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A. General review
B. Production and consumption
C. Continuation of international allocations
D. International trade problems relating to agricultural products
E. Documentation for annual reviews

The Present Supply Situation

The year 1948 has been particularly favorable to agriculture. At the beginning of the year Southern Hemisphere countries gathered excellent harvests, particularly of cereals, and in the summer and autumn Northern Hemisphere harvests were also extremely good. Yields were especially abundant in North America and Europe, where exceptionally favorable weather conditions prevailed. For the first time since the war the food situation, at least in the Western world, has been greatly eased.

As will be seen from the following figures, a virtual equilibrium between exportable surpluses and effective demand of cereals seems to have been reached.

A similar ease exists for sugar; there the situation has changed from shortages and allocations to fears of future surpluses.

As regards rice, the situation is not so favorable. A gradual improvement has been halted by failure of the monsoon in South India and by political and economic disturbances which have impeded the marketing of rice in some other countries of the Far East.

For the world as a whole, production of oils and fats has reached the prewar level, but Consumption in deficit regions, especially in Europe, remains well below prewar.

As a result of the much improved supply of feed grains, the livestock industry in the Northern Hemisphere anticipates a substantially increased output. Because of the good grass situation, European milk production has already increased and by the second half of 1949 the out put of meat should be larger both in Europe and in North America.

The supply of textile fibers is in general adequate, but output of forest products is still quite insufficient to meet the greatly expanded demand.

The improved stood situation has enabled many governments to relax or abolish their various) controls. Rationing of food and clothing has been largely discontinued in recent mouths while regulations governing the utilization of agricultural products have either been made more flexible or have been abolished.

But the recent improvement in the world food situation, particularly as it concerns cereals, may too easily engender a false sense of security. First, this year's harvest was far above what court be expected in an average year. Second, the increased dependence of the world on supplies from North America enlarges the element of risk, because of the extreme fluctuations of output which occur in the United States of America and Canada. Third, world stocks of food have been cut to the barest minimum, and will still be low at the end of 1948/49, so that the world will again depend on the hazard of next year's harvest. For all these reasons, optimism must be tempered with caution in appraising the future food outlook.

Fundamental Trends

By the nature of things, agricultural trends can be distinguished only over a considerable period of years. The peculiar character of the past three years - to which efforts at rehabilitation of war damage and an alternation Of unfavorable and favorable weather have been contributing factors - has made it more than unusually difficult to see the current situation in long-term perspective.

Although the war ravaged the world's two most densely populated regions, Europe and the Par East, the population of both regions continued to increase. Geographic distribution of population in relation to potentialities of production has become for the time being, arid perhaps permanently, more markedly uneven.

Using the documentation, at present available to the Conference it would seem that the following findings can be established concerning the regions.

The Far East, which faces an immense production problem, may be able to bring new land into cultivation to a limited extent, especially in the food-surplus producing areas, but the main effort throughout this region must be concentrated upon increasing yields per unit of area. All agricultural progress, however. encounters grave social and economic obstacles which cannot be overcome easily or quickly. While current disorders in many parts of the region make it difficult to form a judgment, it seems doubtful whether in the future the Far East as a whole will be able to resume all export of agricultural products on the prewar scale.

Europe, particularly Western and Central Europe, is trying to resume the trend toward larger output of animal products, especially milk and meat. There e is also a trend toward expanding output of other high-priced products, such as fruits and vegetables, notably in the climatically favored districts. The recent changes in agricultural structure in East and Southeast Europe will have a similar effect and may well reduce the movement of the more primary agricultural products from Eastern to Western Europe. As a result, it may be that Europe as a whole is tending to depend increasingly upon other continents for its supply of cereals and other basic agricultural products.

The Union of Soviet Socialists Republics is planning expansion mainly of industrial crops. Unless the agricultural development envisaged for her eastern regions is particularly rapid and successful, it is doubtful whether the U.S.S.R. will become a large exporter of foodstuffs in the near future, except in extremely favorable seasons.

In the Near East no particular trends are discernible and the current economic and political situation impedes progress. Large-scale investments will be necessary to expand food production both for the benefit of the local population and to improve exports.

