TWENTIETH REGIONAL CONFERENCE FOR EUROPE

(in cooperation with the UN Economic Commission for Europe)

Tel Aviv, Israel, 29 April-3 May 1996
WORLD FOOD SUMMIT: FOOD SECURITY SITUATION AND

ISSUES IN EUROPE


Page
I.WORLD FOOD SECURITY TRENDS 1
II.FOOD SECURITY TRENDS, PROSPECTS AND ISSUES IN THE EUROPE REGION 3
1.Overall food security situation and prospects3
2.Food security prospects for the Traditional Market Economies (TME)5
The nature of the food security problem 5
Food security prospects for the Traditional Market Economies (TME) sub-region 5
The contribution of the sub-region to world food supplies 6
3.The causes and nature of food insecurity in the transition economies7
Food security prospects in the Central and Eastern European Countries (CEEC) 8
Food security prospects in the Baltic States and the Commonwealth of Independent States 9
4.The role of the region in global food security 10
The region's contribution to the export prospects of the developing countries 11
The effects of trade liberalisation 11
Official Development Assistance (ODA), food stocks and food aid 12
Trade liberalisation and food stocks: implications for food aid and food price stability 12
5.World Food Summit and regional goals for food security 13
III.ACTIONS TO ADDRESS REGIONAL FOOD SECURITY 14
1.Ensuring the political and economic environment for food security 15
Basis for action 15
Objectives 15
Actions to be taken 15
2.Securing sustainable safety nets and social support systems for the food insecure 16
Basis for action 16
Objectives 16
Actions to be taken 16
3.Ensuring the availability of adequate food supplies 17
Basis for action 17
Objectives 17
Actions to be taken 18
4.Strengthening the role of Europe in improving global food security 19
Basis for action 19
Objectives 19
Actions to be taken 19
Table 121
Table 224



WORLD FOOD SUMMIT: FOOD SECURITY SITUATION AND ISSUES IN EUROPE


1. The Committee on World Food Security expressed its wish to benefit from the perspectives of the Regional Conferences on the major, regionally specific, issues, policies and actions for regional and global food security, as their contribution to the World Food Summit Plan of Action. The purpose of this paper is to stimulate Regional level discussions on food security in Europe and the region's role in global food security. Similar papers have been prepared for the other Regional Conferences to be held in the course of 1996.

I - WORLD FOOD SECURITY TRENDS

2. Over the past three decades, world food production has grown faster than population. Per caput food production is today about 18 percent above that of 30 years ago. Food availabilities for direct human consumption are equivalent to some 2 700 Calories per person per day, up from 2 300 Calories 30 years ago. At the one extreme, in Western Europe per caput food availabilities stand at some 3 500 Calories and in North America at some 3 600. At the other extreme, average per caput food availabilities are only 2 300 Calories in Africa.

3. Despite the considerable progress achieved in increasing per caput food supplies, more than 800 million people in the developing countries were undernourished in the early 1990s. Millions more suffer debilitating diseases related to micro-nutrient deficiencies and to contaminated food and water. Every day, one out of five people in the developing world cannot get enough food to meet their daily needs; in 17 African countries, two or three out of five people do not have adequate food. The regions of Western Europe, North America, Near East and Latin America and the Caribbean had the lowest percentage of undernourished. The largest numbers, though declining, are to be found in Asia but those in Africa have been increasing in total and, in many countries, as a proportion of the population.

4. In addition to the chronically undernourished, civil strife and wars have adversely affected millions of people. Although food assistance is provided to ease their plight, the per person amount provided is too often insufficient for good health. The sharp reduction in food aid availability over the past three years has reduced the capacity to face crisis situations.

5. To bring each undernourished person to his or her respective energy requirement level (2 200 Calories/day) would require, on average, an additional 570 Calories/day. This is obviously an underestimate of any realistic estimate to eliminate undernourishment. World food consumption in 1990-92 was short of such needs by about 3 percent. In more concrete terms, given that cereals represent around 60 percent of the calorie supply of the population of the developing countries, the gap in cereals would represent about 30 million tons of grains (to be compared with about 9-12 million tons of food aid in recent years). The food gap varies widely between regions, ranging from negligible in some Western industrialised countries to about 5 percent in the low-income food-deficit countries (LIFDCs), 10 percent in Africa and close to 5 percent in the developing countries as a whole.

6. The prospects for the future, as they emerge from FAO's World Agriculture: Towards 2010 study (1995) (AT2010), indicate that trends towards increasing per caput food supplies in most developing countries will continue. For the developing countries as a whole, average per caput food supplies are expected to reach 2 730 Calories in the year 2010 - a substantial increase from 2 520 in the years 1990-92.

7. Despite such progress, the number of undernourished in the developing countries by the year 2010 is still projected to be between 700 to 800 million. The two regions expected to have the largest number of undernourished remain South Asia and Africa. However, while in South Asia their number is forecast to diminish sharply, bringing their share of the total population close to the 12 percent average of developing countries as a whole, in Africa the number of undernourished is projected to increase by about 100 million to over 300 million, mostly in the LIFDCs.

8. The forecast level of undernutrition would exist alongside increasing food imports in the developing countries. Net cereal imports are projected to expand from the nearly 90 million tons of 1989-91 to some 162 million tons in the year 2010; and the aggregate cereal self-sufficiency ratio to decline from 92 percent to 90 percent. Although the largest increases are foreseen for the Near East and North Africa (33 million tons) and Latin America and the Caribbean (15 million tons), only a small number of countries in these regions currently face serious foreign exchange shortages.

