Mr.Chairman, ladies and gentlemen, distinguished delegates and observers,
It is my privilege to welcome you to the 83rd Session of the FAO Council on behalf of myself and my colleagues. Among the latter, I am glad to introduce to you the newly appointed Assistant Director—General for Administration and Finance, Mr. Dean Crowther, who comes to FAO from a distinguished career in the United States’ Department of Agriculture.
I also have the pleasure of introducing to you the new Assistant Director—General in charge of the Development Department, Mr. Raymond Lignon, He is a native of France and replaces Mr. Jacques de Mèredieu.
Mr.Chairman, the springtime session which the Council holds in Conference years is always a key session in our biennal cycle of meetings, since it deals not only with the world food situation but also with the Summary Programme of Work and Budget, preparations for the Conference, and the reports of several important Committees.
Mr. Chairman, the world’s most urgent problems today can be summed up in three words — missiles, money and food. Excessive armaments, the instability of our monetary system and the extreme fragility of food supplies, especially for the poorest countries and the poorest people, are three major challenges of the mid—eighties. We must tackle and solve all three, or give up any hope of an improvement of the world eoonomy.
I am not going to moralize here, to denounce yet again the scandal of armaments expenditures compared to development needs Let me merely remind you of a few facts: over 17 000 strategic weapons are now aimed at us The military expenditures of the two super—powers exceed the entire value of all world trade in agricultural products. The armaments trade plays a major role in some economies. Lastly, 75 percent of all arms imports are accounted for by the developing countries whose military spending already exceeded 300 million dollars per day in 1980.
Concerning financial problems, the attention of the industrial world’s leaders is fastened mainly on currency instability, excessive real interest rates and the exposure of the banking system as a result of massive lending to a small number of middle—income developing countries The situation of the poorest developing countries, whose indebtedness is mainly to official sources, and whose economy has been crippled by the most savage collapse in agricultural commodity prices for a generation, is desperate. Globally the external debt pf the developing countries is reported to have reached 700 thousand million dollars, in other words to have increased tenfold in ten years. A few days ago I reread the speech of the late President Boumédienne to the United Nations General Assembly in 1974; he said that the debts of the developing countries came to 70 thousand million dollars that year (1974). And we have now reached 700 thousand million. This debt poses a grave threat to the chances of the world economic recovery.
As regards food, let us first discuss the postive side, Subject to the usual uneveness, the 1982 harvests were generally good. World cereal production was on the order of 15 thousand million tons, or three percent more than in 1981. World grain stocks are now at record levels; at 21 percent of annual consumption, they are much above the minimum needs for food security, which are estimated at 18 percent. However, most of the increase has been in coarse grains which are used mainly for animal feed, and furthermore over half of these stocks are held in North America.
Globally,food production grew overall by 25 percent in 1982, the results in the developing countries being slightly below that figure.
On the other hand, per caput food production in developing countries with a mar ket economy declined slightly and in 33 out of 69 low—income food—deficit countries per caput cereal production decreased considerably. In fact, in 19 developing countries production even dropped in absolute terms. Although China had good harvests, production declined in the Far East as a whole, and particularly in India.
Africa had mixed results, with per caput food production declining in 23 out of 42 countries Many of these countries are experiencing serious difficulties, and this led me last month to launch an appeal to the international community to grant emergency aid to those African countries most affected by shortages Most of the African continent has been stricken by drought, destroying crops. Furthermore, a severe outbreak of rinderpest now threatens Africa’s livestock production. Cereal imports (including food aid) should rise by more than one million tons over last year At the same time, minimum emergency measures are needed to protect and rehabilitate crop and animal production at a cost estimated to be $27 million. I am sure that the donor countries will, as usual, respond generously on a bilateral or multilateral basis in providing the necessary additional food aid, inputs and other requirements.
Over the past two years, the terms of trade of agricultural commodity exports from developed countries have deteriorated by 9 percent. This is most unfortunate. Yet what can we say of the developing countries where the fall has been almost 30 percent? The low—income developing countries have experienced a drop of 60 percent in current dollars in their net earnings from agricultural trade since the period 1977—79.
