CL 116/2




Hundred and sixteenth Session

Rome, 14-19 June 1999



Table of Contents


1. This document reviews recent trends and developments in food production and markets for basic food products. In line with Council suggestion that in future reporting on the current world food situation the Secretariat should (inter alia) increase its monitoring of the broad food security situation, it should be noted that document CFS 99/2 "Assessment of the World Food Security Situation" prepared for the twenty-fifth session of the Committee on World Food Security, 31 May - 3 June 1999, focuses on the monitoring of undernourishment in the world, short term shocks and developments at the national level that could increase the number of undernourished, as well as the food security status of specific vulnerable groups, and should be seen as complementary to the present one.


2. According to provisional estimates, global food production in 1998 grew by only 0.5 percent, which represents a decline of close to 1 percent in per caput terms. Over the last five-year period, 1994-98, global food production is estimated to have expanded at an average annual rate of 2.3 percent, implying a growth rate of 0.5 percent in per caput terms.

3. Overall the developing country group experienced higher output growth over the last five years than the developed countries, and the developing countries having experienced an increase in per caput food production represent 77 percent of the developing country population. There are nevertheless major variations in performance, not only across countries but also across regions. Thus, alone among the developing country regions, Africa South of Sahara has suffered a decline in per caput terms over the 1994-98 period. Not only slow output growth, but also high rates of population growth have contributed to poor per caput production performances.

4. Global production of staple food declined slightly in 1998, with most of the decline being in cereals, although developing country cereal production increased moderately. Global end-cereal stocks for the 1998/99 seasons are forecast to decline slightly, but to remain within the range of 17-18 percent of trend utilization which the FAO Secretariat considers as the minimum necessary to safeguard world food security.

5. For global fish production, estimates for 1998 are not yet available, but in 1997 total production expanded further to reach a peak of 122 million tonnes. The increase is due to continued growth in aquaculture production, while capture fisheries experienced a slight decrease.

6. A very large number of countries continue to face food emergencies, largely as a result of either adverse weather conditions or civil strife. Food aid shipments are estimated to have increased by about 9 percent in 1997/98 to 5.8 million tonnes, but remained lower than the average of the last five years. FAO currently forecasts a further increase in 1998/99 to a total of 8.5 million tonnes in the face of increased requirements from Asia, Central America and the CIS.

7. As a result of reduced import volumes, lower international prices and increased food aid shipments, developing country cereal import bills are expected to decline for the third consecutive year in 1998/99. Medium term prospects for the world food situation will depend to a large extent on developments in the world economy and the timing and strength of recovery from the financial crisis.


Food production in 1998

8. Provisional estimates of food production in 1998 indicate an increase at the global level over 1997 of only 0.5 percent (Table 1). This would represent the lowest rate of global expansion since 1991 and would correspond to a contraction of 0.9 percent in per caput terms, the first such contraction at the global level since 1993 (Table 2). Both groups of developing and developed countries shared in the slowdown, with production actually contracting by an estimated 1 percent in the developed country group and growing only by a modest 1.8 percent in the developing countries.

9. The estimated contraction in food production in the developed country group in 1998 reflected primarily a further sharp reduction in production in the CIS with declines in overall food production of 10 percent or more in the Russian Federation, Kazakhstan and Ukraine. In contrast, food production in the Eastern European transition countries1 overall are estimated to have remained stable relative to 1997. In the remaining developed country area, production increased somewhat in North America and Australia while declining slightly in Japan and Western Europe.

Table 1. Annual changes in world and regional food production (crop and livestock)

