April 14 (Bloomberg) -- The surge in world food prices is accomplishing what seven years of trade talks haven't: knocking down import barriers.

The Doha round of global trade negotiations has been stalled since 2001 because developing nations have refused to lower import tariffs that protect their farmers and rich countries won't give up farm-price supports. Now, import duties are being slashed from Brazil to Burkina Faso in response to prices that the World Bank says have risen 83 percent the past three years; subsidies in the U.S. and Europe are falling.

``Food prices have done for import liberalization what Doha wouldn't have been able to achieve for a very long time,'' says Arvind Subramanian, a trade expert at the Peterson Institute for International Economics in Washington.

Since early 2007, when cereal prices began rising, developing nations have taken a raft of measures to increase imports.

India removed a 36 percent import tariff on wheat flour, and Indonesia eliminated duties on wheat and soybeans. Peru jettisoned tariffs on wheat and corn. Turkey cut import taxes on wheat to 8 percent from 130 percent and on barley to zero from 100 percent. Mongolia scrapped its value-added tax on imported wheat and flour.

Burkina Faso suspended import taxes on four food staples in February after riots in the West African nation over price increases. And Brazil may remove its 10 percent tax on wheat imports. In all, at least 24 nations have reduced duties and value-added taxes, according to an April 9 World Bank report.

Falling Subsidies

In the U.S., farm subsidies are expected to fall below $8 billion this year, down from $13 billion in 2005, says David Orden, a senior research fellow at the International Food Policy Research Institute. European Union support of farmers fell by 10 billion euros ($15.7 billion) from 2004 to 2006, according to the Organization for Economic Cooperation and Development in Paris.

``The prospect that food prices will remain relatively high in the future helps the U.S. accept lower levels of subsidies,'' says Carlos Marcio Cozendey, economic department chief at Brazil's foreign affairs office in Brasilia. Brazil has led a group of nations holding up the Doha round because of U.S. and European farm subsidies.

The current round of World Trade Organization talks was launched in Doha, Qatar, in 2001. The talks among the 151 WTO members have already collapsed twice, in large part over differences on how to cut farm subsidies and tariffs.

Trying Again

Trade negotiators are preparing to try again for a broad agreement in Geneva in the next month or two. A deal might add $100 billion a year to a weakening global economy by spurring trade and growth, according to the World Bank.

``We are once again trying to take a run at getting this elusive breakthrough,'' U.S. Trade Representative Susan Schwab told a congressional committee on April 9.

High food prices may help, says Gawain Kripke, a senior policy adviser at Oxfam America. ``It is having obvious benefits in terms of subsidy payments and import tariffs,'' says Kripke, who tracks agriculture and trade issues for the anti-poverty organization.

After years of protecting domestic production of food staples by penalizing imports, places like Indonesia and the Philippines, the world's largest rice importer, are suddenly welcoming American rice, says Song Seng-Wun, an economist at CIMB-GK Research in Singapore.

Protection Not an Issue

``The stomach moves things faster than trade talks around a table,'' says Song. ``Asian governments now have no choice but to open up their most sensitive industries like agriculture. Suddenly, protection isn't an issue anymore.''

Philippine Agriculture Secretary Arthur Yap today urged China, Japan, India and other Asian nations to convene an emergency meeting on the food crisis, with the gathering likely to be held in April or May. In China, the government said today it will increase subsidies paid to rice and corn farmers to encourage production.

In the U.S. and EU, subsidies are automatically coming down because farm supports are based on world prices. U.S. food prices have increased 6.5 percent this year, with dairy products gaining the most; in February, eggs were up more than 25 percent from a year earlier.

While food inflation may increase the chances for a new global agreement, it is still a long-shot, trade analysts say. And the effects of higher food prices aren't all positive from a free-trade perspective: To husband their resources, many nations are restricting exports.

Export Restrictions

In March, Cambodian Prime Minister Hun Sen ordered a two- month ban on rice exports. Egypt prohibited overseas rice shipments, while China imposed export taxes on the food product in January. Pakistan put a 35 percent duty on wheat exports. Russia quadrupled wheat-export taxes to 40 percent.

Argentina raised soybean and sunflower export taxes to as much as 44 percent from 35 percent, prompting three weeks of farmer protests last month that led to food shortages.

Other governments are hoarding or rationing. In January, Malaysia announced it will create a new agency to stock up on oil, rice and other items. Singapore and Sri Lanka are stockpiling rice. The government of the Philippines asked fast-food chains including McDonald's Corp. to serve half-portions of rice.

The surge in food prices includes everything from cereals like wheat, which is up 181 percent over the past 36 months, and rice, which is double its year-ago price, to corn, soybeans, sugar and food oils.

Biofuel Production

The increases are the result of growing demand in nations such as China and India. Another factor may be the diversion of crops to biofuels, though the effects of using foods like corn to produce ethanol are disputed. High energy prices, which encourage biofuel production, also raise the cost of fertilizers and food transportation. Bad weather, including a drought in Australia, has contributed.

According to research by Merrill Lynch & Co., global food production grew at a slower pace than the world population in 2006, the first time that has happened in at least 15 years.

It's ``classic Malthusian economics in the form of population gains beginning to outstrip the available food supply,'' Merrill Lynch economist David Rosenberg wrote in a February report, referring to English economist Thomas Malthus's theory that populations tend to outgrow food production, causing suffering.

Food Riots

Already, rising prices have spurred unrest in Burkina Faso, Cameroon, Egypt, Indonesia, Cote d'Ivoire, Mauritania, Mozambique and Senegal, according to the United Nations. In Pakistan, government troops were deployed in February to guard flour mills. Four persons were killed during food riots in the southern Haitian city of Les Cayes.

WTO negotiators ought to keep all that in mind when they gather to try again in Geneva, and should take advantage of the lowered import restrictions to lock in new trade rules, says Joe Glauber, the chief U.S. agricultural negotiator.

``We need to look at what's happening in the real world,'' Glauber said in an interview. ``We think it's important to have open markets.''

To contact the reporters on this story: Matthew Benjamin at mbenjamin2@bloomberg.netMark Drajem in Washington at mdrajem@bloomberg.net

Last Updated: April 14, 2008 02:02 EDT