TWENTY-FIFTH FAO REGIONAL
Beirut, Lebanon, 20-24 March 2000
TOWARDS A STRATEGIC FRAMEWORK FOR SUSTAINABLE AGRICULTURAL DEVELOPMENT IN THE NEAR EAST REGION
B. The Implementation of WFS Commitments for Sustainable Agricultural Development
C. Agriculture Sector Role, Structure and Performance
D. Food Security Trends and Policy Issues
E. Food Security Scenarios
F. A Regional Strategic Framework for Sustainable Agricultural Development
G. Conclusion and Recommendation
1. As a follow-up to the World Food Summit (WFS) of 1996, this paper aims to provide an overall evaluation of recent trends in agricultural development in the Near East (NE) Region and suggestions for a strategy for sustainable development in the Region. The document falls in eight sections. The second section discusses the implementation of the WFS commitments for sustainable agricultural development, while the third provides a critical overview of the Region's agricultural resources and their deployment, and the sector's structure, performance, and trends. The fourth evaluates trends in the Region's food security and underlying food policy issues. The fifth section examines scenarios for future food gaps and contingencies, and their strategic implications for various country groups in the region, while the sixth outlines directions as to the necessary strategies and policy actions for sustainable agricultural development. The seventh section is devoted to the role of Governments at national and regional levels, while the last section is devoted to the role of FAO.
2. Exploring the food security situation in the year 2010 for 20 NE countries, for which FAO projections are available, indicates significant variations among sub-regions and between countries in the same sub-region. However, with the exception of Turkey, all sub-regions are expected to have relatively large food deficits. The Region's food gap is expected to increase at an annual average rate of 2.9percent between 1995 and 2010. The final stage of the GATT Agreement and the establishment of the WTO is expected to result in higher grain prices and lower foreign food aid. This would make the estimated food deficits in the year 2010 even worse unless mitigating factors are in place.
3. Nine elements are suggested when formulating an agricultural development strategic framework to face this situation. In addition to developing rainfed and irrigated areas, these elements include: a scheme for stocking and allocating food grains under unstable production conditions, rationalization of import-export policies, promoting intra-regional cooperation, eliminating market distortions, developing rural non-farm activities, and targeting rural development projects to specific segments of the rural poor.
4. The study suggests that Member Countries consider at the national level to (i) enhance efforts to meet the seven commitments made at the 1996 WFS and set up reasonable indicators to measure progress in this direction; (ii) enhance the country food supply capacity by reducing small farmer risk in rainfed areas, and reorienting land use in irrigated lands; (iii) follow a comprehensive and holistic approach for designing a national strategic framework including the appropriate "agricultural development mix" combining research, extension, incentive pricing for both input and output, and adequate investment; (iv) continue the policy and institutional reforms at the macroeconomic and sector levels to ensure the creation of an enabling socio-economic environment to increasing production, productivity, and efficient resource mobilization; and (v) support the establishment of the Near East and North Africa Regional Network for Agricultural Policies (NENARNAP) through active participation in its activities. At the Regional level, the study suggests that countries of the Region consider: (i) match, at the country and sub-Regional levels, food surplus and deficits, and establish a "clearing house" for exchange; (ii) establish a regional market information system to stimulate intra-regional trade; (iii) assess the possibility of establishing a mechanism for joint procurement, marketing and collective bargaining with foreign trade blocks to be consistent with trade liberalization policies; (iv) provide an adequate mechanism for technical cooperation in agricultural research and other aspects of agricultural development; (v) foster a group action to confront environmental threats, such as desertification, pollution, plant and animal diseases and others, that cut across national borders; and (vi) exchange experiences regarding the formulation and implementation of national development strategies, plans and policies.
5. The study suggests that FAO, within its financial and manpower resource limitations, could: (i) continue to support Member Countries in the Region in their efforts to develop long term strategies for sustainable agricultural development at the country and regiona/sub-regional levels; (ii) assist countries in monitoring global developments, particularly resulting from the WTO, and assess their impact; (iii) continue its efforts to support the establishment of the Near East and North Africa Network for Agricultural Policies; (iv) assist in the development of special strategies for low-income food-deficit countries threatened by higher grain prices and falling foreign exchange earnings; (v) continue its support to capacity building for policy analysts and planners at the country and regional/sub-regional levels; (vi) continue its efforts for enhancing regional cooperation through providing special training on collective bargaining, negotiations, joint marketing and other developmental issues; and (vii) continue assisting NE countries in the preparation for the next round of negotiations within the WTO.