9. The near doubling in the net cereal trade deficit (from 27 to 50 million tons) foreseen for Africa, on the other hand, is more ominous given the precarious balance of payments situation in many of the countries in the region and the unfavourable prospects for many of them, especially those that must continue to finance their growing food import requirements from agricultural export earnings.

10. The above prospects for a protracted incidence of undernutrition for hundreds of millions of people would be the likely consequence of a 'business as usual' approach. By contrast, therefore, all efforts must be mobilised to reduce the incidence of undernutrition and malnutrition as fast and on as broad a geographical scope as possible, so as to achieve by the year 2010 a better outcome than that forecast in the AT2010 study.

11. The additional amount of food that would be required to increase the per caput consumption of the projected 700-800 million undernourished to the level of average requirements for a healthy life is small relative to the requirements of world populations. Therefore the issue is not only whether the world as a whole could produce such additional amounts of food, but even more how to ensure that the countries with the largest concentration of undernourished improve their access to food for all. This would require substantial increases in food import capacity, international food assistance, incomes and food production in those countries projected to have low food supplies and high undernutrition in 2010. For the developing countries in this class, per caput food supplies are projected to be 2 360 Calories in 2010. If none of them were to have less than 2 700 Calories by then (which, assuming current income and food assistance, would bring the incidence of undernutrition of the developing countries to a more moderate 6 percent, or 330 million people), their food supplies would need to grow at 3.5 percent rather than the projected 2.7 percent annually. This would require a 10-12 percent increase in the world production growth rate from what is currently projected to 2010 (1.8 percent) to 2.0 percent annually. But where the additional food would come from is of greater importance. For those countries and regions with high rates of undernourishment, the task would represent a great challenge for both themselves and the world community. For example, if the food were to come from the region itself, African production growth would have to be at 4.0 percent per annum for 20 years, notwithstanding increased commercial or concessionary imports, instead of 2.0 percent during 1970-90 and 2.9 percent projected to the year 2010. Such a target may not be sustainable, economically or environmentally.

12. Raising world food production, primarily where natural conditions make it compatible with sustainability of the natural resource base; ensuring satisfaction at moderate cost of the growing food needs; raising and distributing incomes to enable the largest numbers to provide for their food needs; providing food assistance to poor and vulnerable population groups; and ensuring stability of food supplies and access, are the objectives which all countries, regions and the international community, have to strongly pursue to prevent dire predictions from materialising.


II - FOOD SECURITY TRENDS, PROSPECTS AND ISSUES IN THE EUROPE REGION

1. Overall food security situation and prospects

13. Universal food security has been a priority objective in the European region for decades. Food supplies in the region on a per person basis were over 3 000 Calories on average per day by 1960, and exceeded 3 400 by 1990, an amount considered by nutritionists to be abundant to excessive. But large differences exist within the region. The long existing political and economic divide between market and centrally planned economies has given way in the early 1990s to the distinction between traditional market economies (TME) and countries in transition (CIT) towards a market economy. In the wake of the collapse of the central planning system, the latter economies experienced economic, political and social upheavals resulting in drastic declines in economic activity and disruptions in the productive sectors. The violent conflicts that have accompanied the disintegration of the former Yugoslavia and the former USSR have added their toll to the economic hardships and food insecurity generated by the breakdown of the old systems.

14. For most of the CIT the first half of the current decade saw a decline in the food supply per person. Most of these countries could not maintain adequate food security safety nets during the transition. Moreover, relatively high unemployment and budgetary pressures in Western European countries have led to reviews of the social safety nets that have been maintained over the years.

15. Looking to the future, the regional population growth rate is expected to continue declining and in several countries even population levels will decline. By the year 2010 the region's population will be slightly above present levels. The decline in entrants to the labour force and the increase in the number of the elderly will lead to a rising dependency ratio. Population trends thus imply little scope for overall increases in the quantity of food needed to satisfy nutrition requirements. Moreover, an adequate diet can be maintained with food supplies per person declining from the high regional average levels reached during 1990-92.

16. However, the regional economy will be expanding, and incomes will be rising. In response, average calorie intake may still remain at a level that is in excess of nutritional requirements. Rising incomes are expected to continue to stimulate gradual changes in the composition of the food basket, which will probably mobilise more sophisticated processing methods and abundant primary food products. Nevertheless, a declining share of income will need to be allocated for food, and ensuring food for all will be a relatively easy task for the region, especially for the TME. However, the transition countries face a much more difficult task, and some of them will have to postpone the goal of universal food security for years.

17. The annual rate of growth in food production in the region has slowed over time, from 1.7 percent in the 1970s to 1.3 percent in the 1980s and -3.1 percent between 1990 and 1995. The quantity of food produced in 1989 has not been equalled during the first half of the 1990s. For TME, food production declined by an average annual rate of -0.8 percent in the 1990-1995 period. For the same period, a sharp decline in food production took place in the countries in transition, and especially those formerly in the USSR, where food production declined by an average annual rate of -6.8 percent. Production of cereals for the period 1990-1994 declined at an average annual rate of -1.9 percent, -5.8 percent and -7.5 percent for the TME, Central Eastern European Countries (CEEC) and those in the former USSR respectively. In the transition countries, the livestock sector experienced a near-collapse. In the Baltic States and countries in the Commonwealth of Independent States (BS and CIS), stocks of cattle and pigs declined by 22 and 37 percent respectively, between 1989 and 1995 while for CEEC, the corresponding figures were 14 and 10 percent.

