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State of Food and Agriculture 19761

6. The Council noted with satisfaction that there had been a distinct improvement in the immediate world food and agricultural situation during the last twelve months. In welcoming this improvement, however, it stressed that many features of the situation remained unsatisfactory, especially when viewed in the longer term perspective. It was essential to avoid the danger of relapsing into complacency at the first signs of recovery since the food crisis had begun in 1972. There was still a very long way to go to the establishment of a New International Economic Order. However, slow progress had been made towards the full achievement of the main recommendations adopted at the World Food Conference two years before.

7. Although world food and agricultural production increased by only about 2 percent in 1975, there was an encouraging rise of about 4 percent in the group of developing countries. A very good monsoon brought an increase of some 8 percent in production in the crucial Far East region, but there was no increase in Africa where production in 1975 was only about 1 percent greater than in 1971. Despite good harvests in North America and Oceania, production in the developed countries rose by only 1 percent in 1975. The progress though patchy in 1975 has been further consolidated by generally good to excellent harvests in 1976. North America continued to be the major source of grain and holder of stocks. FAO's first preliminary estimates of agricultural production in 1976 indicated an increase of between 2 and 3 percent in both developing and developed countries. As a result of drought, production had remained approximately stable in Oceania and fallen slightly in eastern and western Europe. There had been a very large recovery in the U.S.S.R., and satisfactory increases in each of the other main regions of the world. World fish catches also appeared likely to have risen substantially in 1976, following several years of stagnation.

8. The Council recognized that much of the increase in production in 1975 and 1976 had to be attributed to better weather. At the same time, however, it felt that due credit should be given to the steps taken in many developing countries to give higher priority to agriculture in their national development plans, and to implement various new policies and measures which resulted in increased output. It recommended that, in its future analyses of the world food and agricultural situation, FAO should attempt to distinguish the effects of the weather and of government policies, although recognizing that such a distinction was difficult to make at the global level and must rely mainly on national information provided by Member Governments.

9. Carryover stocks of cereals had increased for the first time in three years. World stocks (excluding China and the U.S.S.R.) at the close of the 1975/76 seasons were estimated to have risen by 11 percent over the low level of the previous year. FAO's first estimate of the aggregate 1976/77 closing stocks pointed to a further rise of 18 percent, mainly in wheat.

10. The increase in world cereal stocks was expected to take them to about 15 percent of annual consumption by the close of the 1976/77 seasons. While this was a considerable step forward, they would still (at about 140 million tons) be some 20 to 30 million tons below the 17 to 18 percent of consumption estimated by the FAO Secretariat, as the minimum safe level for world food security. Whether this level of stocks would be reached with another year of good harvests would depend to a great extent upon the establishment of adequate stock policies within the framework of the International Undertaking on World Food Security, and the construction of additional storage facilities for which many developing countries required international assistance. A number of developing countries had established stock policies, and were beginning to move toward their targets, but the increased stocks in some developed countries had benefited from record-size crops.

11. Food prices had tended to ease. Per caput food consumption had recovered from recent depressed levels in most countries, with the exception of certain parts of Africa. However, per caput food consumption levels.remained inadequate in most developing countries. More detailed information on the actual state of malnutrition was awaited from FAO's Fourth World Food Survey, but it was probable that the total number of people suffering from poverty and malnutrition had increased still further. The fertilizer situation was in better balance than for some time, but a recent upward trend in prices had been noted 2.

12. The Council drew attention to the many longer-term problems where little or no progress had so far been made. The average annual increase in the food production of the developing countries since the beginning of the 1970's was still only about 2.5 percent. This was only slightly above the growth of population, and far below the 4 percent target set in the International Development Strategy for the Second United Nations Development Decade (DD2) and reaffirmed by the World Food Conference. Recent production trends had been particularly disappointing in many parts of Africa, reflecting the effects of prolonged drought, pests, trade and financial difficulties. Negative effects in the field of food production had also been caused by the acts of aggression of racist regimes against neighbouring African countries which supported the struggle of liberation movements in Southern Africa. A few members felt that they were not in a position to express a judgement in this matter.