As regards the prospects for 1983, we are probably faced ultimately with a notable decline in world grain output. This will be chiefly due to the deliberate land set—aside. measures of the USA. And in addition there will be the effects of the bad weather that has struck Europe, especially Ceñtrál Europe, as well as a number of large producers in Asia and Oceania and some countries in Africa as I have just mentioned. Thus, wheat and coarse grain production in Europe is expected to be some 3 percent smaller in 1983 than the previous year, mostly in coarse grains. Other important crops such as vegetables have also been badly affected in Europe. Meat supplies in Africa are in great danger from the ravages of rinderpest. The general situation in large parts of Africa is very serious. Emergency assistance is required.
The collapse in prices of some of the leading export commodities, which for many developing countries are the main sources of foreign exchange, shows every sign of being a real disaster.
In 1982, many commodities were trading at their lowest prices, in real terms, for 50 years. Let us hope that the brisk upturn in the early months of this year is the start of a sustained recovery in prices. I refer particularly to the recovery of sugar and cocoa prices Actually, a document recently distributed by UNCTAD indicates that for a number of basic agricultural commodities, which are products exported by the developing countries, demand by 1990 will decrease compared to 1983 (the demand on these markets will increase for only one product, tobacco). Therefore, UNCTAD foresees the possibility of zero growth between 1980 and 1990 in imports by the developed market—economy countries of most products from the developing countries I hope that these statistics are wrong. Otherwise basic raw materials will be in a really difficult situation.
Meanwhile, we are all looking to UNCTAD VI and the hoped—for follow—up of the Williamsburg Summit to reverse the trend towards protectionism. I will not therefore dwell on this subject except to underline the critical aspect of protectionism in food and agricultural trade, particularly on the processed products and semi—processed products of the developing countries. It is also of course of crucial importance in the relations between the richer countries. The dangers for all of a protectionist spiral comparáble to that of the Thirties have been amply discussed in recent weeks: its effects would be far worse now than they were then.
I have just come back from Belgrade where I attended the first part of UNCTAD’s meeting, and I can tell you that protectionism was discussed in great detail there. Mr. Chairman, allow me to have a copy of the statement I delivered at that time distributed to all the delegates here.
Protectionism would not solve unemployment problems in the countries of the North any more than it would end trade imbalances As for the poorer countries, they would be more than ever at the mercy of relentless external forces.
Yet they could, if encouraged and assisted, be among the engines of recovery and growth for the North. Interdependence is not a fiction: it is not an invention of idealists bent on promoting international aid; it is a reality, a fact which it is in the interest of everyone to accept.
Thus, while it is disturbing that farmers’ incomes have gone down by 4 percent in the US and 9 percent in Canada, the effects of the much lower prices, the deterioration in terms of trade of the poor countries, and protectionism are much more destructive on the incomes, nutritional levels, and capacity to fend for themselves of the poorest farmers and landless labourers.
In such a situation food security is more timely than ever.
Let me turn then, 4r. Chairman, to the recent session of the Committee on World Food Security, which met in April in this room.
The main subject of the Committee was the report which I submitted on the principles and methods of a new approach to world food security. It was deliberately a comprehensive and boldly ambitious report, not in what I expected to achieve immediately, but in my effo.rt to give adequate scope and innovation to the deliberations of the Committee. From the start, my conception was based on the need for a step—by—step progress by consensus.
Consensus is never easy to achieve, particularly in a field strewn with traps where powerful trade and financial interests confront each other. lam therefore gratified that we made what I consider to be a good start.
The first and most important result was that the Committee as a whole approved the wider concept of food security that I proposed, aimed at ensuring material and economic access of all people at all times to the staple foods they need.
Food security should have three specific objectives: ensuring the production of sufficient supplies; stabilizing the flow of supplies to the maximum; and giving access to available supplies to those who need them.
To this end, large—scale action will be necessary, involving all the factors that affect the capacity of countries and persons to produce or to buy food. Among other things, agricultural and rural develôpment, food production (especially in low—income countries with a food deficit), the purchasing power of the poorest social strata, food reserves, the ‘functioning of national and international food markets, the foreign—exchange needs of importing countries, liberalization of trade, export revenue, financial resources, technical aid, food aid and arrangements for emergency intervention are some of the specific fields Never before in the United Nations has a committee dealt with the issue of food security in all its aspects, in its full magnitude, as did your Committee this spring.
