6. The Council noted that during the period under review there had been little change in the world food situation. While there were some encouraging factors in the last two years, the situation was still fragile and many unsatisfactory features remained in respect both of longer-term trends and of the actual results obtained in different developing countries. Little progress had been made towards either the goals agreed at the World Food Conference or the target of agricultural growth set forth in the development strategy of the Second Development Decade. There was therefore no cause for complacency or undue optimism.
7. World food production had shown a good production performance in both 1975 and 1976, including the developing countries where, in these two years, the increase in food produc- tion had averaged about 4 percent per year, although this average covered considerable differences between countries and regions.
8. The improvement in world food supplies begun in 1975 had continued. However, the Council acknowledged that much of this improvement was due to more favourable weather. More favourable prices had also brought an expansion of the cultivated area and the supply of fertilizers and other inputs had improved. At the same time, it felt that due recognition should be given to the serious efforts being made by the international community, and particularly the developing countries to sustain higher rates of growth of agricultural production.
9. World stocks of cereals (excluding China and the USSR) had increased for the first time in three years in 1975/76. At the close of the 1976/77 seasons, these stocks were expected to have risen by another 30 percent. At 159 million tons they would be equivalent to 17 percent of their annual consumption and within the range of the Secretariat's provisional estimates of the minimum level for world food security. The total increase of 37 million tons over 1975/76 mainly reflected large wheat and coarse grain stocks in the major export- ing countries. Some importing developing countries had also increased their stocks. Rice stocks were expected to be marginally lower. The Council noted that the immediate cereal stocks position was encouraging and urged the international community to take the opportunity to implement the principles of the International Undertaking on World Food Security.
10. The outlook for wheat and coarse grain crops in 1977 pointed to the likelihood of a further increase in carry-over stocks of these grains. World wheat production was currently forecast by FAO at close to 400 million tons, slightly less therefore than the 417 million tons of 1976, and coarse grains at 718 million tons were expected to reach a new record. There had been improved growing conditions in most parts of the developed regions, with a mixed picture in the developing regions. It was still too early to forecast the outcome of the major 1977 rice crops. World milk production had grown only slowly so far in 1977. Total production of the main types of meat was still forecast to increase very little in 1977. The fisheries catch was unlikely to show any increase over 1976.
11. The Council drew attention to the many long-term problems where little or no. progress has so far been made. Terms of trade of most developing countries had further deteriorated. The average annual increase in the food production of the developing countries since the beginning of the 1970s was only 2.6 percent, well below the 4 percent target set in the International Development Strategy for the Second United Nations Development Decade (DD2), and reaffirmed at the World Food Conference. Recent production trends had not been favourable in some developing countries, particularly in Africa and in the poorest food deficit countries. The Council urged, that FAO action in Africa should be intensified, and in favour of these countries in general. It also urged that every effort should be made to establish a new International Grains Agreement before the expiry of the current extension of the agreement.
12. Food aid in non-cereal products had risen substantially in 1975 and again in 1976. Total allocations of food aid in cereals for 1976/77 were about 8.3 million tons and considerably below the minimum annual target of 10 million tons recommended by the World Food Conference. Allocations for 19.77/78, at about 8.6 million tons, would again fall short of this target and the Council urged donor countries to increase their allocations. Som e members suggested that the minimum target for food aid in cereals should be raised in order to improve nutrition and build up reserve stocks. The Council noted with concern the slow progress made towards the establishment of the 500 000 ton emergency reserve stock of cereals.2
13. The Council noted the main burden for solving the food problems of the developing countries rested on themselves, but reaffirmed that the developed countries had a vital role in helping to provide a better economic environment for development, including more favour- able trading conditions for developing countries in world markets, and a larger flow of development assistance on concessional terms. It noted with concern, however, that the increases in commitments of external assistance for agriculture in 1974 and 1975 had been followed by a decline in 1976. The gap between commitments and requirements of external assistance for accelerating the rate of increase in agricultural production in the develop- ing countries, already large, had thus widened. In this connexion, the Council welcomed the imminent establishment of the International Fund for Agricultural Development (IFAD). The Council once again urged donors to increase the level and improve the terms of thei r official commitments of assistance to agriculture so that the capital and technical assist- ance requirements would be met on appropriate concessional terms for increasing production in the developing countries, in line with the recommendations of the World Food Conference. Similarly, the Council urged that recipient countries accelerate their internal efforts , both to provide more domestic resources and to overcome social and institutional obstacles to agricultural and rural development. The Council noted that a majority of its members expressed serious concern with the fact that not only barriers to exports of developing countries in world markets remained but were even raised in a number of cases; it noted further that those members considered that improvement of conditions of access to markets in developed countries was both urgent and essential to facilitate and promote agricultural and food production in developing countries.
