Analysis of Agri-Food Trade Structures
To Promote Agri-Food Trade Networks
In the Islamic Countries
1
EXECUTIVE SUMMARY
Agriculture is a major source of employment and income in many parts of the world. The sector
as a proportion of Gross Domestic Product (GDP) tends to decline as per capita incomes rise and
resources shift into manufacturing and services. But for developing countries, particularly those
in the low and lower middle income groups, agriculture is still a vital sector from the
perspectives of growth and poverty reduction. OIC member countries are no exception:
agriculture can account for significant proportions of GDP and employment in some countries.
Despite the importance of the sector, global agricultural markets remain significantly more
distorted than markets for manufactured goods. In part, this is a legacy of the fact that the
General Agreement on Tariffs and Trade (GATT) and its successive rounds of trade liberalization
largely excluded agriculture until the Uruguay Round, which started in the 1980s. Nonetheless,
agricultural products remain important sources of export income in many developing countries.
Unlocking the potential of the agricultural sector, including through the development of
international linkages, is crucial for growth and development, particularly in low and middle
income countries, but is also vital for social welfare in higher income countries without large
reserves of domestic arable land or water.
Since its inclusion in the World Trade Organization (WTO) Agreements, agriculture has
undergone substantial liberalization worldwide. As a result, trade flows have increased
substantially in value over time. OIC member countries do not stand apart from this
development, but indeed are intricately involved in it. A diverse organization like the OIC brings
together countries that are both net exporters and net importers of key agricultural products,
and as such has the potential to help promote further mutually beneficial trade integration.
The overall objective of this study is to review global and regional agri-food trade and to analyze
the global and regional agri-food trade networks in OIC Member Countries. It is also intended to
identify and elaborate options for policy recommendations on challenges and opportunities for
inclusive and sustainable agri-food trade networks among the OIC Member Countries.
The study combines quantitative and qualitative methodologies to produce a detailed analysis
of trade networks in agricultural products as they involve OIC member countries. It is
necessarily wide-ranging in its consideration of data, but often very precise in its treatment of
individual countries and products. Nonetheless, the study’s key general findings can be
summarized as follows:
1. Global agricultural markets remain more distorted than global markets for
manufactured goods, as evidenced by higher average levels of trade costs. Tariffs are a
driving force behind this, but Non-Tariff Measures (NTMs) also play a key role in
keeping trade costs high.
2. Notwithstanding these distortions, trade in agricultural products has seen substantial
growth since 1995. Nonetheless, market distortions hold back trade growth, which
poses substantial development challenges for countries that are relatively dependent
on agricultural exports, in particular low and middle income countries.
3. Although trade in agricultural products has been growing within the OIC over recent
years, the proportion of world trade accounted for by OIC countries remains relatively
small. In 1995, OIC countries accounted for 6.7% of global exports; by 2016, that