Secondly,the Committee agreed by and large on the specific national and regional measures proposed in my report. On the other hand, not suprisingly my suggestions for measures at international level were not unanimously accepted. Therefore they will have to be clarified and worked out in detail.
We could thus pursue those suggestions which appear likely to achieve consensus in the near future, for example, what FAO could do to promote a “Food Security Action Programmer”.
Thirdly, the Committee acknowledged FAO’s pioneering role in strengthening world food security Without it the General Assembly of the United Nations would not have created a Committee on World Food Security under FAO’s auspices. This Committe would have been placed elsewhere. Needless to say, FAO will play a pioneering, but not the only, role in the strengthening of world food security Many delegations stressed the central role CFS has to play in this respect and the need for gradually strengthening its activities under its present terms of reference. Let me repeat, under its present terms of reference.
In practice, this will mean ensuring a global and integrated approach, so that the various components of food security are duly taken into account and discussed before decisions are taken by the appropriate organs. Some people might wish that the Committee were empowered not only to discuss all aspects of food, but would have competence to examine all the problems and solutions itself. This is not the case. It is never the case in the United Nations The Committee plays a propelling role but many decisions depend on other competent bodies which are free to change the point of view the Committee may express, but which still benefit by the main lines of the proposals made by the Committee. I shall return to this point later.
The Committee on Food Aid Policies and Programmes has presented its regular report to this Council. and to ECOSOC. (It is going to propose it, it has not yet submitted it.) The CFA has proposed a resources target for the World Food Programme in 1985—86 of $1.35 thousand million. Although ten percent below the figure proposed by the Executive Director, with support from the Secretary—General of the United Nations, and from myself, the proposed target represents a modest advance over the current biennial target.
If, as I hope, this target is acceptable to you, I feel that at least it could for once be met in full — for it has never been reached — and perhaps even exceeded, since in the face of the needs and possibilities it would indeed seem modest. This should enable the WFP to maintain and possibly to slightly expand the momentum of its activities, and especially to more vigorously support national food policies and food security programmes, including price stabilization and storage projects. This opens up an important new line of activity for the World Food Programme which I believe was mentioned at the last Session.
The Committee considered a paper prepared by FAO and WFP, containing revised estimates of food aid requirements for 1985. These include over 20 million tons of cereals, of which 3 million tons would be for emergencies arising from poor harvests The Committee did not agree on an increase in the target of 10 million tons for the annual flow of cereal aid, which was set in 1974 and has never been met, but there was a consensus that the new estimate provided “a useful indicator” of needs in 1985.
As regards the IEFR, cereal contributions to the reserve dropped in 1982 by 40 thousand tons. So far only 365 thousand tons have been pledged for 1983 (I do not know whether the figure was increased since this statement was prepared, Mr. Ingram will tell you) and 177 thousand tons for 1984. Moreover, the number of donors has fallen from 20 in 1980 to 18 in 1982 and so far only 15 have announced their contributions for 1983.
As I said earlier, this 500 000 ton reserve is ultimately financed by a very small number — 15 to 18 — of countries, which is really unfortunate, A higher number would be desirable, for there are still other countries which could provide aid and I hope that their number will increase.
It is therefore evident that the resources of the IEFR are still unpredictable, despite the new procedures adopted for pledging. I hope that the next Pledging Conference will meet the expectations of those who supported the new procedures. In any case, in my opinion the problem of strengthening the reserve must be solved,
Mr. Chairman, I turn now to the meeting of the Committee on Agriculture which preceded the meetings of CFS and CFAO One of its main items was the Summary Programme of Work and Budget. I will deal with this subject shortly, but I am glad to report that COAG supported the main priorities in the Summary Programme of Work and Budget and the allocations for them.
The separate COAG papers on selected subjects were also well received and the comments of the Committee will guide our work in the future.
