Development Papers 1404 - Agricultural trade liberalization for food security in South Asia

Development Papers 1404 - Agricultural trade liberalization for food security in South Asia

Date: 
Tuesday, November 25, 2014
Type: 
Public information and advocacy materials
Abstract

Latest available figures indicate that close to 40 per cent of the world’s population suffering from hunger and malnutrition belongs to South Asia. Remarkable strides towards enhancing food production in the recent decades in the region seem to have limited impact on undernourishment that remains pervasive. While recognizing the multidimensionality and complexity of reasons behind persistent poverty and hunger in the region, this study identifies freer intraregional trade in food products as a partial but effective solution which can contribute to substantially enhance food security. Undertaking a detailed product-by-product analysis at a disaggregated level, with the objective of identifying agricultural and primary products -- that have both high regional trade potential and high sensitivity from a food
security point of view, this study subjects the composition of food exports and imports of South Asian countries to a thorough examination. The concept of Additional Market Access Frontier (AMAF) is employed to assess the potential for imports of important food items by each South Asian country from regional trading partners, possibly at a cheaper price than current imports from the rest of the world. In aggregate, the analysis has shown trade complementarity in a wide range of food products within South Asia. From this, a list of 397 food products with trade potential of US$ one million or above were selected for more detailed analysis on possible impact of application of preferential tariff rates under the Agreement on South Asian Free Trade Area (SAFTA). Based on these analyses, the study offers a set of policy recommendations for selection of food products for trade liberalization measures under SAFTA as well as for correction of certain anomalies that currently exist in the application of preferential tariffs and in classification and standardization of traded food items. The study also suggests some measures to improve the operational efficiency of the SAARC Food Bank and SAARC Seed Bank and make them effective institutions in addressing food insecurity in South Asia.

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