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International Food and Agricultural Trade Policy Council
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Promoting an Open and Equitable Global Food System

IPCPolicy Areas

Agricultural and Rural Development Policies

National agricultural and rural development policies have an impact on trade liberalization, while trade agreements, in turn, can encourage more efficient national policies. Therefore, IPC explores linkages between domestic agricultural and rural development policies and trade liberalization to promote a more open and equitable global food system that meets the world's growing needs.

Despite their international commitments, member states of the WTO often enact policies that protect or support domestic industries. While these measures serve short-term political goals, policymakers ignore the larger economic gains that would accrue to their economies through trade liberalization. Protectionist measures are expensive, both in the funds that they require and in the costs that accumulate in the form of foregone benefits, such as lower food prices, lower tax expenditures, and increased efficiency in food production.

Rather than clinging to protectionist measures like high tariffs and trade distorting support, IPC believes that developed countries should focus on expanding their export markets. Due to increasing populations, food demand is expected to double by 2050, and most of this growth will occur in developing countries. Developed countries need to look ahead to the population boom beyond their borders and position themselves to meet the demands of these new consumers. Furthermore, IPC maintains that more progressive domestic policies would increase the efficiency of developed country producers by introducing more competition; ease pressure on domestic budgets by removing domestic support payments to farmers; and reduce food prices to consumers.

However, developed countries are not the only parties who need to reconsider their protectionist measures. Developing countries must also implement policies that open their economies to trade, as trade liberalization has been shown to increase economic growth and to alleviate poverty. Creating trade barriers or insisting on extensive protection within trade agreements will limit the benefits that liberalized trade can deliver to their own economies; moreover, it will hamper opportunities for trade with developed countries and, more importantly, with other developing countries. IPC analysis demonstrates the counterproductive effects of trade barriers between developing countries to their own efficiency and economic growth. IPC supports special and differential treatment for developing countries and believes that it should take the form of reduced commitments and longer phase-in periods for implementing these commitments. It should not, however, lead to an indefinite delay of reforms.

International trade also interacts with national measures to ensure environmental and social sustainability. Sustainability applies to rural areas in many ways. Whether as a result of competition with lower-cost producers or commodities produced with the help of subsidies, farmers everywhere are stressed over low crop prices and limited market access. In order for rural areas to produce sustainable livelihoods, returns to farmers must increase; however, employment opportunities must also diversify from agriculture. Furthermore, agricultural trade liberalization leads to shifts in production as efficiency increases. IPC examines the environmental and social impacts of changes to rural development policies, seeking to develop recommendations for domestic policies that mitigate the negative outcomes of change and maximize positive results of trade liberalization.

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