As was expected, there was one, and only one agenda item which raised major problems, I refer to the drafting of a Convention on plant resources and the establishment of an International Bank for Plant Genetic Resources. There were some fairly sharp differences on this issue and it was not without difficulty that the Committee reached the only conclusion that was probably possible in the circumstances, namely, they requested me to call together a selective, representative Working Group of Governments under Article VI,5 of the Constitution and by virtue of the power conferred upon me by Article VI, 6.
The Working Group met during the entire morning last Friday and I think we reached a consensus on the nature of the report I should present to the Council in November (a consensus on the content of the report but not on its conclusions). I have asked all the members of the Working Group who wished to do so to send me their written comments and ideas on the plan of work I outlined and which it seemed to me was accepted by the persons present at that meeting. In any case, it is a report of the Director—General, and the Working Group is a group which should advise the Director—General, I shall present the report on my own responsibility.
In this connexion, I should also mention the important problem of fertilizers. In 1981/82, world fertilizer production declined for the first time since 1945. Thus the economic crisis is having a grave impact on the world fertilizer economy, The consumption of fertilizers in Latin America fell sharply, by 15 percent, and also in Asia where I understand that it dropped in India in particular. There was only a nominal increase in consumption, less than half of one percent in Africa. Fertilizer supplies from 1986—87 onwards would be endangered by postponement of investment in new productive capacity of the industry. Without a continuous increase in the production and consumption of fertilizers it will be impossible, in the. present state of technology, to maintain the growth in food supplies needed by a rising population,
In this connexion, I would mention that I recently wrote to the Managing Director of the International Monetary Fund about the report of the last meeting of the Commission on Fertilizers and with specific reference to the possibility of the IMF providing additional support, in collaboration with FAO, for fertilizer procurement to those MSA/LDC countries with critical balance—of--payments difficulties. I will report the outcome in due course. However, as it happens several countries represented here are also members of the IMF and, should the opportunity arise, they could support this proposal which I am happy to endorse, although it is not mine but that of the governments which participated in the meeting of the Commission on Fertilizers held in Rome this year.
I must also refer to the fall in aid to the agriculture of the low—income food— deficit countries. Without adequate aid these nations have little hope of getting their food production strategies on a dynamic upward course. Yet the replenishment of funds of the International Development Association and the International Fund for Agricultural Development have encountered grave obstacles. Suddenly the future flow of multilateral investment funds on concessional terms seems threatened, As you know, commitments for the International Development Association have fallen by 30 percent in the past two years. Moreover, the agricultural sector which received over one third of International Bank loans will only obtain 25 percent of such loans. And I must tell you that the IBED and AID are the main financing sources for the agricultural sector. I may also add that the funds for IFAD have decreased in real value.
There is no evidence of a compensating increase in bilateral aid.
On the contrary, we have seen that bilateral aid too has decreased further for the GATT countries. Technical assistance for agriculture, too, has been severaly affected by the shortfall in UNDP resources, and the inadequate funding of FAQ action programmes. Is it not discouraging that the setback in aid comes at a time when in response to strong international pressures, the food—deficit countries are redoubling their efforts to tackle the basic policy problems which account for a large part of their difficulties? Failure by the international community to help now will lead to an increase in the magnitude and severity of the problems that will have to be faced later.
Nevertheless, I am glad to report that our cooperation with the World Bank, IFAD and the Regional Banks is closer than ever. Indeed, the President of the World Bank, Mr. Clausen, was recently in Rome and we had some very friendly and fruitful talks on ways to strengthen our cooperation programme which is already having excellent results
We also remain the principal partner of the UND? in the field of technical cooperation. About 25 percent of the IPFs is still devoted to agriculture, despite UNDP’s resource problems.
It is regrettable that the recent efforts of the Intersessional Committee of the UNDP Governing Council have not resulted in significant additions to UNDP’s current resources nor in agreement on a more secure multi—year funding system.
