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FAO SYMPOSIUM
ON
AGRICULTURE, TRADE AND FOOD SECURITY:
ISSUES AND OPTIONS IN THE FORTHCOMING WTO NEGOTIATIONS FROM THE PERSPECTIVE OF DEVELOPING
COUNTRIES
Geneva, 23-24 September 1999
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Paper No. 4
Issues at stake relating to agricultural development, trade
and food security
Commodity Policy and Projections Service
Commodities and Trade Division
I. The current agricultural situation of the developing countries
II. Issues relating to developing domestic capacities in agriculture
This paper discusses key issues relating to the development of agricultural production and trade, and the enhancement of food security in developing countries in the context of the forthcoming World Trade Organization (WTO) negotiations on agriculture.
1. For a large number of developing countries, especially the current 82 low-income food-deficit countries (LIFDCs) identified by FAO,1 the agricultural sector remains largely underdeveloped - in production both for the domestic market and for export. At the same time, in most of these countries, the agricultural sector lies at the centre of their economies. It accounts for a large share of Gross Domestic Product (GDP), employs a large proportion of the labour force, represents a major source of foreign exchange, supplies the bulk of basic food and provides subsistence and income for large rural populations (see Table 1). Thus, significant progress in promoting economic growth, reducing poverty and enhancing food security cannot be achieved in most of these countries without developing more fully the potential productive capacity of the agricultural sector and its contribution to overall economic development.
2. Several factors have contributed, in varying degrees in different countries, to the underdevelopment of agriculture in most of the developing countries. However, two key factors stand out: the past policy bias against agriculture in these countries, and the high degree of distortions on world agricultural markets due to the protection and subsidisation of this sector in many developed countries. While progress has been made in both areas in recent years, much remains to be done. Developing countries have a crucial stake in the next round of WTO negotiations on agriculture, as these will largely determine whether meaningful reforms that address these issues are achieved.
3. The traditional policy bias in most developing countries against the agricultural sector,2 reflected in direct and indirect taxation of agricultural production and exports, arose for a variety of reasons. Revenue considerations were one major factor as agriculture was the only viable economic activity available for taxation in many countries in the immediate post-Colonial period. A second important factor was the socio-political imperative of maintaining low food prices, commonly operated through state-controlled marketing boards. Indirect taxation of agricultural exports occurred principally through overvalued exchange rates. These factors, taken together, had the unintended consequence of depressing farm prices and profitability, thus reducing incentives for investment in the agricultural sector.
4. Since the late 1980s and early 1990s, many developing countries have implemented domestic policy reforms which have reduced the policy bias against agriculture3. Further agricultural sector policy reforms remain high on the agenda of many developing countries. The common objectives of these reforms4 are to: i) enhance productivity; ii) raise the levels of domestic production of basic food commodities to their potential; iii) improve the quality and standards of products; and iv) diversify production and exports by promoting the development of new crops and the processing of primary products. Achieving these objectives would require building farming capacity, attracting new investment, promoting innovation and providing infrastructure, farm inputs and credit. While many challenges remain for these countries in achieving the full productive potential of their agricultural sectors, the main domestic policy impediments are being greatly reduced.
5. The second key factor constraining the agricultural potential of developing countries - that is, the high levels of subsidies and protection provided to agriculture in the developed world - remains a serious problem. High levels of support and protection to agriculture in developed countries adversely affect developing countries in several ways. Domestic support to agriculture encourages over-production which in turn increases supplies on world markets (by reducing import demand or increasing export supply) and depresses world prices. Low prices make it harder for producers in developing countries to compete in their home markets as well as in international markets thus reducing incentives for production and retarding the development of their agricultural sector.
6. Export subsidies further distort global markets and often destabilise world prices as developed countries tend to use subsidies more when world prices are low, thus further depressing prices. On the other hand, subsidised exports tend to fall when world prices are high, just at the time when developing countries might be said to "benefit" from subsidised supplies.5 Developing countries thus have an interest in the reduction of both domestic support and export subsidies in the developed countries. They have a concomitant interest, however, in ensuring that disciplines intended to restrain the excesses of some developed countries do not interfere with the ability of developing countries to adopt appropriate policies to support their agricultural development.
7. High levels of border protection in many developed countries are an additional impediment to the export potential of developing countries. But because some developing country exporters benefit from preferential access to these markets in some heavily protected products, it is difficult to achieve consensus among developing countries for reducing the barriers in those cases. Trade preferences other than those under the Generalised System of Preferences are being challenged within the WTO, and there is growing pressure to convert these non-reciprocal programmes - e.g. the Lom� Agreement - into free trade agreements. Furthermore, as multilateral trade reform proceeds, the value of trade preferences will continue to erode.6 Thus an export strategy based solely on preferential access is unlikely to be successful in the long run. Nevertheless, at present, several developing countries depend on trade preferences for a substantial share of their export earnings and their interests need to be taken into account somehow. Thus, developing countries have an interest in reducing border protection in the developed countries and in ensuring that the current beneficiaries of preferential programmes are compensated and assisted in adjusting to a more competitive environment.
8. The Uruguay Round (UR) Agreement on Agriculture (AoA) began a process of bringing the trade distorting agricultural policies of developed countries under multilateral rules and disciplines7. However, much remains to be done before developing countries can benefit significantly. For this reason, the next round of negotiations will have a direct bearing on agricultural development, trade and food security in the developing countries. Issues arising from the implementation of the UR agreements as well as those emerging for the forthcoming negotiations on agriculture are outlined below from the perspective of the development of the agricultural capacities of developing countries to enhance their domestic food security and to take advantage of trading opportunities offered by the WTO process.
9. In view of the overriding role of agriculture in the developing economies, enhancing the domestic capacities of the sector is crucial for their socio-economic development. While the AoA acknowledges the need for special and differential treatment (SDT) for developing countries and has a number of provisions dealing with SDT, these provisions have been seen by many developing countries as falling short of providing the needed SDT and policy flexibility. In this context, developing countries have made a distinction between the protection and support measures used in developed countries that distort world markets and those used by developing countries to ensure food security, to promote broader economic development, or to diversify their agricultural exports. In developing countries where market institutions are not fully developed, or function only imperfectly, a degree of support and protection are considered necessary. However, the need for policy flexibility by developing countries should not be used as an argument for the continuation of trade-distorting policies in the developed countries. This section addresses some issues at stake regarding domestic policy flexibility to develop the agricultural potential of developing countries.
10. The policy flexibility of developing countries under the AoA can be defined in relation to four elements: reduction commitments on domestic support, exemptions under the de minimis threshold, special and differential treatment provisions, and "green box" policies. Most developing countries do not have reduction commitments on domestic support under the AoA because, as noted above, they typically did not provide support to agriculture. Under the de minimis provisions, developing countries may exclude from their calculation, and hence from their reduction commitments, support that would otherwise be subject to disciplines if such support constitute less than 10 percent of the value of production.8 For product-specific programmes, the de minimis limit is based on production of the specified product, whereas for non-product-specific programmes, the limit refers to the value of total agricultural production.
11. Some of the particular needs of developing countries in the area of domestic support are taken into account in the AoA provisions for special and differential treatment. Article 6 of the AoA excludes from the reduction commitment some support measures that are considered developmental. These are programmes designed to encourage agricultural and rural development and that are an integral part of the development programmes of developing countries. They include: investment subsidies which are generally available to agriculture in developing countries; agricultural input subsidies generally available to low-income or resource-poor producers in developing countries; and domestic support to producers in developing countries to encourage diversification from growing illicit narcotic crops.