1. This document aims to provide an overall evaluation of recent trends in agricultural development in the Near East (NE) Region and suggestions for a strategic framework for sustainable development in the Region. It discusses briefly the implementation of the World Food Summit (WFS) commitments for sustainable agricultural development in the NE, provides a critical overview of the Region's agricultural resources and their deployment, and analyses the sector structure and performance trends. It, then, evaluates trends in the Region's food security and the underlying food policy issues, identifies scenarios for future food gaps and contingencies, and discusses their strategic implications for various country groups. The document concludes with outlining directions as to the necessary strategies and policy actions for sustainable agricultural development. The document benefited from the national agricultural development strategies till the year 2010 prepared for most of the countries of the Region, and the draft regional strategies and programmes for food security prepared by FAO as a follow up to the WFS.
2. With only few years elapsing since the 1996 WFS, it might be too early to gauge the extent to which Near East countries have implemented the Plan of Action and met their commitments. The implementation of these commitments seems to be affected by natural and political disruptions. Wars and civil strives continue to deepen the conflict-driven nature of food insecurity in the Region. These disruptions have plagued several countries in the Region and had serious negative effects on access to food, particularly in remote areas such as Southern Sudan, Afghanistan, and Northern Iraq, where it has been very difficult for emergency supplies to reach. Problems of targeting assistance to vulnerable groups such as the rural poor and women-headed families continued to confront NE countries. On the macroeconomic front, the significant drop in oil prices affected oil-producing countries and those relying heavily on workers' remittances. Obviously, that exogenous force has been a significant limitation on investment and sustainability of agricultural development. However, the sharp and steady increase in oil prices starting in early 1999 is expected to compensate for the earlier losses in income.
3. The Region has historically two types of emergencies that warrant food aid: civil strife and natural disasters (earthquakes, flooding, and drought). Greater preparedness is needed to prevent crises from becoming unmanageable, including the development of local institutional capacity to effectively respond to the crisis.
4. To foster sustainable development, several governments have undertaken major reform programmes. However, natural resource degradations and downfalls in financial resources earmarked to agricultural development continue to hamper these reform programmes.
5. Political and social factors continue to affect participatory structures in some NE countries. Poverty continues to be a formidable barrier to participation and empowerment even in some high and middle-income countries, where many poverty pockets have persisted particularly in remote rural areas and city slums. In some countries, women represent a large vulnerable poverty group and still face barriers to earning income, acquiring education, sharing in decision-making and gaining political representations.
6. Bias against agriculture in terms of public investments continues to be apparent in some NE countries. Low rates of aggregate investment, limited domestic saving capacity and foreign exchange resources aggravate the problem. Recent examples have shown that increased investment in agricultural infrastructure paid off only when fostered by greater focus on research and extension as well as favorable producer prices.
7. Agricultural development and food security could be severely affected by adverse forces cutting across countries such as deforestation and environmental degradation. Counteracting these forces requires Regional cooperation. Regional cooperation is also needed to intensify trade and the exchange of skills and know-how. A new direction in international cooperation with a special focus on research and biotechnology transfer is highly needed.
8. Scarcity of water constitutes the most formidable challenge to agriculture in almost all countries of the Region. Out of twenty-nine countries, ten have annual per capita availability of renewable water supplies below the world average of around 5,000 m3, and less than 1,500 m3 in another ten countries. The present over use and degradation of water resources and growing competition from non-agriculture water users are expected to influence the cost and availability of water for food production. The World Bank reports that, by year 2025, annual renewable water supplies in almost all countries of the Region will fall below 700 m3 per capita. Despite substantial scope for greater efficiency in water use in the Region, there is simply not enough water for expanding irrigated agriculture to meet the rising food needs in the Region.
9. Because of the low precipitation and the consequent low biological productivity over much of the range-lands, nomadism has been a traditional way of life in several countries, with declining productivity in most of the range-lands. Disappearance of native vegetation has been reported for some countries of the Region such as Iraq, Syria, and Yemen.
