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Current World Food Situation 1

11. The Council reviewed the global and regional food situation on the basis of the report Current World Food Situation, and generally agreed with the assessments made and the conclusions reached. It recommended that at future sessions of the Council, this item should be the first substantive item for discussion as in the past. It was also suggested that, if possible, this item should be considered together with the report of the Committee on World Food Security (CFS).

12. The Council underlined the disquieting features of the current food situation. Production of staple foods had fallen below aggregate consumption for the second consecutive year and in per caput terms it was only 1 percent more in 1988 than it had been at the beginning of the decade. World carry-over stocks of cereals were expected to be drawn down by the largest recorded year-to-year amount in 1988/89 and would be barely at the minimum level that FAO considers necessary to safeguard world food security. Prices of cereals had risen significantly on international markets, creating problems for financing imports for low-income food-deficit countries, particularly those with severe debt servicing difficulties, and jeopardising the access to food of vulnerable groups of their populations. Such problems were exacerbated by the decline in the volume of food aid which had fallen to its lowest level in about six years. The Council noted and supported the appeal by Peru to donors to provide 160 000 tons of cereals as emergency food aid during the second half of 1989 to meet urgent needs of its people affected by food shortages.

13. The Council concluded that the size, composition and distribution of cereal production in 1989, would be of particular significance for global food security in the coming year. Developments in the situation since the Fourteenth Session of the Committee on World Food Security in April 1989 tended to confirm the assessment made then: that cereal production was expected to increase in 1989 compared to the depressed level of 1988 but that production would be insufficient to replenish stocks and restore global consumption to its trend level. The point was made that higher prices of cereals could have a positive effect on food production.

14. The Council welcomed the increase in food production in 1988 in those developing regions that had experienced a decline in 1987. It regretted, however, that per caput food production remained below its average levels of 1979-81 in both Africa and the Near East. It expressed concern that in Africa, per caput food production was 7 percent lower than in 1979-81 and that about one half of the countries in the region had recorded declines. Food production increases also remained far short of those needed to satisfy nutritional requirements in many developing countries.

15. The Council noted with concern that little progress in terms of per caput food production had been achieved in Latin America and the Caribbean in the 1980s. It underlined the adverse effects of high levels of external debt on the development process and the cost, in the short-term, of structural adjustment efforts on agricultural and rural development in many countries in this and other affected regions. Stressing the need for giving higher priority to food and agricultural production in the developing countries, the Council urged that the international community should redouble its efforts to accelerate the development of the food and agriculture sector both by reversing the outflow of resources from developing to developed countries and by creating a global economic environment more conducive to growth.

16. The Council noted that resource flows devoted to food production (the narrow definition of agriculture) had declined in 1987. For 1988 it was expected that changes in multilateral concessional and non-concessional commitments would be largely mutually offsetting, leading to little overall growth in commitments. It noted with satisfaction, however, that Africa's share of official commitments to agriculture (OCA) had recently increased, in response to the call made for additional resource flows to Africa in the United Nations Programme of Action for Africa's Economic Recovery and Development 1986-1990 (UN-PAAERD). It nevertheless stressed the need for continued priority attention to that region.

17. The Council noted the buoyant growth in world agricultural trade in both 1986 and 1987, in the context of an overall surge in global merchandise trade in those years. Growth in exports of forestry and fishery products had been particularly vigorous with developing countries fully sharing in this expansion. However, agricultural export earnings of the developing countries had hardly expanded in recent years. It, therefore, welcomed the progress achieved at the meeting of the Trade Negotiations Committee in April 1989 in the Uruguay Round of Multilateral Trade Negotiations (MTN) which provided the opportunity to improve the agricultural trading environment.

18. As regards food availability and nutrition, the Council welcomed the evidence of some improvement in average nutrition levels in some regions during the decade. However, it noted with concern the significant deceleration in the growth of dietary energy supplies (DES) in all developing regions except the Near East and the Asian Centrally Planned Economies during the 1980s.

Report of the Fourteenth Session of the Committee on World Food Security (Rome, 3-7 April 1989)2

19. The Council considered the report of the Fourteenth Session of the Committee on World Food Security and endorsed its conclusions and recommendations.

