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tables, and reduce the demand for more basic, income-inelastic sources such as wheat and rice.

Trade liberalisation can affect the price of agricultural inputs as well as outputs. In the past, many governments in developing countries have subsidised the prices of fertilisers, pesticides, and water. Trade liberalisation packages in Asia currently include the reduction or removal of such subsidies, and are likely to continue to do so under pressure from trading partners. The effect will be to increase agricultural input prices and lower real incomes for producers.

Trade liberalisation by developed countries

The Doha 'Development' Round of WTO negotiations is expected to phase out export subsidies and reduce domestic support for agriculture by OECD countries. It is also expected to offer increased and significant access for developing countries to markets in OECD countries, by removing quotas and reducing tariffs on both processed and unprocessed agricultural products.

If successful, a rise in the world price of agricultural products is likely, stemming from lower agricultural production by OECD countries. This will in most cases offset the fall in the domestic price of agricultural products resulting from trade liberalisation by individual Asian countries, although in certain cases it will reinforce the rise: for example, in the case of rice prices in Thailand.

There is, however, much disagreement about by how much prices would rise in response to OECD liberalisation. This stems from uncertainty about the amount by which agricultural producers outside the OECD would respond to higher prices by increasing production. Some developing countries have benefited in recent years from preferential access to OECD markets. Bangladesh, Cambodia and Nepal, for example, have been treated preferentially in the EU relative to China and other South Asian states with regard to quotas on exports to OECD countries of textiles and garments, under the Multi-Fibre Agreement (MFA). They have as a result been able to export large quantities of such goods, at the high prices prevailing in protected OECD markets.

However, as access to OECD markets for textiles and garments is widened, these benefits will disappear as a result of growing competition from other Asian countries including China and Vietnam. The likely result is a decline in export revenues, and downward pressure on profits and wages in the Bangladeshi garments industry, with potentially adverse impacts on household food security. These risks are discussed further in Section 5.1.5 (Shocks, Risks and Hazards).

Food Insecurity in India

India is a country of its people, being the world's largest democracy. Indians have had freedom of speech, religion, and the press ever since their constitution was adopted on January 26, 1950. Within this democracy people still live everyday being food insecure. 'Food insecurity exists when all people, at all times, do not have physical and economic access to the sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life.' Poverty easily coexists with food insecurity and is the main cause of hunger and malnutrition. Poverty exists when there is lack of income,

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