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II. Economics

General comments

1. The Committee expressed its appreciation of both the volume of work and the consistently high professional standard maintained by all the Divisions.

2. The Committee noted the extent of the regular program of work and the additional work proposed, and it offered some guidance on the general direction of the work to be undertaken in future years. It stressed the importance of strengthening the work in the developing countries and especially in the African region. It emphasized the need to train local experts and to improve the collection preparation and dissemination of basic data, particularly in the developing countries. The Committee noted with approval the assurance given by the Assistant Director-General to examine the scope for increasing this work by making savings in some of the other work of the Divisions. Some possible realignment of the work was suggested which might release some resources for the needed additional work indicated above. Some delegations thought that there might be some overlapping between the three Divisions of the Economics Department. It was noted, however, that the secretariat would do its utmost to avoid all such duplication.

The Committee urged FAO to encourage Member Governments to assume more responsibility for the analysis of their internal commodity, economic and statistical problems in agriculture, wherever possible, either directly or through the use of appropriate technical assistance experts, in order to reduce some of the load in the Economics Department.

3. In addition to this general guidance for the Economics Department as a whole, the Committee offered guidance on the future direction of work for the individual Divisions within the Department. The relative importance of the many facets of the work of each Division is indicated in the paragraphs below.


4. Stress was laid by the Committee on the growing importance of commodity problems generally and on the work carried out in this field by FAO, particularly to the economies of those developing countries whose future growth and stability depended largely on the solution of world-wide problems facing individual commodities and groups of commodities. The Committee also recognized the responsibilities resulting to FAO's commodities work from the fact that there was no other intergovernmental unit in existence specialized to the same extent for work on commodity problems and policies for such a wide range of primary products. Attention was called to the need for careful selection of priorities by the Committee on Commodity Problems (CCP) and its subsidiary bodies and secretariat, in view of the heavy workload of the Division during the coming biennium.

Commodity intelligence and current reports

5. In reviewing work in the fields of commodity intelligence and current reports, the Committee welcomed in particular the first issue of the new annual FAO commodity review which contained a comprehensive review of the world agricultural commodity situation, problems and outlook. The Committee noted with satisfaction the proposal made by CCP and endorsed by the Council, that this publication should in future years form a basic document for use by the competent FAO organs, including the FAO regional conferences, and also by other international agencies such as the United Nations regional commissions and the United Nations Commission on International Commodity Trade. Such arrangements would contribute toward economy in documents and avoidance of duplication.

6. The Committee also suggested the desirability of expanding further the current commodity intelligence services for example by publishing regular periodic and up-to-date commodity news sheets, provided that this could be done within the over-all framework of the program and budget proposed by the Director-General. Such commodity news sheets, in addition to providing timely information notes on the major agricultural commodities, should also provide summary reports of intergovernmental consultations and conferences in the commodities field, both regional and worldwide. Several delegates expressed interest in the further studies to be undertaken on rice, dairy and livestock products, fibers, and fats and oils.

Work on commodity policies and trends

7. In reviewing other major parts of the Division's program of work, the Committee recalled that the Conference, at its Tenth Session in 1959, had drawn attention to some areas where further strengthening was needed in the commodities field, particularly in the period beyond 1961. These areas, in the words of the 1959 Conference report, "included the analyses of commodity trends and of national and international commodity policies. Special attention was drawn to the importance of national commodity stabilization policies and to the need for moving toward the study of new techniques and solutions which would take into account the new realities of international trade, such as trade on special terms, the influence of regional trading arrangements, and other particular market situations. " ' The Committee noted with satisfaction the provisions made in the proposed program of work on the lines which had been recommended by it two years ago, for special consideration beyond 1961, and which had since become even more important.

8. Many delegates referred to the importance of commodity trend studies as an element in the determination and adjustment of national development programs and policies. Note was taken of the fact that such projections of commodity trends had to be compiled, and interpreted, with great care and discrimination. These requirements underlined the importance of work on projection techniques and of the contributions made to such techniques by FAO's work on commodity trends. The Committee noted that in line with a request of the Economic and Social Council and a parallel request of the previous FAO Conference session, a report on medium-term projections of the supply of, and demand for, primary commodities was to be a major subject for consideration by the session to be held jointly by the Committee on Commodity Problems and the United Nations Commission on International Commodity Trade in 1962. The Committee stressed that close working relations should continue to be maintained with a number of other interested international organizations and noted that this type of work was also of great interest to FAO commodity groups and to consultations on regional plans and problems.

