How agricultural trade can support climate change mitigation

AS CLIMATE CHANGE AL TERS the comparative advantage and competitiveness of agriculture across regions, some nations could be on the receiving end while others could gain. In the coming years, agricultural trade could be subject to further changes, reflecting the uneven and disproportionate impact of climate change on agricultural sectors across the globe.

But international trade could play a key role in adaptation efforts, contributing towards food security. By moving food from surplus to deficit areas, in the short term, trade according to “the State of Agricultural Commodities Markets”, a Food and Agricultural Organisation report, can provide an important mechanism to address production shortfalls due to extreme weather events.

In the long term, international trade could contribute towards adjusting agricultural production in an efficient manner across countries. With global agricultural market integration, the adaptive role of trade in terms of increasing availability of and access to food in the countries that will be negatively affected by climate change should be reinforced.

Even so, global agricultural market integration would also affect the distribution of gains and losses between producers and consumers. “Small-scale family farmers in low-latitude regions could lose, while consumers of food could gain. A reverse result is expected in temperate regions,” the report said.

Climate change, a rise in the average global tempera- ture due to an increase in the concentration of atmospheric greenhouse gases resulting in numerous climatic shifts and impacts around the globe is foreseen to have significant implications for agriculture and food security.

By the middle of the 21st century, higher average temperatures, changes in precipitation, rising sea levels, an increase in the frequency and intensity of extreme weather events, as well as the possibility of an increase in damage from pests and disease, are expected to affect crop and livestock production, as well as fisheries and aquaculture.

This impact, the report says will be uneven across regions and countries. In lowlatitude regions such as Nigeria, agriculture is already being adversely affected by climate change, specifically, by a higher frequency of droughts and floods. As such, climate change could exacerbate the food security challenges already experienced. Climate change impacts will be location specific, with significant variations across crops and regions.

Dry and semi-arid regions will be exposed to even lower rainfall and higher temperatures and, consequently, experience yield losses. Conversely, countries in temperate areas, many of which have developed economies, are expected to benefit from warmer weather during their growing season. As a result, climate change could exacerbate existing inequalities and further widen the gap between developed and developing Agriculture, therefore, needs to adjust to the effects of climate change and to reduce its greenhouse gas (GHG) emissions. Simultaneously, to meet growing demand, agriculture in 2050 will need to produce almost 50 percent more food, feed and biofuel than in 2012, according to FAO which emphasises that appropriate agricultural and trade policies are important in strengthening the adaptation role of trade and balancing the objectives of the sector.

“Producing more with less, while preserving natural resources and enhancing the livelihoods of small-scale family farmers, will be a key challenge for the future. Transformative changes in agriculture and food systems appear to be economically and technically feasible. Domestic support measures and trade policies can promote productivity growth and ensure that the international trading system is open, fair and transparent,” the report said.

“At the same time, these policies should help both agriculture and trade adapt to and mitigate climate change. Hunger and malnutrition, poverty, and climate change must be addressed together in order to meet Sustainable Development Goal 2 to end hunger, achieve food security and improved nutrition, and promote sustainable agriculture. Multilateral agreements and mechanisms allow for global collective action and encourage the alignment of multiple objectives, such as: eradicating hunger; achieving sustainable agriculture; strengthening global partnerships and cooperation in the context of trade; and fighting climate change,” FAO explains in the report.

It further notes that significant progress in adaptation and mitigation can be achieved through measures that do not distort trade. These include spending more on innovative technologies and investing in their adoption, as well as extending climatesmart agricultural practices that promote productivity, adapt to climate change and increase carbon sequestration.

It also suggests that expenditure on environmental programmes and ecosystem services that can reduce the negative external effects of emissions generated by agricultural production are additional measures that pose minimal or no distortion to production and trade.

Measures such as market price support and some types of input subsidies can distort trade. But some well-targeted climate-smart subsidies, FAO believes, may be an effective instrument to provide incentives to farmers to adopt technologies and practices that promote climate change adaptation and mitigation, or to obtain insurance and hedge against the risks of extreme weather events.

Such policies can provide a climate-smart stimulus to agriculture and effectively address the trade-offs between food security and climate change objectives. According to FAO, “effective climatesmart support to farmers can also improve the comparative advantage of agriculture in countries that will be negatively affected by changing climate, allowing them to become competitive and achieve a better balance in export and import performance. Such measures will be crucial for developing countries that may experience a considerable increase in their net food imports due to climate change. For countries that may be subject to significant climate-induced problems, safety nets will be necessary both at the international level, to alleviate potential pressures in funding food imports, and at the national level through emergency food reserves and social protection programmes that target the poor and the vulnerable.”

“Trade policies can contribute towards well-functioning international markets to which countries that experience production shortfalls due to weather shocks can resort in order to ensure food security. Global market integration can reinforce this role of trade in adaptation, as long as trade policies are combined with climate-smart domestic measures and investments. Trade could also be central in climate change mitigation efforts. If trade could provide the necessary signals to farmers to produce low carbon footprint products, emissions could be reduced globally. In practice, this would necessitate the imposition of a carbon tax (or an equivalent mitigation measure) on agricultural products domestically, combined with a corresponding tariff adjustment at the border to discriminate against high carbon footprint imports.”

Small-scale family farmers in low-latitude regions could lose, while consumers of food could gain. A reverse result is expected in temperate regions