Total food production 1991 1992 1993 1994 1995 1996 1997 1998 Average 1994-98
  ..................................................... % ....................................................
World 0.1 2.8 0.8 3.1 1.9 4.1 1.8 0.5 2.3
Developed countries -2.9 1.5 -4.1 1.2 -1.7 3.2 1.1 -1.0 0.5
North America -0.9 8.6 -8.1 14.9 -4.2 3.7 2.9 1.6 3.8
Oceania 0.4 7.8 4.0 -5.3 9.7 8.6 0.5 2.3 3.2
Western Europe 0.7 1.1 -3.1 -1.1 -0.2 4.3 0.1 -0.4 0.5
Eastern Europe 1/ -1.7 -13.0 1.4 -8.6 4.7 0.3 -0.2 -0.2 -0.8
CIS ... ... -4.2 -13.6 -5.6 -1.1 0.8 -12.1 -6.3
Developing countries 2.6 3.8 4.8 4.5 4.7 4.4 2.5 1.8 3.6
Africa South of Sahara 5.8 1.3 3.4 3.5 2.9 4.9 -1.7 1.3 2.2
Far East and Oceania 2.2 5.1 6.6 4.9 5.5 4.3 3.9 1.4 4.0
Latin America & the Caribbean 3.0 1.7 1.1 5.1 5.0 2.1 2.8 1.6 3.3
Near East and North Africa 2.7 2.6 1.7 1.7 0.3 10.9 -4.8 5.8 2.8
Low-income food deficit countries 2.5 4.0 5.8 4.8 4.9 4.7 3.2 0.7 3.6
1/ From 1993 including Estonia, Latvia and Lithuania. Source: FAOSTAT.

Table 2. Annual changes in per caput food production (crop and livestock)

Per caput food production 1991 1992 1993 1994 1995 1996 1997 1998 Average 1994-98
  .......................................................... % .....................................................
World -1.4 1.2 -0.6 1.6 0.5 2.6 0.4 -0.9 0.9
Developed countries -3.5 1.0 -4.6 0.6 -2.1 2.9 0.7 -1.5 0.1
Developing countries 0.7 2.0 3.0 2.6 2.9 2.7 0.8 0.1 1.8
Africa South of Sahara 2.9 -1.5 0.7 0.8 0.3 2.3 -4.1 -1.2 -0.4
Far East and Oceania 0.6 3.5 5.0 3.4 4.0 2.8 2.4 0.0 2.5
Latin America & the Caribbean 1.1 0.0 -0.7 3.3 3.3 0.5 1.2 0.0 1.7
Near East & North Africa -0.1 -0.1 -0.9 -0.9 -2.2 8.1 -7.2 3.1 0.2
Low-income food deficit countries 0.6 0.4 4.0 3.0 3.2 2.9 1.5 -0.9 1.9
Source: FAOSTAT.                  

10. Although the developing countries as a group experienced a slowdown in food production growth for the third consecutive year, they continued to expand food production faster than the developed countries. Their estimated 1.8 percent rate of growth was the lowest in the 1990s and only enabled a marginal (0.1 percent) gain in per caput terms (table 2). For the group of low-income food deficit countries, in particular, 1998 appears to have been a very unfavourable year for crop and livestock production, which fell nearly 1 percent in per caput terms.

Food production trends in 1994-98

11. In order to place the preliminary production estimates for 1998 into perspective, this section reviews trends in total and per caput production for the five-year period 1994-98 (Tables 1 and 2). Outstanding features are:

12. Table 3 shows, by region and globally, the distribution of developing country populations according to changes in per caput food production for the five-year period 1994-98. Although achieving per caput gains in food production is not an equally meaningful objective for all developing countries, per caput food production is nevertheless an important indicator for many of them. It emerges from the table that the countries that have achieved gains in per caput food production over the period represent 77 percent of the developing country population. If China and India (both of which have experienced increases in per caput terms) are excluded, however, such share falls to only 55 percent.

13. The table likewise shows that 7 percent of the developing country population lives in countries which have suffered a relatively sharp decline in per caput food production, exceeding 1 percent on average per year over the period. The share is 14 percent if China and India are excluded. The table, however, also highlights very sharp differences between the regions.

14. Fig. 1 shows the relationship between the rate of change of total food production and population growth in the different countries for the five-year period 1994-98. It can be seen that production has lagged population growth in nearly half of the total number of countries considered. In some cases this has reflected strong demographic pressure rather that faltering performances of the agricultural sector (eg. Guinea, Ethiopia where per caput production declined despite food production increases of 2.5 to 3 percent). Many other countries experienced a perverse combination of high population growth with stagnating or even declining production performances (countries in the bottom-right area of the table).