14.The Council endorsed the Director-General's proposals on the future arrangements for the annual report on The State of Food and Agriculture (SOFA) and on the orientation to be given to its contents, together~with the comments of the Thirty-Second Session of the Programme Committee on these proposals. It emphasized the usefulness of the report, and the widespread interest that it had consistently attracted. SOFA's annual assessment of the world food and agricultural situation and outlook helped to determine FAO's priorities and programmes, and provided essential background against which to measure its performance.
15. Since 1974 the Conference or Council had received, on an experimental basis, a "mini- SOFA" (essentially a preliminary version of the main contents of the world chapter of the printed report), supplemented by an updating statement tabled at the session, while the printed SOFA was finalized later. The Council recommended that this system should now b e confirmed on a permanent basis as the most practical solution. It also agreed that, in order to save costs and speed up processing, the final SOFA should from 1977 be reproduced from typewritten copy instead of by typographic composition and letterpress printing. It should be issued by the end of the year to which it referred.
16. The Council endorsed the Director-General's proposal that SOFA should be a development- oriented document, with a high content of policy analysis of direct practical usefulness to Member Governments. This implied that it should focus on the problems of agricultural development and the possible solutions to them, in order to speed up the identification of
problems as well as the definition and the implementation of the necessary policies to overcome them, and should assess the situation in relation to long-term trends and develop- ment goals. At the same time it was necessary to monitor the situation on a comparable basis from year to year, which implied the inclusion of a certain amount of standard infor- mation and analysis in each issue (including statistical annexes) The Council agreed that the Director-General should take a flexible approach to the contents of SOFA each year. In this way he could take account of the many suggestions made for topics to be covered without overburdening the document. There need not necessarily be both a regional and a special chapter each year. Important regional developments could always be covered in the world chapter and in the "mini-SOFA", and appropriate special chapters could be presented to the Conference or Council as separate documents. While brevity was desirable, it should not be pursued at the expense of omitting useful material, including that which would otherwise be available only to a more limited audience. Topics for special consideration should be chosen in the light of the Director-General's priorities. Although it was recognized that detailed quantitative analysis was not always possible, an attempt should be made to distinguish the different factors affecting the world food situation.
17. The Council considered the Report of the Second Session of the Committee on World Food Security (CFS) (Rome, 13 - 19 April 1977) and agreed with its conclusions and recommend ations. It was noted that in accordance with the decision of the Committee, the secretariat had included, on its responsibility, a summary of recommendations and requests as section I of the report. Noting that the Director-General had made the report of the Committee available to the Preparatory Meeting of the Third Session of the World Food Council (Rome, 9-14 May 1977), the Council agreed that the report should be provided also to the Ministerial-le vel meeting of the World Food Council (Manila, 20 - 24 June 1977).
18. There was general consensus that the question of world food security was of vital and continuing importance to all countries. The Council agreed that a lasting solution to t he food security problem was to accelerate food production in developing countries. Emphasizing the need for increasing the flow of external assistance to developing countries for agri cultural production, the Council expressed concern that on the basis of available infor- mation, the total value of development assistance committed to agriculture in 1976 was lower than in 1975 even at current prices. It urged all developed countries and other potenti al donors to make the necessary efforts to step up in real terms their financial and technical assistance to help developing countries in accelerating food production. In this connexion, one member referred to the recommendation of the Conference on International Economic Cooperation (CIEC) that financial and technical assistance up to US$20 million be provided for seed production, training and research and expressed the readiness of his government to cooperate with other countries in this respect.
19. The Council emphasized that the increased food production in many countries in t he past two years provided a good opportunity to build reserves so as to ensure against a repetition of the food crisis experienced in 1972-74. It recognized that many developing countries were not in a position to take advantage of good crops in building national food reserves due to lack of resources. It, therefore, urged developed countries and other potential donors to provide food, financial and technical assistance to developing countries for implementing their programmes to build and maintain national food reserves, including the expansion of storage and transport facilities. Some members considered that in providing food aid, priority should be given to meeting emergency requirements rather than to building food reserves, which in their view were costly to maintain.