18. The distinction between TME and CIT is bound to be transitory. Several of the latter have already achieved significant steps on the reform path; many however are facing serious difficulties in transforming their economic and political systems. For those countries, the path to recovery will be longer and more tedious, and their food security situation in the medium term will continue to be a cause for concern. In view of the present differences in the food security situation within Europe, the prospects for the Region are considered for three groups of countries, TME, CEEC, and BS and CIS.

2. Food security prospects for the Traditional Market Economies (TME)

The nature of the food security problem

19. For the TME, dietary energy supplies (DES) are estimated to be 3 480 Calories per caput per day. Despite the high average food consumption of these countries, pockets of food insecurity are found in all of them, even the most developed ones. Most of these countries have developed a broad range of safety nets, including income support, unemployment relief, basic health services and direct food assistance programmes, with often significant participation by civil organisations. Such measures and programmes render food insecurity a marginal problem, limited to such groups as the elderly on fixed incomes, and the chronically unemployed who fall outside of the social safety nets.

20. In some of the TME, existing social security and safety net systems have been downsized under pressures for fiscal austerity, while in others they are under review and may be adjusted accordingly. Those adjustments take place in the face of the changing character of unemployment from cyclical to structural. The need for restructuring and modernization of the industrial, and increasingly of the services sector under escalating competitive and deregulation pressures, results in the release of significant portions of the labour force, and especially the unskilled or low skilled workers. Despite the generally continuous (albeit uneven) economic growth, unemployment remains stubbornly high.

21. Food security concerns relate also to the quality characteristics of the foods in the market, food safety, and sometimes the deterioration in the nutritional quality of diets due to changing lifestyles and increased dependence on processed foods. Such problems, although more pronounced among the poorest, affect all strata of society. Deterioration of the nutritional content of diets can also take the form of inadequately balanced or excessive food consumption, with associated obesity and other health consequences. Excessive food consumption draws heavily on primary agricultural production, thus adding the individual and social costs of unhealthy nutrition to those of food resource wastage.

Food security prospects for the Traditional Market Economies (TME) sub-region

22. Population growth in the sub-region is expected to slow from 0.6 in 1990-1995 to 0.3 between 1995 and 2010 and further to 0.1 between 2010 and 2025. For a number of countries in the sub-region population will peak in early 2000 and will start declining thereafter. The composition of the population is also changing. The dependency ratio will decline from 50.8 in 1995 to 50.1 by 2010 and subsequently increase by 2025. There will be an increase in the weight of the "over 65" cohort. Projected population figures and dependency ratios, may underestimate the actual population in the region since they do not take into account the significant migratory movements towards the sub-region from CIT and developing countries. Such movements are likely, at least partly to counter-balance the effects of an increasing dependency ratio and increase the projected entry into the labour force. Nevertheless, trends imply little need for increasing the overall quantity of food needed to satisfy nutrition requirements and that adequate diets per person can be maintained with food supplies per caput declining.

23. The sub-region's income (real GDP) is expected to continue growing at a rate of 2.4 percent per caput between 1995 and 2010. Increasing real income should eventually reduce unemployment, as skills demanded by the restructured industrial and service sectors are matched to those available in the labour force. Increases in income mean that average Calorie intake may still remain at a level that is in excess of nutritional requirements. Rising incomes will cause shifts in the diets of the population in the sub-region towards more processed foods, fruits and vegetables and vegetable oils. The share of the household budget devoted to food is expected to decline further.

24. The population and income dynamics call for little if any increases in the overall quantity of food needed to satisfy consumption requirements, and the region will have a fairly easy task in providing food security for all. Even where public social support has declined, activities by non-governmental groups and charitable organisations have been effective in complementing public programmes and are expected to continue doing so in the future.

The contribution of the sub-region to world food supplies

25. The sub-region has traditionally been a net importer of food. For cereals, a major food item imported by developing countries, the sub-region has been a net exporter since the mid-1980s, with net exports of 19.8 million tonnes in 1994. The longer term net contribution of the sub-region to global food availability is a confluence of three major trends: population dynamics, income growth, and trends in agricultural production and productivity in the region. From the point of view of developing countries and especially LIFDCs, the sub-region's net export position on basic food items (mainly cereals) is of importance as is the sub-region's role as an importer of food from the developing countries.

26. In terms of demand for cereals, some changes in the demand for feedgrains may be forthcoming, following dietary shifts especially between different kinds of meats. In addition, the sub-region's demand for domestically produced cereals may grow at the expense of imported substitutes. Nevertheless, the overall demand for cereals is expected to increase by only 13.5 percent between 1988-90 and 2010.

27. On the supply side, reforms in the policies of the European Union (EU) will have a major impact. Such reforms are the result of both internal pressures to control agricultural expenditures as well as of obligations undertaken under the Uruguay Round Agreement. In 1992, substantial reforms in the Common Agricultural Policy were initiated towards a support policy decoupled from production. The agreed reduction in the volume of EU subsidised exports is also an important factor arising from the Uruguay Round Agreement.

28. The combined effects of lower domestic support prices, set-aside programmes, environmental considerations and slower productivity growth, could lead to a reduction in net exports of over 20 percent between 1988-90 and 2010. Depite lower exports, the types of policies followed to reduce overproduction (set-aside programmes) could preserve the ability of the sub-region to increase production in cases of tight world market supplies.

29. The production potential in the sub-region will also depend on the environmental policies concerning agriculture of the countries in the sub-region. Many of them, especially in Western Europe, are increasingly taking measures to overcome the more serious threats to the environment coming from agriculture. They have, for example, taken marginal land out of production; reduced or banned the use of mineral fertilisers and residual pesticides on sensitive watersheds vulnerable to groundwater contamination; tightened the controls on waste disposal from intensive livestock units, and so forth. The sensitivity of civil society on such issues, and the technical and economic capacity to implement environmentally-benign practices and to bear the possible costs, make this trend likely to continue. Direct payments and cost compensation for the adoption of environmentally-friendly practices are increasingly important in the TME of Europe, but their effects on the production potential of the region have not been identified.