10. In several countries of the Region, the traditional nomadic pastoralism has been replaced by modern mechanized farming. The traditional livestock sector, however, remains important in some countries, while others, such as the Gulf States, are supporting nomadic and sedentary small scale producers through subsidies. Some countries have embarked on range-lands improvement programs through range cooperatives and range-lands use regulations.
11. Agriculture plays an important role in the economies of most NE countries. However, this importance varies considerably among different countries. Contribution of agricultural value added to aggregate GDP varies between 1 percent (Bahrain and Qatar) and 65 percent (Somalia).
12. Agriculture is also an important generator of employment in several countries of the Region. The percentage of agricultural labor ranging from 1 to 11 in the Gulf States, Libya and Iraq, through about 33 in economies such as in Egypt, Turkey, Morocco, Syria and Iran and to 56 to 74 in countries such as Somalia, Sudan, Yemen, and Afghanistan.
13. The sector has a significant relation to foreign trade in some countries of the Region, both as a generator of foreign exchange and a satisfier of domestic food demand. Examples include Sudan, Afghanistan, and Kyrgyzstan, where percent agricultural exports to total merchandise exports amounted to 93percent, 62percent and 31 percent, respectively in 1996. However, the opposite is true for some other countries such as Libya and Saudi Arabia, where it is 0.3 and 0.8 percent, respectively.
14. In contrast, the ratio of agricultural imports to total imports confirms the Region's dependence on food imports. Agricultural imports constitute an unweighted average of around one fourth of the Region's total merchandise imports. However, the actual import dependence varies greatly from less than 10 percent in Bahrain and UAE to more than 40 percent in Mauritania, Iraq and Afghanistan. Similarly, the agricultural trade balance (total agriculture exports as a percent of total agricultural imports) ranges from very low levels in oil-rich countries such as Algeria, Libya, Qatar and Saudi Arabia, to relatively high levels in Sudan, Morocco, Afghanistan and Syria.
15. Most NE countries have recorded significant expansion in agricultural production over the past decade, with the major exceptions being Iraq, Somalia, Afghanistan and few other countries affected by adverse political events.
16. When translated into per capita terms, agricultural performance in the Region over the last decade becomes less significant. Iran and Egypt achieved clear and constant gains in per capita production, while the per capita agricultural production in Syria increased since 1990. Similar trends have been observed in the Magreb countries, particularly in Tunisia.
17. With the exception of Turkey, all NE countries are dependent on food imports at varying degrees. For the Region as a whole, imports of cereals as a proportion of total annual consumption, expanded from 15 percent in 1970-75 to 33 percent in 1980-85 and dropped only slightly to 30 percent in 1990-96. Such dependence varies considerably among countries. In recent years, for instance, Egypt, Algeria and Yemen imported about 55percent, 70percent and 85percent of their requirements of wheat flour. Such dependence has been of concern to policy makers in most countries of the Region, economically and politically.
(i) Disparities in dependence on food imports
18. Low-income food-deficit countries, such as Somalia, Sudan, Mauritania, Afghanistan, Yemen and Pakistan differ in their dependence on external food supplies, with self-sufficiency ratios (SSRs) ranging from 39 percent for Mauritania to 92 percent for Pakistan. The effect of their food imports on their very limited foreign exchange resources is serious.
19. SSRs for middle-income food-deficit countries, including Egypt, Iraq, Jordan, Lebanon, Syria, Tunisia and Iran varies from 49 percent for Jordan to 92 percent for Morocco. They are confronted with higher per capita consumption and shift in their diet due to rising incomes and urbanization.
20. High-income food-deficit countries, comprising most of the oil-producing countries, exhibit very low food SSRs, ranging form 39 percent for Libya, to 49 percent for Algeria, with lower percentages for most of the Gulf States. While food imports do not presently constitute a serious concern in these countries, efforts for increasing SSRs are in progress.
21. SSRs for middle-income food-surplus countries including Turkey and some CIS countries are quite high. However, accelerating food production is necessary for sustaining these high ratios.
(ii) Trends in food production
22. With the exception of few NE countries, food production growth rates are generally lower than population growth rates. This is evidenced by the negative per capita food production growth rates for 15 countries in the Region during the period 1991-96.