20. The Council supported the Committee's intention to analyse the long-term implica tions of the past rates of growth in rice production, which had been considerably lower than for wheat, on the food security situation of rice producing and consuming countries and to suggest possible steps needed to remedy the situation. It also stressed the need for an alys ing the role of non-cereal commodities in the food security situation of developing cou ntries.
21. The Council noted with satisfaction that the Committee had agreed, pending further examination, with the secretariat's estimated figures of the minimum safe level of carry- over stocks as a reasonable basis for its assessments, although this would carry no par- ticular commitments as to the desirable level of stocks in an International Grains Agreement. It was noted that the minimum safe level of cereal stocks for world food security had been estimated by the secretariat to be 17 to 18 percent of annual world consumption, of which 5 to 6 percent represented the 'reserve' element, the rest being 'working' or 'pipeline' stocks. The Council agreed that this consensus would help the Committee in carrying out an important function assigned to it, namely, assessing the adequacy of global stocks for the purposes of food security.
22. The Council stressed the importance of early implementation of the principles of the International Undertaking on World Food Security by the international community, and in particular, of the recommendation of the First Session of the Committee, that by the end of 1977, if possible, all countries should define and adopt national stock policies and targets or objectives and modify them as appropriate in order to conform with the Under- taking. Several members informed the Council of the stock policies and programmes adopted by their countries in line with the Guidelines of the Undertaking.
23. The Council expressed satisfaction with the Global Information and Early Warning System on Food and Agriculture which the Committee had concluded was working well. It welcomed the priority given by the Director-General to this important activity, and supported the initiatives being taken to help interested countries in establishing nati onal early warning systems of basic food supplies.
24. Many members supported the proposals made by the Group of 77 in the Statement made at the First Session of the Committee as well as the updating Statement at the Second Session. The Council noted that following the request by the Committee, the Director-General had transmitted to the International Wheat Council the proposals submitted by the Group of 77 concerning specific policy provisions in a new International Grains Agreement for appropriate consideration by its Preparatory Group. The Council urged the countries concerned to ta ke full account of the Committee's recommendation that the objectives and main elements of the International Undertaking on World Food Security should be appropriately reflected in the provisions of a new International Grains Agreement, which should also pay particular attention to safeguarding the special interests of the developing countries. The Council also stressed the need for an early conclusion of a new International Grains Agreement which would envisage the building up of reserve stocks appropriate for ensuring food security as well as price and supply stability. It was also broadly agreed that an important ele ment of this Agreement should be a new food aid convention.
25. Noting that food aid continued to remain below the minimum food aid target of 10 million tons of cereals, the Council urged the donor countries to increase their food aid allocations so as to achieve this target as soon as possible. As regards the International Emergency Food Reserve, the delegate of the United States of America informed the Council that his government was prepared to contribute up to .125 000 tons of food aid toward the target of 500 000 tons, in company with other donor countries. While welcoming this development, the Council noted that even if this additional contribution were taken into account, the contributions so far made would total less than one half of the target of 500 000 tons. The Council stressed the urgent need for other donors to contribute to the International Emergency Food Reserve so that the target could be achieved.
26. The Council considered the Report of the Fifty-First Session of the Committee on Commodity Problems (CCP) (Rome, 2-6 May 1977) and expressed agreement with its conclusi ons. In particular, the Committee had drawn the attention of the Council to its review of inter- national action on important commodity and trade issues and its conclusions on the role of
FAO, its deliberations on a proposal which had been made for it to be associated with the task of monitoring the impact on trade of food standards developed by the Codex Alimentariu s, and its discussions concerning arrangements for its next session.
27. The Council concurred with the CCP in the view that progress in international fo ra towards resolving the long-standing problems affecting agricultural commodities continued to be slow. It expressed its serious concern at the high degree of instability in the prices of most agricultural commodities in recent years and at the lack of success, so far, of international efforts to stabilize prices at levels remunerative to producers and reasonable to consumers. In this regard, members drew the attention of the Council to the special difficulties experienced by producers of agricultural commodities. Prices of such commodities as bananas, hard fibres, jute, meat, oilseeds, sugar and rice, which were of critical importance to many developing countries, had either failed to keep pace with increases in the prices of crucial imports, such as manufactured goods and fuels, or had in some cases fallen even in current terms. Prices of wheat remained low. This seriously affected the rural employment and overall economic situation in developing countries (and in some developed countries), many of which faced a growing debt burden and were heavily dependent on agricultural trade as a source of resources for investment in development.
