Multilateral Trading System and Global Food Security - Case Study Example

Multilateral Trading System and Global Food Security Name: Institution: Course: Tutor: Date of submission: Multilateral Trading System and Global Food Security Introduction The entire world entered a period of great depression during 2008-2009 when the food and fuel prices escalated. The financial and food crisis recorded in the year 2008 and 2009 has the given birth to poverty among many people across the world. The crises brought together great minds to resolve the situations. During this period, the prices of rice tripled while those of maize and wheat doubled. Indeed, this aspect resulted in the inflation rates skyrocketing which in the end led to poverty in many nations. The biggest contributor to this great depression was China. The government stated that they will not sell their rare minerals anymore. Consequently, this resulted in the countries that relied on China to look for alternative sources. Most of them opted to engage in the mining of the minerals and with minimal technology and financial resources they ended up depleting their resources. In the end, they had to start borrowing from the World Bank and other nations to provide the services to their people. However, this resulted in them overpricing their prices to ensure they meet their debt obligation. In the end, the false price alarm led to the entire globe increasing the prices of their commodities. A good example of a country that failed to recover from the crisis is Greece. It was plunged into much debt to the point they had to withdraw themselves from the European Union. Agriculture is the backbone of any economy, and any failure in the agricultural sector will result in the inability of the economy. During the period of a crisis, the total cost incurred in purchasing essential commodities increased by a margin of 25%. For sure, this was an indication that the consumer disposable income decreased by the same margin. A decline in consumer purchasing power definitely will lower the GDP of a country resulting in the increase in poverty levels. Therefore, to salvage the situations, the professionals from different fields came together to analyze the relationship between food security and international trade. However, this resulted in the WTO instituting policies that will be discussed in the essay to elevate the situation. Indeed, the policies gear towards promoting global food security and eliminate hunger in the community (Markovic, 2006). The essay also proposes some new strategies that International Trade as well as WTO ought to be embrace to deal effectively with the issue of food security. That includes regulating the volatile commodity market and its diverse products to minimize fluctuations. (Cohen and Clapp, 2009). Indeed, the cross-disciplinary statutes allow scholars to get the know-how on the relationship between the environmental, political and economic aspect of International trade. In essence, the essay appeals to the so-called policy makers and trade practitioners who are in a position to institute changes. Food Security issues During 2008-2009, the entire globe was plunged into a situation of dire need on food. In India for example, many deaths that occurred were attributed to the international food shortage. The most affected were the children; the country has 47% of its children who are underweight and 46% who are suffering from malnutrition. In this case, the analysis deliberates on the UNICEF and the WTO assessment of the country (Fisanick, 2010). Therefore, there is a need for International bodies to intervene and deliberate changes in global food policies to come up with a comprehensive long-term and favorable solutions to serve all. Also, during this period, the food prices increased by 60% while the fuel prices rose by 125% that resulted in the majority the people sleeping without food. Indeed, there was a crisis, and people were starving. Very few individuals would afford to feed their families. Movement from one place to another to seek employment was difficult owing to increased fuel prices. Consequently, the poverty levels increased tremendously with 160 million persons living below poverty levels. Indeed, the effect was felt both in the rural and urban areas. It was a global phenomenon. Therefore, relevant bodies realized there was a need for action if they were to solve the world food shortage and to save humanity. During this period to protect themselves, countries instituted stringent measures that barred exportation and importation in abide to protect their domestic industries. However, this policy resulted in the worsening of the situation since the more countries stress on applying this theory, the less efficient international trading system becomes. Arguably, countries put more emphasis on the trade policies to ensure foods security within their borders (ALSCHNER, 2013). In reality, strenuous trade policies derail economies which result in underdevelopment in the third world. As such, only the independent countries are safe from food shortages. Therefore, there is a need for all countries to work together in solving food shortage issue. For an individual to formulate a discussion on solutions to under-provision of food globally, there are some factors to be flagged to create a baseline of the argument on collective action problem. The first factor to consider is the closed system used in the world's food market. That means that only what the producers has managed to produce in the previous years can be consumed. Indeed, this system is detrimental in solving food shortage issues. Therefore, if the problem of food shortage is to be solved, the global stock must be adequate to act as food security. The second condition is that production and capital reflect with those having the willingness and ability to purchase commodities. Indeed, there is a need for every nation to address the issue in regard to the widening gap between the rich and the poor as far as food shortage crises are concerned. Without a doubt, those without the capacity to buy the products are left to serve food insecurity in the community. Also, when prices of production go up, the prices of goods in the market also rises respectively. Hence, food insecurity is observed among the poor (Krishna, 2012). Unless relevant government bodies intervene and control food prices, then food insecurity continue to go up. Therefore, if the government is to solve the situation of food insecurity, there has to redistribution of food prices to make them affordable even to the low-income earners. If the problem is to be solved internally, internal trade policies have to be implemented while international transfers are to be put into place when addressing the issue of food insecurity globally (Smyth, Phillips, and Kerr, 2015). WTO is again not in a position to control internal transfers that aim at