23. Wheat, which is mostly grown in Turkey, Pakistan, Egypt, Iran, Morocco and Saudi Arabia, represents more than 50 percent of cereal production, while coarse grains account for 33 percent. Rice accounts for 10 percent with more than three-quarters of its output coming from Pakistan and Egypt.
(iii) Trends in food demand
24. The long-term trend for total demand for food products (food demand added to changes in stock) shows a steady annual growth rate of 3.2 percent during the period 1980-1996, which is not very far from the population growth rate during that period. Population growth is therefore the major determinant of food demand. An alarming trend is the increasing dependency on outside sources for food in rural areas. This is partly explained by the shift of agricultural production to higher value cash crops. The annual growth rate in the consumption of cereals averaged about 3 percent in the 1980's and 3.5 percent in the 1990's. Coarse grains are predominantly and increasingly used as animal feed. Increases are even more dramatic in the consumption of livestock products, with meat per capita consumption increasing form about 15 kg in the 1970's to about 30 kg in the early 1990's.
25. An important facet of food demand is the nutritional status in the Region. UN reports indicate that the percentage of underweight children in NE countries decreased from 15 percent in the 1980's to less than 13 percent in the 1990's. Infant mortality rates also fell considerably in the 1990's. The number of undernourished stood at 25.7 million people or 12 percent of the population in 1995/1997. While most of the countries in the Region have low levels of undernutrition with less than 4 percent of their population being undernourished, the problem of undernourishment is concentrated in Afghanistan (with 12.7 million people or 62 percent of the population); Yemen (5.7 million people or 37 percent of the population) fand Iraq (3.2 million people or 15 percent of the population).
26. By the year 2000, Middle Asia is estimated to account for more than 40 percent of the Region's population, and for only 19 percent of the food deficit within the Region. At the other extreme, the Arabian Peninsula is expected to constitute only 8.5 percent of the population but due to higher income levels, it accounts for almost 22 percent of the Region's food deficit.
27. While income and population increases are the traditional factors behind the increase in food demand, urbanization emerged as another important factor. Changing consumption patterns adds to the complexity of rising food demand. Generally, wheat and rice are increasingly replacing coarse grains in domestic human consumption. Inappropriate price and foreign exchange policies also contribute to the problem by making such imported food relatively cheap.
(iv) Major policy issues
28. Food supply issues include ecological threats of the increased use of chemicals in food production, desertification, salinity and rising water tables, competition of livestock feed with food production, inequitable food distribution, rising inflation rates and market distortions.
29. Food demand issues include per capita income growth, population growth, urbanization, urbanization of rural diets, shifting of consumption patterns to better quality and higher protein diets, the unbalanced diet ( sufficient in quantity and poor in quality), the co-existence of under- as well as over-nutrition, the prevalence of micro nutrient deficiencies.
30. Foremost among the above issues are the intra- and inter- annual crop production instability. This is particularly felt under rainfed conditions exhibiting sharp variation in yields in many countries of the NE Region. While irrigation appears to be the answer to this problem, expanding irrigated areas requires huge investment and is constrained by the availability of surface and underground water. Even improving water management efficiency to increase water availability is costly and requires additional investment. Using buffer (reserve) stocks to stabilize food supply and flow to domestic markets is among options to be considered.
31. Closely related to production stability is price stability. This is an issue of special concern because of its social and political implications. Issues involved include the impact of the removal of food subsidies, privatization of distribution systems and trade channels, market distortions and manipulation. Buffer stocks managed by the government could play a balancing role when markets fluctuate beyond reasonable ranges.
32. Issues related to food accessibility include major disparities in income distribution, lack of sufficient infrastructure in remote areas, chronic under-nutrition where niches of the so-called "ultra-poor" prevail within poverty segments, identification of right target groups in devising appropriate forms of food assistance, distinguishing between physical and economic access to food in poverty alleviation programs, replacement of consumer price support by targeted income support, targeting assistance to rural women, and the existence of refugees and displaced people.
33. This section explores the food security situation in the year 2010 for a group of twenty NE countries1 for which FAO projections are available. The quantitative estimates given hereunder should be considered as only orders of magnitude, since the long-term time horizon is clouded with uncertainties surrounding the course of events at the national, Regional, and global levels. The implication of such scenarios to food insecure and undernourished segments of the population need further investigation.