Nevertheless, our join efforts with UNDP to continue our collaboration, particularly at field level, in the pursuit of common objectives are being enhanced. The Administrator and I have recently agreed on the issue of a second letter, jointly signed by us, to Resident Representatives and FAQ Country Representatives. The letter draws attention basically to the gravity of the world food situation, to the priority assigned to it in the International Development Strategy and by decisions of governments at the highest international levels, and to our improved cooperation at the country level. I think this is important for representatives of Ministries of Agriculture of developing countries because they should find, after the text has been received by the UNDP Representatives, highly favourable conditions for giving higher priority to technical assistance projects in the agricultural sector financed by the UNDP.
Mr. Chairman, I should like to take this opportunity of paying tribute to the untiring efforts of the Administrator of the UNDP, Mr. Bradford Morse, on behalf of the cause of multilateral technical cooperation and for his support to the priority of agriculture in economic and social development.
Mr. Chairman, I will turn now to some of the main items emerging from the reports of the Programme and Finance Committees.
First, I should refer to the financial position of the Organization, in particular, contribution matters, You are well aware of the situation in 1982. I am glad to say that the position for the first half of 1983 has been better, but it is still somewhat unsatisfactory. A number of important Member Nations have paid promptly and in full. Others have paid in part; and some have also made up arrears I should like to congratulate those countries which, in spite of the economic difficulties they are experiencing, have paid up. You will recognize them when you have seen the document on this matter. I repeat, the situation has improved but it is not yet completely satisfactory.
I am still, however, much preoccupied with the problem of arrears, especially for those Member Nations who risk losing their voting rights. A number of them are in that position. I do not however expect to run into a critical liquidity situation in the remainder of the year, but much depends on the intentions of two, or even three of the largest contributors.
Of greatest concern, however, is the deteriorating situation in regard to the immunity of the Organization and the lack of progress regarding Headquarters accommodation. On the latter, there is little concrete progress to report, particularly as regards the plan to build a new wing adjacent to Building C. We have made some slow and painful progress concerning the plan to build 70 rooms on the eighth floor of Building D. We have not yet cleared all the formidable array of planning authority obstacles and we have been advised that it will require one and a half years after final approvals and securing of necessary funding to complete the construction. As regards the plan for a new wing adjacent to the main buildings, it seems that we cannot make progress until the Superintendency of Archaeology has made a report on the site. Last week, I was informed that it needed to do more investigations but had run out of funds for this.
Thus, Mr. Chairman, it is not surprising that the Finance Committee expresses disappointment and frustration about the situation even before this latest development.
In the circumstances, the capacity of the Organization to accommodate its own staff but also that of others in its present premises is already seriously compromised and could be aggravated by future developments. Moreover, our efforts to cut our administrative expenses and improve efficiency even further are limited by our obligations to pay possibly increasing expenses for transport between buildings
On the question of immunity, the situation has deteriorated in that not only the landlords of Building F are pursuing their claims in the courts, but we have also been the victim of judgements in other new cases The Finance Committee had an informal session about accommodation and immunity attended by the new Permanent Representative of Italy, Ambassador Francisci Di Baschi, whom I welcomed here, and by myself. I am grateful for his friendly and constructive attitude, but pending more concrete signs of progress I must confess that I will remain deeply concerned if not frustrated on behalf of all Member Nations, since it is their interests which are at stake.
Mr. Chairman, I will now turn to the main item on your agenda, but only briefly since I will participate fully when you deal with this item on your agenda.
This has been the most difficult to prepare of the Programme and Budgets I have presented so far. As usual, I have had to take account of the fact that the needs for expanded FAO assistance and the continuing imperatuve for FAO programmes to be more effective and responsive are greater than ever, and especially so in the current adverse international economic situation.
It is traditional for most developed Member Nations to demand budgetary restraint, but we are also now witnessing a strengthening of bilateralism versus multilateralism as well as constraints on aid allocations. Moreover, the developing countries are also feeling severely constrained by foreign exchange difficulties and are trying to concentrate their efforts on certain priority sectors and seeking maximum efficiency. Priorities, effectiveness and efficiency are not the monopoly of one group but of us all in common.