12. Also exempt from reduction commitments, for all WTO members, the "green box" policies outlined in Annex 2 of the AoA. These are policies that are considered to have no, or at most minimal, trade-distorting effects or effects on production. The "green box" includes, inter alia, general services to agriculture such as research and extension, and pest and disease control; public stockholding for food security purposes; structural adjustment programmes; environmental programmes9; crop and income insurance schemes; and certain direct payments and income supports that are not linked to agricultural production. "Green box" support must be provided through publicly-funded government programmes (including government revenue foregone), and must neither involve transfers from consumers nor have the effect of providing price support to producers.
13. The domestic support reduction commitments of developed countries were an important first step toward addressing the high levels of support and protection provided to agriculture in many industrialised countries. Nevertheless, the global level of this "amber box" support remains quite high and the distribution is skewed against developing countries. The trade-distorting agricultural policies of developed countries impose significant costs on developing countries, as has been well documented,10 and further reforms are needed before developing countries can benefit significantly.
14. In contrast, the overwhelming majority of the developing countries, as shown in Table 2, have reported zero or less than de minimis total base aggregate measurement of support (AMS). Most of these countries, which represent about two thirds of the WTO membership, have no reduction commitments on domestic support but neither do they have WTO "rights" to use "amber box" support in excess of the de minimis level in the future. Although many of these countries are not currently constrained by the domestic support provisions of the AoA, they may find their policy options limited in the future. Only 20 developing countries (out of more than 100 countries) have reported positive total base AMS and, of these, only 12 reported base total AMS in excess of the 10 percent de minimis allowance. Furthermore, depending on the interpretation of Article 13.b of the AoA, their rights to product-specific de minimis support could be further constrained if the support given in the 1992 marketing year were less than the de minimis level.
15. A second issue of concern for developing countries is related to the fact that product-specific support in most developing countries is devoted mainly to production of basic foodstuffs. On average, more than 70 percent of the Current Total AMS notified by developing countries during 1995 and 1996 was allocated to the production of cereals. For several countries, such support is near the allowed product-specific de minimis level. Thus, while the de minimis exemption is unused for many products in these countries, it may constrain their support of basic food production. Furthermore, the extent of flexibility in non-product specific support for developing countries may be inadequate.11 Sector-wide support in areas such as agricultural credit, transport, irrigation and fuel are important aspects of the development strategies of many countries, and additional flexibility in their use may be needed.
16. Third, because the base year AMS is expressed in fixed nominal prices, several developing countries have difficulties remaining within their current allowed AMS levels due to high inflation and exchange rate depreciation, despite the fact that the real support to agriculture has not increased.12 Although the AoA recognises the problem of excessive inflation and the need for giving it due consideration, the precise way to give such a "consideration" as well as the meaning of "excessive rates of inflation" are not spelled out. Some of these countries have therefore raised the issue of being allowed to maintain support levels in real terms.
17. The interpretation of certain other terms associated with domestic support may be an important issue for developing countries. In general, countries have not been consistent in their interpretation of the term `eligible production': some used total production, others used marketed amounts and still others used the amount procured by a parastatal. As a result, the AMS and its respective de minimis levels may change considerably if a different interpretation is made on what production level to include in the calculation. Other problems have arisen regarding lack of clarity on the definition of `low-income and resource poor farmers'. Most of the developing countries have referred to the exemption of input subsidies for poor farmers and excluded almost all of their input subsidies, a practice that has been intensively questioned at the WTO. For many developing countries, input subsidies are an essential component of their broader agricultural development strategies and are used to facilitate the adoption of improved farming technology. Therefore, how this issue is clarified is important for them.
18. A critical issue of concern to developing countries is the need for a more precise definition of policies that qualify for inclusion in the "green box". Although such policies are described as having, at most, only minimal distorting effects on production or trade, that is probably not the case at least in the long run for many policies currently justified under the green box. In view of the limited financial ability of many of the developing countries to provide such support, their expenditures remain insignificant compared with that of the developed countries (see Table 3). There is currently no WTO limit on total amount of expenditure on green box measures, thus developing countries have an interest in clarifying, and perhaps tightening, the definition of such policies.
19. It is sometimes necessary to maintain a degree of border protection in order to implement a domestic support policy. This is particularly true for an administered price support system. Where there are no such programmes, producer prices may still be supported through tariffs. In general, the bound tariffs of developing countries are sufficiently high to allow for a considerable degree of protection at the border.13 However, there are issues in this area that need to be noted.
20. First, most developing countries chose to offer a uniform single rate of binding for all agricultural products. With the tariffs now bound and facing further reductions in the next round, some of these countries might need to approach tariff reductions carefully. In particular, an across-the-board reduction could leave little room to provide a degree of protection for sensitive sectors - this aspect needs to be taken into account in the choice of a reduction formula. Second, some countries have bound their tariffs at very low levels so that they now have little room to manoeuvre in the use of the tariff as a contingency measure against price fluctuations on world markets. Third, there are some anomalies in the schedule of bound tariffs in some developing countries. For example, for some products the bound rates are very low (even zero) while for other products - e.g. substitute commodities - they are very high, implying that the high bound rates have no practical significance. Some rationalization of tariff bindings seems necessary.
21. There are two main concerns regarding the export subsidy provisions of the AoA. One is that they legitimise the use of export subsidies in agriculture (such subsidies are prohibited for other goods), and the other is that they effectively favour exporters that used subsidies in the past (predominantly developed countries) while prohibiting others from using them. As it stands, only a small number of the developing countries have access to this provision, although developing countries are permitted to use subsidies for marketing costs and internal transport and freight costs. For a developing country, one of the main rationales for the use of trade policies is the need to support infant industries. Thus, in view of the severe supply bottlenecks and technological constraints in developing countries in the area of agricultural trade, export subsidy schemes could have relevance in some cases, as they would allow the targeting of incentives to specific, selected agro-industries. Few developing countries have the financial resources necessary to use export subsidies as a market-development tool, and what is more important for developing countries is the need to discipline the use of export subsidies by the developed countries.
22. The acquisition and adaptation of technology, particularly for production, is an issue
of vital concern for developing countries in the agricultural sector. In the context of
the TRIPs Agreement this relates notably to the requirement under the agreement, that
countries provide for the protection of property rights to plant and animal varieties,
either by patents or by effective sui generis legislation. The issue of the
patentability of plant and animal varieties as well as those related to genetically
modified organisms (GMOs) raise questions beyond the mere protection of intellectual
property rights. These include issues concerning the rights of local communities and
indigenous peoples, sovereign rights over natural genetic resources, biosafety and food
security. Developing countries face two sets of difficulties in this area. On the one
hand, most of them, particularly Least Developed Countries (LDCs), lack the scientific
capability to innovate and patent new materials - a majority of them are not even in a
position to fully catalogue the natural resources of bio-materials that they currently
possess. They also do not have appropriate legislation in this area. On the other hand,
there is a growing concentration of transnational companies in bio-tech industries,
notably in the seed sector. This concentration or lack of competition in the industry
(reinforced by global patentability) puts it in a position to exact monopoly-rents from
farmers world-wide. In addition, aside from the issue of costs, many countries feel
insecure to rely entirely on external sources for an input as strategically important as
seeds.
23. The Agreement recognised these problems and addressed them through "special and differential" treatment provisions for developing countries. However, in the view of many developing countries, these provisions have not resulted in any concrete benefits in the implementation process, particularly regarding financial and technical assistance and access on favourable terms to new technologies.