Africa is facing a heavy increase in internal requirements. That continent must improve the food supply of its own population and, at the same time, has an opportunity of playing a larger part than hitherto in provisioning Europe, notably in oilseeds.

In Oceania, New Zealand is specializing more and more on animal products, and relying increasingly upon Australia and for the supply of cereals. Australian land use is characterized by more intensified farming and greater diversification of output in suitable rainfall areas.

The trend in Latin America is toward greater economic independence and manufacture locally of raw materials and basic agricultural products. There are excellent possibilities of agricultural expansion to meet the needs of the rapidly growing population. Already great success has been achieved in certain directions, notably in the expansion of sugar production in Central America, but the maintenance of an expansion of food exports from the whole of this hard-currency subcontinent will depend upon the trade arrangements which can be made with potential importing countries.

North America, in particular Canada and the United States of America, has recorded the most remarkable expansion of food production-more than 30 percent in the past ten years. In spite of the high level of agricultural prices, this expansion has been brought about not by an increase in the area sown, but in yields per unit area accompanied by a run of favorable seasons. Increased mechanization, the introduction of new of seeds and hybrids, the greatly increased use of fertilizers and insecticides, and generally improved cultivation practices, have contributed to the remarkable result which has made possible a substantial improvement in diets and a massive exportation to deficit areas.

The preceding analysis indicates clearly that only one region has matte substantial progress in the past decade, to become, indeed, the principal supplier of all deficit areas. Industrial equipment as well as agricultural products are involved. Such a situation, coupled with the abnormally high reconstruction needs of the deficit areas, is indicative of the grievous unbalance between the economies of the different regions which constitutes the principal economic problem of our time. A significant fact in this respect. is that in recent years 80 percent of the world's cereal exports has come from hard-currency areas.

This unbalance has two aspects, one temporary and the other more permanent. It is temporary to the extent that both the main deficit regions, Europe and the Far East, have become more than usually deficit on account of war damage but are in the process of recovery and rehabilitation. It may have elements of permanence for two reasons: (a) less food is being and is likely to be exported from other areas of the world as a result of political changes in some of those areas and increased domestic consumption in others; and (b) production is expanding less rapidly than population in deficit areas themselves, certainly in Asia and possibly also in Europe.

Unless positive action is taken, the result might well be aggravated disequilibrium in many spheres: a glut in some areas, deficit in others; a glut of one commodity and shortage of another; unexportable surpluses in one region for lack of the necessary foreign exchange elsewhere

This raises, therefore, the two fundamental problems for consideration by the Conference in the light of its review of the world situation. The first problem concerns production. A large increase in production is called for in the world as a whole and is obviously most urgent in the deficit regions and the low-income regions. A maintenance or expansion of high levels of production in North America, where conditions for technical progress are especially favorable, would be universally welcomed provided that satisfactory solutions could be found to the international trade and payment problems which the deficit countries at present face.

This leads to the second principal problem: how the international trading arrangements of the nations might be improved so as to facilitate a larger and more regular flow of products at prices fair to producers and reasonable to consumers.

These two problems of production and of trade are considered in the sections which follow.

The Far East
The Near East
Europe
Africa
Latin America

On the basis of the documents before the Conference, there has been full discussion of the major production and consumption problems.

Higher Production and Better Nutrition

During the past twenty years the tempo of agricultural production has not in most parts of the world been sufficiently rapid to ensure any real progress towards achievement of the nutritional objectives adopted by member governments in accordance with the principles of the FAO Constitution. Such national nutritional objectives should be at the basis of national agricultural plans and programs. The necessary increase in agricultural production can only be achieved by means of more vigorous action on the part of all governments. Further efforts are necessary: more research and education, a greater supply of the means of production, and a greater volume of investment than has occurred since the beginning of the century, considering world agriculture as a whole. In some areas fresh land can still be opened up to agricultural production. More often, however, it is rather a question of increasing yields on areas already under cultivation, which can only be effected by means of modern techniques, improved equipment, greater investment, and expensive and lengthy work of general development.

If the supply of crop products is to catch up with increasing population, crop production must expand in many regions. But to create adequate supplies of protective foods - an expensive undertaking - crop production (including grass) must expand still further.

