The chronic crisis in trade in agricultural commodities is closely linked to issues of poverty and environmental degradation. Dealing with entrenched rural poverty and major impacts from agriculture on ecosystem viability requires a new look at how commodity markets work or fail. If we are to introduce fairness, justice and sustainability into these markets,we must understand better how they work, and the room for manoeuvre in public and private sector policy design.This challenging context provides the background for this book, which brings together an edited selection of think pieces and inputs prepared for two strategic dialogues.The first, on Agriculture, Trade...

This book arises from two Strategic Dialogues that were recently organized jointly by the International Centre for Trade and Sustainable Development (ICTSD) and the International Institute for Environment and Development (IIED).The first was held in Windsor, England, in July 2004 on Agricultural Trade Negotiations, Poverty and Sustainability, and the second in Barcelona in June 2005 on Commodities Trade, Poverty and Sustainable Development.² Both brought together a mix of policymakers, researchers and activists.

The dialogues were not designed to generate a road map or coalition for action but to gain a broader understanding of leverage points for action and opportunities for...

Agriculture lies at the heart of the trade and sustainable development nexus. It comprises over 50 per cent of GDP in some of the poorest countries and provides livelihoods for the large majority of people in developing countries. Agricultural trade has implications for public policy objectives such as economic growth, income generation, food security, poverty reduction, rural development, and environment and biodiversity protection.This chapter begins from the premise that in many poor countries, agricultural production² offers greater prospects for broad-based economic growth and poverty reduction than non-farm opportunities do.However, the source of agricultural growth, and the mechanisms by which it...

‘We recognize the need for all peoples to benefit from the increased opportunities and welfare gains that the multilateral trading system generates.’

Ministerial Declaration,WTO, 14 November 2001

Four years on, the encouraging words adopted at the start of the Doha Round have a hollow ring. So far, the ‘development’ round has delivered little more than encouraging rhetoric, punctuated by deadlock and episodic breakdown. Rich countries have not delivered the reforms needed to make the global trading system a more powerful force for development. Failure to change this picture will inevitably damage the legitimacy of the rules-based system represented by the...

Agriculture is a key sector for most developing countries. In the LDCs it contributes nearly one-third of GDP, compared with less than 3 per cent in developed countries. The poor in most developing countries are heavily engaged in subsistence farming, and food accounts for a significant proportion of all poor people’s expenditure. Moreover, a high proportion of the poor live in rural areas — more than 60 per cent worldwide, nearly 90 per cent in China and Bangladesh, and between 65 per cent and 90 per cent in Sub-Saharan Africa.² Concerning the link between agriculture, the environment and development, more...

‘There is, on this subject of commodities, a sort of conspiracy of silence.There are no simple solutions. Many of the remedies introduced in the past — especially the major commodity agreements — have failed and we do not want to repeat these experiences.Yet there is no justification for the current indifference.’

President Jacques Chirac, Paris, February 2003.

This chapter summarizes the main aspects of the crisis affecting agricultural commodities, both those that compete with Northern agriculture (e.g. sugar, maize) and the non-competing commodities such as coffee and tea, also known as tropical commodities. It examines and compares the main approaches...

The world is producing more food than ever before.However, after decades of declining numbers of hungry in the world, the number of people who go hungry is increasing. Between 1997 and 2001, the number of hungry people globally increased by 18 million to a total of 798 million, most of them landless.The World Food Programme provides food to about 90 million people every year, but the remainder are beyond the reach of the international community. In part, infrastructure is the problem, as many of the hungry live in remote places where they neither have access to sufficient food nor the...

Classically, the ‘commodity question’ has been conceptualized as having two elements. The first was commodity price volatility.The second was decline in relative prices, an issue first raised by Prebisch and Singer in 1950, who both argued that volatility and relative price decline were linked, via reference to the notion of inelasticity in demand for commodities.The Prebisch-Singer analysis still forms the basis for most common understandings of the ‘commodity question’ today.² However, the last decade has seen a widespread acceptance that the question also includes a third element, namely oligopolistic market structures on the demand side. Concentration amongst Northern-based international traders...

Since 1980, the prices of tropical export crops have decreased sharply (Table 1).The ensuing impoverishment of farmers in the producing countries has stimulated violent conflict, flight into narcotic crops and increased emigration. Ecological damage, such as deforestation due to the decline of shade tree systems and the trend towards less sustainable farming patterns, has also been linked to declining returns from tropical agriculture.

Many policymakers have conceded that ‘something should be done’ about the tropical export crop disaster, but they have failed to come up with effective solutions. International commodity agreements for coffee, cocoa and sugar collapsed in the 1980s....

This chapter explores the potential for fostering production and trade in sustainable commodities. Sustainable commodities are defined as providing greater positive or reduced negative social, environmental and economic impacts along the value chain than conventional commodities. Benefits are either realized through the production, consumption or disposal processes, or accrue to the people involved in production.

Exploring different leverage points on both the demand and supply sides of sustainable commodities and also the incentives for key stakeholders, this chapter provides guidance on increasing gains from production and trade in sustainable commodities.The first section presents the main sustainable development impacts associated with...

This chapter sets out some key points of the discussions that took place at both strategic dialogues, and then lists a series of conclusions drawn by the participants on future policy and research directions.

Agricultural trade reform through the WTO process will not provide all the answers to food security, poverty reduction and sustainable development.Trade policy, though important, is only one element of any successful growth and development strategy.To reduce poverty at the national level,numerous domestic reforms are required in tandem with improvements in international trade. One also needs to be realistic about what the reform of developed-world agricultural policies...