Based on forecasts of global population growth, food security will remain an important economic development issue over the next several decades. In addition, real food prices have risen in recent years after decades of decline, bringing the issue of food security even further into the public spotlight. However, there is no global food shortage: the problem is one of moving food, often across borders, from surplus production areas to deficit ones at prices that low-income consumers in developing countries can afford. Trade can be an excellent buffer for domestic fluctuations in food supply. World output of a given food commodity is far less variable than output in individual countries so increased trade integration holds considerable potential to stabilize food prices, boost returns to farmers and reduce the prices faced by consumers. Trade liberalization protects national food markets against domestic shocks by allowing more food to be imported in times of shortage and exported in periods of plenty. Historically, however, most countries have chosen to take the opposite approach by restricting imports of food and discouraging exports to keep domestic markets isolated from international shocks. Food commodity markets, therefore, remain highly distorted despite the wave of liberalization that has swept world trade since the 1980s. In addition to examining the determinants of recent food price spikes, Trade Policy and Food Security explores the impact of food prices on economic welfare, and how the effect of price changes on food security and economic welfare in developing countries can be mitigated through appropriate national policies at the border. It highlights the importance of both the extension and continued application of existing WTO disciplines on trade-distorting agricultural trade policies as a key resolution to the collective action problem witnessed during the recent food price spikes, whereby unilateral border policies--especially export controls--simply exacerbated the initial price increases.

Table of Contents:
Overview • Introduction • Drivers of World Food Prices • High Food Prices versus Food Price Volatility • The Role of Trade Policy in Boosting Food Security • International Experience with Trade and Food Security • References Chapter 1: Long-Term Drivers of Food Prices (John Baffes and Allen Dennis) • Introduction • Explaining Long-Term Price Trends • Discussion • Assessing Post-2004 Price Movements • Conclusions and Further Research • References Chapter 2: The Role of Biofuel Policies on Grain and Oilseed Prices (Harry de Gorter, Dusan Drabik, and Erika M. Kliauga) • Introduction • Measuring the Support and Trade Distortion Caused by Biofuel Policies • The Impact of Biofuel Policy Compared to Other “Perfect Storm” Factors • The Role of Sugarcane-Ethanol in Brazil on Grain and Oilseed Prices • Concluding Remarks • Notes • References Chapter 3: Price Transmission from World to Local Grain Markets in Developing Countries (Sergiy Zorya, Stephan von Cramon-Taubadel, Friederike Greb, Nelissa Jamora, Carolin Mengel, and Nadine Würriehausen) • Why It Matters • How It Works • Stylized Facts Pertaining to Recent Cereal Price Transmission • What Can Be Done to Enhance Food Price Transmission? • Annex 3A: Literature Review • Annex 3B: Prevalence of Different International Prices in the Literature • Notes • References Chapter 4: Trade Policy Responses to High and Volatile Food Prices (Ian Gillson and Christina Busch) • Introduction • Trade in Food • Higher World Food Prices and Their Trade Effects • Trade Policy Responses • Opening Food Trade in the Pursuit of Food Security • Trade and Transport Facilitation to Promote Access to Food • Policy Measures to Support Food Security • Notes • References Chapter 5: The Welfare Effects of Changes in Food Prices (Maros Ivanic and Will Martin) • Introduction • Effects of Food Price Changes on National Income • Effects of Food Price Changes on Poverty • Policy Implications • Conclusions • Annex 5A: Agricultural Imports and GDP • References Chapter 6: Food Security and the World Trade Organization (Clem Boonekamp) • Introduction • Trade and Food Security • The WTO and Other Forums • Conclusion • Notes • References Chapter 7: Regional Trade of Food Staples and Crop Inputs in Africa (John C. Keyser) • Introduction • Current Trade of Food Staples • Regional Trade of Seed and Fertilizer • The Benefits of Minimizing Trade Barriers • Opportunities to Improve Trade Conditions • Conclusion • Notes • References Chapter 8: The Grain Chain (Michelle Battat and Julian Lampietti) • The Importance of Food Trade for Arab Countries • Trade Policy Implications for Food Security • Procurement Strategies to Manage Wheat Trade Risks • Effect of Wheat-Trade Logistics on Food Security in Arab Countries • Role of Strategic Reserves as a Food Security Policy • Conclusion • Notes • References Chapter 9: How Can Latin America and the Caribbean Contribute to Global Food Security? (Nabil Chaherli and John Nash) • Introduction • Recent Performance of Latin America and the Caribbean in Agricultural Markets: Overall Good News • The Enabling Environment for Agricultural Trade: Potential Constraints and What Can Be Done to Overcome Them • The Future: How Can LAC Help Feed the World? • Notes • References Chapter 10: Trade Policy and Food Security in Latin America (Ekaterina Krivonos and Rogerio Da Paixao) • Introduction • Food Prices and Food Security in Latin America and the Caribbean • Evolution of Food and Agricultural Trade • Policy Responses to High Food Prices • Country Case Studies: Policy Responses to the Increase in Food Prices • Effects of the Trade Policy Measures on Consumer Prices for Main Food Staples • Conclusion • Notes • References Chapter 11: Using Trade to Enhance Food Security in Southeast Asia (Hamid R. Alavi and Aira Htenas) • Introduction • State of Rice Production and Trade in the ASEAN Region • Objectives and Features of Food Security Policies in the Rice Market in Southeast Asian Countries • The Effects of Food Security Policies on Production, Consumption, and Trade • Enhancing Regional Trade Coordination to Improve Food Security • Conclusion • Annex 11A: State Trading Enterprises (Parastatals) in Selected ASEAN Countries • Notes • References Boxes • Figures • Map • Tables