9. The Committee expressed its interest in the continuation and further development of work on international commodity policies and arrangements, including stabilization techniques, regional integration schemes, and compensatory financing. A substantial part of this work was determined by the requirements of the Committee on Commodity Problems and its subsidiary bodies. The Committee commended the effective working arrangements developed with other intergovernmental organizations, such as the United Nations, GATT, and the commodity councils and study groups. Such arrangements had helped to strengthen the work and, at the same time, contributed to the efficient use of government funds. Similarly, practical benefits could be derived from FAO's close co-operation in the commodities field with the United Nations regional commissions and the active interest taken in commodity programs of other bodies of a regional character such as the European Economic Community. In asking the Director-General to maintain and develop such links with other agencies working in related fields, the Committee recognized that such arrangements, even when carried out on a very selective basis, were bound to make substantial calls on the time of professional staff and on the supporting services, notably travel. In the view of the Committee, these efforts were likely to be fully repaid, however, in the improved contacts and substantive division of labor resulting from them.

Servicing of Committee on Commodity Problems and commodity groups

10. The Committee commended the servicing provided for the Committee on Commodity Problems, the CCP Consultative Subcommittee on Surplus Disposal, and the CCP commodity groups, as well as ad hoc commodity meetings of different kinds. Several delegates emphasized the usefulness of work done through the media of such intergovernmental commodity groups in the fields of intelligence, trend studies and policy consultations.

11. The Committee urged CCP and its subsidiary bodies to review the policy of requesting new documents, keeping the heavy workload of the Division in mind. In this and other ways, CCP and in subsidiary bodies, together with the secretariat, might be able to reduce the documentation for meetings to a few concise working papers and to facilitate their dispatch well in advance of the meetings. Any time and work saved thereby should be used in favor of the regular publications series of the Division.

Expansions proposed for 1962-63

12. The Committee noted that, apart from the post of Assistant to the Director (on the lines proposed for each of the technical divisions), the Division's expanded program and budget did not provide for any additions to the professional staff. Proposals for increased allocations had been limited to those supporting services where the shortage of funds had been most acutely felt in 1960 61, such as the servicing of meetings, travel, consultant services and clerical help. In response to questions raised by some delegates about the size of the increase in the travel budget, explanations of the special circumstances involved were given to the Committee by the Assistant Director-General of the Economics Department and by the Director of the Division. The Committee also noted, however, that calls on the professional staff, under the program as proposed, were likely to be increasingly heavy and might thus necessitate some minor adjustments and transfers as between provisions for regular professional staff and those for other supporting services with a view to providing some strengthening of the former where corresponding savings could be found possible with regard to the latter.

Economic analysis

Current trends

13. The Director presented a statement on the work of the Economic Analysis Division, which was handled by four Branches - Agricultural Development Analysis, Regional Analysis, Investment, Trade and Price Analysis, and Marketing and by the Director's office which included a research unit servicing the Division as a whole. Hitherto the Division's work had been primarily analytical, but work on direct advisory programs for the less developed countries, particularly in agricultural planning and programing and on marketing had grown very rapidly in the last few years and now accounted for a substantial proportion of the time of the professional staff. Nevertheless the Division's responsibilities for analytical work still continued; for example, the preparation of the annual report on the state of food and agriculture which included both the general review and the more detailed chapters on special subjects such as trends in international trade or agricultural development programing. It was stressed that analysis work was an essential aspect of the Division's activities and without this the value of its operational work would be reduced.

Operational programs

14. On the operational side, the Division was now responsible for some 30 agricultural programing posts, 30 in marketing and a few in other fields such as crop insurance and agricultural financing. Increased work has also been involved in the initial analysis and formulation of projects proposed for financing under the United Nations Special Fund, and the Division was participating in the operational work on 20 projects. Under the Freedom from Hunger Campaign the Division was preparing one of the basic documents, dealing with the rob of marketing in economic development and was contributing to others. It was also taking part in a special fertilizer program under the Campaign. Although the specific projects were financed from other sources, the additional responsibilities falling to the regular staff added considerably to their workload.

15. The Division had also been responsible for the organization of special area development survey missions, such as that recently undertaken for Africa, and for follow-up work on the Mediterranean Development Project.

