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State of Food and Agriculture, 1978 1

8. When commenting upon the state of food and agriculture in 1978, members of the Council made frequent references to the opening statement which the Director-General had made on the general theme of “FAO in action” 2. The Council expressed its warm appreciation of the clear and objective manner in which the Director-General had reported on world food and agricultural problems and supported his dynamic leadership of the Organization, in implementing the new policies the Council had adopted in 1976. This included, in particular,mobilizing and allocating increasing resources for practical action in countries at the field level, in close association with national authorities and regional organizations and, in these and other ways, contributing in a significant manner to the achievement of the objectives of the New International Economic Order.

9. The Council endorsed the general lines of analysis of the world food and agricultural situation and outlook as presented in the Director-General’s report, and considered the assessment useful and informative. It considered that such assessments provided important background for the determination of policies, programmes and priorities, including those of the Organization, as well as for assessing progress towards the objectives of the New International Economic Order. It felt that, although there had been a general easing of food supplies, especially of cereals, there were no grounds for complacency. A particularly large number of emergency situations arose in 1978. Insufficient progress had been made toward solving the long-standing problems of agricultural and rural development.

10. According to FAO’s preliminary estimates, the increase in world food production in 1978 was about 3 percent, with a somewhat smaller gain in the developing countries. Reflecting the generally favourable weather, world cereal production reached a record level and there was a sharp increase in the production of oilseeds. In spite of these satisfactory production results, the Council noted with concern the devastation caused by floods in several Asian countries, the severe drought in China, the desert locust invasion in some parts of Africa and Asia that has reached plague proportions in certain countries, and the serious outbreak. of African swine fever in certain countries of the Mediterranean and Latin America.

11. Furthermore, the longer-term trends in food production remained unsatisfactory. In the developing countries, the average annual increase in food production during the first eight years of DD2 was not only below the International Development Strategy target of 4 percent, but also below the 3 percent achieved in the 1960s. Although there was a recovery of production in Africa in 1978, nevertheless the rate of growth in that region so far in this decade remained less than half that achieved in the other developing countries. In this regard, the Council noted with interest the completion of FAO’s work on the Regional Food Plan for Africa aimed at increasing food self-sufficiency in the region and the recommendations of the FAO Regional Conference for Africa for effective follow-up at country and sub-regional levels. Some members pointed out that the rapid rate of desertification must be checked if many African countries were to achieve an improvement in their level of self-sufficiency.

12. The Council was concerned that, in spite of the generally good harvests and the high level of stocks, the incidence of hunger and malnutrition showed no sign of abating. FAO’s Fourth World Food Survey estimated that the available supplies of dietary energy per caput in the developing market economies declined slightly between 1969-71 and 1972-74, and that the number of undernourished people in these countries rose from about 400 million in the first period to about 450 million in the second. Partial data for more recent years indicated that dietary energy supplies per caput fell in 1975, especially in the NSA countries and in the Far East. Although there was a recovery in 1976, particularly in these countries, the situation in subsequent years remained uncertain despite production increases.

13. In global terms, the level of cereal stocks projected for the close of the current 1978/79 seasons was sufficient for the necessary minimum degree of world food security. The increase in these stocks, however, would be mainly in coarse grains. They also remained highly concentrated in the developed exporting countries 3, which might cause serious logistic problems in the event they were needed to meet a major food emergency. The Council called for increased assistance to developing countries in the creation of their own food reserves. In this context, the Council expressed regret that no progress had been made on the establishment of the internationally coordinated system of food reserves envisaged in FAO’s International Undertaking on World Food Security, and that a new Food Aid Convention had still not been concluded. The failure to reach agreement in the latest session of the negotiations concerning a new international grains agreement, which dealt with these and other matters, was viewed with concern. Furthermore, some members expressed their concern at the fact that the existence of large stocks had led some developed countries to adopt policies aimed at reducing the area sown to cereal crops.

14. The Council noted with regret that once again in 1977/78 food aid shipments fell short of the World Food Conference’s minimum target of 10 million tons of cereals, although the preliminary allocations for 1978/79 appeared to have met the goal for the first time since it was established. It also expressed concern that the 1978 contributions to the Inter- national Emergency Food Reserve of 500 000 tons of cereals reached only 350 000 tons, and that the present balance was below 50 000 tons.

