South Asian Free Trade Area and Food Trade: Implications for Regional Food Security

Hansjörg Herr, Megan Ward and Jennifer Pédussel Wu

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The South Asian Free Trade Area (SAFTA) is an agreement between Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka. The agreement was signed in 2004 and came into force by 2006. Most studies focusing on Regional Trade Agreements look at the relationship with trade and welfare but do not explicitly analyse the links with food security. This paper seeks to answer two questions, 1) what is the impact of SAFTA on trade in agro-food products within the region and 2) what are the resulting implications on regional food security?

This paper explores the impact of the SAFTA agreement on food security by using a gravity model to examine the regional changes in trade in agricultural products. This is followed by a discussion of how this might affect the four dimensions of food security, availability, access, stability and utility. We find that while meat and meat preparations have become more regionalised, cereals has become less so. The high level of protection for cereals within the agreement has not encouraged specialisation and investment. Therefore, supply has been unable to keep up with growing demand, pushing cereal prices up. This has negatively influenced food security in the region. This paper calls for more cooperation amongst the SAFTA countries if the Sustainable Development Goals are not to be neglected. Although coordination between SAFTA members has provided some positive food security attainment, institutional uncertainty and conflicts have prevented the full potential benefits from being reached.