Priorities for 1962-63

16. The proposals for expansion of the professional services during the coming biennium were directly linked to the increase in responsibility on the operational side, together with the need for more analytical work under the regular program for the newly-independent countries in Africa.

17. The work of the Division was commended by the Committee which laid special stress on the high standard which had been maintained and approved the trend toward increasing the operational side, while emphasizing that this should not be allowed to impair the high quality of the analytical and advisory work. In reply to a request for an explanation of the proposed substantial increase in the budget for the Director's office the Committee was given details of the Director's responsibilities for coordinating the regular and operational work of the Division and maintaining its professional quality, there was thus a need to strengthen his office in view of the greatly increased workload in the operational field.

18. The increased burden imposed on the Division led to a consideration of the relative priorities of the various lines of work proposed. There was general agreement supporting the high priority given to the work on programing and agricultural development and the improvement of marketing in the less developed countries, and also on increased attention to African problems.

Agricultural programing

19. Both the direct technical assistance work and the studies made under the regular program were making a contribution to the formation of policy in less developed countries which were becoming increasingly aware of the value of systematic programing for agricultural development as a means of making the best use of their limited resources in human skills and finance. A hope was expressed that the newly-independent countries could have increased technical guidance not only in the formulation of agricultural plans, but also in their implementation. The Committee welcomed the attention which was to be given to the training of specialists for programing work by means of fellowships and training centers. The chapter included in The state of food and agriculture on agricultural planning and programing had been most valuable, as also had been the report of a special seminar on agricultural programing held in the Far East in late 1960. It was requested that the report of this seminar should be published as soon as possible, since it would be a valuable document for government staff with responsibilities in this field.


20. The Committee also expressed approval of the increased attention given to work on agricultural marketing. While it was noted that some aspects were of a technical nature, it was pointed out that the work fitted in well with the general responsibility of the Division for agricultural development. Furthermore, there were marketing problems which must be solved before there was hope for substantial agricultural progress.

21. The Committee noted with approval the intensive program of marketing training centers which had been carried out in the last biennium, and endorsed the proposal to conduct a center in the Far East with special reference to the improvements in marketing required to ensure that agricultural price policies were effective at the producer level, if they were to provide an adequate incentive for the needed increase in output. The program to establish permanent marketing training facilities in the different regions was also welcomed. The series of marketing guides, which endeavored to provide the practical and economic information needed for effective marketing operations, had achieved a wide sale in the less developed countries.

Work in Africa

22. The Committee felt that the priority being given to development programing and marketing services for the African region, together with the analytical studies which formed a background for this work, was correct. The Committee generally endorsed the proposals to expand the Division's activities in Africa, and in the over-all field of agricultural development programing and marketing.

Agricultural price stabilization and support policies

23. Many delegations expressed their appreciation of the work done by the Division in developing guiding principles for price stabilization and support policies. Although this was a complicated subject it was one of great importance to governments in formulating their price policies and in international discussion. The Committee emphasized the need for continuing annual reports to the Committee on Commodity Problems of changes in price stabilization and support policies, and indicated the value of further work on this subject as an aid to development in less advanced countries.

Other projects

24. On the proposal for further work on the factors underlying the changes in the terms of trade for agricultural products there was some difference of view. Some delegations allotted it high priority, while others felt that it was a subject which raised a number of difficulties and one already being examined in other organizations. It was pointed out that this work formed a very small part of the total program of the Division and represented a more detailed analysis of data assembled for other purposes. There was similarly some difference of views on the priority to be given to work on crop and livestock insurance. The suggestion that a resumé of experience might be prepared was supported by some delegations, while others felt that a study of crop insurance at this stage might be premature. This question arose mainly under the technical assistance program where an increasing number of requests were being received.

25. The value of the increased emphasis on agricultural investment and credit proposed in the program was stressed by a number of delegations.

26. The importance of close co-ordination with GATT and other international organizations was emphasized, and approval was given to the joint work being undertaken with GATT on the measurement of the degree of agricultural protection resulting from support policies. The Committee emphasized that requests for information from member countries should be carefully co-ordinated, where possible, in cooperation with other international bodies.

27. The value of studies on the impact of regional economic integration arrangements was stressed by several delegations, while some others pointed out that other organizations were considering such problems. There was general agreement that the first priority for the Division, as for FAO, should be to serve the needs of the less developed countries.



