Trade and Food Security: Trade and Employment Specialist, ILO The Employment Link David Cheong Trade and Employment Specialist, ILO FAO/EST Informal Expert Consultation on the Relationship between Trade and Food Security, Rome, 12-13 March 2015.

Trade and Food Security: Links Source: Diaz-Bonilla, Thomas, Robinson and Cattaneo, “Food security and trade negotiations in the WTO: a cluster analysis of country groups”, TMD Discussion Paper No. 59, IFPRI, 2000.

Trade and Employment 1996 to 2012, Lower Middle and Low Income Countries Data: World Development Indicators, 30-Jan-2015 update.

Trade and Employment in Developing Countries Many developing countries have seen their international trade grow rapidly in the past few decades. In developing countries, unemployment is a luxury and most workers are employed → employment is supply-determined. Most workers in developing countries are in self-employment and casual wage employment in the informal segment of the labour market → they are grossly underemployed in terms of hours worked. Trade appears to have a strong positive effect on labour productivity.

Trade and Employment in Developing Countries Developing countries where international trade has resulted in clear positive employment outcomes have: Had more equal initial distribution of assets (including human capital). Had more stable macro environments. Guided structural transformation towards more productive activities. Supported the supply response through providing credit, infrastructure, adequately skilled workers, etc. Reduced labour mobility barriers: geographical, skill, labour-market frictions, etc.

Employment and Food Security: Anecdotal Evidence The prevalence of food insecurity was higher for rural households with 27% having "low" or "borderline" food consumption scores. A significantly smaller percentage of urban households (17%) fell into the same food insecurity category. The food insecure households generally had smaller than average family sizes and their household heads were less educated. They also had fewer assets and fewer income earners. Female-headed households were strongly over-represented within the food insecure group, with 38% of these households associated either with poor or borderline food consumption. Bangladesh Household Food Security and Nutrition Assessment Report, 2009.

Employment and Food Security: Anecdotal Evidence Nationally almost half (48%) of Liberians said they had experienced a shock in the last seven days that had hindered their ability to access food. These shocks were most commonly reported as sickness of a household member (26%), high food prices (17%), loss of employment or reduced income (10%), death of a household member (8.4%), animal pests (5.3%) destroying crops and limited access to markets by road (4.7%). Less than one in 10 rural households are reliant on a regular salary as their primary source of income compared with a third (35%) in urban areas. Most rural dwellers (79%) derive their income from two or more livelihood sources, often combining food and cash crop production, petty trading or street vending, hunting/gathering, casual labor, palm oil, charcoal production or rubber tapping in order to diversify their sources of income. Liberia Comprehensive Food Security And Nutrition Survey, June 2013

Many developing-country workers are in agriculture … Shares of agricultural employment Source: Global Employment Trends 2014: The risk of a jobless recovery, ILO.

… working informally … Shares of the agricultural workforce by employment status in developing countries, 2001 to 2008 Source: Cheong, D., Jansen, M. and Peters, R (eds.). 2013. “Shared Harvests: Agriculture, Trade, and Employment.” Authors’ computations using ILO LABORSTA (2012). The sample included 42 countries that reported employment status by the International Classification by Status in Employment (ICSE) in the period 2001 to 2008.

… for relatively low earnings… Average earnings or wages of agricultural and manufacturing workers in selected developing countries in US dollars Agricultural earnings or wages are, on average, 60 % of that in manufacturing. Source: Cheong, D., Jansen, M. and Peters, R (eds.). 2013. “Shared Harvests: Agriculture, Trade, and Employment.”

Change in Prevalence of Undernourishment %, 1996 to 2012, Lower Middle and Low Income Countries Data: World Development Indicators, 30-Jan-2015 update.

Conclusions For trade policy to positively affect employment in developing countries, it must be part of a policy package. Because agricultural employment is important for rural populations who tend to be food insecure, there is a need to promote agricultural productivity growth and facilitate movements of labor to more productive non-farm employment in order to raise incomes. Future research: How does trade relate to pro-employment policies and programs (e.g., food-for-work schemes, public works, rural employment strategies, SME development programs) that can target food-insecure workers?

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