20. The Council reaffirmed the Committee's concern at the precariousness of the world food security situation. It noted that following the worst drought in half a century in the United States of America and Canada and poor harvests in a number of other countries, world cereal stocks had been drawn down considerably and would be barely at a level considered necessary to safeguard world food security in 1989/90. It was also pointed out that the measures adopted by some countries to reduce their surpluses had also contributed to this situation. The Council further noted with concern that because of the rise in international cereal prices, particularly of wheat and maize, the cost of cereal imports for developing countries was estimated by FAO to increase by about US$5 000 million (37 percent) while food aid shipments were expected to decline by about 25 percent to 9.7 million tons.

21. The Council agreed that in order to restore consumption to trend and replenish stocks at a reasonable level, there was a need to increase production in 1989 and beyond, where this was economically sound. However, the Council recognized that the required expansion in output should be undertaken with caution and be finely balanced so that on the one hand the risk of supply shortages was averted and, on the other hand, a return to a situation of surpluses and depressed markets was avoided.

.22. The Council also stressed that there was a need for concerted action by the major cereal producing countries to ensure that their stock policies took into account the needs of world food security. It was pointed out that the concentration of excessive and costly stocks in a few countries had resulted in these countries bearing a disproportionate share of the responsibility for world food security. At the same time it had made world food security too dependent on the policies of those countries. The Council therefore stressed the need to achieve a more equitable distribution of global cereal stocks, by every country making efforts to establish adequate stocks, as well as the creation of regional reserves.

23. The Council emphasized that, in order to achieve food security on a firm footing, it was necessary to accelerate food production in low-income, food-deficit countries. In this context it stressed the importance of policies that are conducive to the growth of the agricultural sector, including inter alia policies for providing incentives and inputs and strengthening infrastructures and institutions. It stressed that while the primary responsibility for increasing food production and achieving national food security rested with the developing countries themselves, the international community should support their efforts through the provision of adequate technical and financial assistance.

24. The Council also stressed the important role of women, particularly young rural women, in food security in developing countries and agreed with the Committee that the Secretariat should carry out a study on this subject in compliance with Council Resolution 194 for consideration by the Committee at its next session.

25. The Council expressed its support to FAO's Food Security Assistance Scheme (FSAS) and stressed that this Scheme should be expanded and re-oriented to help interested developing countries in achieving food security in its broader sense through implementation of field programmes and projects fully involving both recipient countries, donors, the World Bank, other multilateral financial institutions and the World Food Programme (WFP). The Council noted with interest the first steps taken to expand the mandate of the FSAS with a view to preparing comprehensive and long-term food security policies and programmes, in line with the broadened concept of food security, for interested developing countries in collaboration with them and donors. It requested the Secretariat to report to the next session of the Committee on World Food Security on progress in the implementation of this broader mandate and in particular on operational plans prepared between the above-mentioned partners.

26. The Council invited food aid donors to make all efforts to maintain food aid shipments to both low-income and other food-deficit countries. Several members urged increasing the resources and creating a standby reserve for the International Emergency Food Reserve (IEFR). In this context, some members recalled the recent decision of the Committee on Food Aid Policies and

Programmes to re-structure the IEFR so as to place its resources for emergency needs on a more stable and regular footing with a view to producing over time a higher level of resources. The Council urged donors and the World Food Programme to make further use of surpluses produced in developing countries, through triangular transactions, swap arrangements and local purchases.

27. The Council stressed the importance of the Uruguay Round of Multilateral Trade Negotiations in the General Agreement on Tariffs and Trade (GATT) to reduce protectionism and thus foster the liberalization of trade in agricultural commodities (including tropical products), especially those exported by developing countries. It noted with satisfaction the positive outcome of the meeting of the Trade Negotiations Committee of the Uruguay Round held in April 1989, and expressed it's hope that this would be followed by concrete steps towards successful negotiations. It stressed that trade liberalization would, in the long run, benefit both developed and developing countries. It was suggested that the Council might at a future session have elements before it which would enable it to formulate recommendations concerning compensatory measures for possible increases in the food import bills of developing countries following trade liberalization.

28. The Council recognized that the external debt problem acted as a severe constraint on food security in many developing countries by diverting resources away from investment in agriculture and limiting developing countries' capacities to import food. It urged that, following recent initiatives, concrete steps be taken in appropriate fora to overcome the debt problem of developing countries.

29. The Council stressed the importance of regional and sub-regional cooperation among developing countries to strengthen their food security and recommended that FAO continue to support regional and,sub-regional cooperative activities.

30. The Council noted the potential importance of wheatless bread developed by FAO which would permit substitution of locally-produced cereals for imported wheat in breadmaking. It also recognized the importance of promoting traditional forms of using locally-produced cereals which play a central role in the diets of developing countries.

