The second point is to separate countries not just by income and region, as has been done previously, but to add a few more subgroups. Major food importing developing countries are either oil exporters, or higher-income semi-industrialized countries.

In addition to the oil exporters, there are countries that have serious internal conflicts which hinder their production of food. While these countries are vulnerable to higher food prices, solutions to their problems lie beyond the reforms in global trade regimes. Their food requirements and its distribution within these conflict areas need to be taken care of using other mechanisms. These countries should not be confused with “other or normal” developing countries. Thus, two other subcategories were added to the developing countries classification; oil exporters, and countries in conflict.<sup>9</sup> There is also another large group of countries that are small island states. They usually sell services and import most of their needs, including some food. Although their numbers are large, their trade is very small, along with their populations.

Net imports over time were also estimated to observe how the net food balance has evolved for these groups of countries. To minimize yearly fluctuations, two-year averages for the years 1980/81, 1990/91, 2000/01 and 2004/05 are used.<sup>10</sup> Earlier data is presented primarily for information and the discussions in the text are based on the net trade values for 2004/05.

To measure the relative importance of the food imports for these economies, we have estimated the share of these net imports in their total imports. Merchandise imports are used to measure of the potential impact of food price changes rather than merchandise exports, because many countries export services and labor that is not captured in merchandise exports data. Imports give a more accurate measure of the import capacity of these countries in terms of the effects of a food price change. While many countries might have net imports of food, the important issue whether these imports are large enough to have a significant impact on the balance of payments of these countries.

The data on Least Developed Countries (LDCs) are presented separately in annex tables 9 and 10. The reason is because the WTO discussions have treated LDCs as a separate group of countries, separate from other low-income countries. However, the discussions in the text are carried out primarily in terms of low-income countries rather than LDCs.

We have analyzed the case of Sub-Saharan Africa separately, because the continent has significant net food imports and the food deficits of SSA has been used in many arguments against global reforms. It is also an agricultural region that has significant trade surplus in all agriculture.

> 9 Oil exporters have been defined as countries where oil constitutes more than 40 percent of their exports between 2000 and 2005. Similarly, conflict countries are defined as the countries that were in serious conflicts in 2004/2005, which made it difficult for them to have “normal” food production. Annex table 2 shows the countries in each group.

> 10 D. Mitchell has pointed out that by picking the beginning years of each decade, we might have picked the years where food prices were low. Our judgment was to pick the decadal points and the data starts in this form in 1980. Years, 2004/05 on which the discussion in this paper are based, are the years where the food price levels are close to their average over the period in question.

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