Previous Page Table of Contents Next Page


Current World Food Situation - Progress Report by the Director-General 1

6. The Council examined the current world food situation in the light of a progress report by the Director-General. It agreed that this report provided a useful and quite realistic basis for its discussions, and emphasized the important role of FAO in contributing in this way to the analysis and possible solution of world food problems. It hoped that, with the progressive implementation of the recommendations of the World Food Conference concerning a global food information system, it would be possible for FAO to make further improvements in its monitoring, current reporting and analysis, thus facilitating the early identification of the priority action programmes.

7. Although the previous three months had brought some improvements in the outlook for the world food situation, the Council stressed that there was still considerable cause for concern not only as regards food production per se but also as regards economic disequilibria in each country and in the international sphere. The world continued to live from season to season in respect of basic food supplies, and true world food security would require lengthy efforts. World cereal production had fallen in 1974 for the second time in three years, and the carry-over stocks of the main exporting countries would be still further reduced by the close of their respective 1974/75 crop seasons. Total carry-over stocks of cereals (excluding China and the U.S.S.R.) were likely to fall below 100 million tons at the close of the 1974/75 crop seasons; the effect on this figure of the decline in demand on feed grains was, however, uncertain.

8. Farmers of many countries had been urged to increase their cereal-acreages. Their intentions and the increased acreage seemed to indicate favorable prospects for 1975 and an increase of as much as 8 percent in wheat and coarse grains production. Bearing in mind the drop of 4 percent in 1974, this increase could permit some rebuilding of dangerously depleted stocks. The Council, however, emphasized that this improvement should be viewed with caution because the decline in cereal prices, while alleviating the difficulties of importing countries, could induce farmers in the main cereal exporting countries to alter their planting intentions. Moreover, the crop season could still be drastically changed, as in 1974, by bad weather.

9. Although fertilizer supplies had eased slightly for some countries, the basic situation remained one of shortage. Prices in world markets were still very high, and some countries reported reductions in fertilizer use. The inability of many developing countries to import sufficient fertilizers was particularly serious, since the import of the equivalent quantity of food was even more costly. Shortages of pesticides and the high cost of power, especially for irrigation pumping, were causing additional difficulties in some areas.

10. These difficulties bore especially hard on the developing countries. Per caput food production in these countries was lower in 1974 than in 1970 and, because of the shortage and high price of supplies on world markets, actual per caput food supplies had fallen in many of them, and rising consumer prices had caused severe hardship for the poorer consumers. Even though widespread starvation had been averted, the already vast numbers of severely malnourished people had increased since the FAO assessment relating to 1970.

11. The developing countries had been forced to divert scarce foreign exchange from essential import of capital goods required for development to the purchase of food and fertilizers at higher prices, when the prices fetched by their own exports to the developed countries had historically been lagging far behind the prices of manufactured goods and equipment imported by them. They felt that prospects had become worse due to the prevailing fear of recession in the developed countries.

12. The Council expressed appreciation for the special efforts that had been made by the international community on behalf of the 33 most seriously affected countries (MSAs). The uncovered cereal import requirements of these countries up to 30 June 1975, which had been estimated at 7.5 million tons in November 1974, were by mid-February 1975 down to 4 million tons. Essential purchases of food and fertilizers by these countries had been greatly facilitated by the United Nations Emergency Operation and the International Fertilizer Supply Scheme. Considerable assistance from new donors had helped many countries in contracting for imports on commercial terms.

13. The Council was greatly encouraged by this response of the international community to the short-term emergency. A new priority had been given to human need in matters of trade and aid. Many donor countries had increased their commitments for financial and technical assistance for agricultural production and for fertilizer production in the developing countries, and for fertilizer purchases by these countries. Food aid commitments for 1975 had already reached 8.8 million tons of cereals, and were thus within striking distance of the minimum target of 10 million tons set by the World Food Conference. Good progress had been made in international discussions of the operational aspects of world food security. Other important recent initiatives were the new trade, aid and cooperation agreement between the EEC and 46 African, Caribbean and Pacific developing countries (ACPs), and UNCTAD's proposal for the establishment of a multi-commodity arrangement, including 11 agricultural products, within an integrated programme for commodities.

14. While noting all these encouraging signs, the Council emphasized the dangers of a return to complacency and to the former situation of rapid swings from surplus to scarcity and of unstable prices. A well considered policy for price stabilization was needed. It was necessary to encourage the rapid expansion of cereal production not only in the major exporting countries, but also in other areas with the potential resources, by means of increased financial and technical assistance and by greater stability of prices, within reasonable limits, so as to provide sufficient incentive to producers. If a large cereal crop materialized in 1975, it would be particularly necessary to pay close attention to price incentives in the following years. In this connexion the Council welcomed the current initiatives aimed at promoting an orderly expansion of world trade in cereals at more stable prices, and noted FAO's work on international agricultural adjustment.

15. It looked forward to the results of the “authoritative analysis” of fertilizer supply and demand, to provide the basis for a world fertilizer policy, that the World Food Conference had requested the FAO Commission on Fertilizers to undertake. Some members referred to the much higher level of fertilizer prices in world markets than in the domestic markets of the producing countries, and stated that this situation was giving rise to increasing concern.

16. It was suggested that FAO should study the effects of recent developments in food prices in international markets on domestic producer and consumer prices and on production and consumption. It was also suggested that FAO should study in more detail the quantitative relationships between fertilizer use and food production, although it was understood in both cases that no additional financial resources would be involved.

17. The Council considered that all governments should continue to keep the changing food situation under constant review, and called for the participation of all countries in the Global Information and Early Warning System for Food and Agriculture. It was essential to assess the likely import requirements in 1975/76 as early as possible, so that remedial action could be taken in time. Some members recommended that when necessary FAO should convene periodic consultations between the main exporting and importing countries. Other members felt that as FAO and the International Wheat Council were closely monitoring the situation, the convening of any future consultations should be left to the Director-General.

18. The Council stressed the continued gravity of the balance of payments problems of the developing countries, in general, especially the MSAs, and the need for special measures for financing their essential imports, particularly of food, fertilizers and other agricultural inputs. The import gap would be critical in the next few months, during which speedy action was essential, but the difficulties of the MSAs would extend well beyond the end of the year. The Council requested the Director-General to draw this matter to the attention of the World Food Council for urgent action.

1 CL 65/6, CL 65/INF/8, CL 65/PV/1, CL 65/PV/2, CL 65/PV/9.

Previous Page Top of Page Next Page