1. Trade and Food Security in Central Asia Ekaterina Krivonos Trade and Markets Division FAO-Rome

2. Outline I. Trade and food security – conceptual linkages II. Food security and agricultural trade in Caucasus and Central Asia III. FAO assistance to developing agricultural and food trade capacities in the region

3. Food security – main concepts Millennium Development Goals:  Goal 1: Eradicate extreme poverty and hunger  Targets: between 1990 and 2015, halve the proportion of people who suffer from hunger  Progress: 980 million in 1990-92; 852 million in 2010-12 Food security exists when all people, at all times, have physical, economic and social access to sufficient, safe and nutritious food which meets their dietary needs and food preferences for an active and healthy life

4. Food security – main concepts Dimensions of food security: Availability: Having available sufficient quantities of food on a consistent basis Access: Having sufficient resources to obtain food Utilization: Nutrition, diversity of diet, food preparation Stability: Risks to long-term food security Trade affects all these dimensions

5. Trade policy and food security Changes in trade policy affect the relative prices of goods and factors => Both food production and consumption are affected Different impacts on different segments and population groups Examples:  An export ban can boost domestic supplies and reduce prices in the short- run. Good for consumers and domestic food processors, bad for agricultural producers who export.  Trade liberalization is likely to reduce food prices to consumers and benefit competitive farmers, but the incomes of other farmers, and their food security, may be negatively affected.

6. Trade and food security – conceptual linkages Possible effects of open trade Availability (Supply: food production, stock levels and net trade. Access (Incomes, expenditure, markets and prices) Utilization (Nutrition and food safety) Stability (Weather political instability, economic factors Positive ↑ Quantity and variety of food available  Net food importers:↓ Food prices  ↑ Incomes in competitive sectors  ↓ Input prices and access to technology  ↑ Growth, FDI and employment  ↑ Variety of available foods  ↑ Food safety and quality  ↓ Seasonality of supplies  ↑ Imports mitigate local production risks Negative  Net food exporters: ↓Own production available for domestic consumption  Net food importers: ↓ Domestic food production  Net food exporters Food prices ↑  ↓ Incomes in sensitive / non-competitive sectors  ↑Consumption of high calorie / low nutritional value foods  ↓ Consumption of traditional and indigenous foods  ↓ Own food production  ↑ Price volatility from global markets  ↑ Land grabbing  ↑ Less space for trade policy response

7. Inclusive and efficient global market systems For countries to be able to participate effectively in global trading systems we need to address differences in opportunities among developing and developed countries (asymmetries) Countries need specific and different national strategies and policies to benefit from international trade, improve livelihoods and pursue their own food security objectives (while taking account of food security needs elsewhere).

8. Food availability: Agricultural production in Central Asia Share of agricultural land and arable land in total land area, % (2011) Source: FAOSTAT and WDI Gross Agricultural Production Value (constant 2004-2006 million US$) (2011) Agriculture value added, share in GDP, % (2011)

9. Food availability: Food production in Central Asia Average value of food production, int.$ per capita Source: The State of Food Insecurity in the World, 2012, FAO, Rome Between 2000-02 and 2008-10, the value of production per capita in Caucasus and Central Asia increased by 27%, double of global growth.

10. Agricultural trade in Central Asia Source: FAOSTAT Value of agricultural exports and imports in 2010 million US$ Trade balance in agricultural products million US$

11. Food imports and vulnerability Value of food imports over total merchandise exports, % Cereals imports dependency ratio, % Imports/(production+ import-export) Source: The State of Food Insecurity in the World, 2012, FAO, Rome

12. Agricultural exports Agricultural exports are heavily concentrated in few products Azerbaijan: Oils and fats (31% * ), sugar (24%) and fruits (13%) Kazakhstan: Wheat (49%) and wheat flour (29%) Kyrgyzstan: Beans (16%), cotton lint (12%) and fruits (12%) Tajikistan: Cotton lint (49%), tomatoes (15%), onions (15%) and dried fruits (14%) Turkmenistan: Cotton lint (79%) and cotton linter (11%) Uzbekistan: Cotton lint (62%) and fruits (12%) * Share in the total value of agricultural exports in 2010

