III. Impact on selected agricultural markets

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Coarse grains
Oils and fats and oilmeals
Milk and milk products
Hides and skins


As previously reported, the overall growth in the production of the selected commodities is projected to decline slightly compared with the 1980s (Tables la to 1g). The decrease in growth rates is greatest in rice, meat other than bovine, dairy products, coffee and cocoa. By contrast some increases are envisaged for tea and bananas. The impact of the Uruguay Round is negligible on world agricultural production.

The growth rate for global consumption of the agricultural commodities covered by this study is also projected to decrease, with the exception of bananas. Allowing for population growth at 1. 7 percent a year, per caput consumption is expected to decrease for dairy products, grains, beef and coffee, while per caput consumption of vegetable oils, some meat, tea, bananas, cocoa and rubber should rise. On balance, the Agreement will slightly slow consumption growth in the Low-Income, Food-Deficit Countries.

The Uruguay Round is not seen as arresting the slowdown in the growth rate of world agricultural trade, despite a positive effect on the growth in trade for rice, fats and oils and bovine meat and to a lesser extent most of the other commodities. It is possible that the commodities not covered by this study, accounting for 41 percent of the total value of agricultural trade, will enjoy greater benefits, including cotton and some horticultural products.

For the developing countries, the import growth rate is expected to decline for cereals, the oilseed sector, dairy, some meat and tropical products. The growth rate of their bovine meat and banana imports are seen as accelerating. By contrast the exports of the developing countries are expected to expand more rapidly than in the eighties for rice, coarse grains, dairy, tea, sugar and bananas. Their slight net surplus in 1987-89 for the commodities studied is unlikely to change by 2000.

For the developed countries, the growth rates of both imports and exports are expected to weaken. In the case of imports, there is expected to be a sharp decrease in growth of virtually all the main temperate zone products but export growth is also expected to fade. Overall the developed countries would remain large net exporters of temperate zone commodities in 2000 but close to balance in the main agricultural commodities covered in this study. In all these commodities, however, some countries will gain and others lose, while each commodity has some particular characteristics that cannot be captured in these overall summary statistics. In what follows, therefore, the detailed analysis of the revised projections to the year 2000 are described together with some observations on the impact of the Uruguay Round which, it is worth emphasizing, is usually rather small compared with all the other changes taking place between the base period and the year 2000.

Table 1a - Growth of Production of Selected Agricultural Commodities, Past and Projected

Table 1b - Growth of Consumption of Selected Agricultural Commodities, Past and Projected

Table 1c - Growth of Imports of Selected Agricultural Commodities, Past and Projected

Table 1d - Growth of Exports of Selected Agricultural Commodities, Past and Projected

Table 1e - World: Base period 1987-89 average and Projections to the year 2000, Base-line and GATT simulation

Table 1f - Developing countries: Base period 1987-89 average and Projections to tile year 2000, Base-line and GATT simulation

Table 1g . Developed countries: Base period 1987-89 average and Projections to the year 2000, Base-line and GATT simulation


Production. Global wheat production is projected to increase by 1.6 percent annually during the 1990s, reaching 631 million tonnes by the year 2000, compared with a volume of 520 million tonnes during the base period (1987-89). However, these projection results indicate somewhat slower growth in production than would have been the case without the Uruguay Round. The global output of wheat is expected to shrink by 2 million tonnes due to the Uruguay Round, which is the net result of an almost 7 million tonne decline in the developed countries and a 5 million tonne gain in the developing countries.

The growth expected among the developing countries largely stems from yield advances, but higher relative wheat prices are also assumed to improve production incentives in many developing countries. In particular, some 80 percent of the increase in the wheat output due to the Uruguay Round is likely to be accounted for by four countries: Argentina, China, India and Pakistan. The gains for Argentina are driven primarily by export demand as other major wheat exporters are expected to reduce their production and cut subsidized exports. The significant gains in outputs for China, India and Pakistan are largely explained by increased producer prices.

At the same time, restrictions on production support and limits on export subsidies under the Uruguay Round are forecast to reduce the output in most developed countries, in particular in the member countries of the EC and the United States, compared to the base projections. By comparison, output will expand in Australia due to higher prices. Wheat production could also increase by over half a million tonnes in the area of the former USSR. One expected result of the Uruguay Round, therefore, is a partial shift in grain production away from some traditional developed producing countries toward developing countries with the overall net effect of somewhat smaller global wheat output in 2000.

