Analysis of Agri-Food Trade Structures
To Promote Agri-Food Trade Networks
In the Islamic Countries
5
INTRODUCTION
Agriculture is a major source of employment and income in many parts of the world. Indeed,
almost half of the world’s population lives in rural areas, where agriculture is the main source
of income.1 The sector as a proportion of 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. Moreover, there is empirical evidence that one
percent economic growth originating in agriculture increases spending in the three poorest
deciles of the income distribution by at least 2.5 percent more than similar growth originating
elsewhere in the economy.2 From a development point of view, agriculture is therefore a vital
issue for many countries around the world—including OIC member countries, which in 2015
accounted for around one-fifth of global agricultural production and employment.3
Within the OIC, the largest proportion of agricultural production is accounted for by the Asian
Group. Its proportion is about twice as large as that of either the Arab Group or the African
Group. However, in line with trends observed more generally, the share of agriculture in GDP is
declining in all OIC regions. It is lowest in the Arab Group (5.7% in 2015), then the Asian Group
(11.5%), but is significantly higher in the African Group (21.3%).4 It is therefore clear that while
all regional groups have an interest in expanding opportunities in the agricultural sector,
including through trade, it is typically the lower income countries that have the largest sectors
relative to the rest of the economy.
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 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 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.
1 COMCEC Coordination Office. 2017. COMCEC Agriculture Outlook 2017. Ankara: COMCEC Coordination Office.
2 COMCEC Coordination Office. 2017. COMCEC Agriculture Outlook 2017. Ankara: COMCEC Coordination Office.
3 COMCEC Coordination Office. 2017. COMCEC Agriculture Outlook 2017. Ankara: COMCEC Coordination Office.
4 COMCEC Coordination Office. 2017. COMCEC Agriculture Outlook 2017. Ankara: COMCEC Coordination Office.