In order to arrive at recommendations for as specific action as possible, Commission T. which was set up to consider the major tendencies and propose policies in the field of food and agriculture, established five regional committees, viz. for the Far East, the Near East, Europe, Africa, and Latin America. This procedure has enabled the Conference to take note of the particular problems of primary interest to the governments in the different regions.

There is general agreement that it remains an urgent necessity to improve both nutrition and production in all areas with a low level of consumption or in those dependent on large imports of food. In general, it is assumed that the main source of food supply must come from local production.

But international aspects in relation to trade, as well as regional and national aspects, have been kept in mind.

It is generally recognized that the task of achieving better consumption and higher production is enormous and in many cafes, of a long-term character. This has led the regional committees to focus attention on those measures which governments could take at an early date to remove the impediments to achievement of the objectives of FAO. In their discussions it has been constantly kept in mind that action must be initiated by governments and farmers themselves, but that FAO's task is to assist governments toward that end.

At the stage of Commission discussion, it was not possible to bring the policies recommended to member governments into detailed line with the program of work of FAO for 1949; but it is felt that the recommendations set out below are not incompatible with the work of FAO within its limited budget for 1949. The Organization should keep in touch with member governments concerning the best way to adapt FAO's program and its budget for 1950 to the work recommended to governments for action, both individually and by region.

Requisites for Agricultural Production

The discussions have emphasized a realization that increased agricultural production and improved consumption can only be achieved within the general pattern of an expanding world economy and that in many countries, therefore, the development of industry and the development of a higher output per mall are prerequisites to attaining the objectives of FAO.

Increased agricultural production is dependent on certain definite requirements produced by industry. The need for fertilizers and farm machinery adapted to specific purposes is keenly felt. FAO can contribute by research, and also by co-operating with the regional commissions of the Economic and Social Council of the United Nations and with the International Bank for Reconstruction and Development, in assessing needs and helping to frame solutions for the production and distribution of the required capital goods and fertilizers. Here, as in other fields of action, exporting and importing countries can achieve the best results when acting together. The Conference has given special attention to the promising examples of close cooperation with the two international agencies cited.

International Investment

On the general subject of international investment, the Conference stresses the fact that large-scale development of world resources, both in agriculture and in industry, is impossible without large-scale international lending. This is especially true of the more undeveloped countries. In this connection, the Conference has been privileged to receive a statement by the Vice-President of the International Bank for Reconstruction and Development.

Although financing for development in the field of food and agriculture must mainly derive from national sources, nevertheless in many cases international financial aid is a necessary . element in order to overcome foreign exchange difficulties. Several delegates have stated that progress in agricultural expansion may be seriously impeded by lack of adequate international financing facilities and that, in their opinion, the resources of the International flank and other resources taken together are not commensurate with the current needs of the world. In this connection, the Conference calls attention to the recommendation of the y Preparatory Commission on World Food Proposals, which reads as follows:

In order to ascertain how far there might be such a leek and to enable the next session of the Conference to consider possible lines of action,

General Conditions for Higher Production

Among general conditions for higher production, much attention has betel given to the human factor in agriculture. With modifications as to the most urgent needs of the regions, the Conference agrees upon the importance of the following conditions and problems: health and rural welfare; government services for extension; and the problems of manpower, including the best use of available human resources, not overlooking the existence or possibilities of local industries.

Another factor to which the Conference ascribes great importance is transportation - adequate means of transportation to bring producers and consumers closer to tether and to make possible a better distribution of products both regionally and on a world scale.

Better Use of Existing Resources

Since curly at lion is desirable, the Conference draws the attention of member governments to the necessity of making the maximum use of existing resources, both of: land and of capital goods. Much can still be done, to avoid losses brought about by animal and plant diseases, insects pests, and infestation of crops and stored food.

The conservation of forests and soils through appropriate far m techniques and government measures constitutes a major problem in many regions. When projects are undertaken to increase agricultural production this must not lead to depletion of the soil. For regions where irrigation can be applied, the Conference stresses the maximum use of water; for other regions it emphasizes the best use of grazing lands and fodder plants.