24. As has been noted above, if developing countries are to develop fully their agricultural potential, they need to rectify their past policy bias against agriculture as well as seek a reform of policies in developed countries that distort world agricultural markets. While both sets of reforms are essential, in practice, their sequencing could be crucial as to whether the situation of the developing countries progressively improves or becomes worse. As was mentioned earlier, there is a substantial imbalance in the remaining levels of domestic support and export subsidies allowed to developed countries on the one hand, and developing countries on the other, under the AoA commitments. Given the "standstill and roll back" principle underlying the AoA, this implies that developed countries have WTO "rights" to use their remaining high levels of support and protection, while developing countries' "rights" to similar support and protection are constrained to their considerably lower levels. The issue of concern is that, unless the levels of support and protection of the developed countries can be brought down quickly, the imbalance in support levels together with the constraints on developing countries' policies could make their adjustment much slower and more difficult.
25. If developing countries are to fully develop the potential of their agricultural sectors they must also receive better access for their products in the major import markets. These are primarily in the developed countries of Europe, Japan and North America. However, improved access to the markets of the higher-income developing countries is also important.
26. In principle, tariffication was meant to result in bound tariffs no more protective than the non-trade barriers that existed in the base period. And since all tariffs are being reduced, market access terms should have improved. However, a recent Organisation for Economic Co-operation and Development (OECD) study on border protection showed that actual border protection to agriculture was higher in 1996 compared to 1993 in eight of the 10 OECD countries (EC as one).14 It was also found that tariff protection is substantially higher on food and beverages group compared to agriculture as a whole. The study used production-weighted averages of applied Most-Favoured Nation (MFN) tariffs, and since bound rates cannot be below the applied rates, border protection based on bound rates would be even higher.
27. The post-UR tariff profile of many developed countries is typically characterised by relatively high rates on temperate-zone food products and lower rates on tropical products. Tariff reductions were generally lower for temperate-zone products (cuts on tropical products averaged 43 percent, cuts were lower for other product groups, the lowest being 26 percent for dairy products).15 Developing countries as a whole have a high stake in the export of temperate-zone products as these are also the products where the market is still expanding. Tariff peaks in agriculture are most common in three product groups: major food staples; fruit and vegetables; and the food industry (processed food products). For all agricultural and fisheries products taken together [Standard International Trade Classification (SITC) numbers 1-24], the proportion of tariff lines for which duties exceed 20 percent is about one-quarter of all tariff lines for both the EC and Japan and about one-tenth for the United States (Table 4).16
28. Tariff escalation refers to a situation where tariffs rise as the processing chain advances. This practice can result in significant effective protection to processed products, depending on the share of value added in the final output. Tariff escalation as a barrier to trade will matter more in the coming years as trade is rapidly shifting to processed products. The developing countries have a strong interest on this matter as they are trying to escape from the circle of producing and exporting primary products. As said above, the post-UR bound tariffs are relatively very high on processed foods. Several studies have shown that although tariff escalation was reduced post-UR, it still prevails in several important product chains, notably coffee, cocoa, oilseeds, vegetables, fruit and nuts and hides and skins.17
29. The post-UR agriculture tariff structure of several major developed countries is also complex, contrary to the UR's promise of a simple "tariff-only" regime. Apart from in-quota and above-quota duties, non-ad valorem tariffs are used quite frequently. In many cases, these tariffs also vary according to one or more technical reasons such as sugar content or alcohol content, making them even less transparent. Non-ad valorem tariffs are obviously more complex than ad valorem tariffs and complicate the comparison of trade restrictiveness across products and countries, which is essential for trade negotiations. Specific tariffs also weigh more heavily against lower-priced imports - their degree of restrictiveness varies inversely with unit price of imported product, while they remain constant in the case of an ad valorem tariff.
30. Some cases of more complex import arrangements continue. One notable example is the "entry price" system applied by the EC on fruit and vegetables. This regime also uses seasonal tariffs, complicating it further.18 The developing countries are increasingly becoming competitive in these products and so the regime is seen by many as a source of disguised protection.19 A second example is the cereal import regime of the EC, which works in a way similar to the previous variable levy system. Several developing countries are important exporters of grains and rice.
31. Tariff rate quotas (TRQs) were intended to ease the process of tariffication. Thirty-six WTO Members have tariff quota commitments in their Schedules with a total of 1,370 individual quotas on agriculture. The total volume of the TRQ in 1995 as a percentage of the world trade in that product typically ranged between 3 to 7 percent. For some product groups, e.g. dairy, meat and sugar, this exceeds 10 percent and so how the TRQs are used matters immensely.
32. While TRQs have potentially created some new trading opportunities, a number of conceptual and implementation issues have arisen, including: the lack of transparency in their administration (e.g. the many ways of administering TRQs not all of which provide effective market access); allocation to traditional (historical) suppliers and not on an MFN basis, and counting existing preferential access schemes as part of minimum access commitments;20 counting allocations to non-WTO members; allocation to state-trading enterprises and producer organizations, etc. All of these have presented difficulties for new entrants. Also, the broad product classification for TRQs allowed under the UR has prevented opening up minimum access in some sub-products within this broad product category.21 Finally, the setting of within-quota tariffs under the UR has been very uneven and, although many of the TRQs have been opened at low or zero tariffs, there are some cases where within-quota tariffs are so high that imports may not take place. All these problems have been responsible for an under-utilisation of TRQs (some 60-65 percent overall), although in some cases market conditions have also been identified as the main cause of under-fill.
33. The developing countries have a stake in reforming the TRQ system, but perhaps what is most important for them is ensuring that they have a fair access. The quota utilization data for 1995-98 are yet to be analyzed to examine the extent to which the developing countries were able to access the new quotas. Such an analysis remains a priority.
34. The special safeguard (SSG) provisions allow an importer to increase tariffs above bound levels in response to a surge in imports or a decline in import prices. Because the agricultural SSG measures were reserved for countries undertaking tariffication, most developing countries do not have access to SSG measures (Table 5).22 Close to 80 percent of the tariffed items of the OECD countries are subject to SSGs.23 The right to have recourse to SSGs is more common in meat, cereals, fruit and vegetables, oilseeds and oil products and dairy products (Table 6).
35. Maintaining the SSG under present conditions (existing country and product eligibility) will perpetuate discrimination against those Members that do not have access to the SSG, largely developing countries. Thus, some suggestions have been made for the elimination of the SSG altogether, also on grounds that Members can resort to the other WTO safeguards. However, the general WTO safeguards are not automatic. They require proof of "injury test", are costly and involve delays. Hence, in general, available WTO safeguards are not a viable option for many developing countries and for them the SSG option would be highly desirable. Thus, from the point of view of many developing countries it would be desirable to seek that the SSG becomes a permanent instrument in the multilateral trade system machinery but, preferably, be limited to a specified number of basic foodstuffs, i.e. those that are considered sensitive from domestic food security considerations, as discussed above. At the same time, some tightening of "triggers" may be desirable so that the SSG is not used too often.
36. The SPS and TBT agreements define rules for setting national standard and regulations relating to sanitary and phytosanitary measures as well as technical requirements for food safety and quality so that such regulations do not unduly restrict trade.
