Sustainable agri-food trade requires ‘good’ governance focused on sustainability impacts

Integrating multi-level and multi-regional effects of agri-food trade policies confirms that transparent, rules-based governance and stakeholder inclusivity are essential to social and environmental sustainability.

Food and Natural Resources

Trade policy analyses are often based on high-level macro models considering trade flows across countries and impacts on national economic growth. These approaches, however, fail to adequately capture micro-level effects – specifically the economic, social and environmental impacts on the well-being of individuals such as local farmers. The EU-funded MATS(opens in new window) project integrated agri-food trade macro models (quantitative methods) with micro perspectives (qualitative ones) via country- and commodity-focused case studies in Africa, Latin America and Europe. MATS also considered the legal and institutional frameworks within local and global agri-food markets. This systems approach enabled a deeper understanding of the conditions that enable or hinder the achievement of sustainable development goals and thus more sustainable agri-food trade.

Social sustainability: from micro-level scenarios to effective macro-level policies

In 15 country-, region- and commodity-focused case studies, MATS explored trade regimes and their social, environmental and economic sustainability impacts and mechanisms at the level of individual farmers and consumers. Case studies were also used as inputs to macro-level trade models. “Our bottom-up analysis enabled customised assessments considering land use changes or ecosystem services relevant as part of sustainability impact measurements. These were connected to macro models that provided insights on implications of potential country-level collaborative effort,” explains project coordinator Bodo Steiner of the University of Helsinki(opens in new window). For example, quantitative assessments of more sustainable farm production – simultaneously increasing land productivity and reducing emissions – became inputs for formulating macro scenarios. Among these is the formation of ‘climate clubs’ in which African or other carbon-intensive regions make a joint global-level commitment to carbon neutrality that can be more effective than individual country-level commitments.

Inclusivity, transparency and the key role of investment

“The outcomes are all about good governance and agency – making sure that those with less information access and lower market power, especially smallholder farmers, are not left behind in the trade game,” Steiner underscores. This will also require sustainability-supporting investment beyond farm-level production or global transport initiatives. More transparent and equitable investments recognising the varying needs of smallholder farmers and female entrepreneurs for micro-credits in value chains are needed. Finally, the transparency, reliability and coherence of regulatory and legal instruments and trade-related policies and institutions are key. Problems enforcing rules at every level – from the World Trade Organization to trade agreements lacking intellectual properties integration and farmers’ contracts with traders – lead to uncertainties for value chain actors. This lowers investments, reduces EU market access of African commodities, and negatively impacts smallholder farmers and exports. More frequent and transparent impact assessments of trade policies before and after implementation should be standard procedure at institutions overseeing trade policies at all levels.

Supporting future generations with sustainable agri-food trade

“Our work resonates with the key message of the 2024 Nobel Prize in Economics, namely that inclusive governance is at the core of growth and prosperity. In our agri-food trade context, we need science-based institutionalised sustainability impact assessment and stakeholder inclusiveness in global agri-food trade policy implementation as central pillars of rules-based governance,” summarises Steiner. To support concrete action, the MATS website has diverse information and services(opens in new window), the latter targeting businesses, policymakers, consultants and trade associations. MATS has also published the e-book(opens in new window) Sustainable agricultural trade through inclusive agency and robust governance – Lessons for policymaking. The MATS website will be continuously updated during the coming two years. “More sustainable agri-food trade can be achieved with a strategic approach ensuring the most vulnerable actors are not left behind and considering the social and environmental sustainability implications of current trade on future generations,” concludes Steiner.