3. The causes and nature of food insecurity in the transition economies.

30. Although there are large differences between the CEEC and those in the former-USSR regarding the nature of and prospects for food security, the sub-regions share some common characteristics. The economic and social upheavals following the collapse of central planning, and the ensuing deep economic recession are at the root of the deterioration of all basic dimensions of food security (availability, stability and access) in the transition countries, and of the degradation of basic social amenities. The problem has appeared most severe in regions affected by war and civil strife.

31. The economic crisis caused sharp reductions in disposable household incomes, and the quasi disappearance of social safety nets and the social protection and services provided by state and collective enterprises. Large-scale unemployment, and income adjustments lagging behind inflation for many employees and pensioners have created sizeable vulnerable groups.

32. The factors that led to declining agricultural and food output are a combination of transitory short-term upheavals and longer-term adjustment towards the market path. The latter set of adjustments may imply an intersectoral allocation of resources under market conditions that differ substantially from the previous centrally-planned allocation.

33. For agricultural producers, the breakdown of state marketing and distribution channels without a prompt emergence of private channels, meant difficulties in securing inputs as well as outlets for marketed surplus. The continuation of monopolistic structures up- or downstream, and the control of food prices at retail level, created in several countries a price-cost squeeze that greatly reduced producer profit margins. The effects of lower profit margins on incentives were exacerbated by an uncertain institutional framework: uncertain property rights, inefficient forms of redistribution of collectively owned land, hesitations at dismantling large-scale collective agricultural enterprises and/or at creating the conditions for a market for land or land use entitlements. All those factors have prevented the emergence of new, sustainable production structures and discouraged investment and the re-capitalisation of the sector.

34. With few exceptions, headcounts below the poverty line in transition countries range from 20 to 40 percent of the population. With declining incomes and despite the shift to lower quality foods, the national average share of food in household expenditures rose sharply, in many cases reaching above 70 percent, and much more for the poorer strata. For ten countries for which data are available, average dietary energy supplies (DES) declined from a range of 2 500-3 600 Calories (1989) to 1 600-2 700 Calories (1993 or 1994), a decline of 6 to 37 percent in individual countries.

35. Finally, the armed conflicts that developed in several zones have led to the provision of humanitarian assistance to millions of people in the former Yugoslavia and the former USSR.

36. On the basis of low per caput GDP and continuing deficits in basic food commodities, nine (previously 12) countries in transition are currently classified as LIFDCs. For 1994/95, the total estimated import requirements for the 12 LIFDCs for cereals were projected at 7.3 million tonnes of which allocated, committed or shipped food aid was 2.1 million tons, compared to 7.8 million tons of commercial purchases and 1.8 million tons of food aid in 1993/94 .

Food security prospects in Central and Eastern European Countries (CEEC)

37. The population in the CEE sub-region is expected to increase slightly between 1995 and 2010 (average annual growth rate of 0.1 percent). The dependency ratio is expected to decrease until sometime between 2010 and 2025 and increase thereafter.

38. The overall prospects are for economic recovery in the sub-region; the first signs of a sustainable recovery are present. Almost all of the CEEC reported positive growth in 1994 (3.7 percent on average) and were expected to grow by another 4 percent in 1995. Real GDP is projected to recuperate "transition losses" and return to its pre-reform level by 2010.

39. An almost constant and ageing population will imply little need for further increases in per caput calorie intake over the already high pre-reform level. Nevertheless, FAO projects 3 400 Calories per caput per day in the year 2010, more than is necessary on nutritional grounds. Income growth and price reforms in the CEEC are expected to cause shifts in the diets away from red meats and pork and towards poultry, more vegetable oils etc.

40. Cereals consumption per caput is also expected to return to the same level as in the pre-reform period. Some of the recent declines in livestock production are expected to be permanent reflecting changes dictated by market forces rather than as a result of short-term shocks. More efficient use of feed in livestock production and seed, and lower post-harvest losses will moderate the demand for cereals.

41. On the other hand, it is assumed that continuation of market reforms in the CEEC will bring about large changes in agricultural production and productivity. Under such a scenario the CEEC could become net exporters of cereals by the year 2010 of over five million tonnes compared to their net imports of 2.1 million tonnes in 1988-90. The value of net food exports could double during the same period with livestock products accounting for about half of net food exports in the year 2010. There are strong signs of recovery of the agricultural sector from the crisis of the early reform years in a number of those countries. Some of the CEEC have increased their cereals export surpluses, while the sub-region as a whole is expected to produce an exportable surplus in 1995-96.

42. The vigour of the agricultural sector recovery depends on the continuation of reform efforts in those countries. Significant steps forward have been made to date, but important reforms are yet to be completed. Addressing institutional constraints is essential. A secure system of land property rights, and mechanisms for land lease and sale are required to facilitate the emergence of viable market-oriented farms. Such reforms should be accompanied by re-organisation and privatisation of the upstream and downstream sectors and by the removal of monopolistic or oligopolistic situations. Improvements in the flow of and access to market information, and in the business management and technical skills of farmers so that they can deal with competitive market-oriented farming, are important tasks which may require the cooperation of government, the private sector and farmers' organisations.

43. Agricultural recovery may be hampered by environmental problems. The inheritance of decades of environment-insensitive policies has left profound scars, and land degradation, large scale water management disasters, as well as contamination of agricultural resources and products by airborne and other pollutants, are serious in several countries.