37. A major challenge faced by the developing countries is raising the SPS/TBT standards of their exports to at least internationally recognized levels. For example, the import detention list for the United States for the period 1996-97 shows that the majority of detentions and rejections of products originating from developing countries were not related to highly technical or sophisticated requirements (Table 7). Although the gap in their ability to meet such standards is wide, the lack of compliance with standards in the developed countries has not been the only reason for the detention and rejection of food imports from the developing countries. The developing countries face additional challenge where the developed countries, on risk assessment grounds, adopt higher standards than those currently recognized by international standard setting bodies. In addition, rising consumer concerns in the affluent countries over food safety and quality compounds the difficulty of the developing countries in meeting ever higher standards.
38. It would likely be counter-productive for the developing countries to press for exemption from, or a weakening of, WTO rules relating to SPS/TBT; or for that matter, lower international standards. This would merely have a negative impact on consumer confidence vis-�-vis their products in importing countries. Hence, a positive approach appears essential. What is at stake, however, is that many developing countries require assistance to meet these standards. Thus the support of the developing countries for the strengthening of the SPS/TBT Agreements could be predicated on effective mechanisms being put into place to assist these countries to upgrade their SPS standards. The SPS and TBT agreements contain promises of financial and technical assistance for the developing countries - making these promises concrete would be one issue to pursue. In addition, some mechanism (e.g. an international ombudsman/arbitrator) may be required to minimize "trade harassment". Finally, limited participation of these countries, both in number and effectiveness, in international standard-setting bodies also continues to be an issue at stake.24
39. Although price instability on world markets affects all countries, the consequences can be much greater for developing countries for two reasons: i) a large proportion of the rural population still earns a living from food production; and ii) food accounts for a large share of household expenditure in developing countries (see Table 8). While the AoA may contribute to stability in world prices because of the disciplines on trade distorting policies and the greater integration of markets, it may also lead to an increase in the variability of world prices because of reduced world stocks and a shift in the location of production from countries with high levels of support to countries with low or no mechanisms of support. However, the net impact of the AoA on world prices remains uncertain.
40. In any case, world agricultural market instability remains a major problem for LIFDCs because of their high dependence on world food markets and the weakness of their agricultural sectors. Thus, access of these countries to WTO-compatible safeguard measures remains an issue of great concern to them. Three possibilities may be considered for the developing countries. First, for basic foods, many developing countries favour having access to the SSG, which is simpler to use rather than the general GATT safeguard which is not easily applicable in practice. Second, price bands provide an appropriate and tested instrument for these countries.25 It is however important to ensure that the scheme does not fully insulate domestic markets from movements in world prices. Also, the legality of a price band policy is not entirely clear - while applying a duty within the bound rate is permitted, the AoA prohibits "variable import duties". This is an issue on which developing countries could seek clarity in the next round. Third, risk management instruments is yet another option to hedge against market instability. Market-based instruments such as forward and futures price contracts and options are fully compatible with the WTO.
41. Another issue relating to world market stability concerns possible disruptions in world supplies for a variety of reasons: food exporters may restrict exports, trade embargoes may be imposed, large changes in exchange rates can make imports extremely expensive and wars or natural disasters can disrupt supplies. Thus, strengthening the AoA provisions on export prohibition (Article 12) would be highly desirable.
42. The implementation of the Marrakesh Decision in favour of LDCs and NFIDCs is a matter of concern, particularly for these countries. To date, the Decision has not been activated, despite the fact that food aid has dropped to very low levels and food import bills of LDCs and NFIDCs have risen (see the discussion in Paper No. 1). Implementation of the Decision has so far been hampered by several factors, including, inter alia: the requirement for providing an undisputed proof for the need for assistance and whether these needs resulted from the reform process under the UR; and, secondly, the variety of instruments called under the Decision to respond to such needs, without being too specific on the respective responsibilities of all concerned. The major problem related to the Decision, however, is that it addresses a transitional problem while in fact the food security problem in the countries concerned is long term and complex and encompasses broader development issues in addition to trade.
43. The overwhelming concern of the non-WTO member developing countries has been the terms of accession to the WTO. Treating countries on the basis of the most recent three years for which data were available and hard negotiations on the tariff ceiling bindings and access to the special and differential treatment appear to be tighter conditions than previous negotiations, and may impose undue restraint on their flexibility to design domestic food and agricultural policies.
44. Finally, new issues such as state trading, competition policy, environmental considerations and labour standards present a multitude of challenges to developing countries. What is important is that legitimate concerns should be separated from the increasing use of these issues by some countries for protectionist purposes.
45. In conclusion, there are many issues at stake for the developing countries in the forthcoming WTO negotiations. Suggestions on possible solutions to some of the problems are identified in Paper No. 6. In many cases, improvements could be straightforward. In other cases, improving the state of affairs may entail some hard negotiations and bargaining, perhaps with some give and take.
Table 1: Importance of Agriculture in the Developing Economies
| Country | Share of agriculture in total GDP, 1997 (%) | Agricultural population a/ as % of total population (1995-97) | Share of agricultural - in total merchandise exports, 1995-97 (%) | ||