Demand. In both projection scenarios, i.e. with and without the impact of the Uruguay Round, wheat consumption is forecast to grow less during the 1990s compared to the previous decade. Rising real wheat prices, assumed to result from the Uruguay Round, are likely to have an additional dampening effect compared to the baseline projection which showed falling real prices. As a result of the Uruguay Round, aggregate utilization of wheat at the global level is expected to shrink by about 2 million tonnes to 630 million tonnes, most of it occurring in the developing countries, largely in the Far East and Latin America. These reductions in consumption are mainly due to widespread increases in domestic prices of wheat. Most of the slowdown is expected in feed use as wheat is expected to become more expensive compared to alternative grains. The growth in the demand for feed use of wheat is also likely to diminish in those countries which have heavily subsidized such use in the past but are not likely to do so during the 1990s, in particular in the area of the former USSR and eastern Europe. By contrast, utilization of wheat as feed is likely to expand in the developed countries, mainly in North America, Oceania and the Republic of South Africa. Growth in food consumption of wheat is also forecast to slow under the Uruguay Round. Although per caput food consumption should continue to increase in the developing countries of Africa under the Uruguay Round, it may show little or no change among other developing regions and the developed countries compared to the baseline projections.

The projection results suggest that income gains due to the Uruguay Round may not be adequate to offset the dampening effects of higher prices on the demand for wheat. In the case of the Far East, for example, lower wheat use is associated with increased consumption of rice, whose domestic price is projected to rise on average by less than one percent compared to almost 4 percent for wheat.

Prices. FAO's World Food Model (WFM) shows that the implementation of the Uruguay Round is projected to raise international wheat prices by 7 percent in real terms by the year 2000, compared with a scenario without the Round when prices would have fallen by 3 percent (Table 2). The impact of the Uruguay Round on wheat prices is more than for most other grains due in part to the greater degree of subsidization of wheat in the past. Regional price changes resulting from the Uruguay Round scenario show that the average domestic prices of wheat are expected to be highest in Latin America, the Far East and Oceania, whereas they would be lower for western Europe and North America, where subsidies were the highest. On the other hand, prices of grains are not likely to change much in the Near East, Africa, eastern Europe and the area of the former USSR.

Trade. The projections of production and consumption for world wheat trade point to slower growth during the 1990s, compared to the previous decade. Global wheat trade by the year 2000 is projected to show little change from the average base period (1987-89) volume of 114 million tonnes. However, this volume would still be considerably above the current annual range of 92-94 million tonnes to which trade had fallen in recent years. The greatest effects are expected for the developed countries, in particular the EC, where, following CAP reform, feed demand is expected to increase, thus reducing export availabilities. In the area of the former USSR and eastern Europe, feed use is likely to be reduced sharply, and thus imports, due to lower livestock numbers.

The effect of the Uruguay Round on trade is likely to be a lower volume of wheat imports of about 3 million tonnes when compared the baseline projections. In particular, some countries of Asia and Latin America are likely to produce more grains for their own requirements, leading to a slow-down of growth in their import demand for wheat. Most of the projected reduction in imports is likely to occur in four developing countries, i.e. Brazil, China, India and Pakistan, mainly due to gains in production. On the other hand, most of the projected rise in imports is likely to be accounted for by the EC, Poland and the Republic of South Africa. Furthermore, the increase in the minimum access volume for wheat by the end of the implementation period amounts to some 300 000 tonnes over the initial quota, or 2 percent, with most of the reported increases scheduled for Canada, Hungary and Japan.

Given the increase in prices assumed under the Uruguay Round, the value of the wheat trade would increase by just under US$ 700 million compared to a projection without the Uruguay Round, despite a rather stable trade volume. The bulk of higher import costs would fall on the developed countries whose import value is likely to increase by just over US$ 700 million. The largest share of the higher import bills is predicted for the EC and South Africa. By contrast, the financial burden of importing wheat could diminish slightly under the Uruguay Round for the developing countries in aggregate since their volume of imports are projected to decline sufficiently to offset the higher prices. By far, the most substantial decline in the import costs of wheat should be in the Far East where production gains and restrained demand should contribute to smaller import requirements. Nevertheless, all other developing regions are expected to face higher import expenditures due to the Uruguay Round, in particular, Africa and the Near East.