44. Growth in the overall economy and the agricultural sector won't automatically solve the food insecurity problem. Unemployment in the sub-region is high, with long-term unemployment (more than 12 months) at about 40 percent. In general, the social consequences of the crisis are expected to follow income growth with a substantial lag. The importance of incorporation of safety nets in the adjustment programmes cannot be overstated.

Food security prospects in the Baltic States
and the Commonwealth of Independent States (BS and CIS)

45. According to the latest UN population assessment (1994), the population in the sub-region is expected to increase from 292 million in 1995 to 305 and 316 million in 2010 and 2025 respectively. For some large countries in the region the population will decline, and the average annual rate of growth between 1995 and 2010 is expected to be 0.3 percent. The dependency ratio will continue decreasing, reaching the lowest point around the year 2020 and increase afterwards.

46. The recent overall growth performance of the region has not been encouraging. The recession that started in the first reform years and which saw real GDP for the sub-region decline by a cumulative 48 percent, has not yet shown clean signs of reversal, with a decline of around 10 percent for 1994. Lower income growth and the demise of the export sector have resulted in a diminished ability to import food. Thus, despite declines in production of cereals and meat, food imports to the sub-region declined from US$ 15.3 billion in 1990 to US$7.9 billion in 1994. Cereals imports declined from 33 million tonnes in 1990 to 6.8 million tonnes in 1994 also due to the near collapse of the livestock sector. Some countries in the sub-region are likely to face a difficult task in trying to achieve food security for all by the year 2010.

47. On the assumption that substantial economic reforms will be implemented the sub-region is expected to recuperate " transition losses" in real GDP by 2010, which would provide a favourable environment for food security. With few exceptions, the reform process in the sub-region has been hesitant and uncertain and occurs amidst serious social and political contradictions and conflict. The absence of coherent policies for macro-economic stabilisation has given rise to high inflation rates making difficult any form of production planning.

48. Reforms in the agricultural sector may result in the sub-region recovering by 2010 the 1988/1990 level of cereals production, and per caput utilisation may return to the high pre-reform levels. The latter is due to the lower consumption of cereals and livestock products, a smaller livestock sector and improvements in the efficiency of feeding, and lower post-harvest losses. Overall, the sub-region could be almost self-sufficient by 2010. As in the case of CEEC, environmental problems could impede agricultural recovery in the sub-region.

49. In addition to the general economic decline as a major cause of food insecurity, an additional factor in the sub-region is the high market fragmentation caused partly by the breakdown of the marketing and distribution system. As a result, supplies have become erratic especially in urban areas and local shortages have emerged. Availability of existing supplies is also affected by high transport and storage/distribution losses. A considerable part of domestic trade occurs in the form of barter and informal arrangements. Obstacles to market integration exist due to a web of local laws and regulations governing food trade.

50. The proliferation of informal production in many areas makes an accurate assessment of the food security situation difficult. Nevertheless, in many countries, given the danger of drastic declines in availability and access conditions, continuous monitoring of the poverty and food security situations are essential as are appropriate measures to check unemployment, provide access to productive assets and land, restore health and social services for the poor, and facilitate access to food by the vulnerable groups.

4. The role of the region in global food security

51. Improving global food security will depend to a considerable degree on the performance of world food and commodity markets and more generally on the overall macroeconomic and trade environment within which policies and programmes that improve food security will be implemented. The region can be an important force influencing the performance of those markets. The European region is a major supplier of food to the developing countries on commercial or concessional terms, holds a large share of the world's food stocks, is an extremely important market for agricultural exports from developing countries and a major source of development assistance.

The region's contribution to the export prospects of the developing countries

52. With few exceptions (for example fruits and vegetables) developing countries are exporting low income-elasticity agricultural products to the mostly saturated markets of Western Europe. As a result, demand for products such as tropical fruits and beverages grow slowly from a high base. Conversely, a more significant growth in demand for tropical products could be expected by the transition economies as their incomes grow, although by 2010 the per caput consumption in those countries would still be low compared to levels in Western Europe.

The effects of trade liberalisation

53. For tropical agricultural products, tariffs are already generally low. Thus, although reductions to be implemented by WTO members from developed countries are substantial (43 percent on average), their effect on the export earnings of developing country exporters will be small. However, there is scope for further liberalisation in this area, e.g. domestic taxes in some importing countries, if eliminated, could boost market prices of some tropical products considerably. FAO's assessment of the impact of the Uruguay Round Agreement on Agriculture (AoA) points to some gains for developing countries as a whole. As a result, agricultural exports are expected to grow modestly faster than imports (compared to the situation of no liberalisation), resulting in an improvement of their agricultural trade balance by US$ 1.9 billion in the year 2000, of which US$ 0.8 billion will be due to the AoA itself.

54. An important issue for some countries trading with Europe is the loss of preferential margins under trade liberalisation. The FAO has assessed that the potential value of preferences for agricultural commodities given by the EU, Japan and the United States was some US$ 1.9 billion in 1992, and would fall by US$ 0.7 billion after the reduction of Most Favoured Nation (MFN) rates following the AoA. On a commodity basis, the main losses affect fruit and nuts, tea and coffee exporters.

55. Trade and environmental policies may lead to conflicting positions as to how environmental concerns are addressed. Duties or other import restrictions to compensate for a loss of competitiveness due to high domestic environmental standards would reduce access by exporters. Value preferences enforced by importing countries on Production and Processing Methods followed by exporting countries, e.g. to protect global commons, may be difficult to distinguish from disguised protectionism. Proliferation of unilateral measures would reduce the transparency of trade rules. Multilateral approaches, along the principles laid down by the United Nations Conference on Environment and Development (UNCED), are needed to avoid the misuse of environmental policies in international agricultural trade, although the considerable regional and local differences in environmental conditions within and among countries pose a particular challenge to the design and implementation of such approaches.