15. Relatively few countries with high rates of population growth, above 3 percent annually, have succeeded in keeping annual food production growth in line with or above the rate of growth of population. At the other end, an outstanding case, given the massive populations involved, is that of China (top left hand corner), which combined an average annual expansion of total food production of more than 5 percent with a rate of population growth of less than one percent.


16. Global production of food staples (which in this analysis includes wheat, coarse grains, rice, and roots and tubers) is estimated to have fallen slightly to 2033 million tonnes in 1998 (Table 4), about 1 percent below the good harvests of 1997. Most of that decrease was in cereals. Among the low income, food deficit countries (LIFDCs), production of food staples in 1998 was up by 1.2 percent, and 3.3 percent for the same group without China and India.


17. In 1998, global cereal production, estimated at 1 880 million tonnes (including rice in milled equivalent), fell by some 1 percent from the previous year's record, but was still just above trend. Reduced wheat and rice crops accounted for the smaller output while coarse grains production remained similar to 1997's. All of the decline in cereal production was in the developed countries, in particular in the CIS, Eastern Europe and South Africa. By comparison, the developing countries experienced a modest improvement in output in 1998.

18. Early production prospects for 1999 are mixed. Wheat output is expected to fall further due to smaller plantings in several major producing countries, in particular the United States and most of Europe. Although the outlook is generally favourable for important coarse grains crops

Table 3. Distribution of developing country populations according to average annual change in per caput food production

Average change in
per caput food
1994- 1998
Far East and
(Far East and
Oceania, excluding
China and India)
Africa South of
Latin America
and the Caribbean
Near East and
North Africa
Total (Total, excluding
China and India)
% million % million % million % million % million % million % million %
Above 5.0 0 0.0 0 0.0 18 3.0 28 5.8 19 5.3 66 1.5 66 2.8
3.0 to 5.0 1 233 40.3 11 1.2 34 5.5 49 9.9 14 3.8 1 329 29.4 107 4.6
1.0 to 3.0 272 8.9 272 31.0 52 8.5 201 40.8 96 26.8 621 13.7 621 26.6
0.0 to 1.0 1 165 38.1 205 23.4 79 13.0 151 30.7 63 17.5 1 458 32.3 498 21.3
-1.0 to 0.0 362 11.8 362 41.2 251 41.3 12 2.3 101 28.1 725 16.1 725 31.0
-3.0 to -1.0 23 0.7 23 2.6 80 13.1 45 9.1 38 10.6 185 4.1 185 7.9
Below -3.0 5 0.2 5 0.6 95 15.6 7 1.5 29 7.9 136 3.0 136 5.8
Total 3 060 100 877 100 608 100.0 492 100 360 100.0 4 519 100.0 2 337 100.0
1/ For some countries, for which up-to date information on total food production for 1998 is not available, the average rate of change of per caput food production refers to 1994-97. Note: The numbers exclude countries for which up-to-date food production estimates are not available up to at least 1997. Source: FAOSTAT.

Figure 1. Average annual rate of change of food production (crops and livestock) in relation to population growth for developing countries 1994-98

  Average population growth, 1994-97 (%)
Average rate of change of food output, 1994-1998 (%) Below 1.0 1.0 to 1.5 1.5 to 2.0 2.0 to 2.5 2.5 to 3.0 Above 3.0
Above 5.0 Kuwait
China, Mainland
Guyana Bahamas
United Arab Emirates
Costa Rica
Syrian Arab Republic
Angola Laos
4.0 to 5.0   Argentina Egypt
Viet Nam
3.0 to 4.0 Korea Republic of Brazil Fiji
Central African Rep.
C�te d'Ivoire
2.5 to 3.0         Paraguay Guinea
2.0 to 2.5   Mauritius Mexico
Iran Islamic Rep. of
Congo, Republic of
1.5 to 2.0 Cuba
China, Taiwan Prov of
Malawi Colombia
Sierra Leone
El Salvador
South Africa
Tanzania, United Rep of
1.0 to 1.5 Jamaica
Trinidad and Tobago
R�union Indonesia Malaysia Gabon
Solomon Islands
0.5 to 1.0 Sri lanka     Venezuela
Sao Tome & Principe
0.0 to 0.5   Rwanda Cyprus
Dominican Republic
-0.5 to 0.0       Iraq Burkina Faso
Libyan Arab Jamahiriya
-1.0 to -0.5       Burundi
Brunei Darussalam
Cape Verde
Below -1.0 Puerto Rico Suriname Panama
New Caledonia
Papua New Guinea
Equatorial Guinea
Saudi Arabia
Congo, Dem Rep of
  Prod. > population   Prod. = Population   Prod. < Population  
Note: the table includes developing countries for which up-to-date estimates are available for both overall food production and population up to at least 1997. For some countries, for which up-to-date statistics are not yet available for 1998 food production, the average refers to 1994-97 (rather than 1994-98). Source: FAO.