Among the major exporters of wheat, shipments are projected to fall markedly from both the EC and the United States (by about 3 million tonnes each), while those from Australia and Argentina would expand. While the commitments to reduce domestic support programmes are not commodity specific, and therefore were not explicitly accounted for in the projections, the commitments to reduce subsidized wheat exports are substantial, amounting to some 19 million tonnes by the end of the implementation period. Total subsidized wheat exports are scheduled to fall from 59 million tonnes in the initial year to 40 million tonnes by 2004 (a drop of 32 percent). Some three-quarters of the volume reductions are accounted for by the three largest exporters, the EC-12 (5.7 million tonnes), the United States (5.7 million tonnes) and Canada (4.7 million tonnes). Other countries making significant subsidy reduction commitments on wheat are Austria, Hungary, the Nordic countries, South Africa and Turkey and, therefore, are also likely to reduce their export volumes in general.

Table 2 - Change in international food prices between 1987-89 and by the year 2000

  Base Run Uruguay Round Effect Totala
Wheat -3 +7 +4
Rice +7 +7 +15
Maize +3 +4 +7
Millet/Sorghum +6 +4 +10
Other Grains -3 +7 +5
Fats and Oils -4 +4 0
Oilmeal Proteins +3 0 +3
Bovine Meat +6 +8 +14
Pigmeat +3 +10 +13
Sheep Meat +13 +10 +24
Poultry +5 +8 +14
Milk +32 +7 +41

a Total does not necessarily equal the sum of the two effects

Conclusions. The overall impact of the Uruguay Round agreement on global production, utilization and trade of wheat in the year 2000 should be fairly modest, although some significant effects are expected in terms of shifts in the location of production, the direction of trade flows and the share in trade volumes. The Uruguay Round projections confirm widely held expectations that wheat production and exports would shift away from countries with high production support and export subsidies towards less-subsidizing producers, including net importing countries. At the same time, smaller export subsidies could lead to increased international wheat prices, which would contribute to dampening demand.

The impact on trade resulting from the Uruguay Round depends to a large extent on the level of export subsidies that are scheduled to be reduced. The smaller trade subsidies are expected to raise international wheat prices which should stimulate production in some countries and, at the same time, dampen domestic demand, thus reducing overall global wheat imports. The degree to which the higher international prices are transmitted to domestic markets, however, will depend on the actual level of tariffs, which could be at or below the bound rates. In the case of wheat, the full effects of the higher world prices are not expected to be felt in many countries because tariffs will still be high. In addition, the relatively small minimum access commitments for wheat are not likely to offset the effects of the higher prices on imports.

The impact of the Uruguay Round on world wheat trade is attenuated by the fact that a number of the major importing countries are not members of the WTO. This group of countries account for some 22 million tonnes, or 22 percent, of recent world imports. These countries, while not contributing to the change in market conditions, are affected by it and it may be expected that several of these will eventually join the WTO.

Table 3: WHEAT - Commodity Balances, 1987-89 Average, 2000 Baseline and 2000 Uruguay Round Scenarios


Production. Global output of rice (milled equivalent) is projected to grow at 1.8 percent per annum to reach 404 million tonnes in 2000, a rate of growth and a level of production which is only marginally different from the baseline projections before taking into account the outcome of the Uruguay Round. The future expansion in rice production will hinge on improvements in yields and advances in plant technology. The area under rice is projected to increase only slightly, and mainly in Africa where land is more widely available and where large tracts of upland and swampland could be brought under cultivation. In both the Far East and the Near East, the possibilities for increasing the area under rice are minimal. In Latin America the rate of expansion in rice plantings is expected to slowdown due to the high production costs. In the United States, an increase in total output is likely to occur, largely from improvements in yields due to advances in plant technology.

While at the global level production is not expected to change notably due to the Uruguay Round, moderate changes would occur in some countries. Production of rice in some developing Far Eastern countries is projected to rise marginally as a result of the Round, but output in developed countries, especially Japan and the EC is likely to be significantly smaller. Japan's opening of its market is expected to stimulate exporting countries to raise production to meet the additional demand generated by Japan's commitment to buy rice in the international market.