But for an expansion program to be. fully successful it is necessary to do much more Glean ensure adequate supplies of machinery, fertilizers, and other agricultural requisites, and secure reasonable housing and living conditions for rural people. Farmers and their employees cannot be expected to work harder or to adjust their methods of production unless they are assured of effective incentives in the form of reasonable prices, stable curl entice, and adequate supplies of consumption goods; unless they have confidence in the future stability of agricultural prices and farm incomes; and unless there is in each country an efficient extension or advisory service bringing to the producer not only technical knowledge but also realization of the importance of his part in the production program

It is not enough to provide farmers with the tools and skills necessary to increase production. It is Fight important to incur ale the will to produce. The key to the success of ally production program is the key which opens the door to the farmer's mind.

Accordingly, in succeeding sections of this chapter the Conference deals with price stabilization, research and technical knowledge, rural welfare, extension and advisory methods, i.e. with the psychological necessities for increased food production.

Specific Proposal

The Conference agrees that the guidance of Commission I's regional committees has been useful, and endorses the specific action proposed. It feels strongly that the translation of general. recommendations into these more concrete proposals will enable member governments to see more clearly the task ahead and will provide the means of closer co-operation in future with one another and with FOLIO. The Conference requests the Director-General and the Council, in carrying out the program of work of FAO in 1949 and in preparing the program and budget for 1950, to take these recommendations as a guide for further action. After full consideration, therefore,

The reports on each of the five regions fallow.

The Far East

From the survey of the current situation already made by the Conference, it is manifest that there is great need to increase agricultural production in the Far East, not only to restore the production lost by the ravages of war and to meet the needs of a growing population, but also as the most direct means of improving the standard of living of the people in the area. This statement applies most obviously to the production of food and textile fibers, but is no less pertinent to the production of other crops and of forest produce and fish.

Production can be increased, first, by bringing new lands into utilization and, second, by the better utilization of land already employed. The Conference has not sufficient data before it to express a firm opinion of talc former method; in many countries, however, possibilities for opening up new lands certainly exists, and the Conference feels that member countries would find it profitable to make a detailed study of their unused resources. The main consideration of this section is the better utilization of land already in use.

It is agreed that the shortage of food which exists in the Far East nest be overcome chiefly by increased production within the region itself. Further, the region must be restored to its former position as an important exporter of agricultural produce. This involves increased production. It is clear, however, that all efforts to expand production are hampered by several serious obstacles arising from general world conditions: (a) world storage of capital and other essential Foods; (b) unequal distribution of such goods; and (c) shortage of funds for obtaining even those goods which are available.

A statement of the needs of the region in industrially produced goods leas already been prepared by the joint working party of the FAO and Economic Commission for Asia and the Far East. It remains to ensure procurement. To this end,

Agricultural Credit

As regards internal finance,

Research

The Conference is impressed by the great part that agricultural research of all kinds must play in the expansion of production. Resources for research are very unequally distributed not only between the countries of the region but also between the region and the rest of the world. In these circumstances, and to obviate duplication of effort,

To this end,

Pests and Disease

In this connection, the Conference notes the valuable work done on these two pests by the recent conferences in the African region and hopes that the proceedings of these conferences will be widely studied. Attention is also invited to the successful methods of control of rinderpest already employed in Ceylon, Indonesia, and the Philippine Republic.

Improved Technique and Practice

It is not proposed to discuss in detail the multitudinous aspects of farming technique and organization. The application of these is to a great extend a matter for local study, but here again the Conference feels that there is great scope for improvement through the free exchange of information, and that every endeavor should be made to this end. Local adaptations of farm implements and farming methods and work on the genetics of plants and animals are subjects on which the exchange of information will .. perhaps be particularly valuable.

The Conference also desires to direct the attention of member countries to the great advantages which accrue from the production and distribution of pure and improved seed, double cropping, experiments with new crops, the production and utilization of locally available fertilizers, and the use of practical demonstrations on actual farms.

Food Conservation

The Conference is impressed by the great avoidable loss of produce which at all stages from the farm to the consumer, from climatic hazards and infestation. It recognizes the valuable work already done by FAO on this subject and hopes that this work will be continued and intensified; it strongly supports the forthcoming rice conservation campaign which it considers should be expanded to include all food products. It is particularly impressed by the lack of proper storage facilities within the region, and urges all member countries to intensify their efforts to remove this cause of loss and to to-operate to this end. It recognizes that for climatic and other reasons it is desirable in this region that produce should be removed from the exporting countries as soon as possible and should be stored mainly in recipient countries, but observes that this does not absolve exporting countries from their duties in respect of the period before export.