Official Development Assistance (ODA), food stocks and food aid

56. The countries of Western Europe (the EU plus the European Free Trade Agreement ((EFTA) countries) contributed to Official Development Assistance (ODA) to developing countries by on average some US$ 33.5 billion per annum (in the 1992-1994 period), compared to US$ 30 billion during the 1989-1993 period. For 1992-94 this contribution amounted to more than half of the total ODA by OECD to developing countries.

57. The economic shocks of the post-communist transformation have triggered ODA resource flows to the economies in transition, which received some US$ 7.2 billion in 1993 and a further US$ 7.5 billion in 1994 from the DAC countries. The corresponding amount to developing countries was US$ 59.2 billion in 1994.

58. The foreign assistance budgets of donor countries have come under increasing stress in their efforts to respond to the growing needs of both developing countries and from those within the region. Pressures in developed countries to reduce ODA, stemming from internal budget considerations, are a cause for concern and so is the reported decline of ODA going to agriculture of developing countries.

Trade liberalisation and food stocks: implications for food aid and food price stability

59. The European region has been a major provider of food aid. Between 1990 and 1995 the region provided an average of 4090 thousand tonnes of food aid (mainly cereals). A recent development in the region regarding food aid is that the former centrally planned economies, which had been sporadic recipients of food aid up to 1989, in 1993 absorbed 41 percent of global food aid deliveries. In the 1990-94 period, European Currency Unit (ECU) 2.2 billion worth of food aid was supplied by the G-24 countries to the CEEC and ECU 5.5 billion to the BS and CIS. In addition, transition countries have absorbed 27.5 percent of all food aid (cereals and non-cereals) provided by European countries during the 1990-1995 period. To the extent that food aid flows in the past have been related to the disposal of surplus production, the reduction in Government intervention in agricultural markets, and in particular reduced public stock-holding in exporting countries, might be expected to lead to reduced availabilities for aid. Grain stocks held by the Western Europe sub-region amounted in 1991-1995 to approximately one-third of those held by major exporters.

60. The consequences of the Uruguay Round for food aid flows from the region are expected to be mixed, and on balance should not have much impact. Under the Agreement bona fide food aid is exempt from the prohibition on export subsidies or export subsidy reduction commitments. In addition, food aid could become the only GATT-legal outlet for countries with agricultural surpluses now that limits on the volume of subsidised exports are in place.

61. The effects on market stability of a reduction in the level of public stocks depends on the response of private stockholding. Work at FAO suggests that the degree of replacement of public from private stocks will be in the order of 40 percent, implying a lower level of total stocks in the future. However, the larger share of private in total stocks will make stockholding more responsive to market needs.

5. World Food Summit and regional goals for food security

62. The World Food Summit (WFS) draft Policy Statement calls on all parties to reaffirm their commitment to policies that will ensure the availability and stability of adequate food supplies as well as access to an adequate diet for all. The WFS draft Global Action Plan stresses the need for each region, sub-region and country to choose its own strategy for attaining food security since individual circumstances vary so widely.

63. Although the region is closer to the goal of food security than any other, after the late 1980s it is characterised by an extreme duality. While in some countries food insecurity was and remains a marginal problem limited to pockets of the population, in others, progress in the food security situation has tended to slow and in some cases sharp declines have been observed. Due to its economic importance, the region will continue to play an important role in both reducing undernutrition in the world and in contributing to a steady growth in the world economy and in the developing countries in particular, sufficient to generate employment and incomes.

64. Prominent in the region's concerns are the food security problems and related difficulties faced by the economies in transition. A prolongation of adverse conditions in those economies, increases the risk of halting the pace of, or even reversing the economic reforms necessary for sustained growth. Failure to revive productive capacity in those economies and to create incomes and employment will mean increasing the number of people vulnerable to food insecurity and will prevent governments from putting in place the necessary social safety mechanisms necessary to assist them. Continuing dependence of those economies on foreign assistance will divert scarce resources from other needy areas of the world.

65. In the CIT, food insecurity is the result of a deep and prolonged recession following the collapse of the central planning system and the initiation of market reforms. Economic contraction resulted in mass unemployment and the collapse of social safety nets and social support systems increasing the share of the population with limited ability to access food. The breakdown of marketing and distribution channels created local food shortages and erratic supplies. Food supplies in some of the countries in transition were negatively affected both by the near-collapse of the agricultural sector as well as the sharp decline in the export sectors that prevented imports of food to make up for the production shortfalls.

66. Although transitional problems are not simply agriculture-sector specific, it is imperative that the agricultural sector of the economies in transition gets on the road to recovery both in order to ensure food security of their populations and to stimulate growth and improve wellbeing in the rural sectors and to stem excessive and premature urbanisation. This is particularly true for countries in which agriculture has a large share in economic activity, exports and employment where agricultural growth can be crucial for overall economic recovery.

67. Given the economic significance of the region, individual country policies aiming at domestic targets influence food security in the rest of the world through trade, investment and aid links. A prosperous and growing region can be a major outlet for exports from developing countries while at the same time providing resources that contribute to the development and food security efforts of those countries. The lowering of import barriers and the lowering of domestic support called for under the AoA makes the potential for expanded agricultural exports by developing countries even stronger.