| LIFDCs | LIFDCs | LIFDCs | |||
| Congo, Dem Rep. | 64.0 | Bhutan | 93.3 | Burundi | 95.3 |
| Burundi | 58.0 | Nepal | 93.3 | Sudan | 94.2 |
| Ethiopia | 56.0 | Burkina Faso | 92.3 | Ethiopia | 93.1 |
| Albania | 55.0 | Rwanda | 90.9 | Malawi | 74.6 |
| Central African Rep. | 54.0 | Burundi | 90.8 | Chad | 67.8 |
| Guinea-Bissau | 54.0 | Niger | 88.7 | Guinea-Bissau | 64.9 |
| Kyrgyzstan | 52.0 | Guinea | 85.3 | Guatemala | 62.4 |
| Laos | 52.0 | Ethiopia | 84.0 | Afghanistan | 62.3 |
| Cambodia | 50.0 | Guinea-Bissau | 83.8 | Tanzania, Uni. Rep | 61.6 |
| Mali | 49.0 | Mali | 83.1 | Mali | 59.2 |
| Tanzania, Uni. Rep. | 48.0 | Gambia | 80.2 | Togo | 56.7 |
| Ghana | 47.0 | Tanzania, Uni. Rep | 79.9 | Cuba | 55.7 |
| Nigeria | 45.0 | Malawi | 79.4 | C�te d'Ivoire | 54.8 |
| Armenia | 44.0 | Papua New Guinea | 78.9 | Kenya | 54.5 |
| Sierra Leone | 44.0 | Chad | 78.7 | Comoros | 52.0 |
| Nepal | 43.0 | Eritrea | 78.7 | Somalia | 50.9 |
| Haiti | 42.0 | Kenya | 77.1 | Nicaragua | 49.1 |
| Cameroon | 41.0 | Laos | 77.1 | Benin | 47.4 |
| Togo | 40.0 | Mozambique | 77.1 | Madagascar | 45.4 |
| Chad | 39.0 | Central African Rep | 75.9 | Burkina Faso | 40.6 |
| Mozambique | 39.0 | Madagascar | 75.9 | Gambia | 40.0 |
| Rwanda | 39.0 | Comoros | 75.2 | Honduras | 38.5 |
| Benin | 38.0 | Senegal | 75.0 | Rwanda | 37.1 |
| Niger | 38.0 | Solomon Islands | 74.6 | Ghana | 36.9 |
| Malawi | 36.0 | Angola | 72.9 | Kyrgyzstan | 36.0 |
| Burkina Faso | 35.0 | Somalia | 72.9 | Ecuador | 34.5 |
| Georgia | 35.0 | Equatorial Guinea | 72.3 | Swaziland | 33.0 |
| Nicaragua | 34.0 | Cambodia | 71.6 | Cameroon | 32.4 |
| Madagascar | 32.0 | Zambia | 71.6 | Bolivia | 29.6 |
| Mongolia | 31.0 | China | 70.0 | Mozambique | 28.7 |
| Bangladesh | 30.0 | Liberia | 69.5 | Macedonia, FYR | 27.5 |
| Kenya | 29.0 | Afghanistan | 68.3 | Congo, Dem Rep | 24.4 |
| C�te d'Ivoire | 27.0 | Congo, Dem Rep | 65.1 | Central African Rep | 24.2 |
| India | 27.0 | Haiti | 64.8 | Syrian Arab Rep | 22.2 |
| Guinea | 26.0 | Sudan | 64.6 | Haiti | 21.5 |
| Pakistan | 26.0 | Sierra Leone | 64.3 | Sri Lanka | 20.8 |
| Papua New Guinea | 26.0 | Togo | 62.1 | Laos | 18.5 |
| Mauritania | 25.0 | Bangladesh | 59.6 | Morocco | 17.9 |
| Guatemala | 24.0 | Benin | 57.9 | Papua New Guinea | 17.4 |
| Azerbaijan | 22.0 | Ghana | 57.1 | Nepal | 17.3 |
| Sri Lanka | 22.0 | Cameroon | 56.8 | Solomon Islands | 17.1 |
| China | 20.0 | India | 56.8 | Georgia | 16.7 |
| Honduras | 20.0 | Yemen | 54.6 | Niger | 16.5 |
| Morocco | 20.0 | Mauritania | 53.8 | Mongolia | 16.5 |
| Philippines | 20.0 | C�te d'Ivoire | 53.6 | India | 16.5 |
| Senegal | 18.0 | Pakistan | 52.6 | Bhutan | 16.0 |
| Yemen | 18.0 | Sri Lanka | 47.5 | Egypt | 13.8 |
| Egypt | 16.0 | Indonesia | 46.7 | Pakistan | 13.4 |
| Indonesia | 16.0 | Congo, Republic of | 44.0 | Cambodia | 13.2 |
| Zambia | 16.0 | Bolivia | 43.6 | Sierra Leone | 13.1 |
| Lesotho | 14.0 | Philippines | 41.8 | Albania | 12.2 |
| Bolivia | 13.0 | Morocco | 40.3 | Indonesia | 11.7 |
| Ecuador | 12.0 | Egypt | 39.3 | Azerbaijan | 11.5 |
| Macedonia, FYR | 11.0 | Honduras | 39.1 | Senegal | 10.3 |
| Congo, Rep. | 10.0 | Lesotho | 38.8 | Korea, Dem Rep | 9.0 |
| Angola | 7.0 | Nigeria | 37.1 | Philippines | 8.9 |
| Korea, Dem Rep | 6.0 | Swaziland | 36.2 | Mauritania | 8.6 |
| Eritrea | na | Korea, Dem Rep | 33.2 | Guinea | 7.1 |
| Afghanistan | na | Ecuador | 30.3 | Equatorial Guinea | 6.8 |
| Bhutan | na | Syrian Arab Rep | 29.8 | Lesotho | 5.9 |
| Comoros | na | Mongolia | 27.2 | Liberia | 5.8 |
| Cuba | na | Nicaragua | 25.4 | Armenia | 5.5 |
| Equatorial Guinea | na | Cuba | 18.0 | China | 5.1 |
| Gambia | na | Albania | na | Zambia | 3.6 |
| Liberia | na | Armenia | na | Bangladesh | 3.4 |
| Solomon Islands | na | Azerbaijan | na | Nigeria | 3.2 |
| Somalia | na | Georgia | na | Yemen | 2.9 |
| Sudan | na | Guatemala | na | Eritrea | 2.7 |
| Swaziland | na | Kyrgyzstan | na | Congo, Republic of | 0.7 |
| Syrian Arab Rep | na | Macedonia, FYR | na | Angola | 0.1 |
| Other Developing Countries | 13.2 | Other Developing Countries | 29.1 | Other Developing Countries | 22.9 |
| Uganda | 44.0 | Uganda | 80.8 | Uganda | 76.3 |
| Zimbabwe | 28.0 | Myanmar | 71.5 | Paraguay | 72.1 |
| Viet Nam | 27.0 | Viet Nam | 69.0 | Costa Rica | 61.9 |
| Paraguay | 23.0 | Zimbabwe | 64.9 | Cyprus | 56.7 |
| Turkey | 17.0 | Namibia | 52.0 | Uruguay | 56.2 |
| Colombia | 16.0 | Thailand | 52.0 | Panama | 53.0 |
| Costa Rica | 15.0 | Botswana | 45.3 | Dominican Rep | 47.7 |
| Brazil | 14.0 | Gabon | 43.1 | Zimbabwe | 46.1 |
| Namibia | 14.0 | Paraguay | 42.7 | Argentina | 45.2 |
| Tunisia | 14.0 | Fiji Islands | 42.0 | Myanmar | 41.1 |
| Dominican Rep | 13.0 | Oman | 39.4 | Colombia | 32.9 |
| El Salvador | 13.0 | El Salvador | 36.1 | El Salvador | 30.1 |
| Malaysia | 13.0 | Turkey | 33.2 | Brazil | 29.9 |
| Algeria | 12.0 | Peru | 32.0 | Mauritius | 25.1 |
| Lebanon | 12.0 | Iran, Islamic Rep | 29.3 | Viet Nam | 23.2 |
| Thailand | 11.0 | Tunisia | 26.1 | Jamaica | 21.0 |
| Mauritius | 10.0 | Mexico | 26.0 | Turkey | 20.0 |
| Uruguay | 9.0 | Panama | 25.3 | Chile | 15.2 |
| Jamaica | 8.0 | Algeria | 24.7 | Lebanon | 15.0 |
| Panama | 8.0 | Costa Rica | 23.2 | Namibia | 14.6 |
| Peru | 7.0 | Colombia | 23.1 | Thailand | 14.1 |
| Argentina | 6.0 | Jamaica | 22.2 | Mexico | 10.2 |
| Korea, Rep | 6.0 | Dominican Rep | 20.7 | Jordan | 10.1 |
| Jordan | 5.0 | Malaysia | 20.6 | Malaysia | 10.1 |
| Mexico | 5.0 | Brazil | 18.7 | Peru | 9.4 |
| Venezuela | 4.0 | Chile | 16.5 | Tunisia | 8.0 |
| Gabon | 2.0 | Mauritius | 13.3 | Botswana | 5.0 |
| Botswana | na | Saudi Arabia | 13.1 | Iran, Islamic Rep | 4.8 |
| Chile | na | Jordan | 12.8 | Iraq | 3.7 |
| Cyprus | na | Iraq | 12.2 | Oman | 3.5 |
| Fiji Islands | na | Uruguay | 11.5 | Venezuela | 2.2 |
| Iran, Islamic Rep | na | Argentina | 11.4 | Un. Arab Emirates | 2.2 |
| Iraq | na | Korea, Repub | 11.2 | Fiji Islands | 1.6 |
| Libya | na | Venezuela | 11.2 | Korea, Rep | 1.3 |
| Myanmar | na | Cyprus | 10.4 | Saudi Arabia | 0.8 |
| Oman | na | Libya | 7.6 | Algeria | 0.8 |
| Saudi Arabia | na | Un. Arab Emirates | 5.9 | Libya | 0.5 |
| Un. Arab Emirates | na | Lebanon | 4.9 | Gabon | 0.4 |
| Developing Countriesb/ | 26.3 | Developing countries | 50.4 | Developing countries | 27.3 |
| - LIFDCsb/: | 32.5 | - LIFDCsb/: | 63.2 | - LIFDCsb/: | 29.7 |
| Developed Countries | 3.0c/ | Developed Countries | 8.7 | Developed Countries | 8.3 |
Source: Column 1 is taken from World Bank (1999), World Development Report
1998/89; columns 2 and 3 are computed using data from FAO STAT (1999).
a/ The Agricultural Population is defined as all persons depending for their livelihood on
agriculture, hunting, fishing or forestry. This estimate comprises all persons actively
engaged in agriculture and their non-working dependants.
b/ simple average of the respective countries in the list.
c/ average for higher income countries in 1980 (World Bank, 1999).
