Can market access ensure food security?

Improving access to markets for small land holders and local farmers is the most important factor in achieving global food security, according to experts speaking at Wednesday’s panel “Markets and Trade: How They Affect Food Security.”

Despite the fact that market failure was the primary cause for the price spikes in foods that occurred in late 2008, panel speakers argued that markets and trade must not be abandoned if global food insecurities are to be resolved.

“Market and trade are the tools that we have, [in order] to be able to deal with the realities of the world we face,” said Neil Conklin, president of Farm Foundation.

Conklin emphasized that national protection mechanisms, such as local subsidies and export restrictions, are strategies that will only deepen the unequal distribution of food around the world.

“We will only be food secure if we are secure globally,” Conklin said.

But security for the world’s hungry and poor is complicated by the fact that they spend 60-70 per cent of their income on food, making them particularly sensitive to market fluctuations. Maximo Torero from the International Food Policy Research Institute explained that an increase in international food prices is very quickly passed to consumers.

“What this means is that the international price of wheat [for example] was significantly affecting the price of commodities in [Latin American] countries. So that the consumers in rural areas were paying more for these goods,” Torero said.

Henk-Jan Brinkman, a senior advisor for economic policy at the United Nations World Food Programme, added that information asymmetries between the rich and the poor, the lack of access to markets, and risk aversion among the poor are all drivers of market failure. Brinkman said that correcting these factors requires increased attention to the poor.

“It is very critical for households that are poor and hungry to have a good safety net so that they are able to take on the risks that markets generate. Whether that is through food, cash, vouchers, or through insurance mechanisms is dependent on [a country’s particular situation],” Brinkman said.

“Employment security programs, preventive school feeding, and early-child nutrition programs are essential, because we [need solutions] for the people who are in the worst conditions,” Torero said. “But we also need to link farmers to markets. And for that, we need to capture their unique produces; one solution doesn’t fit all.”

Conklin affirmed that the key component to achieving global food security is reforming the international trading system.

“We have no shortage of creative thinking of ideas that it will take to achieve the kind of reform that we need,” Conklin said.