Agricultural Trading System and Global Food Crisis

This paper summarizes the arguments and counterarguments within the scientific discussion on the issue of agricultural trading system and global food crisis. The main purpose of the research is to identify the relationship between world trading system and 2007-2008 food crisis by discussing some agricultural domestic and trade policies as well as selected World Trade Organization (WTO) agricultural trade rules and provisions that have a bearing on response measures to the soaring food prices. Systematization literary sources and approaches for solving the problem of what contributed to the food crisis indicates that though analysts attributed 2007-2008 global food prices spike to various causes, the crisis has its long-term origins in trade policies and agricultural trading system. The relevance of the decision of this scientific problem is that food security is important to the developing countries, and food security is not determined by where the food is produced, but by whether individuals have access to it. Investigation of the topic on food crisis contributing factors in the paper is carried out in the following logical sequence: the description of the food commodity prices evolution in the historical context, followed by the discussion on agricultural trading system, including domestic trade policies as well as the selected WTO agricultural trade rules, and reflections upon recent development on relevant research, agriculture policy as well as WTO negotiation developments. Methodological tools of the research methods were decades of years of research in the field of agricultural trade and food security. The object of research is the countries in the world, especially WTO members, because namely they are the ones who develop these trading system and policies. The paper presents the results of an empirical analysis, examining global agricultural trade policies and selected World Trade Organization (WTO) agricultural rules in the light of the 2007-2008 global food prices spike, which showed that (1) agricultural trade distortion policies are among the long-term contributors to the recent food prices spike; (2) export restrictions during 2007-2008 played a critical role in pushing the food commodity prices upward; (3) the current WTO rules are weak in effect in disciplining export restrictions on food export. The research empirically confirms and theoretically proves that the most effective trade policy response to high food prices over the long term is greater liberalization around the world, complemented by other domestic policies aiming at increasing agricultural productivity, linking rural communities to markets. The results of the research can be useful for negotiation in agriculture trade and domestic reform on agriculture policies.