Table 4. Food: World production, utilization, trade and stock changes


-------------------- UTILIZATION ----------------

  1996/97 1997/98 1998/99 forecast 1996/97 1997/98 1998/99 forecast 1996/97 1997/98 1998/99 forecast 1996/97 1997/98 1998/99 forecast 1996/97 1997/98 1998/99 forecast

..................................................................... million tonnes ..................................................................

BY COMMODITY                              
Staples 2/ 2048.7 2058.4 2032.8 2004.2 2024.1 2034.2 1021.6 1030.3 1046.8 214.5 218.9 212.1      
Total Cereals 3/ 1893.2 1904.9 1879.6 1848.7 1870.6 1881.0 935.8 945.5 962.2 206.2 210.8 204.0 41.9 28.8 -3.4
Wheat 589.6 613.9 597.9 577.3 591.3 599.4 403.2 412.8 418.9 98.0 95.7 93.3 10.7 22.5 -1.4
Rice (milled) 383.0 387.0 372.9 380.3 383.1 382.4 341.1 345.3 349.5 18.9 26.6 21.1 3.9 -1.5 -5.3
Coarse Grains 920.6 904.0 908.8 891.1 896.2 899.2 191.5 187.4 193.8 89.3 88.5 89.6 27.3 7.7 3.5
Roots and Tubers 4/ 155.5 153.5 153.2 155.5 153.5 153.2 85.8 84.8 84.6 8.3 8.1 8.1      
Meat 5/ 212.5 217.8 222.1 212.5 217.8 222.1 212.5 217.8 222.1 14.3 14.2 14.0      
Oils and Fats 6/ 101.0 103.7 107.6 100.8 105.0 107.2       42.7 43.4 44.2 0.2 -1.3 0.4
Milk 7/ 541.0 545.0 553.0 541.0 545.0 553.0 444.0 447.0 454.0 61.3 65.2 63.0      
STAPLES BY COUNTRY GROUPS                              
Developed countries 912.2 943.8 904.3 784.7 798.0 797.7 183.1 183.8 185.2 58.3 54.7 56.2 21.2 42.8 3.3
Developing countries 1136.5 1114.6 1128.4 1219.5 1226.1 1236.4 838.5 846.5 861.6 156.2 164.2 155.9 20.7 -14.0 -6.7
LIFDC 892.8 871.4 882.9 926.5 930.4 939.5 683.4 689.8 701.6 69.7 79.2 69.6 16.7 -9.4 -4.4
LIFDC, excl. India & China 364.8 350.0 361.5 402.0 405.1 409.9 294.9 298.6 304.0 55.2 68.0 58.0 27.5 -14.7 -8.0

1/ Imports for cereals; exports for roots and tubers, meat and oils. 5/ Data are on a calendar year basis and refer to the second year shown
2/ Includes cereals and roots and tubers. 6/ Trade is defined as the sum of trade in oil and the oil equivalent of oilseeds trade.
3/ Rice production is converted from paddy to milled basis. 7/ Data are on a calendar year basis and refer to the first year shown.
4/ In grain equivalent. Data are on a calendar year basis and refer to the second year shown
Source: FAO. Totals computed from unrounded data.

which are already in the ground in southern Africa and South America, early indications in the northern hemisphere point to reduced plantings, unless market developments increase the attractiveness of feed grains compared to non-cereals before the end of the planting seasons. Rice production in 1999 is likely to show some improvement, assuming normal weather returns after the previous year's adverse conditions in major producing regions.