15. A number of members stressed the growing dependence of the developing countries on imports of food, mainly from developed countries. The net cereal imports of developing countries rose from an average of 32 million tons in 1962-64 to 66 million in 1977/78 and,if present trends continued, would exceed 90 million by 1985. Particularly because the role of food aid in meeting the rising import requirement had declined substantially since the mid-1960s, the increasing imports of cereals were progressively reducing the ability of the developing countries to import capital goods, fertilizers, and other production requisites urgently needed for their economic development.

16. Concern was expressed about recent rises in international fertilizer prices, the serious shortfall in the fertilizer assistance to the MSA countries called for by the Seventh Special Session of the United Nations General Assembly, and the inadequate response of donor countries to the FAO Seed Improvement and Development Programme and to the Inter-national Fertilizer Scheme. The opinion was also advanced that the forecasts of fertilizer consumption made by the FAO/UNIDO/World Bank Working Group on Fertilizers were below the level needed to achieve the target of 4 percent annual growth in agricultural production in the developing countries.17. Although the developing countries were of course, chiefly responsible for solving their food problems, the developed countries should play a major role in providing the necessary development assistance on concessional terms. In this connexion, the Council noted with concern that although there was an increase in the flow of external resources for the agriculture of the developing countries in real terms in 1977, the total commitments of external assistance for agriculture were little more than half of the estimated target figure used by the World Food Council. The FAO Council urged all donors to increase the level and improve the terms of their official development assistance for agriculture so that the recommendations of the World Food Conference for increasing production in the developing countries would be achieved. Several members also stressed the need to replenish the resources of the International Fund for Agricultural Development In good time. It also noted the statements of some delegations that donor countries had been shifting their commitments for agriculture in favour of the poorest countries and small farmers, and recommended that this trend should be further strengthened.

18. A major problem in many developing countries, especially the poorest, remained the need for more assistance, including training, in the identification and preparation of agricultural investment programmes and projects for improving their absorptive capacity. FAO was giving increased emphasis to assistance of this kind but its capacity was limited. It was emphasized that the problem of absorptive capacity in the developing countries notwithstanding, there was need for a greatly enlarged flow of external resources.

19. The Council noted FAO’s efforts to improve the supply of information on external aid to agriculture as well as domestic investment and recurrent expenditures in agriculture and requested member countries to give high priority to providing FAQ with data required in a new statistical questionnaire.-

Developments in Commodity and Trade Matters 4

20. The Council noted that in 1977, for the second year in succession, the largest increase in agricultural export earnings (including fishery and forestry products) was registered by the developing countries. As a result, the share of these countries in total world agricultural exports had recovered slightly. It was emphasized, however, that the upturn derived to a large extent from a substantial expansion in the value of trade of a few commodities temporarily in short supply (such as beverages and oilseeds), and that the longer-term trend showed a gradual decline in the share of developing countries in a rising world total. Concern was expressed that, while the terms of trade of the agricultural exports of the developing countries improved markedly in 1977, there was a sharp reversal of this trend in the first half of 1978.

21. As regards international trade policies, many members expressed great concern at the mounting use of protectionist measures by developed countries, especially on meat and sugar, and at their use of trade restrictions to limit market access for agricultural products of export interest to developing countries in particular. Moreover, it was pointed out that the support policies of those countries had in some instances led to excess supplies which may be disposed of with the assistance of export subsidies in such a way as to seriously disturb normal trade patterns. These measures continued to have adverse effects on the developing countries in their efforts to raise agricultural production and exports. It was noted that EEC’s net sugar exports had doubled from 1977 to 1978. Some other members pointed out, however, that their imports of agricultural and food products from developing countries had considerably increased and that, thanks particularly to the Generalized System of Preferences, they ha4 reduced their tariff barriers on imports of both raw and processed agricultural products, especially tropical products. As regards sugar, it was pointed out that although EEC exports had recently increased, they should be compared with the importation, within the framework of the Convention of Lome´, of 1 400 000 tons of sugar from developing countries members of this Convention, at the price fixed in the EEC for its own producers. In addition, in recent years the area under sugarbeet had decreased by 4.5 percent, and the increase in exports was due to an improvement in yields and a return to more normal climatic conditions than those that had prevailed previously.

22. The Council noted that little progress had been made toward mitigating the long-standing problems of international trade in agricultural products. In particular, it expressed its disappointment that the GATT multilateral trade negotiations had run into further difficulties arid that a successful conclusion to these negotiations now seemed unlikely before the end of the year, and that other important international negotiations on commodities, especially those under the UNCTAD Integrated Programme for Commodities, were also making only slow headway.

