A Removable Feast

C. Ford Runge and Benjamin Senauer

From Foreign Affairs, May/June 2000

Summary:  Amid all the fuss over genetically modified food, environmentalists and consumer activists have overlooked a vital challenge for the developing world: food security. As the South's population grows, it will need more food, a more varied and nutritious diet, and better access to the North's markets. Rich countries must do their part by slashing trade barriers to developing countries' goods -- especially in agriculture -- and spreading the biotechnology revolution to the poorest farmers who need it most. But the debacle in Seattle showed how difficult this quest will be.

C. Ford Runge is Distinguished McKnight University Professor of Applied Economics and Law at the University of Minnesota. Benjamin Senauer, Professor of Applied Economics at the University of Minnesota, is currently on leave at the International Food Policy Research Institute (IFPRI). This article was supported by a Ford Foundation grant to IFPRI.

FOOD SECURITY AND TRADE

The debacle of the World Trade Organization's meeting in Seattle last year underscored how much can go wrong with world trade -- and how insecure the future of trade liberalization has become. America's overreaching unilateralism offended delegations from around the world and undercut the multilateral premise of the gathering. Seattle's timing and location were equally disastrous, in contrast to the carefully planned (and relatively secluded) launch of the Uruguay Round, which began in 1986 in Punta del Este. And the industrial nations, led by the United States, did not even address one of the most vital issues: how developing countries can use technology and freer trade to better feed their populations. This need for "food security" touches on almost all the hot-button issues surrounding trade -- especially agricultural trade liberalization and genetically modified (GM) food -- yet the American media barely noted it.

What does food security entail? First, it involves improving a developing nation's access to cheaper food from comparatively advantaged exporting countries. It is generally more efficient and cheaper than self-sufficiency, in which a nation tries to produce all crops that its population needs, regardless of the cost or the country's natural endowments. Food security also requires that richer countries lower their tariffs on all goods from developing countries so that emerging markets can earn cash to import the food they need. Finally, the drive for food security should tap the potential of GM technology for developing countries to both enhance nutrition and boost agricultural output.

Rather than ushering in a new era in global economic interdependence, however, Seattle exacerbated the insecurity and palpable alienation among developing countries. The influence 0f environmental and labor groups was hurt by the presence of their radical fringes, which confirmed the worst fears of developing countries: that turtle suits and dolphin costumes are really forms of protectionist cross-dressing. It may have been a "defining moment" for the diverse array of groups who see the WTO as a symbol of multinational corporate power, but it is difficult to understand what exactly the moment defined. The summit did nothing but highlight the disarray among policymakers over trade issues. Back when trade policy was the realm of diplomats and economic experts, at least bids and offers were made. In contrast, the Seattle battleground resembled a war of many clans -- with no winners and no breakthroughs.

CALLING MALTHUS

Amid this impasse, a troubling problem at the heart of the trade policy debate is left unanswered. Notwithstanding current surpluses and depressed commodities prices, the world may become less able to feed itself in the 21st century. The International Food Policy Research Institute estimates that about 73 million people will join the world's population every year between 1995 and 2020, increasing it by 32 percent to 7.5 billion. Almost all the population growth will occur in developing countries, and much of it will be urban. Fortunately, per capita incomes will also increase, especially in developing countries. This will allow households to purchase more meat and animal products; demand for meat alone in the developing world is projected to double between 1995 and 2020. But to meet the needs posed by population and income growth, the world will have to produce 40 percent more grain by 2020. With yield increases slowing from the heady days of the green revolution in the 1970s, only about one-fifth of this increase is likely to come from expanding the amount of land under cultivation.

In this context, trade will be increasingly vital to food security. Because cereal production in the developing world will not keep pace with demand, net cereal imports by developing countries will need to almost double between 1995 and 2020 (to nearly 200 million tons) to fill the gap. Net imports of meat will need to increase to 6.6 million tons, or eightfold. Although many antitrade activists in Seattle advocated a return to locally produced goods, including food, the hard truth is that developing countries need freer trade to feed themselves. The United States will continue to be central to this task; in 2020, about 60 percent of world net cereal imports will still come from the United States. This role does not simply reflect American dominance as a comparatively advantaged producer of grains and livestock. Eastern Europe, the former Soviet Union, the European Union, and Australia will also substantially increase their net exports. But if any of them, notably the former Soviet Union, fails to do so, the burden of supplying the rest will fall even more on net exporters like the United States.

Assuming that production and trade keep pace with demand, per capita food availability in most developing countries will rise by about 10 percent from 1995 to 2020. Despite this, 135 million children under the age of 5 are projected to remain hungry in 2020, especially in sub-Saharan Africa and South Asia. In Africa, their number is projected to increase 30 percent by 2020. If production and trade do not keep pace with demand, a Malthusian specter of rapid population growth and dwindling food supplies could emerge. Even under the projections noted above, stagnating yield increases and growing demand will mean that real prices for food could actually rise, rather than fall as they have during the past quarter century. All these trends, which brought a boon to consumers when they lowered food prices, are unlikely to persist in the next century.

The challenge of food security is therefore a race between productivity and populations with rising incomes. Here is where trade can make a difference. It enables food -- primarily grain -- to move from areas of surplus to areas of deficit, allowing the deficient regions to feed themselves as long as they can pay. Expanded access to rich-country markets also increases the export earnings of developing countries by raising the cash needed to buy food and other goods. Conversely, anything that restricts this movement or reduces the ability to pay for food imports will damage this capacity.

Despite the tremendous significance of food security to trade, Seattle showed that the deep rifts over agricultural subsidies and market access, especially between the United States and the EU, remain largely unresolved. It also underscored the fact that environmentalists, who came to the negotiating table late in the Uruguay Round, now intend to be fully heard in agriculture as well as in other negotiating areas, even if they do not yet speak with a clear voice. Finally, Seattle made it clear that biotechnology -- whatever it may augur for world agriculture -- will be aggressively opposed as a symbol of globalization.