34. Two main determinants of the long-term outlook of the food gap are food production and food total demand. Food total demand projections are based on assumptions related to the behavior of three basic variables: per capita income growth rate, population growth rate, and income elasticity of food demand. Production estimates are obtained through analysis of expert judgement concerning future outlook of cropping patterns, yields and harvested areas in each country of the Region. The deficit (demand - production) is expected to reach $65 billion for the Region, reflecting an annual growth rate of 2.9 percent between 1995 and 2010. With the exception of Turkey, all sub-Regions would have relatively large food deficits, ranging between $ 16 billion for North-East Africa and $28 billion for the Maghreb sub-Region.
35. Contributions of the sub-Regions to the food gap, relative to their population sizes differ considerably. Middle Asia with 45 percent of the Region's population would account only for 22 per cent of the food gap. On the other hand, the Arabian Peninsula with only 7.5 percent of the Region's population would be responsible for 24 percent of that gap.
36. Projected food self-sufficiency ratios in the year 2010 are expected to be less than 60 percent for Libya, Saudi Arabia, Algeria, Mauritania, Yemen, Iraq, and Jordan; between 60 percent and 80 percent for Tunisia, Egypt, Syria, Lebanon and Iran; and more than 80 percent for Morocco, Turkey, Somalia, Sudan, Afghanistan, and Pakistan.
37. The long-term estimates given by the quantitative scenarios should be tempered by considering the probable impact of two major global developments on regional food security, namely, the establishment of the World Trade Organization (WTO) and the future of food aid. This is referred to as the Contingency Scenarios.
38. Objectives of the World Trade Organization with respect to agriculture are "to achieve greater liberalization of trade in Agriculture and bring all measures affecting import access and export competition under strengthened and more operationally-effective GATT rules and disciplines".
39. The purpose of the Uruguay Round Agreement on Agriculture is to curb the policies that have created distortions in agricultural production and trade at the world level. These policies may be divided into the following three categories: (i) market access restrictions; (ii) domestic price support, and (iii) export subsidies. Changes in the external policy environment, triggered by the implementation of these three major policies, would influence the food security system in most NE countries through influencing the foreign exchange earnings, price of food imports and market stability, as well as availability of food assistance.
40. Influencing the foreign exchange earning would affect import capacity. Potential foreign exchange earnings could be increased as a result of the improvements in market access, although the effect could be limited in the short to medium term, unless there is an effective supply response. On the other hand, the focus of the Uruguay Round Agreement on Agriculture (UR-AoA) is on temperate products such as cereals, produced mainly in developed countries. Thus, there is a likely increase in cereal prices which would be of negative impact for the NE. The loss in preferential margins would also have a negative effect on several NE countries. Overall, their ability to make adequate gains via export earnings to meet the increase in food import bills might be limited.
41. As previously indicated, the 2010 estimates show a projected 54 percent increase in the Region's food import bill. It is difficult to say how the UR would account for much of that increase, however, prevailing judgements estimate it to be 10 to 15 percent. This would be mainly due to domestic policy reforms in developed countries that reduce their production of major agricultural food commodities and consequently put upward pressure on food prices. The implication of the trade liberalization on reducing undernourishment and food insecurity needs further assessment.
42. The reduction in export subsidies and other forms of price support in developed countries is likely to reduce the level of cereal stocks which were used in many cases to fulfill food aid requirements.
43. The NE countries are generally large recipients of food aid, which constitutes a significant share of their food imports, particularly cereals. Food aid flows would obviously be affected by policy changes in the donor countries in response to domestic and global production and trade scene. The flow has been on the decline since 1993 and presently stands at 8 million tons, nearly 55 percent less than the peak levels of 1993. Nevertheless, for several NE countries such as Yemen, Iraq, and Afghanistan; food aid remains an important source of cereal supplies.