I have therefore formulated my proposals to achieve the aims of:
The strategies and priorities for 1984—85 have been guided by the continuous process of consultation which takes place in each biennium in the Conference, Council, Council Committees, Regional Conferences, meetings of our technical bodies, and the recommendations of the United Nations General Assembly, ECOSOC and other organizations with which FAO collaborates,
The priority areas proposed for net increases are described in detail in the document. They range from research and technology development, which lays the groundwork for our technical programmes, through policy analysis and planning, including studies of crucial aspects of agricultural development, such as farming systems and agricultural price policies, to action at the country level through the TCP, our field programmes and investment support work. Fisheries and Forestry receive their share. Particular attention is paid to the problems and requirements of Africa.
However, net increases are not the only indicators of reorientation in the substantive programmes, The shifts in resources in the individual programmes are reported in the Annex to the Summary Programme of Work and Budget as you have requested in the past. They are also tangible evidence of how the Organization will accommodate changing needs and confront new problems
Mr. Chairman, I am glad to note that the Programme and Finance Committees were broadly supportive of the priorities and allocations I proposed. Subject to your views on their reports, I shall pay careful attention to the feasibility of any adjustments of detail in preparation of the final version of the Programme of Work and Budget which you will review next November.
For the current biennium, I had to propose a provision of $114 million, excluding currency adjustment, to meet cost increases. This was 40 percent of the base in 1982—83. As you know, inflation is mainly responsible for these cost increases,, This time for the 1984—85 estimated budget, which is preliminary and provisional at this stage, that item is only 22 percent of the base compared to 40 percent in 1982—1983, Thus it is barely half the percentage of cost increases in the preceding budget. I wish to stress this point because I believe it is significant. The Finance Committee has reviewed both the methodology and the content of the proposed cost increases, and presents to you its positive conclusions thereon.
Judging, however, by current trends in the Host Country, the estimates for cost increases might already be insufficient. Furthermore, they do not contain any provision for certain increases which might arise in the next biennium, in particular any proposals which the International Civil Service Commission might make for an increase in the General Service salary scale as a result of the forthcoming survey to be conducted by them; the costs of our accommodation may also be higher than estimated. In other words, under Italian legislation there might be a rent increase. I reserve the right, therefore, to propose changes in the full Programme of Work and Budget if necessary. I would naturally hope that the cost increases could be lower, but they may have to be higher.
Having said that, I want to stress most emphatically that my colleagues and I have made every effort to achieve a consensus on the Programme of Work and Budget in the forthcoming Conference. I do sincerely hope that this will be possible. I would like to think that it could be achieved here in the Council at this session, so that the Conference could concentrate on other matters of policy and substance rather than budget problems. I am aware that this may not be possible for some of you, Nevertheless, I hope that the Council will give a rather clear and positive signal in whatever it says in its Report for my preparation of the full Programme of Work and Budget.
The Programme of Work and Budget is extremely important. It provides the basis on which this Organization will carry out its role and functions and serve its Member Nations for the next two years in the struggle against poverty and hunger.
In this, I shall strive always to strengthen our cooperation with all other concerned institutions. The role and duties of FAO are however comprehensive and paramount, They cover all fields of agricultural, food and rural development and all means of action, policy, planning, information, advice, regulation, and operations, There are no artificial constraints on the recommendations which its Governing Bodies can make to others concerning these matters nor on its decisions concerning the recommendations of others. It is my bounden duty, which I will faithfully carry out, to defend and maintain as and where necessary the scope and effectiveness of FAO’s role and functions.
In this, the support of our Member Nations is essential Without this support, the Organization cannot make its full potential contribution to the solution of the greatest challenge of our times, The problem of world hunger is not a short—term problem which can he cured by a few days’ treatment, It calls for the sustained and devoted efforts of all men everywhere in the age—old and unremitting battle against the ravages of drought, pestilence, and deprivation, against poverty and for better social justice; they will have to struggle to achieve the objectives enshrined in our Constitution, namely raising levels of nutrition and standards of living, bettering the condition of rural populations, and thus contributing toward an expanding world economy and ensuring humanity’s freedom from hunger.
I know of no nobler or more compelling aim. While we deal with our mundane daily work problems, let us not lose sight of this faith and this vision. Let it sustain us through these difficult times and into what we must hope and believe will be a better, brighter future for the people of all nations,
Thank you all,