19. Total world utilization of cereals in 1998/99 is expected to increase marginally compared to the previous season (to 1 881 million tonnes), but would be below the long-term trend for the first time since 1995/96, albeit slightly. This would be mostly due to the economic difficulties in Asia, where feed demand started to fall already in the second half of the previous season, and the CIS, where 1998 production fell sharply. World per caput cereal food consumption in 1998/99 is again expected to change little.

20. After two consecutive years of expansion, world cereal stocks by the close of the seasons ending in 1999 are forecast to contract slightly (1 percent) largely on account of reduced inventories in China and the CIS. Total cereal carryovers are expected to reach 328 million tonnes, down 3 million tonnes from their opening level. Among individual cereals, the largest decline is expected in rice inventories followed by some reduction in wheat stocks. These contractions are expected to be partly offset by increases in coarse grain stocks. While a decline is expected at the global level, there is a significant improvement in the forecast of cereal stocks to be held by the major exporting countries which are the primary source of surplus cereals to meet unexpected requirements. The ratio of global end-of-season stocks in 1998/99 to trend utilization in 1999/2000 is forecast to decline slightly to 17.2 percent, which is well below the average of 18.3 percent of the first half of the 1990s but higher than in the mid-nineties. At 17.2 percent, the ratio would, however, be within the 17-18 percent range which the FAO Secretariat considers as the minimum necessary to safeguard world food security, the ratio consisting of a 12 percent working stocks and a 5-6 percent reserve stock element.

21. World trade in cereals in 1998/99 is currently forecast at 204 million tonnes, down 7 million tonnes, or 3 percent, from the previous year. Most of the anticipated contraction in world imports would be in rice (down 5.5 million tonnes, or 20.5 percent) and wheat (down 2.4 million tonnes, or 2.5 percent), mainly because of reduced import demand, particularly in a number of low-income food-deficit countries where domestic production increased in 1998. By contrast, coarse grain imports are expected to remain virtually unchanged from the previous year. Overall, two important developments have dampened cereal import demand during the 1998/99 season, i.e. the decline in petroleum prices and the financial turmoil in many regions. For several oil-exporting, major cereal-importing countries, the drop in their export earnings, triggered by sharply lower petroleum prices, have lead to smaller cereal purchases this season. In addition, the continuing financial turmoil, which started in Asia and gradually spread to the Russian Federation and lately to Brazil, also forced some of the countries affected to curtail their foreign cereal purchases despite smaller domestic output in some cases and the slide in international cereal prices. However, larger supplies in major exporting countries are expected to increase substantially the food aid component of total cereal trade in 1998/99.

22. Because of large export supplies and subdued commercial import demand, international market prices of all major cereals have continued to remain relatively weak during the 1998/99 marketing season. Reflecting this overall situation, abundant wheat inventories in major exporting countries coupled with weak global demand have kept wheat export prices below the previous season's. Similarly for major coarse grains, a revival in maize and barley export sales in late 1998 did little to alleviate the overall stagnant market situation, caused primarily by slow recovery in Asian import demand and abundant supplies, especially in the United States. International rice prices have also experienced the pressure of shrinking demand and have remained generally below those of a year ago.

Roots and tubers

23. Global production of roots and tubers is forecast to reach 153.2 million tonnes (in grain equivalent) in 1999, marginally less than in the previous year and 5 percent below the 1996-98 average. This situation reflects stagnant outputs of cassava and potatoes, as well as of other roots and tubers (yams, taro, and minor roots and tubers) which is concentrated in the developing countries. Among the developing countries, the LIFDCs account for nearly 60 percent of the total production and any reduction in output there would have a negative impact on their food security.