13. The Council took note of the fact that most of the recent trends in world trade had been unfavourable to the developing countries. Although the volume of the agricultural exports of the developing countries had increased in 1975, lower prices brought only a marginal increase in their earnings from these exports, and their share of the total world trade in agricultural products again declined. Forest products had suffered particularly severely from the economic recession in the developed countries. Although the food situation of almost all of the Most Seriously Affected (MSA) countries had improved, they still required substantial assistance to obtain their essential imports of food, fertilizers and other agricultural production requisites. The annual target of an estimated 1 million nutrient tons of fertilizer aid for these countries, called for by the Seventh Special Session of the UN General Assembly, had not yet been reached. Little progress had been made in the many recent and current trade negotiations, including those directed towards a new international grains arrangement, to which the Council attached particular importance.

14. Food aid in cereals had not yet reached the minimum annual target of 10 million tons recommended by the World Food Conference. Allocations for 1976/77 could again fall short of this target, and the Council urged donor countries and countries in a position to do so to increase their contributions in cash or kind. Few countries had so far undertaken the forward planning of food aid called for by the World Food Conference. Consequently, the Council called upon all governments in a position to do so to adopt such a planning. There was an encouraging trend in food and in non-cereal products.

15. While the solution to the food problems of the developing countries depended mainly on their own efforts towards greater self-reliance, the developed countries had to play a major role in the establishment of a better economic environment for development, including more equitable arrangements for developing countries in world trade and a larger flow of development assistance on concessional terms. In this connexion, the Council welcomed the imminent establishment of the International Fund for Agricultural Development. It noted with concern, however, that the recent large increase in commitments of external assistance for agriculture now appeared likely to be followed by a decline in real terms, the causes of which should be analysed. In real terms the volume of assistance to agriculture remained far below what was required for the necessary acceleration of the agricultural production increase in the developing countries. The picture was even worse if the net flow of resources were considered, allowing for reverse flows such as amortization and interest payments and the profit withdrawals of multinationals. The Council urged all donors to increase the level and improve the terms of their official development assistance to agriculture, so that the capital and technical assistance requirements would be met for increasing production in the developing countries in line with the recommendations of the World Food Conference.

16. While commending the high quality of the documentation on the state of food and agriculture provided by the Director-General, members of the Council suggested a number of improvements that should be attempted in future years. In addition to an analysis of the situation and problems, policy suggestions should also be included. More attention should be paid to individual country situations, and to the analysis of successful policies adopted and implemented by Member Governments and of particular constraints that had been encountered, as well as to the situation of the farmers themselves and the factors that motivated them. Rural employment problems should be analysed. The analysis of development assistance should attempt to identify the net flow of resources, although it was recognized that this depended on the information made available by other organizations, in particular the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD), and could not be done for the agricultural sector alone. Where necessary (as with the figures of cereal stocks), global totals should be completed by means of FAO estimates. Reports should contain quantitative estimates of food used as feed for animals including that used for pets. The Council noted that any such detailed analysis largely depended upon the provision of relevant and timely information to FAO by member countries.

17. A number of members stressed the importance of the development of high fructose corn syrup and its possible implications for sugar producers and markets. The Council was informed that a commodity report on this question was already under preparation by the Secretariat and should become available early in 1977.

Review of Measures Being Taken to Reduce Post-Harvest Losses3

18. The Council heard the statement of the Assistant Director-General, Agriculture Department, reviewing measures being taken to reduce post-harvest food losses. The Council recalled that the Seventh Special Session of the UN General Assembly, September 1975, had resolved that the further reduction of these losses should be undertaken as a matter of priority. It also recalled that the Eighteenth FAO Conference Session, November 1975, by Resolution 12/75, had stressed that high priority should be given to post-harvest conservation of food.

19. The Council emphasized the importance of reducing post-harvest food losses and requested that further prompt action be taken. It concurred in the proposal that the FAO Committee on Agriculture (COAG) should consider this subject in depth at its Fourth Session in April 1977, as one of its selected development problems. The Council requested the Secretariat to present a working document on the subject to the Committee on Agriculture. This document should define the problems and describe the objectives and main elements of the activities to be carried out by countries, FAO and other organizations, and indicate the resources being applied and needed. The Council stressed that the reduction of post-harvest food losses should not be considered in isolation, but as an added effort to those ongoing activities aimed at the reduction of pre-harvest and harvest losses.

20. The Council noted a proposal for establishing a US $ 20 million fund to finance an assistance programme to reduce pre-harvest, harvest and post-harvest food losses. It concurred with the Director-General that COAG should study the feasibility of the proposal for such a fund and report further to the Council. Toward that end the Council authorized the Director-General to take action on preparing a specific proposal for consideration by COAG and the Programme and Finance Committees.

