Tehran/Rome, 11 March 2000 -- The high dependency on food imports in the Near East poses a formidable challenge for countries throughout the region, the UN Food and Agriculture Organization (FAO) warned today at its 26th Regional Conference for the Near East. High dependence on food imports exposes countries to a number of food security risks, FAO said. Near East imports of cereals expanded from 15 percent in the early 1970s to 33 percent at the end of the 1990s.

While import dependence varies widely among countries, with Egypt, Algeria, Yemen and the Gulf states importing as much as 50 percent of their wheat and flour, it is the low-income food-deficit countries that face the greatest difficulties finding foreign exchange earnings to finance their imports, FAO said.

Multilateral agricultural trade reforms are also expected to have a negative impact on food aid and subsidized food exports to the Near East, carrying the risk of increased food import bills, according to FAO. "By virtue of the high import dependence, access to concessionary food imports is extremely important for many Near East countries to supplement their domestic supplies. In the past countries in the region benefited from low world prices and the subsidized exports associated with the export subsidy and credit programmes of the European Union and the United States."

Agricultural trade in the Near East has been limited even through many countries in the region have liberalized their agriculture sectors by eliminating or reducing input subsides, removing or reducing guaranteed producer prices and liberalizing exchange rates and trade regimes. FAO said that this is partly because fruit and vegetables dominate agricultural trade in the Near East. "On average, exports of fruits and vegetables constituted about 40 percent of the region's total value of agricultural exports during 1992-96. This share exceeded 50 percent in Algeria, Lebanon, Morocco and the Islamic Republic of Iran."

The main external market for fruit and vegetables is the European Union (EU), where tariffs vary by product, season and country of origin, FAO said. Higher tariffs are imposed during periods when imports compete with domestic production. Most of the Near East's exports of fruit and vegetables to the EU are also subjected to seasonal tariff quotas, which are duty free.

FAO cautioned against the continued dominance of fruit and vegetables in agricultural exports, urging the region to diversify into newer and higher value products, while promoting competitiveness to better integrate domestic enterprises into the international economy.

Regional trade in the Near East has so far remained disappointing, accounting for less than 4 percent of world agricultural trade, FAO said. Intra-regional agricultural trade has generally remained low and stagnant. Live animals, meat, fish and fish products are predominantly directed to regional markets, while vegetables, fruits and agricultural raw materials such as cotton reveal a clear extra-regional orientation, according to FAO.

To realize increased benefits from agricultural trade, FAO urged Near East countries to develop and strengthen their institutional capacity to meet international standards in food safety and quality. The UN agency called on Near East governments to promote sub-regional and regional cooperation, including export promotion and improved transport infrastructure to reduce costs and increase trade flows. It also suggested removing procedural and institutional bottlenecks to regional trade in food and agriculture and called on the countries of the Near East to improve efficiency, efficacy and transparency by implementing trade facilitation measures, improving standard and quality control.

FAO also urged the Region to ensure that food, agricultural trade and overall trade policies are conducive to fostering food security for all through a fair, market-oriented agricultural trading system.

The UN food agency pledged to continue "providing technical support to establish the Near East and North Africa Regional Network for Agricultural Policies and to strengthen national capacities in the area of agricultural policy analysis related to international trade and World Trade Organization (WTO) requirements."

FAO said it would continue its assistance to help the Region develop agricultural sector strategies based on comparative advantage and efficient resource allocation taking into consideration environmental and gender aspects in order to reap the benefits of trade liberalization and to cope with any negative impact from trade liberalization.

The Organization will also help Near East countries strengthen their capacities to meet Codex Alimentarius requirements and WTO agreements on Sanitary and Phytosanitary measures and Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), including food quality and safety.