis situations that are very unlikely at present, may not be so in a decade. Given the long-term nature of agricultural production, as described in Section Three, precautions are therefore required. In the following, possible crisis scenarios are briefly described. While several of these crises are unlikely to happen, it seems that virtually none can be totally excluded.
3. Political crises may affect availability. During the last century, the world has experienced two extensive world wars that dramatically affected the world food supply situation. In addition, a number of regional wars have had an adverse impact on food supply. While, at present, a blockade situation affecting food imports for prolonged periods does not seem to be very likely for most countries, it has occurred and may occur again.
4. Moreover, since the last world war, the world has seen the development of far-reaching and highly destructive nuclear, bacteriological and chemical weapons that could, if used, devastate the food production capacity of major world food production regions, and thus have a long-term impact on the availability of world food supplies.
5. Certain exporting countries have placed embargoes on particular countries or imposed restrictions on their food exports. The United States and the European Union have applied temporary export restrictions, on soybeans in 1973 and cereals in 1995-96, respectively, in order to satisfy domestic demand. In addition, food has from time to time been used as a political and strategic weapon. Naturally, such use of trade sanctions increases the uncertainty related to imported food supplies.
6. Availability may also be affected by substantial changes in global demand. Such changes may take place, for instance if the harvests fail in populous countries such as India or China or such countries for other reasons substantially increase their demand on the world market. Changes in the dietary patterns in some developing countries towards a higher consumption of animal products may also increase world demand.
7. A number of ecologically related crises may also affect availability. Extensive radioactive fallout may not only be associated with war, it may also occur as a result of a nuclear accident. Several major food-exporting regions are located in or near areas where nuclear plants are situated. Winds and atmospheric air currents may transport radioactive fallout over huge distances.
8. Modern agricultural production systems are intensive and seem to be relatively vulnerable to pests and diseases, partly due to extensive mono-cultivation and specialisation. Different types of ecological crises, including so-called bio-invasions and the outbreak of various diseases in plants and animals, may have a detrimental impact on agricultural production and thereby on global availability.
9. Reduced availability of water represents a serious threat to agricultural production worldwide, which at present accounts for about 70 % of world water consumption. Water is likely to become one of the most pressing resource issues of the next century. Between 1900 and 1995, global water consumption rose twice as much as the population. Globally, water resources are abundant, but unevenly distributed among and within countries. In some areas, high water withdrawals, relative to supply, are resulting in shrinking surface and ground water supplies. According to a 1997 United Nations water assessment, one third of the world’s population lives in countries with moderate to high water stress (i.e. annual consumption levels exceeding 20 % of available water supply).
10. The UN makes clear that, without major improvements, the global water situation will get considerably worse over the next 30 years Water pollution adds enormously to existing problems of water scarcity by removing large volumes of water from available supply. Moreover, the use of industrial water, accounting for 23 % of world water use at present, is projected to double by 2025, increasing the competition for clean water.
11. In the long term, the UN water assessment makes clear that looming water crises in many regions must be addressed through hard policy decisions that reallocate water to the most economically and socially beneficial uses. The World Bank has estimated that the financial and environmental costs of tapping new supplies will be, on average, two to three times those of existing investments. Possible adverse impact of water scarcity on future food supplies should therefore not be underestimated.
12. The UN Intergovernmental Panel on Climate Change concluded in its second assessment report in 1995 that, while there are still many uncertainties, greenhouse gas concentrations have continued to increase and climate change has occurred over the past century. The balance of evidence suggests a discernible human influence on global climate, and climate and climate­related parameters such as temperature, precipitation, soil moisture and sea level are expected to continue to change in the future. The report states that:

Climate models, taking into account greenhouse gases and aerosols, project an increase in global mean surface temperature of about 1-3.5°C by 2100 and an associated increase in sea level of about 15-95 cm.

13. The report stresses that the agricultural sector is sensitive to climate change. While the reliability of regional­scale predictions is still low and the degree to which climate variability may change is uncertain, the report underlines that potentially serious changes have been identified, including an increase in some regions in the incidence of extreme high­temperature events, floods and droughts, with resultant increasing occurrence of fires and pest outbreaks and consequences for the composition, structure and functioning of the ecosystem, including primary production.

Therefore, in our view, while the effects of climate change are uncertain and may to some extent be mixed, such change may have far-reaching adverse implications on global agricultural production and supply.

14. The issue of reduced availability may also relate to the inadequacy, including reduced safety, of the food supplies. For instance, the recent outbreak of mad cow disease (Bovine Spongiform Encephalopathy, BSE) provoked an unexpected crisis that severely affected world meat markets. Moreover, in several countries, there are deep concerns that the increasing use of genetically modified food represents a possible threat to the environment and public health, through, inter alia, unintended side-effects such as the development of antibiotic-resistant bacteria and micro-organisms.

1. THE ROLE OF DOMESTIC PRODUCTION

1. Ensuring food security requires a multifaceted and diverse approach adapted to specific country situations and involving national and international efforts to, inter alia, eradicate poverty as the root cause of hunger, ensure that sufficient food is produced, and ensure that food, agricultural and overall trade policies are conducive to fostering food security for all.
2. To ensure food security, a food system should be characterised by (i) the capacity to produce, store and import sufficient food to meet the needs for an adequate diet; (ii) maximum autonomy and self-determination (without implying self-sufficiency), which reduces vulnerability to international market fluctuations and political pressures; (iii) resilience, such that seasonal, cyclical and other variations in access to food are minimal; (iv) sustainability, such that the ecological system is protected and improved over time; and (v) equity, meaning, as a minimum, dependable access to adequate food for all social groups.
3. In this context, it should be noted that the Rome Declaration and the Plan of Action of the 1996 World Food Summit include a series of specific recommendations on the means of achieving food security. In particular, Commitment Three of the Rome Declaration stressed the importance of food production also in low potential areas:

We will pursue participatory and sustainable food, agriculture, fisheries, forestry and rural development policies and practices in high and low potential areas, which are essential to adequate and reliable food supplies at the household, national, regional and global levels, and combat pests, drought and desertification, considering the multifunctional character of agriculture.

