9. The Council reviewed the current food situation in the light of the grim but realistic appraisal of the world economic situation presented by the Director-General in his opening statement. It agreed with his general view that the prospects currently facing the world economy were not good, that there were increased economic tensions and pressures and that these were having an adverse effect, particularly on the low-income developing countries.
10. The Council noted the broad trends of the food situation over the 1970s presented and analysed in document CL 79/2 and the more optimistic assessment of the immediate situation shown in its supplement. It felt that together the two documents gave a realistic and balanced assessment of the world food situation as it had developed in the first half of 1981, reflecting on the one hand the improved prospects for production of cereal crops in 1981, and, on the other hand, the underlying continuing uncertainty and fragility in the current world food situation.
11. Particular concern was expressed regarding the serious aspects of the current food situation. For two years in succession, the increases in world food production at 0.9 percent and 0.5 percent in 1979 and 1980 respectively, had failed to keep pace with population growth and, in particular, cereal production had failed to match consumption requirements. The incidence of emergencies and abnormal food shortages was showing no signs of abating and many countries, particularly in Africa, were still affected by the drought-reduced harvests of 1979 and 1980. The Council recalled that the Committee on World Food Security, at its Sixth Session 2 noted that according to the International Development Strategy for the Third United Nations Development Decade "world cereal stocks should be maintained at an adequate level, which has been estimated at from 17 to 18 percent of annual world consumption" 3. It pointed out that global stocks at the end of 1980/81 seasons were expected to decline to 14 percent of world cereal consumption which would be considerably below the estimated level.
12. The Council noted the more favourable prospects for increased cereal production in 1981 on which world food security for the next year crucially depended. The size of the wheat crops, and particularly the winter wheat crops, indicated an encouraging rise, with prospects of a record wheat crop in 1981; forecasts of the coarse grain harvests, though encouraging so far, were less firm. It was still too early in the season, however, to give an informed assessment of the main rice crop although the monsoon had arrived ahead of time in important rice-producing countries. Therefore in view of uncertainties in the situation, there was a need for continued vigilance on the part of the international community.
13. The dependence of developing countries on imported cereals to satisfy their needs was increasing, rising to an estimated 98 million tons in 1980/81, an increase of 9 percent over the previous year. What was disturbing was that the cereal import requirements of the low-income countries was increasing more rapidly still, to 42 million tons in 1980/81, an increase of 13 percent over the year, and imposing an untenable burden on their balance of payments.
14. The Council recognized that the performance achieved in food production by developing countries as a whole in the 1970s had relatively improved, as it had increased at an annual average rate of 3.3 percent. It also recalled that several individual countries had done even better, reflecting the increased importance that they had been attaching to food production. However, it also agreed with the Director-General's statement that many countries were still not giving sufficiently high priority to food and agricultural development, either in terms of long-term investment or of current budgetary allocations. There was also a need to ensure that domestic food producers received sufficient markets through remunerative prices and direct assistance to stimulate increased production. The Council reiterated its concern that most low-income, food-deficit countries, particularly in Africa, had not succeeded in improving their food self-sufficiency.
15. The Council noted that food and agricultural production was facing a grave problem caused by the rising costs of inputs. While this was a source of difficulty for producers even in developed countries, the burden on the poorer producers in the developing countries was even heavier. The heavy reliance of many developing countries on imported fertilizers, did not leave them much room for improving the incentives for producers. Fertilizer imports of developing countries had nearly doubled during the 1970s to between 12 million and 13 million tons by 1978/79. In contrast, the quantity of fertilizers distributed by FAO's International Fertilizer Supply Scheme (IFS) of 13 thousand tons in that year was negligible, but pledges to the Scheme had not increased since. Various delegations supported the appeal made by many delegates in the Fertilizer Commission meeting in mid-1980 that at least 10 percent of bilateral assistance for the supply of fertilizers should be channelled through the International Fertilizer Supply Scheme (IFS).
16. While the primary responsibility for development of food and agriculture lay with the developing countries themselves, the Council reiterated the fundamental importance of the International Development Strategy and the need for its urgent implementation. Concern was expressed at the lack of progress in implementation of many measures agreed over the past several years. Food aid was stagnating and had failed to achieve the annual target of 10 million tons of cereals set by the World Food Conference (WFC). The likelihood was remote of achieving the estimated requirements of between 17 million and 18.5 million tons of cereals which provided a useful indicator of the overall requirements of food aid by 1985. There had been no tangible progress towards establishing a new Wheat Trade Convention with a coordinated system of nationally-held stocks. In this connexion, it was also stressed that negotiations should be resumed in the near future in order that an effective wheat trade agreement might be concluded. 4 The International Emergency Food Reserve had not been replenished to the target level of 500 000 tons per annum and there was scope for increasing the predictability of available resources to enable more effective planning of the reserve to meet emergencies. Flows of external assistance to agriculture in the narrow definition had declined in real terms in 1979, and although there might have been an increase in 1980, this would hardly be more than a recovery to the level reached in 1978.