44. There is no reason to believe that the performance of food production in NE countries will increase drastically in the short-to-medium term. Projections presented above indicate that the long-term import requirements would increase considerably and the ability of most of these countries is indeed uncertain. However, those needs would depend ultimately on possibilities for adjustment in consumption and on food production responding to higher prices resulting from changes in the global environment. In effect, higher prices would also be responsible for potentially higher supply response, thus offsetting somewhat the higher import bill. The impact of higher prices would depend on the magnitude of the price transmission of the world market to the domestic market, the elasticities of demand and supply and the food self-sufficiency of the country concerned.
45. There is no one simple solution to the problems facing agricultural and rural development in the NE Region. The countries of the NE have similar production patterns and face similar policy and institutional challenges. However, they differ in resource endowment and ability to invest in agriculture and meeting food import requirements. Thus, issues involved are multi-faceted and require a multi-pronged strategy, the elements of which would converge into an inducement pressure mechanism that would produce the desired results. The following ten elements constitute the overall proposed strategic framework. Given the heterogeneity among the countries of the Region in terms of income and resources endowment, these elements coincide with national priorities for most countries of the Region. They should be considered as a strategic package the impact of which would depend on their combined thrust.
h Role of Governments
46. Based on the above discussion, the following recommendations are provided for considerations by Member Governments in the Region at both the national and regional levels.
a) at the national level:
- Enhance efforts to meet the seven commitments made at the 1996 WFS and set up reasonable targets to measure progress in this direction.
- Enhance the country food supply capacity by reducing small farmer risk in rainfed areas, and reorienting land use in irrigated lands.
- Follow a comprehensive and holistic approach for designing a strategic framework including the appropriate "agricultural development mix" combining research, extension, appropriate pricing policies as well as adequate investment.
- Establish a monitoring system to assess the impact of agricultural policy reform and liberalization with special attention to vulnerable groups and the performance of production and marketing agencies in the production and distribution of both inputs and outputs.
- Sharpen targeting of agricultural development projects on special niches of the rural poor, with safeguards against the leaking of benefits to rich farmers.
- Continue the policy and institutional reforms at the macroeconomic and sector levels to ensure the creation of the enabling socio-economic environment to increasing production and proper resource mobilization.
- Support the establishment of the Near East and North Africa Regional Network for Agricultural Policies through active participation in its meetings and activities.
b) at the Regional level:
- Match, at the country and sub-Regional levels, food surplus and deficits, and establish a "clearing house" for exchange.
- Establish a Regional market information system to stimulate intra-Regional trade.
- Assess the possibility for establishing a mechanism for joint procurement, marketing and collective bargaining with foreign trade blocks consistent with the on going trade liberalization policies.
- Provide an adequate mechanism for technical cooperation in agricultural research and exchange of experiences.
- Encourage bilateral and multilateral arrangements for the pooling of resources: with emphasis on capital and labor mobility.
- Foster a group action to confront environmental threats, such as desertification, pollution, plant and animal diseases and others, that cut across national borders.
- Exchange experiences regarding the formulation and implementation of national strategies for agricultural development.
h Role of FAO
47. Within its financial and human resource limitations, FAO will continue its support to Member Countries in the Region in their efforts to develop long term strategies for sustainable agricultural development at the country and regional/sub-regional levels. In particular FAO will:
- Monitor global developments, particularly resulting from the WTO, and assess their impacts on NE countries.
- Continue its efforts to support the establishment of the Near East and North Africa Network for Agricultural Policies (NENARNAP).
- Assist in the development of special strategies for low-income food-deficit countries threatened by higher grain prices and falling foreign exchange earnings.
- Help in the design of an early warning system tailored for the NE Region or its sub-region.
- Continue its support to enhance capacity building of policy analysts and planners at the country and regional levels.
- Continue its efforts for enhancing regional cooperation through providing special training on collective bargaining, negotiations, joint marketing and other developmental issues.
- Continue assisting NE countries in the preparation for the next round of negotiations for the WTO.
- Continue providing policy advice and guidance in assessing implications of the privatization process
- Continue its efforts to establish new channels and methods for rendering assistance to the private sector for ensuring more of its involvement in agricultural development in the Region.
1 Djibouti , Egypt, Jordan, Iran, Iraq, Kyrgyzstan, Lebanon, , Libya , Mauritania, Morocco, Pakistan, Saudi Arabia, Somalia, Sudan, Syria, Tajikistan, Turkey, Tunisia, United Arab Emirates and Yemen.