A/HRC/16/40 2. Markets, prices, resources and infrastructures services 17. According to the market economy model, higher food prices should represent an incentive for farmers, including those from the developed world, and trigger an increase in production. In reality, the developing world increased cereal production by less than 1 per cent in 2008, and production actually decreased in most developing countries.17 18. As FAO and the International Fund for Agricultural Development pointed out in recent studies, higher output prices are not sufficient to trigger an expansion in food supplies.18 Smallholders, the majority of farmers in developing countries, have limited market participation. Decades of structural adjustment policies and declining investment in agriculture have resulted in a lack of access to resources – agricultural inputs and credit, marketing and transport infrastructure, technology, rural services and institutions – thus posing serious limitations to the market participation of small farms. In addition, while higher food prices do not trickle down to the farm gate where smallholders often have to sell their products, higher input costs do. Those that reap the benefits of higher food prices are large commercial farmers in developed and food-exporting countries.19 3. The role of agricultural trade, subsidies and international companies in the context of the right to food 19. It would appear that the international trade regime as it functions today favours developed countries and creates disadvantages for developing States, particularly in the agriculture sector.20 A report by the International Assessment of Agricultural Knowledge, Science and Technology for Development, for example, asserts that “small-scale farmers and rural livelihoods are negatively affected by agricultural trade” and that “the poorest developing countries are net losers under most trade liberalization scenarios”.21 20. The World Trade Organization (WTO) noted in its comments on the preliminary study that a reform process had been launched during the Uruguay Round of the General Agreement on Tariffs and Trade and furthered in the Doha negotiations aimed at reducing “trade-distorting domestic agricultural subsidies”, in addition to the existing flexibilities for the agriculture sector of developing countries. In its feedback, Argentina pointed out that the long-term goal of WTO was the establishment of an equitable and market-oriented system of agricultural trade.22 21. In Organization for Economic Cooperation and Development (OECD) countries, support for producers remains high: in 2008, it was estimated at EUR 182 billion, equal to 21 per cent of aggregate gross receipts of OECD farm producers.23 Subsidized food and agriculture products arrive on the markets of developing States as cheap imports, with 17 18 19 20 21 22 23 FAO, The State of Agricultural Commodity Markets 2009 (Rome, 2009), p. 29. See ibid. and International Fund for Agricultural Development (IFAD), “Food prices: smallholder farmers can be part of the solution”, 9 July 2009. Available from www.ifad.org/operations/food/farmer.htm. Molly D. Anderson, “A Question of Governance: To Protect Agribusiness Profits or the Right to Food?”, Agribusiness Action Initiatives, November 2009. Available from www.agobservatory.org/library.cfm?refID=107086. GTZ, “The human right to food and agricultural trade”, German Federal Ministry for Economic Cooperation and Development, Eschborn, 2008. International Assessment of Agricultural Knowledge, Science and Technology for Development, Agriculture at a Crossroads: Synthesis Report (Washington, D.C., 2009), p. 65. Comments of Argentina to the preliminary study (14 June 2010). Organization for Economic Cooperation and Development, Agricultural policies in OECD countries 2009: Monitoring and Evaluation (2009), p. 5. 7