68. Western European countries in the region have in the past been supplying a significant part of the cereals imported by developing countries. In Western European countries, policies towards agriculture have permitted producers to operate at a high level of productivity, and to meet internal and external commercial and concessional demand generally at declining real prices. Despite the declines in agricultural support under the AoA, and possible measures to contain negative environmental consequences from intensive agriculture, countries in Western Europe are expected to continue to be large exporters.

69. There is a great potential for the countries in transition to reverse their current import status and turn into net exporters by the year 2010. This potential can be unleashed through the proper policy reforms which will revitalise the economy in general and the agricultural sector in particular. With sustainable overall growth, today's transition countries can become significant markets for developing country products and providers instead of recipients of financial and food aid. In addition to the much needed peace and political stability, a stable macroeconomic environment is necessary for investment and growth of all productive sectors. For agriculture, the strengthening and expansion of institutional reforms establishing a stable system of property and access rights to resources appropriate for a market economy is a priority. Removing obstacles to inter-regional trade movements will make the calculations of costs and returns to farming much easier, and will prevent the emergence of food shortages. Reforming the sectors up and downstream to agricultural production away from monopolistic situations, will greatly improve incentives to producers.


III - ACTIONS TO ENSURE FOOD SECURITY

[The following text is provided to facilitate discussion in the Regional Conference
on the targets and priority actions for food security within the region and globally].

70. Pursuing the broad social, economic and human development objectives through actions agreed at conferences already convened during the 1990s will provide a more favourable overall environment for making progress towards the goal of universal food security. The countries of the European region therefore reaffirm their commitment to the ideals, objectives and actions agreed at the following conferences that will ease the task of ensuring food for all, at all times: the World Summit for Children (1990); the Conference on the Nutritional Rights of Man (Barcelona Declaration, 1992); the United Nations Conference on Environment and Development (UNCED, 1992); the FAO/WHO International Conference on Nutrition (ICN, 1992); the Final Act of the General Agreement on Tariffs and Trade (Uruguay Round, 1994); the United Nations Conference on Population and Development (1994); the World Summit for Social Development (Copenhagen Declaration, 1995); the Fourth World Conference on Women (1995); the International Conference on Sustainable Contributions of Fisheries to Food Security (Kyoto Declaration, 1995). The actions to be agreed at the forthcoming Fourth Technical Conference on Plant Genetic Resources will also help ensure universal food security.

1. Ensuring the political and economic environment for food security

Basis for Action

71. The relationship between peace and food security is well understood by the citizens of Europe. The political and economic environment throughout Europe, so conducive to the goal of universal food security for 45 years, continues to be generally so for the TMEs, but could not be sustained by the other countries of the region. Since the initiation of the reform process, some countries in transition have achieved significant advances in macroeconomic stabilisation, economic liberalisation and openness, which have to be consolidated. But difficult, essential tasks remain in the majority of countries where structural and institutional reforms have proceeded very slowly, and inconsistently, not creating the enabling environment required for private sector emergence and efficient development. Wars and civil strife have contributed to the displacement and destitution of large numbers of people in the region and have caused the destruction of large parts of the productive base of the economies in the countries involved.

Objectives
72.a)To achieve and maintain peace in present and potential war-torn areas, and ensure their reconstruction and rehabilitation;
b)To ensure the political and social stability necessary to establish and strengthen confidence and support for universal food security; and
c)Promote a stable macroeconomic environment conducive to investment and sustainable growth, job creation, poverty alleviation and food security;

Actions to be taken

at the national, sub-regional and regional levels, governments, in cooperation with civil society and regional and international organisations, will:
73.a)Implement peace initiatives that will put an end to ongoing conflicts and maintain the capacity to prevent new ones from erupting;
b)Take coordinated emergency action to alleviate the hardships faced by victims of war and civil strife, including food aid and essential inputs for producing food;
c)Assess the need for the rehabilitation of the food system as part of the overall reconstruction and rehabilitation assessment, and coordinate the implementation of the agreed plan of action;
d)Embrace monetary, fiscal and trade policies that encourage savings and investment, promote sustainable growth in the production of goods and services, and reduce unemployment or under-employment of human resources, and, thereby, improve access to food;
e)Safeguard the basic rights of employees, including to earnings and salaries that enable them to purchase a nutritionally adequate food basket; and
f)Pursue and strengthen human-centred economic and social reforms that balance growth with social objectives.

2. Securing sustainable safety nets and social support systems for the food insecure

Basis for Action

74. The social support systems in Europe which inter alia provide access to food for those who are unable to find work or who are unable to work range from excellent to totally inadequate. In a few countries the level of support appears to be higher than necessary to have access to a healthy diet. The TMEs have been able to maintain their systems, although many of them are seeking more cost effective ways of providing support, and in some of these countries the systems do not yet ensure adequate access to food for all those in need of assistance. Social protection systems have come under severe stress in most transition countries and food insecurity has gained ground in many of them, where the deterioration of entitlements and public social services and safety nets is widespread.

Objectives

75. To ensure access to a nutritionally adequate diet for those unable to produce or procure sufficient food.

Actions to be taken

at national, sub-regional and regional levels governments, in cooperation with civil society and regional and international organisations, will:
76.a)Identify, monitor and map the location of those who are undernourished or malnourished, using universally agreed minimal dietary energy standards;
b)Assess the adequacy and efficiency of social support systems that deliver benefits to the vulnerable, and, as necessary, modify them so that all in need have access to a diet that will permit them to lead a healthy and productive life;
c)Share experiences in ensuring access to food for those with limited incomes, so as to improve efficiency and cost effectiveness of social support systems in ensuring access to a minimally adequate diet;
d)Promote nutritional education and communication activities to raise awareness of the links between diet and good health and reduce excessive, health-deleterious food consumption; and
e)Protect vulnerable groups during the economic restructuring process, and provide technical assistance, advice and funding for special relief programmes to assist the undernourished, especially those in the low-income countries.



