processing plants in China went into the red and as many 64 out of 90 soya mills are now partly or wholly owned by the same soya trading companies, ADM, Cargill, Bunge and Luis Dreyfus. International trade still does not have the regulations and organizations to deal with such cartel behavior.

3.1.5     Trade and food security

Regional Experience of Trade and Food Security
ESAP and developing Asia in particular, has seen rapid re­duction of poverty and improvement in household and in­dividual access to food. At the international trade level, this is largely due to its rise in exports of manufactures. At the same time, there are substantial gains from international, particularly, regional trade in food grains. Carrying and transport costs can be lowered as regional trade in food grains becomes part of the national food management sys­tem of countries, particularly smaller countries. The ability to utilize regional trade to supplement domestic production depends on the country concerned having adequate foreign exchange reserves, otherwise it can be subject to unwanted external pressures. Along with this there is the negative ef­fect of cartel arrangements between exporters and import­ers being more likely in a regional than in a global context (World Bank, 2006a).
     Farmer households do react to market prices in decid­ing between production alternatives. But market prices are lowered by subsidized exports, something done not only by developed countries but also by developing countries, as are rice exports by Thailand, India and Vietnam.
     Thus, given the twin realities of power relations and subsidized exports, countries cannot depend entirely on market-based individual household production decisions to set domestic food production levels. Subsidized exports can justify import duty to the extent of the subsidy.
      In the absence of improvements in public service de­livery like irrigation and other agricultural infrastructure, adequate research and extension and adequate institutional credit  and  marketing  channels,  poor  producers  remain trapped in low productivity states. Poor and food insecure households can benefit from expanded opportunities of trade provided that those constraints are addressed. Giving voice to poor producers' interests by placing these issues on the policy agenda is crucial for fostering reforms that un­leash the productivity potential of poor people and increase their bargaining power.
     Importantly, however, food security issues are related not only to poor producers but also to poor consumers. Low prices of food, brought about through imports of cheap food, when combined with increased productivity, can lead to both higher real wages and increased farm incomes. In­ternal political economy considerations, i.e., the strength of different lobbies, determine the level at which food prices are set. Setting import duties higher than the extent of sub­sidies provided by exporting countries would further erode the food security gains of higher real wages. The possibility of substantial unofficial trade to take advantage of price dif­ferences in neighboring countries, in fact, sets a limit to the extent to which import duties can be greater than transport costs.

     As detailed below, small producers' livelihood are often threatened by imports. In the manner of providing domestic support, however, measures to increase productivity are su­perior to providing subsidies to continue high-cost produc­tion. They would not only increase national productivity but also can strengthen the fiscal position as compared to subsidies.
     Household food security would be improved by al­lowing farm households to choose their own mix of crops and livelihoods, reacting to market prices and their own aspirations, rather than have the mix of crops dictated by administrative decision. Farmers in many areas of Nepal, Bangladesh, Indonesia, etc., are themselves moving into areas of comparative advantage, like vegetables and other such crops, which require more labor than cereals. But developing competitiveness in new areas of production re­quires substantial support, especially in improving quality and building capabilities, for instance, in meeting Sanitary and PhytoSanitary standards.
     Thus, uniform rules on the nature and measures of sup­port cannot be applied to industrial and developing coun­tries alike, in particular, to LDCs. Least developed countries, including the small Pacific islands, are unable to match the competitiveness of larger and more complex economies. Spe­cial, differential market access, for given time periods, both within ESAP and with industrialized countries, can help these and other LDCs benefit from international trade.
     Developing countries in general and LDCs in particular (including the small island nations of the Pacific), with nar­row markets and not-so-developed capabilities, need to be provided specific support to build on areas of comparative advantage. If they are bound by the restrictions of the WTO, disallowing the benefit or support that is crop specific, they may well be unable to undertake the necessary diversifica­tion of production that can increase household incomes and thus food security.
     Prices of primary commodities, like coffee, however, are subject to substantial fluctuations, threatening the food se­curity position of producing households. But measures of price stabilization can be combined with steps to encourage diversification of product use, as is the case with palm oil. Further, as lower cost producers, or producers willing to accept lower returns enter the market, higher cost produc­ers need support to move into other areas production, with disincentives for not doing so.
     In all of the above measures of changes in production structures responding to comparative advantage, gradual change would reduce the social costs of the transformation compared to "big bang" type of change and would thus be more desirable.
     Where women have participated in the commercial process fostered by trade, they have gained in household and social position, though often at the cost of an increased workload. But the frequent exclusion of women from long­distance trade may be tackled by access to capital, training and facilitation measures.
     The nonmarket access rights of tribal or indigenous peo­ples to land and forests, which are important for their food security, may be eroded through trade agreements which open up land to the market. At the same time, the increased scale of production fostered by commercialization cannot be