Demand. The impact of the Round on rice demand is expected to be even less pronounced than on output. Between 198789 and 2000, world demand for milled rice is projected to increase at 1.8 percent annually to reach 402 million tonnes in 2000, a rate of growth and a level of consumption similar to that projected before the effects of the Round were considered. Per caput food consumption of rice during the period is likely to grow at a negligible rate, globally gaining just one kilogramme for the entire decade to reach 58 kilogrammes per head. In the EC and Japan, consumption of rice is unlikely to change significantly, the reduction in domestic output being compensated by increased imports of rice. Likewise, consumer prices for rice will probably be affected little by the introduction of market access. In Japan, for example, the current import mark-up of 292 yen per kilo of rice (US$2 016.2/tonne) if maintained, will keep consumer prices the highest in the world.

Trade. The effect of the Uruguay Round on trade, by contrast, would be substantially more pronounced than for production and consumption, both in terms of its impact on the volume of transactions and on international market prices. Vital to these projected developments, is the assumption of full implementation of the minimum access provisions agreed to at the Round. Under this assumption, world rice imports would increase by 3.8 percent annually, a substantially faster rate of growth than in the previous decade, to reach 18.9 million tonnes in 2000. This would be slightly over one million tonnes more than what could be achieved without the Agreement, and 6.8 million tonnes higher than in the base period.

The impact of the Round on world imports, although substantial, is expected to be highly localised. The impact of the Agreement on imports of Africa, the Near East and Latin America and the Caribbean is expected to be insignificant. Imports into Africa are forecast to rise by 3.3 percent annually to 3.8 million tonnes, which would be 1.2 million tonnes more than in 1987-89, but only marginally higher than the present day level. Although output of rice in Africa is projected to increase by over 4 percent per annum, demand for rice would rise at an almost equal pace. As a result, it is likely to continue to rely on imports to meet over 30 percent of its total demand irrespective of the effects of the Round. Likewise, imports into the Near East, projected to rise by 4.8 percent per annum, would reach 4.3 million tonnes. The Near East's relatively rapid growth as a major importing region would not be so much the result of the Uruguay Round, than of the demand of its immigrant Asian work force and the limited possibilities for raising production to keep pace with consumption growth. Latin America's imports would increase, to account for nearly 10 percent of the world market largely because of production constraints not connected with the Uruguay Round.

In the Far East, however, the Round is expected to have a more noticeable impact. Imports into the developing countries of the region could expand at a much faster rate than without the Uruguay Round, reaching 3.9 million tonnes, and reversing the decline of the previous decade. This projected acceleration, however, will only materialise if the Republic of Korea, Indonesia and Thailand buy the entire amount of rice stipulated under the minimum access provisions. By 2000, the Republic of Korea, which has opted to deter tariffication, would be importing about 2 percent of its consumption requirements in the base year. Thailand has agreed to allow 245 000 tonnes of rice imports in 2000, subject to a 30 percent import duty and Indonesia has subjected its minimum access of 70 000 tonnes to a 90 percent import duty. Whether these tariffs will be low enough to allow the volume of imports indicated is uncertain. Amongst the Far Eastern importing countries, however, the biggest concession comes from Japan which is expected to import 758 000 tonnes of rice by 2000.

The imports of the European Community are also expected to be affected substantially by the Uruguay Round. Although total gross imports into the EC may not change very much, the large reduction in its tariff on rice imports from third countries, and more important, the "ceiling duty-paid import price" established for rice, are likely to enable third country exporters to raise their market share in the EC trade.

The export trade in rice by the year 2000 will undergo significant structural changes, especially in the Far East. Many of these changes are, however, not related to the Round. For example, Bangladesh, largely self-sufficient in rice in recent years, is expected to become a small exporter because of higher production. Indonesia, an occasional exporter in the past years, could be exporting small quantities more regularly. Viet Nam's exports are projected to reach 2.6 million tonnes, displacing the United States as the world's second largest exporter. Pakistan's exports would fluctuate around present day levels because competition for land-use by other crops would limit increases in its output of rice. China, an exporter in the base period would emerge as a substantial net importer, as its exports are projected to decline significantly from recent levels. Exports from Myanmar are likely to increase significantly because of a likely expansion in output. For these countries, differences between the rates of growth projected before and after the Round are small.