Report of the Committee on World Food Security
(3rd Session, Rome, April 1978)

23. The Council agreed that the rise in global food production and stocks in 1977 and 1978 had improved the world food security situation to some extent. The build-up of stocks, which had commenced in 1975, continued and was mainly concentrated in coarse grains in 1978. The Council stressed that world food security would remain precarious until real progress had been made towards strengthening the food production base of developing countries so as to help eradicate hunger and malnutrition.

24. The Council agreed that the present high level of world cereal stocks offered an excellent opportunity for implementing the International Undertaking on World Food Security. It shared the concern of the Committee on World Food Security for an early conclusion of the negotiations on a new international grains agreement, as a means of translating some of the objectives of the International Undertaking on World Food Security into a set of precise legal commitments. The Committee had reached a consensus on a number of specific aspects, to which the negotiations should give special consideration: reserve stocks, prices, and international assistance to developing countries, which had been transmitted by the Director- General for submission to the United Nations Conference to negotiate an international grains arrangement to replace the International Wheat Agreement (1971) as extended.

25. The Council expressed its disappointment at the suspension on 24 November 1978 of the reconvened session of the Negotiating Conference without reaching agreement. It noted that considerable progress had already been made, in particular as regards a Food Aid Convention and a Coarse Grains Trade Convention, and believed that the remaining problems concerning the Wheat Trade Convention could be resolved. Bearing in mind the vital contribution which a new and effective international grains arrangement could make to world food security, the Council recommended that urgent efforts should be made by the negotiating parties to resume the Negotiating Conference as soon as possible, and stressed the need for a full participation of developing countries at all stages of negotiations, in order to bring them to a fruitful conclusion.

26. The Council agreed that lasting food security could only be achieved through adequate growth in food production. It required national production and stock policies which were compatible and mutually supportive. In implementing such policies, however, many developing countries would still need substantial external assistance.

27. The Council noted the recommendations of the Committee on World Food Security that all countries in a position to give food or financial assistance should urgently provide aid to developing countries presently facing severe food shortages, and that aid-giving countries and concerned organizations should increase their financial, technical and material assistance for increasing food production in the developing countries, especially those most vulnerable to food shortages. It expressed satisfaction with the assistance extended by donor countries to countries suffering severe shortages, especially those in the Sahel and other parts of Africa and in South-East Asia, -and welcomed the readiness of the donor countries to provide further aid in the event of future emergencies. The Council also noted that the Committee, while welcoming the contributions to the development of domestic food resources from donor countries which had been made in the form of food and financial aid to a number of developing countries, had urged further contributions to this activity.

28. With reference to the stress laid by the Committee on the rice production problems in South and South-East Asia, the Council was informed that the FAO Interdepartmental Task Force on Rice had completed a comprehensive report which was now being considered by the Director-General. The Council welcomed the greater attention being given by the Committee on World Food Security to the role of non-cereal foods in world food security, and stressed the need for action to promote their production, improved processing and commercial marketing.

29. In response to the apprehensions expressed by a number of members regarding possible food shortages or price increases which could result from production cutbacks decided upon in the main food-grain exporting country, the Council was informed by the representative of that country that, in line with the Committee’s recommendation, they had taken into account the need to maintain adequate world supplies and stocks of basic foodstuffs when formulating their production policies for the 1979 crops.

30. The Council welcomed the decision taken by the Committee on Food Aid Policies and Programmes, in line with the recommendation of the World Food Council, to establish the International Emergency Food Reserve on a continuing basis with regular replenishments. It requested all countries in a position to do so to contribute to the Reserve so as to ensure that it would speedily reach the target of 500 000 tons and that it would be maintained at this level through annual replenishment.

31. The Council approved the objectives and operation of the FAO Food Security Assistance Scheme. This Scheme served as a catalyst, as a framework for coordinating multilateral and bilateral prograimnes, as a source of technical expertise on national food reserves, and as a vehicle for mobilizing funds required for projects. Attention was drawn to the importance of regional food reserves at strategic points in food-deficiency areas. The Council was informed that, at the request of the CILSS, an FAO feasibility study would soon be carried out on a possible Sahel regional reserve linked to national stock policies.

32. With the above considerations, the Council agreed with the conclusions and reconunenda- tions of the Report of the Third Session of the Committee on World Food Security.

1CL 74/2; CL 74/2-Sup.1; CL 74/PV/2; CL 74/PV/3; CL 74/PV/14.

2See Appendix D.

3One such country holding 45 percent of the stock.s.

4CL 74/PV/2; CL 74/PV/3; CL 74/PV/14.

5CL 74/10; CL 74/PV/3; CL 74/PVJ4; CL 74/PV/14.

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