1. The International Emergency Food Committee
The Council has considered a report from the International Emergency Food Committee (CL 6/5) recommending the termination of this Committee, and in view of the fact that the situation for which the Committee was established no longer obtains, the Council has adopted the following resolution:
Having considered the report by the International Emergency Food Committee,
Approves of the recommendation that the Committee should be abolished on 30 June 1949;
Learns that the Cocoa Committee has recommended the abolition of cocoa allocations with effect from 30 June, thereby terminating the effective operations of that Committee;
Notes that the Committee on Rice has recommended the maintenance of rice allocations for the year 1949;
Endorses the continued operation of the Rice Committee in accordance with its general responsibility to the Director-General;
Desires to place on record its appreciation of the work of the IEFC and its Commodity Committees, which have materially contributed to mitigating serious hardship during a period of shortage; and
Expresses its appreciation of the satisfactory service rendered to the IEFC and its commodity committees by the technical staff of FAO.
In adopting this resolution, the Council commends the IEFC as an example of successful international cooperation in a most difficult field.
2. International Commodity Problems
The Council has given careful attention to the report of the Working Party on International Commodity Arrangements (CL 6/6) and to current trends in the principal world market for agricultural products. Widespread apprehension already exists that in certain regions surpluses of particular agricultural products may be beginning to accumulate. It is unquestionably one of the important functions of the Council to deal with such eventualities, for which the Preparatory Commission on World Food Proposals formulated valuable guiding principles.
The Council wishes to affirm clearly and unequivocally that its present interest in this subject derives from the fundamental objective of FAO, namely to ensure more and better food for all peoples. The undernourished peoples of the world can be better fed in two ways. First, and most important, their indigenous agricultural production can be expanded; a major portion of FAO's efforts are directed to this end. Secondly, their food supply can be augmented to some extent by imports; therefore FAO must seek means of expanding international trade rather than, in the event of surpluses, acquiescing in the adoption of measures for restricting production and curtailing trade. It is thus of vital importance to the aims of the Organization - to ensure the achievement of higher standards of nutrition everywhere and to encourage the development of an expanding world economy - that positive remedies be found.
At the present session of the Council some members have expressed anxiety concerning the currently falling prices of certain farm products which may indicate the accumulation, or fear of accumulation, of excessive stocks in certain countries, and the concern lest any price decline might go too far. There must never be a repetition of the catastrophic position in agriculture experienced by so many countries in the 1930's.
The Council has had the benefit of a statement from the International Federation of Agricultural Producers expressing apprehension over the current situation and presenting some concrete suggestions designed to prevent the accumulation of surpluses.
It would be all too easy for surpluses to accumulate in some areas while malnutrition and hunger persisted in others, unless action were taken on three basic problems. One is the low level of domestic purchasing power of most of the ill-fed peoples. A second is the lack of international purchasing power, no matter in what currency, of most of these peoples; they are not able to export in sufficient volume to pay for any large quantity of food imports. The third is the lack of hard currency purchasing power, which affects not only the underdeveloped countries but many others as well. The Council believes that further expert study of these problems, although some aspects of them are possibly only indirectly the responsibility of FAO, is necessary before adequate recommendations for action can be formulated.
At present, the surpluses which threaten to accumulate are located principally in the dollar areas and concern agricultural products exported from these areas. In reporting further on the commodity problem, attention should be concentrated upon these products, particularly foodstuffs, in which difficulties seem likely to develop at an early date. Not only inter-governmental commodity arrangements, but any other relevant measures, national and international, should be considered. In this connection the interrelationships of agricultural products one with another, for example the conversion of cereals into livestock products, and also the relationships between the prices of agricultural and manufactured products should not be ignored.
In view of the rapidity with which the situation might deteriorate, the Council attaches importance to having decisions for effective action taken by member governments at the next session of the Conference. To be able to do so, member governments must receive further basic information and proposals in sufficient time before the Conference convenes. Since the period available for preparation is somewhat short, the report should concentrate on the most urgent aspects of the problem.
In the light of all the above considerations the Council instructs the Director-General:
To prepare a report which shall comprise:
an analysis of the underlying circumstances as a result of which local surpluses, especially of foodstuffs, are emerging or may shortly emerge;
an analysis of the circumstances peculiar to each of the commodities which need to be considered;
recommendations to the Council for subsequent transmission to the Conference for any appropriate action, national or international, which might contribute to the removal or at least to the mitigation of the uncertainties affecting production, trade and consumption to which actual and prospective surpluses of the commodities considered above might give rise;
In preparing such a report
to have regard to Rule XXVI of the Rules of Procedure and in particular to paragraph (1) (c) and (d) thereof;
to have regard to the Report of the Preparatory Commission on World Food Proposals and in particular Chapter V thereof, with special reference to the means of reducing the present gap between effective demand for food and the peoples real needs and of stabilizing agricultural prices at levels fair to producers and consumers;
to give consideration to the proposals submitted by the International Federation of Agricultural Producers to this Sixth Session of the Council; and
to invite, as he considers desirable the cooperation of experts, as for example specialists in general economic problems, in production, consumption, and international trade problems, as well as other persons and bodies outside the FAO secretariat who have special knowledge on the various aspects of the matters coming within the scope of this study;
To circulate his main report to all member governments not later than 30 September, and thereafter any supplementary reports as may become available up to the time of the next session of the Council;
To keep the Council's Commodity Working Party informed from time to time of the progress of his study and to regard the members of the Working Party as available to him for consultation;
To convene the Commodities Working Party at an appropriate time before the next session of the Council to consider his report and to prepare recommendations for action by the Council and the Conference.
In view of the importance of the work of the Commodity Working Party, the Council has decided to expand its present membership, consisting of representatives of Australia, Belgium, Brazil, Canada, India, the United Kingdom, and the United States of America, by the addition of representatives of France, Cuba, and the Netherlands.