Marketing

In the matter of marketing, the Conference's deliberations have brought to light the fact that serious difficulties still exist in connection with the local and international movement of produce. The transport systems of many countries in the region still suffer from the devastation caused by the war, while in others the transport system has never been satisfactory. A shortage of suitable shipping still seems to persist. Accordingly,

The Conference is also impressed by the need to ensure that improvement of the quality of foodstuffs is maintained, and by the importance of standard weights, measures, and qualities in both local and international trade. Accordingly,

Nutrition and Consumption Levels

As has already been observed, the salient feature of the situation in the region is that there is insufficient food available for present needs. The result is undernutrition and the inhibition of future improvement. The Conference is impressed by the difficulty, except in cases of extreme shortage, of effecting rapid changes in the food habits of large populations. While therefore it recognizes that the long-term objective should be a diet improvement in the direction of diversification and improved balance rather than by indefinite increases in the consumption of food grains, it feels that this will not justify any relaxation in the efforts to meet the present demand for food grains, especially rice, and in the search for substitutes for cereals. This does not, of course, mean any abandonment of efforts to improve the diet by increased use of protective foods, but merely that existing facts should be recognized.

In connection with plans for the expansion of food production,

The Conference desires to draw the attention of member governments to the projected work of the Indo-Pacific Fisheries Council and to the importance of the products of marine and inland fisheries to the economy and nutrition of the region.

Finally, the Conference draws the attention of member governments to the recommendations of the Nutrition Committee (Baguio, Philippines. 23-28 February 1948), in particular to those concerned with the practical methods of improving the nutritive value of rice and rice diets. Long-term food production and distribution programs should be based on the scientific assessment of nutritional requirements.

Rural Welfare

The Conference desires to stress the vital relationships between the state of welfare of the rural population and production. The farmer and the agricultural laborer are the producers; increases in production, at least in a free society, will depend primarily on the incentives to production offered to producers, and on the resources at their command. The importance of rural welfare in all its aspects must therefore be clearly recognized. It is felt that FAO can give the greatest assistance in this matter by disseminating information on work accomplished or contemplated throughout the world, with a view to ensuring co-operation among interested international and charitable organizations.

In this connection, the Conference is impressed by the paramount necessity of improving the standards of rural education throughout the region. Such improvement should be directed not only to the elements of formal education but also to developing a desire for learning among both adults and children, and to increasing the power of assimilating new knowledge of improved agricultural practice.

It is further desired to emphasize the importance of a suitable system of land tenure to achievement of the best utilization of the land, maximum production of crops, and welfare of the rural workers, and it is recommended that governments examine their systems of land tenure in the light of this principle

Agricultural Services

The Conference is greatly impressed by the need for the development of governmental and other services designed to assist the farmer and to facilitate agricultural progress. Pride of place in this matter must be given to agricultural advisory services as the best and often the only means of effecting improvement in agriculture. If, however, advisory services are to be effective, there must also be adequate provision for higher agricultural education and for those regulatory services which are essential to the protection both of producer and consumer. It is known that the provision for all these services in the region is still inadequate and, therefore,

Forest Utilization and Conservation

Forest conservation is basic to increased production of rice through assuring water supplies for irrigation. The utilization of forest products is hardly less important. It is fundamental to the supply of indigenous fertilizer in many Asian countries, where cow dung must, for lack of fuel, be utilized for cooking fires. Industrialization must depend on near-at-hand raw materials, of which timber is one of those most readily converted with a comparatively small outlay of capital. Furthermore, the incomes of rural people in many countries of Asia can be augmented by part-time employment in logging and other woods operations.

For these reasons,

The Conference welcomes invitations from the Government of Burma and the Government of and hopes that the conference will be called during 1949 at such time, towards the latter part of the year, as is most convenient to the host government.

Plans and Programs

Most of the countries in the region have made plans or programs for the improvement of agriculture within their respective territories. These plans have usually been outlined in the annual reports and have to a great extent also been discussed at the meeting at Baguio earlier in the year. It is not therefore proposed to discuss them here. However,

The Conference

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