3. Ensuring the availability of adequate food supplies

Basis for action

77. The amount of food needed to meet future regional demands will increase slowly, especially after the short-term surge associated with the resumption of economic growth in the transition countries. The task of ensuring the availability of adequate food supplies for the regional population therefore should not present a serious problem. Instead, the region has the potential to become a more important source of food for the rest of the world, as well as a more important market. At present it is easier for food to move within the European Union (EU) than between the EU and non-EU members. Agreement has been reached on a scheduled reduction in food trade barriers and in export subsidies on food products, but new agreements will have to be negotiated before they will be eliminated. The food system is highly developed in the TMEs, especially in those who are members of the EU, where the level of productivity is extremely high and massive quantities of food are traded. On the other hand, the agricultural and food production capacity in most transition countries has been severely reduced and a massive recapitalisation of the sector is required. Here the potential for productivity and trade gains are larger; those who become members of the EU are likely to increase productivity and trade before those who do not. However, support to food producers has been reduced in most countries, especially in a number of the CIT. Measures to protect the environment are being implemented in a number of countries, but remain to be adopted in others.

Objectives
78.a)To ensure the availability of adequate food supplies to meet regional needs and to contribute to food supplies and markets for the rest of the world; and
b)To rehabilitate and achieve sustainable management of the natural resources and sustainable agricultural development.


Actions to be taken

at the national, sub-regional and regional levels governments, in cooperation with civil society and regional and international organisations, will:
79.a)Reduce, harmonise and eventually remove the barriers to regional food trade, including the subsidies on food exports;
b)Maintain adequate incentives for food producers to earn a fair return to labour and management, and to invest in productivity-enhancing, environmentally- friendly technology;
c)Harmonise producer and food price support systems so as to promote efficiency in the production of food within and beyond the region;
d)Support the maintenance or establishment of efficient systems to provide services to food producers, to produce and distribute inputs to them, and to market, transport, process and distribute food to consumers;
e)Formulate food reserves policies and encourage the maintenance of food reserves sufficient to ensure the role of reliable supplier;
f)Maintain health and quality control of food products, and provide training as necessary in meeting health and quality standards necessary for products to enter national, sub-regional, regional and international markets;
g)Maintain support for food and agricultural research, and establish cooperation mechanisms for rebuilding agricultural research systems and capabilities in CIT through collaboration with public and private research institutions of other countries in the region;
h)Pursue where necessary the restructuring of land ownership and control, complete the necessary legal reforms governing rights and equitable access to land ownership and use, and facilitate market-based land transactions;
i)Assess the extent and forms of environmental degradation of agricultural natural resources, and ensure the necessary action to improve the quality of the environment and the sustainability of agricultural and rural development; and
j)Strengthen the capacity to assess the impact of sector-specific policies and actions and developments in international food markets on food security within the region and beyond.

4. Strengthening the role of Europe in improving global food security

Basis for Action

80. The policies and actions of the European countries have had, and will continue to have, a major influence on the ability of the rest of the world to reach the goal of universal food security. The region includes the countries which devote the largest share of national income to development assistance, and which stand ready to share their experience at home and abroad in ensuring access to food for all, the availability of adequate food supplies and in promoting stability of food supplies. In addition, large quantities of food aid and assistance are provided to those in need who live within or outside the region. The agricultural and trade policies of the countries of the region directly affect global food availability and global price stability. The ability of developing countries to export to markets in the region affects their development prospects and their ability to import food. The region will continue to be a major source of food supplies for developing countries both in commercial and concessional terms, the single most important market for their agricultural exports, and a major source of development assistance and other finance. Narrowing the barriers to food trade between the region and the rest of the world, and eliminating export subsidies on food, will facilitate the task of reaching the goal of universal food security.

Objectives
81.a)To create a global macroeconomic and international trade environment conducive to food security throughout the world; and
b)To contribute towards making the world food market a stable and dependable source of supplies, including during periods of emergency.


Actions to be taken

at the regional and international levels governments, in cooperation with civil society and regional and international organisations, will:
82.a)Coordinate macroeconomic policies so as to promote a favourable economic climate for sustained progress towards universal food security;
b)Reduce and eventually eliminate food trade barriers, subsidies on food exports and internal taxes on imported agricultural commodities;
c)Maximise the efficiency of ODA in promoting food security, agricultural productivity and overall development in developing countries, with priority to be given to the LIFDCs, including assistance in gaining access to technological advances;
d)Monitor closely developments in the world food markets and in developing countries, and ensure at all times the adequacy of food stocks;
e)Maintain WTO-compatible public sector food security reserves and avoid policies which discourage stockholding by the private sector;
f)Guarantee timely, sufficient and adequate food aid, agricultural inputs or other forms of assistance to those countries that may be adversely affected by calamities and emergencies;
g)Provide support to compensatory financing and other mechanisms which would ensure greater price stability and better terms of trade for developing country exports;
h)Develop clear rules related to food quality and safety and prevent such rules from becoming instruments for protection, and contribute to multilateral action for the improvement of procedures and agreements on standards and measures for food safety and in the protection of human health and animal welfare; and support private and public sector actions to improve and strengthen food control procedures and marketing standards;
i)Support the activities of the international research centres performing research relevant to food and agriculture; establish cooperation between research centres in the region and those in developing countries; and
j)Pursue or promote multilateral negotiations on the role of environmental considerations in trade policies.