17. At the same time, the Council drew attention to some positive aspects of international action such as the extension of the Food Aid Convention (FAC) to mid-1983 with firm commitments for 7.6 million tons of cereals, and the establishment of a government-held stock of 4 million tons of wheat in the USA to support its commitment to the FAC. The Council welcomed the decision taken by the Executive Board of the International Monetary Fund (IMF) in May 1981 in response to the request made by the FAO and the WFC, to extend compensatory financial assistance to member countries of the Fund when they encountered balance of payments difficulties caused by a temporary decline in domestic food production or a sharp increase in import prices of food, especially cereals.
18. The Council appealed for increased contributions, particularly from new donors, so that the regular and emergency food aid targets could be met and the pledging target of the World Food Programme for 1981-82 be achieved.
19. As regards the flow of development assistance to agriculture, the delegations of some donor countries stated the policy of their governments to raise substantially their Official Development Assistance (ODA) and to give priority to agriculture in its allocation. Concern was expressed that the flow of total ODA as a percentage of the gross national product of donors was less than half of the agreed international target of 0.7 percent, reaffirmed in the New International Development Strategy as adopted. Questions were asked on levels of investment in food and agricultural production from domestic sources in developing countries. The Council was informed that the lack of data stood in the way of any immediate appraisal in quantitative terms. The Secretariat pointed out that the many conceptual and other problems would have to be sorted out before any simplified methodology, on which it was working, would yield results.
20. The Council expressed its concern about the difficulties faced by developing countries in maintaining the real value of their agricultural export earnings. Reference was also made to similar difficulties faced by exporters of agricultural products from other countries. In some cases the difficulties stemmed from declining terms of trade for specific agricultural commodities vis-à-vis manufactured goods or petroleum products. In other cases, they arose from the restricted access to some markets, particularly in developed countries, difficulties which had been made worse by increased protectionism on the part of some of these countries. On the issue of protectionism, the Council was informed that a detailed review of this question would be carried out shortly by the Committee on Commodity Problems (CCP) in pursuance of Conference Resolution 2/79 on Commodity Trade, Protectionism and Agricultural Adjustment. The CCP's assessment would be submitted to the Council at its next session. In the meantime, a number of the FAO Intergovernmental Commodity Groups had undertaken a detailed examination of the effects of protectionism on the commodities with which they were concerned.
21. Attention was also drawn to the possibilities for developing countries to mutually strengthen their self-reliance in food through the setting up of regional food reserves and other programmes of economic cooperation which had an important role to play in controlling pests and disease, the development of rivers and lakes, production of inputs, promoting fish production in the newly-acquired Exclusive Economic Zones (EEZs) Of developing countries and strengthening agricultural research.
22. The Council considered and endorsed the Report of the Sixth Session of the Committee on World Food Security (CFS), including its recommendations on steps to be taken to implement the Plan of Action on World Food Security; its conclusions concerning the state of preparedness to meet acute and large-scale food shortages; and its conclusions on procedures, mechanisms and remedial action in the event of such shortages.
23. The Council commended the Committee and its Ad Hoc Working Party for the useful and timely recommendations on ways of improving the state of preparedness, both at national and international level, to cope with acute and large-scale food shortages. It agreed that, in particular, the Committee's conclusions on procedures, mechanisms and remedial action, including the Agenda for Consultations and Possible Action to Deal with Acute and LargeScale Food Shortages, represented a useful framework for discussion and action which may be considered necessary for consultations convened by the Director-General. Some members regretted that due to the absence of a consensus, the Committee did not pursue the proposals of the Secretariat's draft Memorandum of Understanding, which had been presented to the Ad Hoc Working Party.
