Agricultural trade reforms key to reducing poverty

With almost 70% of the poor people in developing countries living in rural areas, agricultural sector reforms - in particular global trade liberalization - will be crucial in giving them opportunities for better lives, according to a new World Bank report.

The report, 'Global Agricultural Trade and Developing Countries,' notes that despite the recent framework agreement in Geneva, agricultural protection continues to be among the most contentious issues in global trade negotiations. High protection of agriculture in industrial countries was the main cause of the breakdown of the Cancún Ministerial Meetings in 2003, and remains among the key outstanding issues in the Doha Round of global trade negotiations.

Developing countries are investing to increase their agricultural productivity, but these gains will not be fully translated into poverty reduction unless industrial and some middle-income countries reduce agricultural trade protection, the report says. In the absence of reduced protection in these countries, increased productivity in agriculture will instead give rise to overproduction and price declines for many commodities, undermining competitive poor countries' efforts to expand exports and rural incomes. It also increases pressure for greater protection globally.

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