However, some important changes will result from the Round. Thailand, currently the world's largest rice exporter, is projected to maintain its dominance in the world market with export volumes reaching 6.8 million tonnes; at least some 0.5 million tonnes of the projected trade being linked to the Uruguay Round stimulated opening of the market for rice in the Far East. China's decline in exports would not be a result of the Round, but the direction of its future export trade would be affected. With domestic prices for rice likely to escalate over the next few years, China, which exported mainly to Africa in the past, may concentrate principally on selling small quantities of Japonica rice to Japan where the high prices offered could prove sufficiently remunerative. Among the Asian exporting countries, India may be the most affected by the Round. Over the next few years, India's exports are projected to expand substantially, benefiting especially from changes in the Uruguay Round induced EC regulations on rice imports from third countries and especially because Basmati rice from India will be allowed to enter the EC at a reduced rate of import duty.

Outside of Asia, important changes may also occur to export trade. During the five year period 1995-2000, the relative competitiveness of the United States and the EC rice exports may change because of their different schedules of commitments for reducing export subsidies brought about by the use of different base years. For the major part of the period 1995 - 2000, the United States export subsidies on rice could well exceed that of 1986-88 whereas in the case of the EC a definite decline from those years is scheduled. Partly reflecting this, rice exports from the EC are projected to fall in contrast to the moderate projected increase in the baseline scenario. Exports from the United States, however, are likely to be virtually unaffected by the Round.

The opening of the rice market following the Round and the stronger growth in import demand relative to export supplies are expected to boost international rice prices. In real terms, prices are likely to increase by some 15 percent over the base period, compared to a percent rise in the baseline projections without the Uruguay Round effect. The increase in international rice prices and in the volume of trade is likely to boost the value of global rice trade by 15 percent above what it would be without the Round and 80 percent higher than in 1988.

Conclusions. The Agreements reached at the Uruguay Round could have significant implications for world rice trade. By 2000, global rice trade may be boosted by some 6.8 million tonnes (50 percent) from the base period, while international rice prices in real terms may experience a 15 percent rise from 1988. At least 17 percent of the increase in the volume of trade and about 50 percent of the rise in prices may be attributed to the Round. Such a large impact on trade, however, hinges critically on countries importing the full amount under their minimum access provisions, as the international rice market will not be significantly affected by reductions in tariffs. In most countries, import duties on rice will remain very high by 2000 and, hence, continue to constrain the expansion of trade.

A rise in the volume of shipments and prices will increase the value of rice trade and boost export earnings, especially of the developing countries. For the latter, export earnings from rice are projected to be lifted by over 90 percent from the base year, 17 percent more than if the Round had not been concluded. These large increases by the year 2000, would mean that amongst food grain commodities rice will continue to rank as the most important source of foreign exchange earnings for developing countries.

At a projected US$ 5.1 billion, rice export earnings of developing countries will be 3.4 times their earnings from wheat exports; 2.7 times those from maize and nearly 16 times those from millet and sorghum.

At the same time, importers would be confronted with a larger import bill. The bulk of such increase in expenditures, however, would be borne by developed countries, where most of the increase in the volume of imports would occur.

The impact of the Round on production, by contrast, is not expected to be large in the next few years. This is because no major changes in domestic support to rice are expected to result from the Round at the global level, because the political and economic importance of rice as well as its role as a staple food would help ensure continued support to its production. Any significant changes in production support in the future would more likely be on account of Structural Adjustment Programmes embarked upon by countries and/or of the rapid expansion of industrialization pursued by some countries, both tending to result in a contraction in the support to agriculture.

Table 4: RICE - Commodity Balances, 1987-89 Average, 2000 Baseline and 2000 Uruguay Round Scenarios

Coarse grains

Production. Projections of global coarse grain production point to stronger growth during the 1990s (1.7 percent annually) than during the previous decade to reach 971 million tonnes by the year 2000. Over two-thirds of the forecast increase of 176 million tonnes is expected in the developing countries, primarily in the Far East (largely China), Latin America and the Caribbean and Africa. The bulk of the increase (84 percent) is projected for maize, followed by sorghum and other grains. As with wheat, most of the projected increase in output is attributed to higher yields, with most improvement expected in the developing countries.