4. The Rome Declaration also refers in its Commitment Four to a fair and market oriented world trade system. As spelled out under Objective 4.1. and 4.2., this Commitment concerns first and foremost the implementation of the Uruguay Round (UR) provisions, in particular in relation to the interests of net-food importing developing countries. As explained in Objective 4.3, the Commitment also pertains to the continuation of the reform process according to Article 20 of the Agreement on Agriculture. Commitment Four, therefore, does not negate the importance of Commitment Three.
5. Domestic production is not keeping pace with consumption in developing countries. For cereals, which represent around 50 percent of the diet in developing countries, there has been since the 1960s in all developing regions a down-ward trend of reduced self-sufficiency, see Table 1.According to FAO projections, developing countries will import 162 million tonnes of cereals (with rice in milled equivalents) in year 2010. North America is projected to be the main exporting region.

Table 1: Historical and projected cereal self-sufficiency ratios (in percent, on a volume basis) for 93 developing countries

Source: Global Perspectives Studies Unit of the FAO and World Agriculture: Towards 2010. An FAO Study. Edited by N. Alexandratos. FAO, Rome, 1995, 488 pp.

6. In countries in which groups of the population are experiencing reduced access to food, there may be a case for a certain degree of household food production, as appropriate, in order to increase the entitlement to food, in addition to cash crops or other income-generating activities. Moreover, the high ratio of food imports to total merchandise imports that LDCs and NFIDCs are experiencing, generally calls for increased domestic food production.
7. While lack of access to food, at present, seems to be the major reason for food insecurity in a number of countries, supply shocks and reduced availability may adversely affect all net-food importing countries. Even though the risk that a crisis will negatively affect food availability may be small, a government may consider it irresponsible not to take them into account when food security policies are designed.
8. Considering the long-term characteristics of agricultural production, the very essential role that food plays in every society and the far-reaching consequences should such a crisis materialise, government policies to respond to such concerns are fully legitimate. In such a context, food security policies that include an emphasis on domestic production could be regarded as a risk insurance, and the public costs related to such policies would be a function of the population’s risk aversion and its willingness to pay for such insurance.
9. In a multifaceted approach towards fostering food security, domestic production must be considered in conjunction with food imports. The most efficient and appropriate solution often lies in a combination of domestic production and imports. Moreover, the crises that may adversely affect international supplies, may also under certain circumstances affect domestic production in individual countries. A predictable and stable trading system is therefore a central element in global and national food security. From a global perspective, the best response to the possible threat of different crises probably lies in a decentralised production pattern, with production taking place in as many countries as possible. Combined with a well-functioning world market, such a production structure would allow food-importing countries to make up for shortfalls in domestic production through supplies from a range of sources.

1. IMPLICATIONS FOR THE MULTILATERAL TRADING SYSTEM

1. By the end of this year, WTO negotiations in agriculture will be launched in order to continue the reform process that was initiated during the UR. These negotiations are mandated in Article 20 of the current Agreement on Agriculture. While this article recognises the long-term objective, which was endorsed at the UR Mid-Term Review, of substantial and progressive reductions in support and protection, it also states specifically that non-trade concerns, such as food security, should be taken into account in the reform process.
2. Pursuing food security objectives is a fundamental responsibility of governments. Attention should be paid to the diversity of food insecurity problems as they may appear in different countries and under various circumstances. Trade policies conducive to food security must allow for room for manoeuvre to foster domestic production in net-food importing countries. A government may judge such production as essential, and production also in low-potential areas is recommended by the Plan of Action endorsed at the World Food Summit.
3. An in-depth analysis of the overall cost-efficiency of alternative policies of public support to ensure food security remains to be undertaken. However, in certain low-potential areas, the costs of production may be several times higher than the world average, and an optimal policy mix must ensure that production remains sustainable.
4. Therefore, as a possible guideline for the negotiations ahead on agriculture, policy measures aiming at food production to safeguard national food security should generally be allowed, if subject to certain mutually agreed principles. Such a practical solution would seek to minimise trade distortions and tensions, while safeguarding an important NTC.
5. The Agreement on Agriculture rightfully states that particular attention should be paid to the special problems of developing countries, and to least-developed and net food-importing developing countries, in particular. As a result of the UR, special and differential treatment (SDT) was granted to developing countries. These countries were subject to smaller reduction commitments regarding market access, domestic support and export subsidies, compared to developed country Members. Least-developed countries were altogether exempt from reduction commitments. In addition, SDT was granted in the area of domestic support.
6. In the agricultural sector, in order to further food security and economic development, it seems that SDT, including preferential market access, in particular in favour of the least-developed countries, should continue to evolve. Naturally, the issue of improved market access does not only relate to agricultural products, but concerns all products for which developing countries have an export potential.
7. Moreover, several developing countries have argued that the current agreement, in some areas and to some extent, discriminates against developing countries. Such unbalance is, inter alia, due to the fact that certain commitments are based on historical support. In the upcoming negotiations, one should therefore consider how food security could be fostered and to what extent and how the balance in commitments between developing and developed countries could be established.