1. Perspectives on the challenges for food security in
Asia
Trade Policy
Ramesh Sharma
FAO Regional Office, Bangkok
IFPRI-CDRI Workshop on Agricultural Transformation in Asia: Policy
Options for Food and Nutrition Security
25-27 September 2013
Siem Reap, Cambodia

2. Outline
1. Landscape of trade policy/interventions in Asia
2. Different views on trade interventions

3. Part 1
Landscape of trade policy interventions
- import policy
- export restrictions
- export subsidization
- domestic subsidies

4. Trade policy landscape - (1) -
illustration of interventions on imports
 AoA Annex 5 Special Treatment (Rice - PHL, KOR,
TWN/CHN – JPN no more)
 Prohibitive tariff (JPN rice, THA sugar in-quota)
 Lots of TRQs (JPN rice, THA sugar, maize, CHN several)
 Pure quota, non-automatic license (IDN liv/hort/rice)
 Reference prices – PHL pork, poultry
 STE monopoly/licensing – (MYS rice, many countries)
 Allegation of exceeding WTO bound tariffs (SLK dairy,
many other cases)

5. Trade policy landscape (2) –
illustration of export restrictions
 Export taxation (ad valorem, specific, mixed – many
cases)
 Variable and differential taxation – (palm oil IDN &
MYS)
 Minimum Export Price (MEP) (VNM rice, basmati IND,
PAK earlier)
 Export quota (IND frequent - cotton, rice, wheat,
others)
 Cartelling? (natural rubber THA, MYS, IDN)
 Complete ban – (IND rice, wheat 2008-11, BGD rice)

6. Trade policy landscape (3) –
illustration of export subsidization
(mostly WTO-compatible for DCs, AoA Art. 9.1d & e)
 IND rice & wheat export during 2001-03
 Possibly also IND wheat X 2012/13 (not clear rice)
 Closely watched for a similar case for Thai rice exports
(also watched - all G2G deals)
 Export incentives – many products, many countries
(IND many products, cash incentives NPL & BGD, also
PAK, many other developing countries)
 Cross-subsidization issue raised many times at WTO
CoA

7. Trade policy landscape (4) –
domestic subsidies (illustration of questions asked at
the WTO CoA)
 Public stockholding for food security – rice, wheat
(IND, IDN, PHL)
 Article 6.2 subsidies, e.g. fertilizers (IND, IDN)
definition of low-income resource-poor farmers (LIRP)
 Decoupled income support (CHN) (Thai rice PPP)?
 Trade-distorting subsidy (AMS) (rice - THA, CHN, &
IDN for notifying only once in 2000, IND for not
notifying after 2003)

8. Part 2:
On the connection between trade intervention
and food security
--
Different views

9. One view
e.g. the messages in the World Bank distortions
study

10. One view – distortions are bad for growth
and poverty reduction ... avoid
 Protection of importables:
• misallocates economic resources (Econ 101)
• taxes exports (Lerner Symmetry)
 So, the way ahead (for growth, food security etc) is full
export-orientation of trade policy, not protection
 Instead, use domestic interventions for domestic
problems
 Thus, exemptions like sensitive products, special
products, SSM, negative list etc not desirable
 So, in a way, “Make trade policy history”

11. Alternative view – trade/pricing policies have
a positive role to play (for growth and other goals)
 Market failures etc mean interventions are desirable
(even trade theory supports)
 Cant trust “thin” world food markets (e.g. rice)
 Rice price policy in Asia played a positive role in
structural transformation (e.g. Timmer)
 So, interventions are ok if linked to stage of structural
transformation
 In WTO/AoA also - “reform with policy space” is the
mantra
 etc etc

12. Articulating appropriate trade/
pricing policy - the “Middle Way”
 Avoid large distortions (e.g. protection>10%)
 Be clear/explicit on policy goal aimed at:
o (e.g. food self-sufficiency, fully aware that this is NOT
household food security)
 Find solutions with fewer interventions (e.g. with 2
instruments, not 7  more rules-based, less ad hoc
 Some national problems have global solution only –
so negotiate hard at the WTO (e.g. export
restrictions, domestic subsidies etc)