Trade is particularly important for resource-constrained countries, which are highly dependent on the import of basic and high-value commodities. Trade is also a driver of economic growth as it creates opportunities for producers, including smallholders, to access additional markets.
Agricultural trade and markets
Agricultural trade plays a crucial role in providing livelihoods for farmers and people employed along the food supply chain and contributes to reducing global food insecurity. A growing share of agro-food trade involves global value chains (GVCs), where the different stages of agricultural and food production processes are spread over several countries.
Key messages
How can government support policies to agriculture be designed to best to enhance the environmental effects of agricultural production, meet social objectives and achieve global food security? The OECD’s comprehensive research agenda, based on unique datasets combined with stakeholder consultations, aims to provide answers to these questions.
Demand for agri-food supply chains to be environmentally and socially sustainable is on the increase. A rich landscape of trade and trade-related policies, voluntary standards and corporate accountability tools is arising to enhance the sustainability of supply chains. The OECD-FAO Guidance for Responsible Agricultural Supply Chains represent a central pillar of this landscape.
Digital technologies are increasingly implemented by countries within their SPS systems. The technologies adopted include electronic certificates, remote audits, conformity assessment platforms, and traceability technologies. Together they are important contributions to the digitalization of trade facilitation.
Quantitative OECD analysis shows that the use of e-certificates has had positive effects on trade volumes, notably for processed food, and vegetable and animal products. E-certification is also expected to play an important and positif role in enhancing the environmental sustainability of agricultural trade.
Context
More expensive fertiliser leads to more expensive crops
Scenario analysis estimates that for each 25% increase in fertiliser prices, agricultural commodity prices would increase by 5%. This increase would be more significant for crops that use fertilisers as direct inputs than for livestock products that use fertilisers indirectly, with the exception of poultry and pig meat production which rely heavily on compound feed.
Although this scenario focuses on the link between fertilisers and agricultural commodities, fluctuations in energy, seeds, labour, or machinery prices would also affect food prices.
Export restrictions on staple foods lead to uncertainty and can destabilise agro-food markets
Several key exporters introduced export restrictions following Russia’s war of aggression against Ukraine. Such restrictions risk preventing food from being distributed to those in need and can destabilise agro-food markets. In addition, uncertainty as to whether and how long export restrictions will be implemented can lead firms and governments to make decisions based on incomplete information, resulting in significant and lasting consequences.
The most recent OECD analysis (which includes export restrictions introduced up to 30 September 2023) shows that several key exporters introduced export restrictions following the war in Ukraine, but that many of them were removed by October 2023.