Table 2: Base Total AMS as reported by selected developing countries (by region)
| Region | Reported Base Total AMS | ||
| Above de minimis | Positive but less than de minimis | Zero or negative | |
| AFRICA | Morocco, Tunisia | Mauritius | Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Central African Rep., Chad, Congo, Congo Dem. Rep. of, C�te d'Ivoire, Djibouti, Egypt, Gabon, Gambia, Ghana, Guinea Bissau, Guinea Republic of, Kenya, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, Swaziland, Tanzania, Togo, Uganda, Zambia, Zimbabwe |
| AMERICA | Brazil, Colombia, Costa Rica, Mexico, Venezuela | Argentina, Panama, Uruguay | Antigua and Barbuda, Barbados, Belize, Bolivia, Chile, Cuba, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua, Paraguay, Peru, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and Grenadine, Suriname, Trinidad and Tobago |
| ASIA | Korea, Thailand | India, Pakistan, Philippines | Bahrain, Bangladesh, Brunei Darussalam, Hong Kong - China, Indonesia, Kuwait, Macau, Malaysia, Maldives, Malta, Mongolia, Myanmar, Qatar, Singapore, Sri Lanka, United Arab Emirates |
| EUROPE | Bulgaria, Cyprus | Turkey | Romania |
| OCEANIA | Papua New Guinea | Solomon Islands, Fiji | |
| Number of countries | 12 | 8 | 80 |
Source: Based on information derived from WTO, CoA (1999), Domestic Support - Revision, May 1999, Secretariat Background Paper (AIE/S2/Rev.1)
Table 3. Total expenditure on Green Box measures (US$ million), by member, 1995-99
| Country | 1995 | 1996 | ||
| Amount (US$ million) | Share in reported GB expenditure of all members | Amount (US$ million) | Share in reported GB expenditure of all members | |
| Grand total of reported expenditure | 129,440 | 100.00 | 126,735 | 100.00 |
| Total of reporting developed countries | 110,173 | 85.10 | 110,958 | 87.60 |
| Total of reporting developing countries | 19,266 | 14.91 | 15,776 | 12.50 |
| Developing countries: | ||||
| Argentina | 0.00 | 137 | 0.11 | |
| Bahrain | 0.00 | 0 | 0.00 | |
| Botswana | 11 | 0.01 | 0.00 | |
| Brazil | 4883 | 3.77 | 2600 | 2.05 |
| Chile | 176 | 0.14 | 170 | 0.13 |
| Colombia | 318 | 0.25 | 578 | 0.46 |
| Cuba | 908 | 0.70 | 1090 | 0.86 |
| Cyprus | 130 | 0.10 | 128 | 0.10 |
| Fiji | 0.00 | 16 | 0.01 | |
| Gambia | n.a. | 0.00 | ||
| Guyana | 0.00 | 0.00 | ||
| India | 2196 | 1.70 | 0.00 | |
| Jamaica | 0.00 | 7 | 0.01 | |
| Kenya | 53 | 0.04 | 66 | 0.05 |
| Korea | 5174 | 4.00 | 6443 | 5.08 |
| Malaysia | 244 | 0.19 | 300 | 0.24 |
| Malta | 1 | 0.00 | 0.00 | |
| Mexico | 1626 | 1.26 | 0.00 | |
| Mongolia | n.a. | n.a. | ||
| Morocco | 157 | 0.12 | 378 | 0.30 |
| Namibia | 50 | 0.04 | 0.00 | |
| Pakistan | 440 | 0.34 | 392 | 0.31 |
| Paraguay | 23 | 0.02 | 9 | 0.01 |
| Philippines | 136 | 0.11 | 282 | 0.22 |
| Romania | 730 | 0.56 | 756 | 0.60 |
| Thailand | 1353 | 1.05 | 1624 | 1.28 |
| Trinidad & Tobago | 61 | 0.05 | 98 | 0.08 |
| Tunisia | 30 | 0.02 | 39 | 0.03 |
| Uruguay | 18 | 0.01 | 33 | 0.03 |
| Venezuela | 539 | 0.42 | 618 | 0.49 |
| Zimbabwe | 14 | 0.01 | 12 | 0.01 |
| Developed countries: | ||||
| Australia | 707 | 0.55 | 740 | 0.58 |
| Canada | 1539 | 1.19 | 0.00 | |
| Czech Republic | 132 | 0.10 | 197 | 0.16 |
| EC | 24110 | 18.63 | 28378 | 22.39 |
| Hungary | 105 | 0.08 | 0.00 | |
| Iceland | 30 | 0.02 | 50 | 0.04 |
| Israel | 292 | 0.23 | 414 | 0.33 |
| Japan | 32859 | 25.39 | 25020 | 19.74 |
| New Zealand | 128 | 0.10 | 136 | 0.11 |
| Norway | 647 | 0.50 | 638 | 0.50 |
| Poland | 436 | 0.34 | 549 | 0.43 |
| Slovak Republic | 1 | 0.00 | 1 | 0.00 |
| Slovenia | 85 | 0.07 | 91 | 0.07 |
| South Africa | 763 | 0.59 | 525 | 0.41 |
| Switzerland-Liechtenstein | 2299 | 1.78 | 2404 | 1.90 |
| United States | 46041 | 35.57 | 51815 | 40.88 |
Source: Computations are based on data obtained from WTO, CoA (1999), Domestic Support - Revision, May 1999, Secretariat Background Paper (AIE/S2/Rev.1)
Table 4: Tariff peaks by agricultural product groups (EC, Japan and the US) 1/
| Product group 2/ | Number of tariff lines within a tariff range | No. of peaks | Share in total % | |||
| Total | 20-29 % | 30-99 % | >100 % | |||
| European Community (EC) Meat, live animal (1-2) Fish and crustaceans (3) Dairy products (4) Fruit and vegetables (7-8) Cereals, flours etc. (10-11) Veg. oils, fats, oilseeds (12,15) Canned and prep.meat, fish (16) Sugar, cocoa and prep. (17,18) Prepared fruit, vegetables (20) Other food industry prod. (19,21) Beverages and tobacco (22,24) Other agri. Prod (5-6, 13-14, 23) All agri., fishery products (1-24) Japan United States |
351 373 197 407 174 211 105 75 310 90 202 231 2,726
|
68 45 21 10 29 0 17 34 70 27 9 4 343