24. The Council agreed that the lasting solution to the food security problem lay in a more rapid growth of food production particularly in low-income food-deficit countries. It urged these countries to give higher priority to food production in their development plans. The need for adequate incentives to producers, particularly stable and remunerative prices, arid for sufficient supplies of fertilizers and other agricultural inputs at reasonable cost, was also emphasized. In this connexion concern was expressed that the efforts of developing countries to provide producers with inputs at reasonable prices were being hampered by the existing high import prices of these inputs. In many countries inadequate financial and technical resources hampered growth in food production. The Council agreed that while the primary responsibility for increasing production lay with the developing countries themselves, all developed countries and others in a position to do so should give priority to food production projects in their external assistance programmes, and contribute adequate fertilizer aid to developing countries, either bilaterally or through the FAO International Fertilizer Supply Scheme. Stress was also laid on the transfer of technology within the framework of Technical Cooperation among Developing Countries (TCDC), as well as measures for controlling population growth.
25. The Council noted with concern that for many developing countries, the difficulties in meeting the extra cost of foodgrain imports and of imported agricultural inputs was aggravated by fluctuations in prices of their major export commodities as well as by the negative effects of protectionism on their export earnings. The Council stressed the need to reduce trade barriers against agricultural imports, especially from developing countries.
26. The Council reaffirmed its support to the Plan of Action on World Food Security. It noted with satisfaction the steps taken by many governments to implement the Plan both at national levels and in conjunction with other countries, in a spirit of collective selfreliance. It also appreciated that the recent decision by the Executive Board of the International Monetary Fund (IMF) as outlined in para. 17 was fully in line with the Plan of Action. However, overall progress towards world food security had been limited and slow. The Council therefore called for concerted efforts on the part of all countries to achieve the objectives and targets on which the entire international community had agreed in 1974 at the World Food Conference and in later years, but which had still not been reached.
27. The Council agreed in particular that every effort be made to achieve the food aid target of at least 10 million tons of cereals annually as recommended by the World Food Conference. The Council attached particular importance to increased and new contributions permitting the annual replenishment of the International Emergency Food Reserve to the target level of 500 000 tons as well as increasing the basis of the International Emergency Food Reserve's operations on a predictable and assured basis. The Council also emphasized that all efforts be made to reach and, if possible, surpass the minimum pledging target of US$ 1 000 million for the WFP for the biennium 1981-82 as well as to increase the cash component of its resources. In order to achieve these objectives, the Council invited additional contributions, particularly from OPEC members and the industrialized centrally planned economies.
28. The Council also emphasized the need for financial and technical assistance to improve food security infrastructure including grain storage, transportation and port facilities in the developing countries. The need for continued and increased assistance in the prevention of post-harvest losses was also stressed. The Council noted with concern that while grain storage was only one of the many components in food security programmes, according to Secretariat estimates, there was a substantial shortfall in current capital investment for grain storage capacity for reserves in developing countries; and that there would be large additional grain storage investment needs over the next ten years.6 The Council urged all countries in a position to do so, to contribute resources for this purpose under bilateral and multilateral assistance programmes including the FAO Food Security Assistance Scheme.
29. The Council noted that a new Wheat Trade Convention, which could contribute to strengthening world food security, had not yet been concluded. Many members stressed the need to make all efforts to conclude at an early date a new Wheat Trade Convention with provisions on reserve stocks, prices and assistance to developing countries. One member, representing a major wheat exporting country, informed the Council that while his government was fully committed to finding ways of securing world food security, it was of the view that individual country reserve systems which operated in response to price signals from the world wheat market were preferable to internationally coordinated programmes currently under discussion. He added that his Government accepted the reality that a breakthrough on the negotiat of a binding international system was not imminent and held the view that lack of progress towards a possible new wheat agreement should not serve as an excuse by countries not to take actions unilaterally to do what they can to contribute to world food security. Another member expressed the view that if the negotiations on a new Wheat Trade Convention could not be resumed soon, it would be necessary for governments to consider other measures such as the strengthening of the Plan of Action on World Food Security.
1 CL 79/2; CL 79/2-Sup.l; CL 79/PV/l: CL 79/PV/2; CL 79/PV/3; CL 79/PV/16
2 CL 7 9/10, para.l1
3 UN General Assembly Resolution 35/36 on International Development Strategy for the Third United Nations Development Decade, para.86, Footnote 18: "See the report on world food security of the Intergovernmental Group on Grains of the Food and Agriculture Organization of the United Nations (FAO) (CCP: GR/75/9), issued in August 1975, and the report of the FAO Committee on World Food Security on its Fifth Session (CL 78/10)."
4 The United States of America reserved its position on this point. That country's viewis elaborated in para. 29 of this report.
5 79/10; CL 79/PV/4; CL 79/PV/16.
6 CL 79/10, para. 162