24. World production of cassava, the most important root crop in the developing countries, is expected to decline somewhat in 1998/99, with a contraction in Africa and in Latin America and the Caribbean not fully offset by a marginal increase in Asia. In Africa, where cassava is one of the main staples, smaller outputs are anticipated in a number of major producing countries affected by civil strife and internal conflicts, especially in Angola, Congo Democratic Republic and Sierra Leone. In Nigeria, the suspension of the FAO/IFAD project on the Roots and Tubers Expansion Programme may also have a negative impact on cassava output. Similarly, production is likely to fall in Latin America and the Caribbean as a result of unfavourable weather, resulting in smaller plantings. By contrast, there might be a small recovery in Asia, assuming a return to normal climatic conditions, following the damage caused by El Ni�o in the previous season. The expected recovery in production in the region could result in increased availability of cassava for export in 1999. However, although trade might recover somewhat from the very low levels of last year, the rise is likely to be modest, as lower grain prices in the EC could encourage a continued shift away from non-grain feedstuffs, including cassava.

Oils and fats

25. International prices of oils and fats rose rapidly (by about 15 percent) during the 1997/98 season but this upward trend has come to an end. With total output exceeding consumption, stocks of oils and fats are anticipated to recover somewhat by the end of the 1998/99 season and the closing stocks to use ratio for oils and fats is forecast to edge upwards. While prices are expected to fall compared to the previous season, they are, nevertheless, likely to remain at relatively high levels compared to the early 1990s.

26. The driving force behind these developments is another record global production of oilcrops foreseen for1998/99, surpassing last season's level by some 3-4 percent and reaching some 108 million tonnes. The expansion in total output would mainly be on account of the increases in the production of sunflower and rapeseed oil together with a recovery in palm oil output.

27. Total apparent utilization of fats and oils is expected to continue to expand, albeit at a slower pace of about 2 percent as against 4 percent during the preceding season, possibly reaching 107 million tonnes in 1998/99. The economic crisis affecting some countries since 1997 is not expected to alter their per caput consumption of oils and fats notably, given that they are staple food products. With respect to the composition of global consumption, the share of sunflower, rapeseed and palm oils is likely to rise moderately.

28. Total exports of oils and fats are estimated to reach more than 44 million tonnes, rising some 1.9 percent above last season's level. Following the customary pattern, the main suppliers of oils would be Argentina, Brazil and the United Sates for soybeans, sunflowerseed and their oils; Indonesia and Malaysia for palm and palmkernel oil; the Philippines and Indonesia for copra and coconut oil; and Canada for rapeseed and its oil. The respective shares of the different oils and fats in total trade have changed little with soybean oil and palm oil accounting for about 30 and 27 percent respectively, followed by sunflower seed oil (11 percent), rapeseed oil (9 percent), and coconut oil (3.5 percent).


29. Global meat production is forecast to expand by 2 percent in 1999, boosted mainly by growth in the poultry and pig meat sectors, which should again benefit from low feed prices this year. The bulk of the expansion is forecast to be concentrated in the developing countries with most regions pointing to a renewed dynamism. By contrast, developed countries are likely to record only modest production increases, as investments have been depressed by low meat prices in 1998 and bleak expectations for exports in the nearer future. Despite increased purchases by Japan, the Republic of Korea and the United States, trade in meat products is forecast to continue to contract in 1999, with all meat categories likely to be affected. This pessimistic outlook stems from the poor import prospects by the Russian Federation, notwithstanding the granting of concessional sales and food aid in meat products to this country by the United States and the EC. Most of the brunt of the contraction in international meat trade is likely to be borne by the EC and eastern European exporters. By contrast, Brazil might take advantage of its recent currency devaluation to boost sales abroad. International meat prices are forecast to remain subdued at least until the second half of the year, reflecting relatively ample supplies relative to demand.

30. Global output of milk is expected to increase by 1 percent in 1999, continuing the trend for total production to edge upwards, on a year-to-year basis. Amongst the major milk producing countries, higher output is anticipated in Argentina, Australia, Brazil, India, Poland and the United States. Elsewhere, the devaluation of the Rouble may stimulate milk production in the Russian Federation, as many imported dairy products have increased substantially in price. In the European Union, milk quotas limit any increase in production, while in New Zealand, dry conditions in the first quarter of the year may put a brake on any growth in output there.

