Ambassador Sheikh Mohammed Belal Advocates for Reform in International Commodity Trade at UN Financing for Development Forum
Ambassador Sheikh Mohammed Belal, Managing Director of CFC delivered a compelling speech as a virtual panelist during the "International Trade as an Engine for Development" session at the UN's Financing for Development Forum. His address highlighted significant challenges faced by billions of smallholder commodity producers worldwide.
Speaking on the inequities in the global commodity trade, Ambassador Belal emphasized the stark disparities between the prices received by producers and the ultimate market prices. He drew attention to the urgent need for fair pricing structures by citing recent price spikes in cocoa, where farmers only earn a small portion of the trading price on global markets.
"Despite the critical role of international trade in fostering economic growth and technological advancements, it is paramount that we address the systemic issues that prevent commodity producers, especially in developing countries, from benefiting fully," stated Ambassador Belal.
The Ambassador outlined the "original sins" of the commodity trade, including the volatility and vulnerability of producers to external shocks, and the inadequate reach of sustainability programs that often benefit a minor fraction of smallholders. Citing a UNCTAD research that highlights the severe economic split between nations where profits are concentrated in the global North and those where commodities are produced, he emphasised the huge gap in earnings.
Ambassador Belal introduced the need of the hour, of "humanizing the value chains," urging the international community to ensure that smallholders receive a fair share of the profits their labor generates. This approach aims to lift farmers out of poverty and foster sustainable development.
The Ambassador also called for support for the CFC’s newly proposed Agricultural Commodity Transformation Fund (ACT Fund), designed to finance small to medium enterprises (SMEs) in the agricultural sector, which face a drastic funding shortfall despite a surge in applications. ACT is a US$ 100 million+ impact fund that will invest in SMEs in developing countries at the nexus of smallholder livelihoods, biodiversity and climate action. ACT will unlock the potential of agri-SMEs to create income and climate resilience at scale while preserving natural capital.
In conclusion, Ambassador Belal appealed for a unified approach to addressing the multifaceted challenges of the commodity market, emphasizing that trade should be part of a broader policy package that includes climate management, gender mainstreaming, and access to resources.
The session was held on April 24,2024 in New York and addressed by Ambassador Belal virtually.