28. In a statement presented to the Council by the Group of 77 and in further observations on the subject, it was pointed out that the lack of basic agreement on the larger policy issues related not only to stabilization of commodity prices but also to the improvement of the export earnings of the developing countries. Dissatisfaction was again expressed with the policies of some developed countries which, with a view to reaching self- sufficiency, had resorted to heavy subsidization of internal production and to increased import restrictions with serious negative consequences for the export earnings of the developing countries. The difficulties of the developing countries had, in their view, been exacerbated by the increasing displacement of natural products by synthetics and substi- tutes, by the limited coverage of agricultural commodities under the Generalized System of Preferences and by the failure of developed countries to improve access to their markets for the processed and semi-processed agricultural products of the developing countries.
29. Many members considered that the very slow progress in improving the conditions of international commodity trade reflected the continuing lack of political will on the part of the developed countries, which had been shown clearly in the Report of the CCP, and which had pervaded the negotiations in the GATT and UNCTAD, and at the recently concluded Conference on International Economic Cooperation (CIEC) in Paris. Disappointment was expressed at the very limited nature of the agreements reached at the CIEC and at the failure of the recent negotiating Conference on an International Sugar Agreement. Noting the serious impact of the current low prices of sugar on the economies of producing countries, the Council hoped that consultations concerning the resumption of that Conference would come to fruition at an early date. It expressed satisfaction that the FAO Secretariat's special study on high fructose corn syrup and its competitive relationship with cane and beet sugar was now nearing completion.
30. In the view of several members, the continuing negotiations in the GATT and UNCTAD were moving towards positive conclusions, of direct benefit to the developing countries, and they affirmed that the decisions of the meeting of leaders of industrialized countries in London last month as well as the conclusions of the CIEC could give a new momentum to the current negotiations in the other fora towards these objectives. The Council was informed that the principle of a Common Fund, which was a key element in UNCTAD's Integrated Commodity Programme, had been accepted at the Conference on International Economic Cooper ation. The Council hoped that the UNCTAD Negotiating Conference in November would reach agreement on the practical implementation of a Common Fund.
31. Several members stressed the importance of implementing the series of Measures for Economic Cooperation Among Developing Countries (ECDC) adopted by the Group of 77 (Mexico, September 1976) as an action programme for achieving the objective of collective self- reliance in relation to the establishment of the New International Economic Order. They hoped the Secretariat would actively help the developing countries in their efforts to implement ECDC by providing technical expertise in all the relevant fields of the programme.
32. The Council stressed the importance it attached to the functions of CCP and its Intergovernmental Groups as fora for governments to undertake practical, technical work and consultations on commodity and trade problems which greatly facilitated negotiations in appropriate fora. It agreed that the Fifty-First Session of the CCP had played a particu-larly useful role in setting out clear directions for its Intergovernmental Groups to follow, and paid tribute to its Chairman, H.E. Ambassador George Magombe for the guidance given by him to the Committee's deliberations.
33. In particular, the Council endorsed the conclusions of the CCP with regard to the work in progress in FAO toward an international commodity agreement on bananas, the Committee's conclusions on the need for a comprehensive international action programme on tea, and its decisions and recommendations with regard to future work on Guidelines for international cooperation in the Intergovernmental Groups on Rice, Meat, and Oilseeds, Oils and Fats. Additionally, the Council strongly supported the conclusions of the Committee with regard to the proposed establishment of Jute International and Coir International and expressed the hope that the ad hoc meeting to be held on hides and skins would pave the wa y to mutually acceptable solutions of the economic problems in this sector.
34. In view of the important role of FAO in assisting towards the solution of international problems of agricultural commodities, the Council supported the decision of the Director- General to give high priority to commodities and trade work in the Organization's overall programme of work. In the Council's view, this was necessary to enable FAO's technical expertise to continue to play a fully effective role in supporting the UNCTAD Integrated Programme for Commodities as well as in subsequent follow-up action as foreseen by the CCP, and also to enable the Organization to take the initiative in developing international cooperation on important agricultural commodities not included in the Integrated Commodity Programme.
