Trade in Agricultural Commodities

Kenya - 30 November 2012

Trade in agricultural commodities has enormous variations in terms of impacts – be they on poverty, gender or the environment. This underlines the significance of careful analysis in the choice of trade development path for the sector and calls for deliberate and well-targeted intervention from ACP countries. This concept paper attempts to identify and craft such a path. We argue that ACP can intervene at two levels. At the regional level, ACP countries have the capacity to intervene in ways that can improve their participation in trade by strengthening the environment at the macro-level (to create stability) and at the micro-level (with particular attention to the local institutions that facilitate poor people’s participation in agricultural trade related activity). At the international level, an important task for the ACP countries is to participate in WTO and to argue for their interest so as to attract productive investment by for instance reducing market distortions, eliminating unrealistic exchange rates and other trade restrictions, encouraging international trade, and working to improve the conditions under which it is carried out. Towards this end we identify a number of potential research areas that could help to unearth the key intervention lines that ACP countries could pursue to increase their share of trade in agricultural commodities. These include; Liberalization of Trade in Agricultural Commodities; Trading Infrastructure, Transaction Costs and Trade in Agricultural Commodities; Capital Flows to Support Trade in Agricultural Commodities; Marketing Issues in Trade in Agricultural Commodities, and New Directions in Trade in Agricultural Commodities.

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