Commodity and Trade Problems4

21 . The Council recalled that the acute and long-standing commodity and trade problems which had been reflected in the instability of world commodity prices and in limited growth of export earnings, particularly of developing countries, had been recognized by the FAO Conference at its Eighteenth Session, when it had adopted Resolution 7/75 on the Commodity Market. As requested in the Resolution, the Director-General reported on the main actions taken in pursuance of its objectives.

22. The Council agreed that progress towards the objectives of Resolution 7/75 had been slow and not satisfactory everywhere, although there had been some encouraging developments in certain limited sectors. As negotiations in a number of fora on multilateral commodity matters had been under way for a long time, ECOSOC had expressed its concern and disappointment, which was widely shared by the Council, at the lack of concrete results and the limited nature of the agreements reached so far.

23. The Council recognized that negotiations were still continuing in several international fora. In particular, it emphasized the importance of those regarding the UNCTAD Integrated Programme for Commodities, and noted that preparatory meetings on individual commodities and on a common fund were now proceeding. In this regard the Council welcomed the close teamwork which had been developed between the FAO and UNCTAD Secretariats in the joint preparation for and servicing of the meetings on agricultural commodities, for which the representative of UNCTAD expressed appreciation on behalf of the Secretary- General of UNCTAD. The Council noted with satisfaction that the Director-General had allocated the resources necessary to enable full use to be made of FAO's long and extensive technical experience in this field, and requested him to continue and intensify this collaboration. The Council asked for a greater and more effective involvement of FAO's Intergovernmental Groups in the follow-up action for individual commodities. These Groups could make an important contribution to the implementation of UNCTAD Resolution 93 (IV) because of the expertise accumulated by them.

24. The Council laid stress on FAO's continuing role in the field of commodities, and on its leading position in work on several agricultural products. It considered, therefore, that the greatest possible use should be made of the Organization's experience, especially in view of its capacity to assess the overall technical and economic factors underlying trade problems. It should contribute actively not only in collecting and disseminating information (including market intelligence and reports on commodity policy developments) and in identifying problems from a technical viewpoint, but also in indicating possible solutions and actions which might be the subject of negotiation in appropriate fora. In this respect, the Council took note of FAO's active participation in the work of the commissions on raw materials and development of the Conference on International Economic Cooperation in Paris, and some members expressed the hope that such participation might be extended to other fora, including the GATT multilateral trade negotiations when appropriate.

25. Regarding practical action under FAO auspices towards the objectives of Resolution 7/75, the Council welcomed the adoption by consensus of the Guidelines for International Cooperation in the Livestock and Meat Sector at the Sixth Session.of the FAO Intergovernmental Group on Meat in October 1976, It further welcomed the successful efforts in the inter­ governmental groups on jute and on Hard Fibres to reactivate the informal commodity arrangements for these commodities, as well as the active work on possible international agreements taking place in the Intergovernmental Groups on Tea and Bananas.

26. The Council reaffirmed the urgent need to accelerate progress towards agreement on the important commodity and trade issues now before a number of international fora, includ­ ing UNCTAD, the Conference on International Economic Cooperation, the International Wheat Council, and the GATT, particularly in view of the special needs of developing countries. It believed that these problems were capable of solution, provided the necessary political will was forthcoming in the current negotiations. The Council requested the Director-General to keep further developments in international fora under continuing review, bearing in mind that the Fifty-First Session of the Committee on Commodity Problems (CCP) would examine international action on commodity problems in detail.

Report of the First Session of the Committee on World Food Security. Rome, 5-9 April 19765

27. The Council considered the report of the First Session of the Committee on World Food Security (Rome, April 1976) and expressed agreement with the conclusions and recommendations and future programme of work formulated by the Committee. The Council stressed the importance of the recommendation that all countries should endeavour, by the end of 1977 if possible, to define and adopt national stock policies and targets or objectives of basic foodstuffs, primarily cereals, and to modify them as required in order to conform to the guidelines of the International Undertaking on World Food Security. It also laid stress on the recommendation that donors should endeavour to increase their asssistance on soft terms or in grant form to support the national food production and stock programmes of developing countries.

28. Since the Committee's First Session, the world food security situation had improved owing to the favourable crops in all main producing areas and some rebuilding of stocks, but the Council recognized that in view of the narrow margin between adequacy of supplies and shortages the full attainment of world food security was still remote.