13. Economic access to food Domestic Food Price Level Index The ratio between food purchasing power parity (FPPP) by the General PPP Between 2000 and 2012, food prices (relative to the price of generic consumption basket) in Caucasus and Central Asia increased by 26% Source: The State of Food Insecurity in the World, 2012, FAO, Rome

14. Food security - Outcomes Prevalence of undernourishment Proportion of the population estimated to be at risk of caloric inadequacy, % Note: The dotted line represents <5% Source: The State of Food Insecurity in the World, 2012, FAO, Rome Percentage of underweight children among all children under 5 years (2005-06)

15. FAO’s support to more inclusive and efficient markets FAO provides analytical information, facilitates evidence based policy advice and offers technical support to enhance the capacity of countries to deal with agricultural trade reforms In 2012–2013, FAO elaborated five new Strategic Objectives (SOs) Strategic Objective 4: Enable more inclusive and efficient agricultural and food systems at local, national and international levels Agrarian Structures Initiative for Europe and Central Asia:  Supporting smallholders with improved enabling and legislative environment and lay the groundwork for further work to integrate smallholders into markets. FAO’s five Strategic Objectives SO1: Help eliminate hunger, food insecurity and malnutrition SO2: Make agriculture more productive and sustainable SO3: Reduce rural poverty SO4: Enable inclusive and efficient agricultural and food systems SO5: Protect livelihoods from disasters

16. Agrarian Structures Initiative for Europe and Central Asia (2013) Strategic Objective 4 Organiza- tional Outcomes Project focus Inclusive and efficient agricultural and food systems Policies, regulations and public goods Agricultural extension service Coopera- tives and alternatives Formation of a Livestock Producers Group Food losses and waste assessment International agreements Cooperation with the Eurasian Economic Commission WTO training

17. Formation of a group of livestock producers in Gorno-Badakhshan province, Tajikistan Context: Extremely remote highland of the Pamirs Mountain chain, scarcely populated by semi- nomadic communities of Kyrgyz origin ; Lack of pastures (land degradation + climate change); Lack of technical training/knowledge on value addition and marketing => rudimental marketing (barter) and poor production management (poor control of risks); AS A RESULT: poor farmer returns + danger of forced migration due to environmental degradation

18. Need to reduce pressure on the (fragile) eco- system - “Less animals, better animals, take all from animals!” Solution: link farmers to the existing (and growing!) premium meat market in the capital to increase their incomes and improve livelihoods. How? By facilitating the formation of a livestock producers group and building its capacity to make their farming profitable and environmentally sustainable. Competitive value chain identified: prime- cuts of yak meat and yak milk cheese. Later also wool and down, skins, horns and hooves. The goals: market-driven production system, guaranteed food safety, social inclusiveness and environmental sustainability. Formation of a group of livestock producers in Gorno-Badakhshan province, Tajikistan

19. Facilitating the understanding and adoption of WTO principles and commitments for agriculture in the CIS region Joining WTO implies significant structural changes for the agriculture sector. But accession alone does not guarantee that the CIS countries will participate more effectively in global agricultural trade. The governments will need to develop their institutional capacities to carry out the necessary reforms to comply with WTO commitments, and to adopt accompanying measures to allow the agri-food sector to take advantage of the opportunities that WTO membership provides.

20. Facilitating the understanding and adoption of WTO principles and commitments for agriculture in the CIS region Objectives: Contribute to formulation and implementation of policies to secure greater benefits from expanding agricultural trade by enhancing understanding by the stakeholders of the WTO commitments and their implications for agricultural development in the CIS countries The main outputs of the project are: Country case studies (Azerbaijan, Kazakhstan, the Russian Federation and Tajikistan); A regional workshop to identify and discuss the obligations and main challenges facing the agriculture sector as the result of WTO accession Conducting an online course on WTO rules and country-specific accession commitments for agriculture