Thursday, December 8 2005 11:15 Hrs (IST) - World Time -

New York: Warning that trade reforms might not benefit the poor unless complementary policies are drawn, the UN food agency has recommended setting up of basic market institutions and infrastructure before opening national agricultural markets to international competition.

In a report released ahead of next week's World Trade Organization meeting in Hong Kong, the Food and Agriculture Organization said 'policies and investments' must be put in place to allow the poor to benefit from trade opportunities and to protect the vulnerable against trade-related shocks.

Agricultural trade and further trade liberalization can unlock the potential of the agriculture sector to promote pro-poor growth, but these benefits are not guaranteed, the report said.

The report calls for policies that enable the poor to take advantage of their most valuable asset their own labor.

"The poor often survive on so little that they are particularly vulnerable during any reform process, especially in the short term while productive sectors and labor markets are in transition," the report said.

"Basic market institutions and infrastructure to be set up before opening national agricultural markets to international competition, especially from subsidized competitors, " FAO said.

The report recommends consistent and sustained policies to provide 'appropriate signals for pro-poor, pro-growth outcomes' and warns that 'stop-and-go reforms' are particularly damaging.