helping the needy. Indeed, WTO has its limitation, and only the internal government policies are in a position to solve the poor people food dilemma. WTO and AoA agreements However, the AoA agreements instituted with an objective of ensuring that the poor farmers have a chance of not only feeding the global market but also improving their livelihood. With the introduction of excessive export subsidies, the developing nations have found themselves in a dilemma, where they produce products but end up selling them at the international markets at very low prices. This aspect has resulted in many farmers laying down their tools and seeking an alternative source of income, which hurts the agricultural economy. Indeed, unless the government of the day comes up with food export prices to incent the farmers, then food production in otherwise productive areas is going to reduce tremendously creating unnecessary food shortages. Nevertheless, the WTO has introduced a clause that a nation cannot buy more than 10% of what they produce. In fact, the requirement or policy was put into place to protect the international trade from any disruptions. This has had an adverse effect in countries whose populations are increasing more than their production levels. For example India, that has been campaigning for the elimination of this policy to their favor. Indeed, this policy only supports the international with little consideration for developing countries. Further, the WTO and AoA has instituted policies that tend to place the developing nations at a disadvantage when it comes to trade and food shortage elimination. On the global level, the developed countries have the prowess of manipulating the laws to their favor? For example, when the developing countries export their produce to the world forum, they tend to incur tremendous losses because their production does not meet the set stipulated processing regulations. Indeed, the policy was meant to elevate the food shortage situation crisis in not only Africa but the whole world. However, it has failed since the developing nations still plunge into food insecurities year in year out. For long decades, African countries continue to suffer food crises and rely entirely on WTO for relief food. This issue should be addressed and solved once and for all. Indeed, a lot needs to be done globally for the poverty gap between developed countries in the West and other developing countries. Indeed, the WTO and AoA intends to do everything to come up with a workable solution. Therefore, favorable recommendations have been laid down to save the globe from food shortage. Recommendations towards WTO The continuous search for mechanisms that can help developing countries lower the trade tariffs without fearing disruption of local production. Moving tariffs to a percentage of import prices hence discouraging use of specific rates. That shall give rise to more protection in the situation where prices are low and less protection whenever the prices are high. Improved transparency on the domestic supports as well as exports restriction may act as a way of implementing food security. Development of new links in the international trade agencies is a strategy that can be put into place to control food shortage at the international level. That will increase result in a comprehension of the prevailing world market and the different stock concentrations in the market. AoA Improve the ability of the developing nations to penetrate the global markets with that they produce. Providing extra protection to the developing nations when it comes to them trading on the global front. This is as a result of the decrease in the preferential trade agreements that protected them earlier with the advancement of the reduction on tariffs policies. Introducing a development Box that will allow the developing governments to protect their people from exploitation by foreign policies. Reducing the excessive provision of export would subside the developing countries. This will enable them to have a fair playing field in the competitive economic market when it comes to them engaging in trade. Conclusion The essay has clearly outlined how multilateral trade system has been exploited to ensure that concerned organizations deal with the problem of food insecurity globally. Although the WTO has not achieved its mission of implementing food security system, it has tried to regulate the rates by ensuring they make tariffs internally. It has also set laws to control restriction of exports more so when the prices of commodities are high. Developing countries are said to be most affected by the issue of food shortages making them this it one of the major failures of the WTO. Indeed, it seems the WTO has not done enough to protect the third world. However, the research paper contains recommendations that can improve the situation for a better future. There is a set plan to minimize discrimination or marginalization in respect to food distribution, and insecurity. However, this will only be a workable solution if only every member of the WTO organization plays her role in implementing the food security system. Indeed, with better planning and management, it shall be easy to accomplish the WTO long-term mission centered on ending food shortage in every single country in the world. However, the WTO ought to consider developing countries problems equally as the Western nations. Taking full control over the situation may sound a dream, but collaboration among WTO members may result in tremendous success. There is dire need to save the world from starvation and ensure economic stability for developing countries as well. However, the concerned bodies are moving in the right direction. List of References Krishna, P. (2012). Preferential trade agreements and the world trade system. Cambridge, Mass.: National Bureau of Economic Research. Cohen, M. and Clapp, J. (2009). The global food crisis. [Waterloo, Ont.]: Wilfrid Laurier University Press. McDonald, B. (2010). Food security. Cambridge: Polity. Haerens, M. (2010). The World Trade Organization. Detroit: Greenhaven Press/gale, Cengage Learning. Sampson, G. (2001). The role of the World Trade Organization in global governance. Tokyo: United Nations University Press. Fisanick, C. (2010). Food. Farmington Hills, MI: Greenhaven Press/Gale, Cengage Learning. Grimwade, N. (2000). International trade. London: Routledge. Evenett, S. and Hoekman, B. (2006). Economic Development and Multilateral Trade Cooperation. Washington, DC: World Bank. Pinstrup-Andersen, P. (2009). Food security: definition and measurement. Food Sec., 1(1), pp.5-7. KAYA, A. (2015). Designing the Multilateral Trading System: Voting Equality at the International Trade Organization. World Trade Review, 15(01), pp.25-49. Yadav, N. (2014). Impact of Trade Facilitation on Parts and Components Trade. 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