The implementation of the Uruguay Round is anticipated to result only in a slight expansion of coarse grain production over the baseline projections, primarily in the developed countries. Global output of coarse grains is expected to be higher by 3 million tonnes. Three-quarters would occur in the developed countries, mostly in North America, (by 7 million tonnes) and about one million tonnes each in Oceania and South Africa, whereas production will be lower by 5 million tonnes in western Europe and by one million tonnes in eastern Europe. Output is projected to rise marginally in the area of the former USSR. In the developing countries, production is likely to contract by 3 million tonnes in the Far East compared with the baseline projection. This contraction would be offset almost fully by gains in Latin America, largely accounted for by Argentina and Brazil. In sub-Saharan Africa, the aggregate output gain of close to 800 000 tonnes is expected to be shared widely.

Demand. The global demand for coarse grains is projected to reach 968 million tonnes by the year 2000, for a growth of 1.3 percent annually. Virtually all of the projected expansion of coarse grain utilization during the 1990s, some 140 million tonnes, is forecast for the developing countries. Of the total increase, almost threequarters are forecast to be in feed use (primarily maize) with most of the balance of the increase expected for food consumption, resulting in a slight decline in per caput food use of coarse grains. There would be a strong growth among the developing countries towards livestock feeding, in contrast to an expected decline in the growth of feed use in the developed countries. In particular, Iced use is expected to decline in the area of the former USSR as projected slow income growth and higher prices are likely to reduce further the consumption of livestock products, which had reached very high levels in the base period due to significant consumer subsidies. The Uruguay Round is not expected to increase significantly global coarse grain utilization, although the projection of more modest growth in coarse grain prices compared to wheat could encourage a shift in feed demand towards coarse grains, especially among the developed countries. As a result of the Uruguay Round, global utilization is expected to expand by about 2 million tonnes, almost entirely as feed in the developed countries. By region, utilization could rise moderately in North America and Oceania, and, to a lesser extent, in the EC, whereas contractions are expected for eastern Europe, Japan and the Republic of South Africa. In eastern Europe, the reduced feed use is mainly due to lower meat production.

Prices. The results of the Uruguay Round are projected to lead to moderate gains for maize and millet/sorghum while prices of other coarse grains (mainly barley) could rise by about 7 percent due to the Uruguay Round. This is largely due to the generally higher, and more widespread, protection provided to the "other" grains in earlier years. According to FAO's World Food Model (WFM), domestic maize prices are expected to increase among the major producing countries in Africa, Latin America and North America and to fall in Europe and the Far East. Average sorghum/millet prices will likely be higher in Africa and Latin America hut lower in North America. Major barley producing countries in the Near East and North America should experience higher prices, while barley prices in the EC, eastern Europe and the area of the former USSR should decline.

Trade. After almost no growth during the latter period of the 1980s, coarse grain trade is projected to expand by about one percent annually during the 1990s to 122 million tonnes. At this level, world trade would be substantially above current volumes of about 85 million tonnes. The bulk of the increase in coarse grain trade is expected to be in maize which normally accounts for two thirds of the global total. The projections show a strong rise in imports among the developing countries, almost 27 million tonnes, which account for all of the growth in coarse grain trade. By contrast, coarse grain imports are expected to decline among the developed countries by about 13 million tonnes, especially in the area of the former USSR and eastern Europe. The net increase in coarse grain trade of 14 million tonnes is projected to be equally shared among exporters in the developing and developed countries.

Only modest additional expansion in coarse grain trade is expected as a result of the Uruguay Round, with most of the increase in imports occurring in the developed countries. The projections point to a modest expansion of coarse grain imports at the global level, by about 2 million tonnes, of which two-thirds would be by the developed countries. The most significant impact is expected for western Europe where imports would be higher by 2 million tonnes. In the developing countries, increased production coupled with virtually no change in demand, would reduce the need to import by all regions, except the Far East. Here, imports would expand by close to 3 million tonnes, mainly for feed in China, and, to a lesser extent, Indonesia and the Philippines. By contrast, imports are expected to fall in Brazil, by almost 2 million tonnes, as a result of higher production. The minimum access commitments for coarse grains show a moderate increase in the quotas during the implementation period of 755 000 tonnes, or about 5 percent over the initial quota. Most of the scheduled increases in the quotas for individual coarse grains, in descending order, are in maize, barley, sorghum and millet. Countries with the largest commitments are Canada (barley), China (sorghum and millet), Hungary (maize), the Philippines (maize), Poland (barley) and South Africa (maize).

