includes broad market access could generate $7 billion in
real income gains for the 32 LDCs.11 Much of the gain would
come from increased exports of agricultural products.
But seven years into the Doha Round, WTO-member
countries have been unable to agree on a deal that would
better align trade and development strategies. A satisfactory
agreement requires, in the words of one WTO ambassador
from a developing country, a “hard-headed fairness” that
balances the interests of developed countries with the
needs of developing ones. Completing a trade deal would
demonstrate that developed countries are committed to the
overall development of poor countries—beyond just providing
aid. It would also prevent developed countries from moving
toward greater protectionism.
Below are some negotiating principles that will help assure
that the trade agreements reached truly make progress
toward development.
• Duty-free, Quota-free Market Access: LDCs
should be given 100-percent duty-free, quota-free
access to developed country markets. Opening
developed country markets can provide substantial
new opportunities to entrepreneurs in the poorest
countries.
• Special and Differential Treatment for developing
countries: So far, developed countries have insisted
that if they are required to reduce their domestic
agricultural subsidies and lower tariff barriers,
developing countries must also take steps to open
their markets and reduce domestic subsidies. But
the poorest countries, in particular LDCs, should be
allowed flexibility in how widely and quickly they open
their markets.
• Technical assistance and trade capacity building:
Developed countries have the resources and knowledge
to help developing countries bolster nascent trade
opportunities. This support includes “aid for trade”
and technical capacity building.
Migration and Remittances
Migration can aid development in many ways. When
large numbers of people migrate, they shrink the labor
pool in the country they leave and this can lead to increases
in wages there. By creating social networks that span the
globe, migration also opens new possibilities for trade and
commerce. If immigrants return to their own country, they
take with them the knowledge and connections they have
made while abroad. For example, Indian and Taiwanese
immigrants have contributed to the burgeoning technology
industries in their home countries by acting as experts and
ambassadors, linking U.S. businesses with markets in their
home countries.16
www.bread.org
Rising Food Prices:
The Role of Bad Policy Choices
The price of basic food grains has more than
doubled since 2006.12 It has been more than a decade
since prices last rose this quickly. Unlike the shorter
spike in global food prices that occurred in 1996,
today’s higher prices are expected to remain for up to
a decade, perhaps longer.13
Faced with much higher prices, poor people have to
make difficult choices. They reduce the amount of food
they consume; choose less expensive, less nutritious
foods; forego meals; and reduce other expenditures
such as health care or sending their children to school.
The poorest people are coping by shifting to one meal
a day and by eating famine foods: roots, gr ass, mud
cakes. The World Bank estimates that 100 million more
people may be hungry as a result of the price hikes.
Years of bad policy choices are at least partly to
blame for the sudden spike in prices. While developed
countries were protecting their farmers—paying
subsidies that encouraged them to overproduce—
the agricultural sector in many developing countries
was devastated. Meanwhile, donors discouraged
developing countries from investing in agriculture.
Many developing countries that were once selfsufficient producers of their own food became net food
importers. Most recently, developed countries rapidly
increased production of biofuels and thus dramatically
reduced the supply of staple grains available for food.
Increasing production now would improve food
security in developing countries and lead to higher
profits for farmers. Unfortunately, most farmers in
developing countries do not have the capacity to
respond by planting more. For decades, too little
was invested to improve the necessary physical and
technical infrastructure—rural transportation networks,
storage facilities, irrigation systems, appropriate farming
tools, agricultural extension services, and improved
seed varieties—as bilateral and multilateral donors
underemphasized and underinvested in agriculture. For
example, the World Bank agriculture portfolio declined
from $1.9 billion in 1981 to just $997 million in 2001.14
And in the United States, investments in international
agriculture dropped dramatically starting in the 1980s
and have remained stagnant since 2000.15
Bread for the World Institute 3