|
79 0 77 5 75 8 8 6 39 8 15 14 334
|
14 0 9 1 0 2 0 0 1 0 2 4 33
|
161 45 107 16 104 10 25 40 110 35 26 22 701
|
46 12 54 4 60 5 24 53 35 39 13 10 26
|
| 1/ Tariff peaks are defined as tariff rates
that are 20 percent or more. All are MFN tariffs. 2/ The numbers within the parenthesis in the product are SITC numbers. Source: FAO compilation based on data provided in UNCTAD/WTO (1997), The post-UR tariff environment for developing countries,TD/B/COM.1/14, tables 1-3. |
||||||
Table 5: Special Agricultural Safeguard (SSG): potential application and action by members
| Member | Potential application of SSG | SSG action by member and number of tariff items, 1995-98 | ||
| number of tariff items | number of product groups (HS 4-digit headings) | price-based action | volume-based action | |
| Developed countries: | ||||
| Australia | 10 | 2 | ||
| Bulgaria | 21 | 9 | ||
| Canada | 150 | 37 | ||
| Czech Republic | 236 | 29 | ||
| EC | 539 | 72 | 26 a/ | 47 a/ |
| Hungary | 117 | 117 | ||
| Iceland | 462 | 121 | ||
| Israel | 41 | 14 | ||
| Japan | 121 | 27 | 4 b/ | 73 b/ |
| New Zealand | 4 | 2 | ||
| Norway | 581 | 141 | ||
| Poland | 144 | 133 | 10 /b | 1 c/ |
| Slovak Republic | 114 | 28 | 1 c/ | |
| South Africa | 166 | 75 | ||
| Switzerland-Liechtenstein | 961 | 134 | ||
| United States | 189 | 26 | 24 a/ | 6 a/ |
| Sub-total | 3,856 | 967 | 64 | 128 |
| Developing countries: | ||||
| Barbados | 37 | 24 | ||
| Botswana | 161 | 71 | ||
| Colombia | 56 | 55 | ||
| Costa Rica | 87 | 24 | ||
| Ecuador | 7 | 1 | ||
| El Salvador | 84 | 23 | ||
| Guatemala | 107 | 35 | ||
| Indonesia | 13 | 4 | ||
| Korea | 111 | 34 | 8 c/ | |
| Malaysia | 72 | 12 | ||
| Mexico | 293 | 83 | ||
| Morocco | 374 | 46 | ||
| Namibia | 166 | 75 | ||
| Nicaragua | 21 | 14 | ||
| Panama | 6 | 2 | ||
| Philippines | 118 | 36 | ||
| Romania | 175 | 14 | ||
| Swaziland | 166 | 75 | ||
| Thailand | 52 | 23 | ||
| Tunisia | 32 | 13 | ||
| Uruguay | 2 | 1 | ||
| Venezuela | 76 | 63 | ||
| Sub-total | 2,216 | 728 | 8 | 0 |
| Total | 6,072 | 1,695 | 74 | 128 |
Source: WTO, CoA (1998), Special Agricultural Safeguard, Background Paper by the
Secretariat (AIE/S12)
a/ HS 8-digit items. b/ HS- 9-digit items. c/ HS 6-digit items.Table 6: Special
Agricultural Safeguard (SSG): potential application and action by product category
| Product category | Potential application of SSG | SSG action by member and number of tariff items, 1996-98 | ||
| number of tariff items | as percentage of total number of tariff items | price-based action | volume-based action | |
| Cereals | 1,087 | 17.9 | 7 | 2 |
| Oil seeds, fats and oils and products | 706 | 11.6 | 5 | |
| Sugar and confectionary | 291 | 4.8 | 23 | |
| Dairy products | 715 | 11.8 | 15 | 20 |
| Animal and product thereof | 1327 | 21.9 | 5 | 47 |
| Eggs | 74 | 1.2 | 1 | |
| Beverages and spirits | 329 | 5.4 | 1 | |
| Fruit and vegetables | 809 | 13.3 | 1 | 48 |
| Tobacco | 73 | 1.2 | ||
| Agricultural fibres | 13 | 0.2 | 5 | |
| Coffee, tea, mate, cocoa and preparations; spices and other food preparations | 277 | 4.6 | 6 | 1 |
| Other agricultural products | 371 | 6.1 | 8 | |
| All commodity categories | 6,072 | 100.0 | 72 | 123 |
Source: WTO, CoA (1998), Special Agricultural Safeguard, Background Paper by the
Secretariat (AIE/S12)
Table 7: Number of contraventions cited for United States Food and Drug Administration
Import Detention and their relative importance for the period July 1996-June 1997
| Reason for contravention | Africa | Latin America and Caribbean | Europe | Asia | Total | |||||
| number | % | number | % | number | % | number | % | number | % | |
| Food additives | 2 | 0.7 | 57 | 1.5 | 69 | 5.8 | 426 | 7.4 | 554 | 5.0 |
| Pesticide residues | 0 | 0.0 | 821 | 21.1 | 20 | 1.7 | 23 | 0.4 | 864 | 7.7 |
| Heavy metals | 1 | 0.3 | 426 | 10.9 | 26 | 2.2 | 84 | 1.5 | 537 | 4.8 |
| Mould | 19 | 6.3 | 475 | 12.2 | 27 | 2.3 | 49 | 0.8 | 570 | 5.1 |
| Microbiological contamination | 125 | 41.3 | 246 | 6.3 | 159 | 13.4 | 895 | 15.5 | 1,425 | 12.8 |
| Decomposition | 9 | 3.0 | 206 | 5.3 | 7 | 0.6 | 668 | 11.5 | 890 | 8.0 |
| Filth | 54 | 17.8 | 1,253 | 32.2 | 175 | 14.8 | 2,037 | 35.2 | 3,519 | 31.5 |
| Low acid canned food | 4 | 1.3 | 142 | 3.6 | 425 | 35.9 | 829 | 14.3 | 1,400 | 12.5 |
| Labelling | 38 | 12.5 | 201 | 5.2 | 237 | 20.0 | 622 | 10.8 | 1,098 | 9.8 |
| Other | 51 | 16.8 | 68 | 1.7 | 39 | 3.3 | 151 | 2.6 | 309 | 2.8 |
| Totals | 303 | 100 | 3,895 | 100 | 1,184 | 100 | 5,784 | 100 | 1,1166 | 100 |
Source: FAO (1999), The importance of food quality and safety for developing
countries, Committee on World Food Security , CFS: 99/3.