The increase in the value of coarse grain trade as a result of the Uruguay Round is projected to be substantially higher than for wheat, amounting to over US$ 1 billion. Hover unlike for wheat, the burden of higher importing costs are also likely to be more equally distributed between developing and developed countries. Among the developing countries, the coarse grain import bills for Asia are predicted to rise by US$ 650 million as a result of the Uruguay Round, largely in the Far East for maize and barley. By comparison, Latin America should face smaller import costs for coarse grains of around US$ 100 million, primarily for maize, while Africa could experience a small net decline in its expenditures on coarse grain imports. The developed countries, as a group, may be confronted with an additional US$ 500 million cost to import coarse grains under the Uruguay Round, and perhaps a little more due to lower export subsidies. The EC and some other developed countries are likely to have to pay, in aggregate, an extra US$ 500 million for coarse grain imports, especially for maize and barley, while the area of the former USSR and eastern Europe are projected to have lower import bills under the Uruguay Round by US$ 45 million although this could be offset by reduction of export subsidies.

As regards exports, the most striking change resulting from the Uruguay Round is likely to occur in North America and western Europe: while shipments from North America would expand by 3 million tonnes compared to the baseline, those from the latter would Pall by almost 4 million tonnes. Among other major exporters, shipments by Australia and Argentina are expected to rise.

These results are partly due to the level of subsidized coarse grains exports under the Uruguay Round which are scheduled to decline from 33 million tonnes in the base period to 26 million tonnes by the end of the implementation period (down 21 percent). Some 70 percent of the volume reductions are accounted for by four countries, the EC-12 (2.2 million tonnes), Hungary (1.1 million tonnes), Canada (0.8 million tonnes) and China (0.8 million tonnes). Other countries making significant subsidy reduction commitments in coarse grains are Mexico, South Africa, Turkey and the United States.

Conclusions. The effects of the Uruguay Round on coarse grains in terms of shifts in the location of production, the direction of trade flows and the share in trade volumes are not as significant as those for wheat.

This is due to the relatively low level of subsidies in the coarse grain sector compared to wheat. Nevertheless, some regions which have subsidized production and promoted exports in the past, such as in the EC, will likely face stronger competition in the future from those countries which had fewer coarse grain subsidies, such as in North America, in particular for maize and barley, Argentina [or maize, and Australia for barley. The effect of the reduction in subsidized exports under the Uruguay Round is also likely to be higher international coarse grain prices compared to a scenario without the Uruguay Round.

The effect of the market access commitments on the future volume of coarse grains imports will be determined to a large extent by the level of the bound tariffs and the in quota tariffs under the minimum access provisions. In many countries, the bound rates for coarse grains appear to be prohibitive, i.e. 100 percent or more, especially in some of the developing countries. In the case of maize, for example, countries with bound tariffs of 50 percent or more represent imports of 17 million tonnes, or 28 percent, of recent world trade. For those countries which offered minimum access commitments, the in-quota tariffs in some cases, in particular for maize and barley, are still high and would likely not increase the volume of imports.

As with wheat, a significant share of the world coarse grain trade is not directly covered under the Uruguay Round; about 20 million tonnes, or 22 percent, of the total imports. The largest shares of individual coarse grain imports not covered by the Agreement are for barley (53 percent of the world trade), rye (36 percent) and maize (17 percent).

Table 5: TOTAL COARSE GRAINS - Commodity Balances, 1987-89 Average, 2000 Baseline and 2000 Uruguay Round Scenarios

Table 6: MAIZE - Commodity Balances, 1987-89 Average, 2000 Baseline and 2000 Uruguay Round Scenarios

Table 7: MILLET AND SORGHUM - Commodity Balances, 1987- 89 Average ,2000 Baseline and 2000 Uruguay Round Scenarios

Table 8: OTHER COARSE GRAINS N.E.S. - Commodity Balances, 1987-89 Average, 2000 Baseline and 2000 Uruguay Round Scenarios


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