Chapter 3


provided preferential access to European markets for certain developing countries.
However, the underlying factors affecting international food markets were untouched until
the Uruguay round of GATT, which was finally signed in December 1993. This was the first
GATT round to include trade in agricultural commodities to any extent and is also discussed
in Chapter 6.

It could be argued that the degree of protection of international food markets is only
marginally relevant to the issue of whether or not to become more closely integrated into
world agriculture markets. If this means, as it will for most developing countries,
specialising to a greater extent in cash crop production, are there any particular
considerations from the perspective of food security which weigh for or against this?

2.3 International specialisation and food insecurity

A good case can be made that international specialisation may actually improve food
security in a country. It spreads risk and sources of income, so that in the event of a
domestic food crop failure, the export earnings from cash crops can be used to pay for food
imports. A country which is integrated into international markets will also have developed
good transport infrastructure which will allow easier access to imported commodities.
Countries which have little outside trade often have high transport costs, which indicates
long delivery lead times, congested ports and low-volume carrying capacity. These are not
consistent with food security in times of crisis when fast imports may be necessary. Insofar
as greater external trade implies greater national prosperity, then this in turn indicates
improved economic access to food.

However, this all assumes that international markets are not inherently more risky than
domestic markets. In fact, international prices can be highly unstable yet countries have
somehow to decide what strategy'they should be following over a period of years. A country
cannot switch between export orientation and a self-sufficiency approach from year to year.
International prices are difficult to predict, and usually it is difficult to do more than
calculate past trends on which to base the decision. Most international commodity markets
are outwith the control of any individual country. Past efforts for groups of countries to
operate commodity agreements to stabilise prices have been, for the most part, abject
failures. Most developing countries end up both buying and selling in unpredictable
markets.

Some grain markets are notoriously thin, such as the market for rice. Such a small
proportion of world rice production is traded that variations in domestic production, or
indeed demand, can result in very high relative movements in international supply and
demand. Other markets, such as the wheat market, are rather more robust, but are
dominated by a few major suppliers. This can lead to dependence on one supplier, which
has caused difficulties when political issues have influenced trading agreements.

The decision to follow an export oriented strategy may benefit a country overall, but there
may be significant changes in the distribution of benefits from trade internally within the
country. There will be changes in the quantities of food moving through the marketing
system, and changes in the direction of flow. Domestic food processors and traders may


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