By United Nation, Conference on Trade and Development
July 16, 2001
GENEVA, 16 July (UNCTAD) -- Coping with competitive markets and market barriers while maximizing the opportunities of niche markets and organic agriculture will be discussed by experts meeting in Geneva from 16 to 18 July to help developing countries boost their agricultural exports.
Agriculture is the mainstay of many developing country economies, particularly least developed countries (LDCs). Significant export opportunities exist for these countries' food and agricultural products, but success is not easy. World markets are increasingly competitive, and there is a multitude of standards to be met. Skills required in both production and trade are becoming more and more complex.
Many agricultural products also face high tariffs and/or non-tariff barriers. Developed country agricultural subsidies in various forms undermine the competitiveness of developing country products; they amount to nearly $1 billion a day, and on an annual basis surpass the combined GDP of all 49 LDCs.
And despite recent gains, developing country shares of agricultural commodity exports have slumped, from 31.7 per cent in 1970-1972 to 26.4 per cent in 1998-1999; and the LDCs' share dropped from 3.5 per cent to 1.0 per cent during the same period. Moreover, due to extensive trade liberalization by developing countries, producers are experiencing increasing import penetration in their own markets.
At the meeting, experts in agricultural trade promotion will grapple with these problems, seeking ways by which developing countries can unlock the full potential of their agricultural export sectors.
Experts will identify main production and export constraints and means of overcoming or eliminating these obstacles. These include limited access to international markets, information, finance and new technologies, such as improved seed varieties. Experts will examine ways to improve developing countries' participation in global value chains and address prospects for regional trade. The role of national and local governments, NGOs, farmer communities, business associations and other stakeholders will also be discussed.
The concept of food quality has changed dramatically in recent years. It now refers not only to the characteristics of the final product, but also to the way in which it is produced, processed and transported. Retailers and importers in developed country markets are applying their own quality standards, which are often more stringent than the national quality regulations. Experts will discuss how to improve the quality of products and comply with increasingly exigent importing country quality standards. The two sides of quality control will be presented by Ms. Rachel Ntoyai of the Kenyan Plant Health Inspectorate and Mr. Johann Züblin of Migros.
Rising income, education levels and global tourism have fuelled demand for a number of niche products. There is potential export opportunity for developing countries in these products, which include exotic fruit and vegetables, ethnic products, non-wood forest products, organic products and fair trade products (which guarantee fair prices to small producers in developing countries). Experts will highlight some of the alternative trading channels and most promising niche markets and explore strategies for seizing opportunities. For example, Ms. Paula Ghilliani of Max Havelaar Switzerland, currently the world's largest fair trade organization, will speak about fair trade products, while Mr. Paul Vantomne of the Food and Agricultural Organization (FAO) will present trade trends for non-wood forest products.
Successful market strategies will be shared on such topics as how to improve access to market information, particularly for smallholders, and how to establish brand names or differentiate products in important markets.
Special attention will be given throughout the meeting to organic agriculture, which offers multiple benefits. These include price premiums, natural resource conservation (e.g. improved soil fertility and water quality, prevention of soil erosion, preservation of natural and agro-biodiversity) and social effects (e.g. generation of rural employment and corresponding lower urban migration, improved household nutrition and local food security and reduced dependence on external inputs).
According to recent estimates by the International Trade Centre UNCTAD/WTO (ITC), the world market for organic products is $17.5 billion, roughly the size of the world coffee market. Major world markets are expected to grow at an average rate of 15-20 per cent in the medium term. Significant short-term demand-supply gaps exist, creating opportunities for developing country producers. These producers may have a comparative advantage in organic products since many already use little or no chemical inputs and rural labour is relatively abundant. Over 90 developing countries currently produce certified organic food.
But to take advantage of trade opportunities, developing countries must contend with a plethora of national and regional standards and high certification costs. International efforts are needed to reduce these costs, particularly for smallholders, and to facilitate market access. Developing country governments should also develop supportive policies for encouraging organic agriculture, both for exports and to enhance local food security.
On this issue, Rudy Kortbech-Olesen of ITC will lay out major market trends. Mr. Lukas Kilcher of the Research Institute of Organic Agriculture will highlight production and export constraints facing organic producers in developing countries. Ms. Suzanne Vaupel of the International Federation of Organic Agriculture Movements will speak on harmonization of standards. Mr. Rainer Bächi of IMO, a certifying body, will discuss strategies for lowering certification costs for smallholders in developing countries. Sharing his experiences as an organic farmer will be Mr. Jean-Marc Roch of Bioroch.
The meeting is being organized by the United Nations Conference on Trade and Development (UNCTAD), which has a number of other activities under way on promoting trade in organic agriculture. These include country projects in Viet Nam and India and an interregional project on trade and environment capacity-building. A series of training workshops and seminars is in progress as well, as part of the recently created UNEP-UNCTAD Capacity-Building Task Force on Trade, Environment and Development (CBTF: www.unep-unctad.org/cbtf). The task force is intended to further strengthen country capacities to promote trade expansion and develop their economies in an environmentally friendly and sustainable manner.
Another UNCTAD project, on capacity-building for diversification and commodity-based development, responds to the need for adapting the enterprise sector, government policies and civil society in commodity-dependent developing countries to rapid changes in the trading environment. The project has resulted in three regional workshops in Africa, one in Asia and one in Central America, focusing on horizontal and vertical diversification of agriculture, particularly horticulture, and minerals. Several other subregional and national workshops are being planned.