35. As regards the possible need for a special session of the Committee in the autumn of 1977, the Council concurred with the view of the Bureau of the Committee that such a me eting should not be convened in view of the heavy schedule of meetings already programmed for that period and the burden which an additional session of CCP would impose on governments and on the administrative services of the Organization.
36. The Group of 77, in its statement to the Fifty-First Session of the Committee on Commodity Problems, reproduced as Appendix D to the Committee's report (CL 71/6), had stressed that the development of food standards had important trade implications and that, in the Group's opinion, it would be useful and necessary for the Committee to help the Codex Alimentarius Commission to achieve fair trade practices, as envisaged in the statutes of the Commission. The Group of 77 had expressed the opinion that the Committee should be associated, in particular, with the task of monitoring the impact of food standards on the export interests of developing countries and had recommended that the Committee should bring to the attention of the Council its willingness to perform such a task. The Group of 77 believed that in view of the Committee's expertise and experience in trade problems, the Committee was particularly suitable to look into this problem. The Group indicated that its suggestions had been made in the light of indications that the food standards so far adopted were not always relevant to developing countries and did not adequately safeguard the export interests of developing countries.
37. Several members at the Committee's sessions had expressed serious doubts about the Committee dealing with food standards, which involved consideration of very specialized and technical issues, and required certain expertise which the delegates normally attending the sessions of the Committee did not have. They considered Codex Alimentarius as the most suitable forum to discuss all aspects of food standards including the achieving of fair trade practices. In their view, the Codex Alimentarius had carried out its work satisfac- torily and objectively according to its terms of reference and had achieved fair trade practices, which should be of help to developing countries. They suggested that if some members of the Committee had experienced any particular commodity trade problems arising out of the Codex food standards, such problems could be discussed by the Committee and the Codex Alimentarius Commission at a future session.
38. The Committee had been unable to reach consensus on this subject. It therefore agreed that this subject and its deliberations on it should be called to the attention of the Council.
39. In its statement to the Council, set forth in document CL 71/INF/9, the Group of 77 urged the Council to take favourable action on the proposal that, in the light of its expertise, the Committee on Commodity Problems be associated with the task of ensuring that food standards adopted by the Codex Alimentarius Commission did in fact contribute to promoting fair trade practices in food trade and did not have harmful effects on the development of food industries and on the export trade of developing countries.
40. During the Council's deliberations on this subject, the following points were made in support of the views and proposals of the Group of 77:
41. However, the following points were made by those delegations which took the view that the Committee on Commodity Problems was not the appropriate body to deal with these matters:
42. In conclusion, the Council agreed to refer this matter and the various views expressed on it, as recorded above and in its verbatim report, to the Codex Alimentarius Commission and its Executive Committee for consideration and reporting on its views on the different proposals and points raised to the Director-General, so as to enable him to report to the Council at its autumn session in 1978.
43. The Council noted that the CCP and COAG had reviewed work under way on preparations of the Director-General's report on International Agricultural Adjustment to the Nineteenth Session of the Conference. Many members expressed the hope that this report would be comprehensive in its analysis of the progress towards the achievement of the agreed objec- tives and guidelines of International Agricultural Adjustment, paying particular attention to relevant developments in the national production and price support policies of developed countries, as well as to the net transfer of resources to developing countries, and the degree of concessionality in such resource transfers. Several members cautioned, however, against being over-ambitious in such analysis. Many complex issues had to be weighed in formulating national agricultural policies and, while it was necessary to monitor and assess progress towards International Agricultural Adjustment, the Conference could not in the view of some members be expected to pass judgement on national or regional policies. The same members also pointed out that agricultural adjustment was a dynamic process and progress towards it was taking place in the right direction as evidenced by the increase in food production in response to the shortages experienced in the past few years.
1CL 71/2, CL 71/2-Corr.1, CL 71/PV/2, CL 71/PV/3, CL 71/PV/17.
2See para. 25 below.
3CL 71/4 paras. 2.122-2.125, CL 71/PV/3.
4CL 71/10, CL 71/10-Corr.1, CL 71/PV/3, CL 71/PV/4, CL 71/PV/17.
5C 75/REP, para. 141 - Res. 9/75 operative para. 5, CL 71/6, CL 71/9, CL 71/PV/6.