29. Many members expressed serious concern at the slow progress in the implementation of the Undertaking and the establishment of a reliable world food security system. They considered that since the conclusions reached in the First Session of the Committee were not sufficiently specific in this last respect, the Council should also endorse the principles and approaches to world food security as spelled out in the statement of the Group of 77 to the First Session, appearing as an appendix to that document. They further considered that the Council should urge the speedy conclusion of a new international grains arrangement, not later than by the end of 1977,. well in advance of the expiry of the current extension of the International Wheat Agreement, and that it should contain provisions for food reserves, food aid and other elements which safeguarded the interests of developing countries. They felt that evolving an international system of food reserves was an integral part of the Undertaking and that their establishment at the minimum safe level of 17-18 percent of world cereals consumption as estimated by the FAO secretariat was essential.

30. Other members, while agreeing with many of the general principles and aims of the statement of the Group of 77 considered there were differences of view as to the means to achieve these objectives. They pointed out that some positive steps had been taken to achieve its objectives, such as the establishment of the Global Information and Early Warning System and of the Food Security Assistance Scheme. They further felt that the specific issues raised in the statement of the Group of 77 were complex with important economic implications and that there was insufficient time to discuss these thoroughly at the present session of the Council. They also considered that the FAO secretariat estimate of the safe level of global carryover stocks for world food security required further detailed examination, taking into consideration the deliberations of the International Wheat Council, GATT and other fora in this subject. They further stated that they did not pursue stock policies in the sense that certain quantities were earmarked for certain purposes. They had, however, the necessary instruments available in their agricultural policy regulations allowing them to meet their food aid and food security commitments.

31. One member pointed out that his government maintained its reservation on the Undertaking which it was unable to adopt as it considered that some provisions were not consistent with the principles of national sovereignty.

32. The Council agreed that the statement of the Group of 77, together with the question of the safe level of world stocks, should be considered by the next session of the Committee which would be able to take into account the results of discussions on some of the issues which were currently under way in other fora.

33. The Council was informed of the recommendations made by the World Food Council at its last Session (1976), and its continuing interest in the development of world food security.

34. The Council stressed the importance of additional assistance being provided to develop­ ing countries in implementing their national food security policies, particularly as a means of strengthening their self-reliance in encouraging food production, and building up of adequate national stocks. In this respect the Council recognized the valuable role of the FAO Food Security Assistance Scheme, which had been set up by the Director-General to provide practical assistance at the country level and to mobilize international support for related projects. A number of developed countries were cooperating with this Scheme, and the Council welcomed the announcement of the delegate of the Netherlands of a contribution of 10 million Dutch guilders (US$ 4 million) for 1977, the same amount as pledged for 1976, and the hope was expressed that other donor countries would participate. The important contribution which could be made by the World Food Programme in promoting food security was also recognized.

Review of the Global Information and Early Warning System on Food and Agriculture

35. The Council had a preliminary discussion on the Global Information and Early Warning System on Food and Agriculture, a major element in the arrangements under the International Undertaking on World Food Security. The Council was informed 6 of the steps taken to put the System into full operation. It recognized that considerable progress had been made towards reaching the objectives of the System. The information issued was both accurate and timely and was of great practical use to many of the governments. The Council agreed on the importance of further strengthening the System. There was now an extensive and growing participation in the System, which has increased to 85 countries and two regional groupings - the European Economic Community (EEC) and the General Treaty in Central American Economic Integration (SIECA), - and the Council hoped that countries that had not already joined would find it possible to participate in the future. It agreed that better national information and early warning systems were needed in order to enable developing countries to participate more effectively. Many of these countries would need outside assistance in setting up or improving national information and early warning networks, and the Council noted with approval that such assistance was envisaged as an essential activity of the Global System.

36. The Council endorsed the proposal of the Committee on World Food Security to carry out a detailed evaluation of the operation of the Global Information and Early Warning System at its Second Session, which should also examine the effectiveness of the arrangements for follow-up action.

1 CL 70/2, CL 70/2-Corr.1, CL 70/2-Sup.1, CL 70/PV/1, CL 70/PV/2, CL 70/PV/3, CL 70/PV/14.

2 See para. 45 below.

370/PV/1, CL 70/PV/2, CL 70/PV/3, CL 70/PV/14.

4 CL 70/27, CL 70/PV/3, CL 70/PV/4, CL 70/PV/15.

5 CL 70/10, CL 70/10-Corr.1, CL 70/PV/4, CL 70/PV/5, CL 70/PV/15.

6 CL 70/INF/9.

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