31. In view of the present fragile food security situation and the continuing adverse external environment facing many developing countries, the Council felt that there was a need for concrete action to safeguard world food security. A number of members stressed the importance of the World Food Security Compact and urged member countries to adhere to it. Reference was also made to the Cairo Declaration adopted by the World Food Council in May 1989, which contained important guidelines for action to eradicate hunger and malnutrition.

32. Many members expressed great concern about the difficult financial situation faced by FAO, which had forced it to curtail programmes, including programmes of fundamental importance to Member Nations, when much more needed to be accomplished to enhance food security and alleviate poverty and hunger. The Council reiterated its appeal to all Member Nations with outstanding contributions and particularly to those which are in arrears to pay their obligations promptly and in full.

33. The Council, noted that full assessment of the effects of structural adjustment programmes was limited by data and methodological problems. While recognizing the potential advantages of these programmes for agricultural production it expressed great concern about the experience to date with adjustment programmes in that, in the short term, they often resulted in a sharp fall in the real purchasing power of the poor and limited their ability to purchase food and other essential items. It stressed that the negative effects on the poor were often certain and immediate, whereas positive effects were uncertain and had long gestation periods. A number of members from developing countries drew attention to the origins of the economic crisis many of them faced, inter alia the constraints of repayment and servicing large external debts and the adverse effects on their food security. The Council stressed the importance of including social aspects in the design and implementation of adjustment programmes, and of pursuing coherence in the policy advice provided by international financial institutions and specialized agencies.

34. The Council recognized that adjustment programmes should respect national sovereignty and that a prerequisite for successful adjustment efforts was a high degree of commitment and involvement of governments in the formulation of adjustment programmes from their inception, as well as in the dialogue between the beneficiary governments and external assistance sources. : The Council agreed that there was a need for greater collaboration between the World Bank, the International Monetary Fund (IMF) and FAO in order to safeguard food security concerns in the context of structural adjustment.

35. The Council while recognizing that FAO should play a larger role in the stabilization and structural adjustment processes recommended that interested governments and international financial institutions make increased use of FAO's technical expertise in assisting them in the design and implementation of adjustment processes. It also supported specific areas where FAO's policy-related technical assistance could be of particular value, inter alia, assisting in:

(a) reforming or building-up of institutions in the food and agricultural sector and in training of local staff;

(b) undertaking monitoring and evaluation studies, including nutritional surveillance studies to assess the impact of adjustment;

(c) establishing appropriate relationships between State marketing agencies and the private sector, as well as the role of cooperatives in the production and marketing of agricultural commodities;

(d) overcoming bottlenecks in the marketing infrastructure, including credit, storage, handling and distribution facilities;

(e) designing appropriate investment strategies and implementing incentive pricing policies for food and export crops, given internal physical and institutional bottlenecks, resource limitations, the need to keep consumer prices at reasonable levels, and existing distortions in world markets;

(f) designing special nutritional intervention schemes and employment creation activities required to mitigate short-term negative effects of adjustment while ensuring that such schemes do not discourage domestic production; and

(g) assessing the effects of macro-economic factors, both domestic and external, on the food and agricultural sectors and particularly on their impact on food security of the poor and vulnerable sections of the population.

36. The Council appreciated the Committee's review of the evolution of India's food security situation and the lessons of wider applicability drawn from it. It valued the examination of case studies of national experiences on policies and programmes to achieve food security and encouraged the Committee to continue undertaking such reviews at future sessions as well.

37. The Council emphasized that internal and external peace was an essential prerequisite for food security to become a reality. It urged that efforts be intensified for peace and detente.

38. The Council reiterated its strong support for the work of the Global Information and Early Warning System (GIEWS), which it considered should continue to be accorded high priority in FAO's programme of work and budget.

39. Some members, while stressing the importance of the work of the Committee, reiterated the view that there was merit in considering the holding of only one session of the Committee in a biennium, leaving it to the discretion of the Director-General to call an additional session at an earlier date if the need arose. Most members felt that the Committee should continue to hold annual sessions. The Council noted the decision of the Committee to hold its Fifteenth Session at FAO Headquarters in Rome during the period March-April 1990. It also noted the Committee's intention to review the question of the frequency of future sessions again, in light of developments in the world food security situation.

1 CL 95/2; CL 95/2 - Corr. 1; CL 95/PV/16; CL 95/PV/18.

2 CL 95/10; CL 95/PV/1; CL 95/PV/2; CL 95/PV/3; CL 95/PV/18.

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