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Investing in Agriculture Partnerships to Combat Hunger

Daniel Sullivan, Assistant Secretary of State for Economic, Energy and Business Affairs
Remarks at USAID's Forum on Investing in Agriculture Partnerships to Combat Hunger
New York, NY
September 23, 2008

As Prepared for Delivery

We have heard today about the comprehensive approach the U.S. is taking to the food security crisis, which focuses on providing immediate humanitarian aid in the short term, development assistance to rapidly increase food production in the medium term, and addressing structural issues, such as trade barriers and restrictions on the use of advanced agricultural technologies in the long term.

This approach parallels action taken by the international community, and the U.S. has worked hard to ensure that key international agreements reflect these principles. My colleague Dan Price will tell you more about that shortly.

I want to focus briefly on the third pillar of the U.S. approach. A smoothly functioning, reliable global trading system for food and agricultural products -- underpinned by strong regional markets -- is essential to global food security. When countries have confidence that food supplies will move smoothly from areas of surplus to areas of deficit, prices will remain more stable. Many countries, including some key food producers, reacted to high prices by cutting exports. The United States immediately made a concerted effort to reach out through our embassies to all countries that had put trade barriers in place and urged these countries to quickly remove all restrictions.

Export bans and other trade distortions weaken global food security and penalize poor farmers. We have been pleased to see that since May, 10 countries have removed these restrictions, helping to contribute to the falling prices we have recently seen. Beyond these immediate, country-specific measures, it remains essential to address the global trading system.

The U.S. remains committed to concluding an ambitious Doha Round that increases market access for agricultural products and reduces trade-distorting subsidies. As USTR Susan Schwab put it, “In the face of a global food price crisis, we simply could not agree to a result that would raise more barriers to world food trade.” A successful Doha agreement is the best solution to moderate food and agricultural prices over the medium and long term and will help address food insecurity.

Tariffs on agricultural goods are often 4 to 5 times higher than they are on nonagricultural goods in both African and OECD countries. Open trade will also generate new trade flows that can help lift millions from poverty worldwide and broaden global markets, reducing price volatility generated by shocks in individual markets. Much of the benefit of trade liberalization will come from reducing barriers to trade between developing countries; 50% of global economic growth between now and 2013 will be provided by China, India, Brazil, Argentina and ASEAN, according to the IMF.

But removing tariff barriers is not enough. Governments and private partners must work together to attract investment in infrastructure and production, which is critical to take advantage of trade liberalization. Part of the new funding through the President’s food response will help increase the efficiency of key transport corridors in Africa, and increase trade in staple foods along these corridors.

Globally, the Millennium Challenge Corporation has committed over $1.9 billion to build rural roads and other infrastructure since 2005 that will substantially improve that ability to move products to regional and global markets.

The private sector has a critical voice in this discussion, and a vital role in ensuring that these investments translate into real economic growth in our partner countries. Partnerships with the private sector build real confidence and support for a strong global trading system that ensures the benefits of global markets are broadly and deeply shared across societies.

Thank you.< /p>



Released on September 26, 2008

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