28. In considering the program of work, the Committee recognized that the work carried out in the Statistics Division was fundamental to the attainment of the objectives of the entire Organization. It took note of the increased volume of work in relation to the assistance rendered to developing countries in co-operation with other international agencies in improving the basic data needed for planning, and stressed the necessity of further enhancing this assistance. The Committee agreed that the servicing and co-ordination of these regional and field activities together with the other special activities such as those connected with the Freedom from Hunger Campaign and the Third World Food Survey have greatly increased the burden of work and responsibility in the Office of the Director. It noted that the Director-General, after consultation with the Finance Committee, had already established the post of Assistant to the Director as an interim measure to help the Director in discharging his increased load of work and endorsed the proposal to establish this post on a permanent basis as provided for in the Program of Work and Budget.

Statistics Advisory Committee

29. The Committee noted with satisfaction that provision has been made in the Program of Work and Budget for the establishment of a statistics advisory committee in response to Resolution No. 46/59 of the Tenth Session of the Conference. Noting that the members of this advisory committee would be persons known for their professional competence and proficiency, and drawn from all parts of the world, and that their primary function would be to advise the Organization on the special technical and methodological aspects of its work in the field of food and agricultural statistics, the Committee in general agreed that they should be appointed in their individual capacity by the Director-General. Some delegations, however, urgently stressed that these appointments should be made through and with the consent of the respective governments.

Statistical publications

30. In discussing the statistical publications of the Division. the Committee was of the opinion that the Production and Trade yearbooks were publications of the utmost importance. The Committee welcomed the arrangements made for advancing the date of publication of the Trade yearbook and expressed the hope that countries would cooperate by returning the questionnaires as soon as possible. The Committee suggested that low priority could be given to the publication of tables on trade by countries of origin and destination as a further means of expediting the publication of the Trade yearbook.

31. Some delegates expressed the need for a publication containing a detailed description of the statistical series including concepts, definitions, coverage, and methods of collecting the data published in the Production and Trade yearbooks. It was recognized, however, that the preparation of such a compendium required the assembly and analysis of a large body of information, which could not be carried out with the resources available for 1962-63. The Committee desired that this work should be included in the program of work for 1964 65.

32. The Committee emphasized the usefulness of the publication on Technical conversion factors but recognized that it contains a number of gaps which need to be filled in, and urged countries to provide FAO with the necessary data to enable it to bring out a revised version at an early date.

Standardization of production statistics

33. The Committee took note of the intensified program of work on standardization of statistics of agricultural production through the FAO/ECE Study Group on Problems of Methodology and Definitions in Agricultural Statistics for European countries. The Committee felt that while significant progress may be expected as a result of this drive in Europe, adequate machinery would need to be set up in other regions to achieve tangible results and expressed the hope that this aspect would be borne in mind in formulating proposals for the 1964-65 program of work.

Prices, index numbers and agricultural income

34. The Committee noted the work already carried out in Europe, Central America, Asia and the Far East, on the standardization of statistics of prices received and prices paid by farmers. It recognized the need to keep this work continuously under review and extend it to other regions. In this connection, reference was made to the desirability of organizing training centers on the subject. The Committee welcomed the plan to prepare a practical handbook on methods, concepts, and definitions of prices received and prices paid by farmers.

35. The Committee took note of the development of work on index numbers based on value added in agriculture and noted that the definitions, standards and classifications of the data needed for the different components of these index numbers were closely connected with those of income in agriculture and measurement of agricultural productivity. The Committee agreed that the proposed program of work on the assembly and analysis of the methods used in the different countries for compiling estimates of the agricultural income would facilitate the long-term program of work on farm costs and productivity proposed by the FAO/ECE study group for the European region. It, however, stressed that any such work when it is undertaken, should be carried out in cooperation with the Economic Analysis Division. While a suggestion was made that the proposed work program on income and index numbers might be accorded a lower priority in favor of the more pressing need of strengthening the regional work, the Committee recognized the importance of the work on index numbers as basic for studying and summarizing the food and agricultural situation and suggested that such work might be continuously kept under review as opportunity arises, especially as regards methodology and the better measurement of both the quantitative and the qualitative aspects of diets over the world.