Table 8: Food expenditure as a percentage of household consumption expenditure
| Country | Share of expenditure on food in total household expenditure | Country | Share of expenditure on food in total household expenditure | ||
| % | Year | % | Year | ||
| Low income food deficit countries (LIFDCs): | Other developing countries: | ||||
| Rwanda | 80.6 | 1982/83 | Uganda | 68.0 | 1989/90 |
| Zambia | 80.2 | 1974/75 l | Peru | 54.5 | 1985/86 |
| Albania | 75.0 | 1997 | Algeria | 52.6 | 1988 |
| Togo | 69.2 | 1988/89 | Mexico | 50.6 | 1984 |
| Ghana | 66.4 | 1987/88 | Morocco | 50.6 | 1984/85 |
| India | 65.4 | 1986/97 | Jamaica | 50.5 | 1984 |
| Bangladesh | 63.4 | 1988/89 | Seychelles | 49.4 | 1983/84 |
| Tanzania | 62.5 | 1969 | Latvia | 49.0 | 1997 |
| Sri Lanka | 61.4 | 1985/86 | Fiji | 45.9 | 1977 |
| Egypt | 60.1 | 1981/82 | Mauritius | 45.8 | 1986/87 |
| Nepal | 59.4 | 1984/85 | Iran | 45.2 | 1989 |
| Indonesia | 56.8 | 1987 | Colombia | 44.5 | 1972 |
| China | 56.2 | 1990 | Tunisia | 44.0 | 1985 |
| Samoa | 55.2 | 1971/72 | Macao | 42.7 | 1981/82 |
| Guatemala | 54.8 | 1979/81 | Thailand | 41.7 | 1988 |
| Philippines | 53.9 | 1988 | Jordan | 40.4 | 1986/87 |
| Haiti | 53.6 | 1986/87 | Uruguay | 39.2 | 1982/83 |
| Nigeria | 50.6 | 1980/81 | Hong Kong | 39.0 | 1989/90 |
| C�te d'Ivoire | 49.1 | 1979 | Costa Rica | 38.7 | 1987/88 |
| Pakistan | 44.5 | 1987/88 | Malaysia | 38.6 | 1980/82 |
| Lesotho | 37.8 | 1986/87 | Singapore | 37.3 | 1987/88 |
| Swaziland | 31.6 | 1985 | New Caledonia | 36.3 | 1980/81 |
| Bahamas | 30.5 | 1973 | Botswana | 36.2 | 1985/86 |
| Sierra Leone | 30.3 | 1969/70 | French Guiana | 33.3 | 1984/85 |
| Panama | 33.3 | 1983/84 | |||
| CEECS: | Martinique | 33.2 | 1984/85 | ||
| Romania | 58.6 | 1997 | Turkey | 33.0 | 1987 |
| Bulgaria | 54.3 | 1997 | Rep. Of Korea | 32.0 | 1990 |
| Lithuania | 52.2 | 1997 | Guadeloupe | 30.9 | 1984/85 |
| Croatia | 40.1 | 1991 | Kuwait | 29.7 | 1986/87 |
| Estonia | 39.9 | 1997 | Cyprus | 29.4 | 1984/85 |
| Slovak Republic | 37.3 | 1997 | Brazil | 28.7 | 1987/88 |
| Czech Republic | 30.5 | 1996 | Trinidad & Tobago | 28.3 | 1981/82 |
| Poland | 28.0 | 1995 | Netherlands Antilles | 27.9 | 1981 |
| Slovenia | 22.5 | 1997 | Reunion | 23.3 | 1986/87 |
| Hungary | 17.7 | 1995 | Cayman Islands | 22.1 | 1983/84 |
| Bermuda | 18.8 | 1982 | |||
Source: Data on LIFDCS and other developing countries are obtained from FAO
(1994) Compendium of food
consumption statistics from household surveys in developing countries, volumes 1 and 2, FAO
Economic and Social Development Paper 116; while data for the CEECs are obtained from
OECD (1998), Agricultural policies in non-OECD countries: monitoring and evaluation 1998,
statistical annex, annex table 10, page 15.
Note: The FAO data are based on national household surveys which differ
significantly in terms of survey coverage, concepts, definitions and year and mode of data
collection. Hence, this table should be taken to reflect the broad range across the
selected countries.
1 See FAO Special Programme for Food Security website (www.fao.org/spfs/lifdc) for the definition and list of Low Income Food Deficit Countries (LIFDCs).
2 See, for example, Kruger, A., M. Schiff and A. Valdes (1988), Agricultural incentives in developing countries: measuring the effects of sectoral and economy-wide policies. World Bank Economic Review 2(3): 255-71.
3 These reforms were initiated mainly in the context of structural adjustment programmes. Some were launched as part of policy adjustments to implement regional trade agreements. And some were also reinforced by the Uruguay Round negotiations and commitments.
4 See FAO (1997), "National agricultural development strategies towards 2010," for a number of the LIFDCs.
5 See, Tangermann, S. and T. Josling (1999), "The Interests of Developing Countries in the Next Round of WTO Agricultural Negotiations", UNCTAD.
6 See,Yamazaki, F. (1996) "Potential erosion of trade preferences in agricultural products," Food Policy, 21 (4/5).
7 Other agreements with a specific bearing on agriculture include: the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS), the Agreement on Technical Barriers to Trade (TBT); the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and the Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least Developed Countries and Net Food-Importing Developing Countries.
8 For developed countries the corresponding de minimis limit is 5 percent.
9 It is important to note that in the context of the AoA, "green box" policies refer to a wide array of measures that are considered to have little effect on production and trade, and that are therefore permitted to continue. "Green box" policies are not necessarily environmentally "green". Considerable confusion can arise because environmentally "green" policies are included in the "green box" but the "green box" contains many other types of policy measures as well.
10 See for example Tyers, R. and K. Anderson (1992), Disarray in World Food Markets: A Quantitative Assessment, Cambridge University Press; and Valdes, A. and J. Zietz (1980), "Agricultural protection in OECD countries: its costs to less developed countries," IFPRI Research Report Number 21, IFPRI, Washington, D.C.
11 FAO country case studies in both WTO members (e.g. India, Turkey and Bangladesh) and non-WTO members (e.g. Syria, Yemen and Sudan) have shown that the chances for expanding non-product-specific support under the AoA rules are much more limited than those for product-specific support.
12 To overcome this problem, some countries notified their current AMS in US dollars, at the same time revising the base AMS levels also in US$ terms, while others have adjusted their external reference prices to accommodate changes in exchange rates. These corrections have been questioned at the WTO.
13 Although for several temperate-zone products, tariffs of developed countries are much higher than those of developing countries.
14 OECD (1999), Preliminary Report on Market Access Aspects of UR Implementation, Document COM/AGR/APM/TD/WP (99) 50, June 1999, OECD, Paris.
15 See WTO (1999), Guide to the UR Agreements, Kluwer Law International and WTO Secretariat, Table III.2. Although tariffs on tropical products were reduced the most, that was done on a very low base, e.g. 5 - 10 percent, which for trade can be much less effective than a 26 percent reduction on a very high base.
16 UNCTAD (1997), The Post-UR Tariff Environment for Developing Country Exports, TD/B/COM. 1/14.
17 See, for example, Lindland (1997), The Impact of the UR on Tariff Escalation in Agricultural Products, FAO, ESCP No.3; and OECD (1997) The UR AoA and Processed Agricultural Products, OECD, Paris.
18 For a detailed analysis of the EC's entry price system for fruit and vegetables, see for example, Swinbank, A. (1996), "The Impact of the GATT Agreement on EU Fruit and Vegetable Policy," Food Policy, 20(4).
19 In some cases, e.g. cucumber and tomatoes, market access terms are said to have worsened following the adoption of the entry price system.
20 See,Tangermann, S., Implementation of the Uruguay Round Agreement by Major Developed Countries, UNCTAD/ITD/16, Geneva, 1995.
21 For instance, the EC, in its minimum access commitments, has aggregated all vegetables into one category and all fruit into another. As a result of this aggregation, the quantities of imports of the EC from each of the two categories during 1986-88 was more than 5 percent of its base year internal consumption and as such the minimum access commitment was not applicable. The situation could have been different if a product by product approach had been followed.
22 By virtue of their tariffication, only 22 of the developing countries have reserved the right to invoke the special safeguard clause for some of their agricultural products. As at the end of May 1997, none of these countries, apart from the Republic of Korea, had invoked the SSG right they retained.
23 UNCTAD (1995), Identification of New Trading Opportunities Arising from the Implementation of the UR Agreements in Selected Sectors and Markets, UNCTAD, Geneva.
24 As a priority for more universal acceptance of its standards, the Codex Commission encourages greater developing country participation in its committees, but funding for such participation is very limited.
25 That is, countries may vary their applied rates as long as they keep the maximum rate of duty at a level no higher than their bound rate of duty. In this way countries with fairly high bound tariffs may be able to offset variations in import prices by reducing tariffs when prices rise and raising them when prices fall.