Agricultural census

36. The Committee commended the work undertaken for the promotion of agricultural censuses and appreciated the steps taken to assist countries for speeding up the tabulation and publication of the results of the 1960 censuses of agriculture. Special reference was made to the pilot projects for the tabulation of the agricultural censuses of the United Kingdom of Libya and the United Arab Republic using electronic computers. The Committee recognized the great value of this experience as opening up promising possibilities for speeding up tabulation of agricultural censuses in future.

The Committee stressed the need for an early preparation for the 1970 World Census of Agriculture and requested the Director-General to include appropriate proposals in the program of work for 1964-65.

Food consumption

37. The Committee approved the steps taken to implement Resolution No. 34!59 of the Tenth Session of the Conference to promote food consumption surveys. It noted that a draft program of food consumption surveys had been prepared jointly with the Nutrition Division and reviewed by a panel of experts convened in co-operation with the Conference of European Statisticians. It further noted the plans for adapting this program to the special conditions and needs of other regions, and endorsed the attention given in the program to the practical and methodological difficulties of conducting food consumption surveys in view of the high costs such surveys entailed. The Committee welcomed the proposal to publish a methodological manual on this subject.

38. The Committee reaffirmed the importance of food consumption surveys and of food balance sheets to obtain information on the levels and patterns of food consumption and of the factors influencing them. It recognized the difficulties encountered in constructing food balance sheets because of the deficiencies in available data, especially regarding stocks and utilization of agricultural products, and drew attention to the need for additional and more reliable information on these items. The Committee also felt that the preparation of a manual on methods of collecting statistics of utilization would be a useful stop.

Statistical methodology

39. The Committee commended the publications on statistical methodology for assisting governments in improving their agricultural statistics. It welcomed the publication of the first volume of Sampling methods and censuses and noted that it was particularly oriented to meet the needs of the developing countries. It further noted that the second volume of this publication dealing with the quality aspects of statistical data would be available shortly.

40. The Committee strongly supported the preparation of the two manuals on area estimation and on the use of aerial photographs in the improvement of agricultural statistics. It pointed out the need for a manual on crop forecasting but took note, with regret, that no provision for this purpose could be made in the program of work for 1962-63. It, however, expressed the hope that the experiences on forecasting for both field and tree crops now being assembled in the Division would be made available to the countries in the form of short notes, as and when they are completed.

Near East Regional Research and Training institute

41. The Committee reaffirmed the recommendation made by the Tenth Session of the Conference for the establishment of a Near East regional research and training institute in agricultural statistics. It noted with satisfaction the progress made in formulating the project for submission to the United Nations Special Fund and the expressed intention of a large number of countries of the region to participate in the project. The Committee requested the Director-General to communicate to the United Nations Special Fund the importance attached by the Committee to this project as an essential pre requisite for agricultural development planning of countries in the region, and expressed the hope that the institute would be set up soon.

Strengthening of regional

42. The Committee expressed concern that there was only one Regional Statistician in each of the four regions of Africa, Asia and the Far East, Latin America, and the Near East. It strongly felt than there was need for strengthening the staff in these regions so as to expedite the training of statistical personnel and the improvement of agricultural statistics and recommended that the adequacy of the regional organization in statistics should be reviewed in formulating proposals for the 1964-65 program of work.

43. The Committee especially discussed the need for statistical assistance of the newly-independent countries of Africa. It noted that as an emergency measure, two Regional Advisers in Agricultural Statistics in Africa had already been assigned for one year from the Technical Assistance Contingency Funds and reaffirmed the recommendation of the Tenth Session of the Conference to create the post of an additional Regional Statistician for Africa as soon as possible.

44. The Committee expressed concern that FAO had no machinery in Africa and the Near East for promoting development of agricultural statistics in these regions commensurate with the importance of agriculture and the urgency arising from the pace set up by the United Nations in fields of statistics under their competence. The Committee recognized the urgent need for setting up permanent regional working parties to promote the improvement of agricultural statistics in both these regions and was of the view that this called for immediate action.

45. The Committee expressed the hope that the funds required for the provision of an additional Regional Statistician and/or a working party in Africa and also for the setting up of a regional working party in agricultural statistics for the Near East region should be found from adjustments in the work program of the Division or Department. In this connection, the Committee pointed out the possibilities offered by the recent increase in the regional projects allocation of the Technical Assistance funds

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