31. In many countries, and especially the developing countries, increased milk output is linked to raising domestic demand; however, in some countries, in particular Argentina, Australia and New Zealand, much of the output is destined for processing into dairy products for sale on the international market. At the same time, some exporting countries which subsidize exports of dairy products, including the United States and the European Union, will have to comply with limitations on such sales agreed under the Uruguay Round Agreement. On the demand side, Brazil and the Russian Federation, both of which are important purchasers of dairy products on the international market, are expected to reduce their imports of dairy products in 1999, following a drastic devaluation of their currencies against the US dollar. However, overall, the international dairy market is expected to remain reasonably well-balanced in 1999 and average prices should be similar to those prevailing at the end of 1998.


32. In recent years fish supplies continued to expand. In 1996 they reached 121.0 million tonnes, and in 1997 a new peak of total production was reached with 122.1 million tonnes. The increase is due to continued growth in aquaculture production -particularly in China. Capture fisheries experienced in 1997 a slight decrease in their production level in relation to 1996 landings. Fish supply for human consumption has reached a record level. Fish supplies for fish meal production decreased slightly in 1997 due to the initial impact of the El Ni�o phenomenon on highly fluctuating harvestable stocks of pelagic species off the West Coast of South America.

33. In 1997 landings by capture fisheries reached about 93.4 million tonnes. The ten main fishing countries accounted for about 62 percent of the volume. Aggregate production in the low-income, food deficit countries (LIFDCs) continued the pattern of high growth which has characterised recent years, showing an annual rate of increase of 8.4 percent during the period 1988-1997. In 1997, LIFDCs accounted for 43 percent of total fish production, compared with 27 percent in 1988. Food fish supply in LIFDCs is currently half of the world average and is increasing at a higher rate than population growth.

34. Production figures for mariculture and inland aquaculture show an estimated increase from 26.4 million tonnes in 1996 to 28.7 million tonnes in 1997 more than offsetting a decline of about 1.2 million tonnes during the same period in the harvest from marine and inland capture fisheries. This growth continues to be sustained mainly by an increased predominance of Asia and of Carp species. Five Asian countries (China, India, Japan, Indonesia and Thailand) accounted for 80 percent of the volume of aquaculture produce.

35. Of the total figure of 122.1 million tonnes of total fishery production in 1997, it is preliminarily calculated that some 29.5 million tonnes were used for reduction. Fish available for direct human consumption in 1997 was estimated to be 92.6, million tonnes, almost 2 million tonnes more than in 1995, representing a greater increase than the estimated population growth rate in the same year. As a consequence average annual per caput availability of food fish increased to 15,9 kg.


36. Although cereal production in developing countries in 1998 is estimated to have improved marginally from the previous year, the number of countries facing food emergencies as of mid-March stands at 38 compared to 37 towards the end of 1998, mainly due to adverse weather and civil strife.

37. In Africa, the food situation in Somalia gives cause for serious concern, following six poor harvests in succession, while in Angola, Democratic Republic of Congo, Guinea-Bissau and Sierra Leone, food production is seriously hampered by persistent civil strife and large-scale population displacements. Elsewhere on the continent, adverse weather has significantly affected food security in Tanzania, while the ongoing war between Eritrea and Ethiopia has displaced large numbers of people along the common border.

38. In Asia, severe food shortages persist in Korea DPR due to a combination of economic problems and adverse weather. In Indonesia, despite a favourable outlook for the rice harvest in March/April, food security remains precarious following 1998's sharply reduced rice crop and the effect of the economic crisis. In Afghanistan, the ongoing fighting in the northern provinces, which account for much of the country's cereal output, has hampered production. In Iraq, despite some easing of the food supply situation following the implementation of the oil-for-food deal, malnutrition remains a serious problem. Elsewhere in Asia, weather anomalies have affected production in Bangladesh, China and the Philippines.

39. In Central America, hurricane "Mitch" devastated several countries, causing over 9 500 casualties, severely affecting more than 3 million people and inflicting damage of unprecedented scale to housing, infrastructure and agriculture. Worst affected were Honduras and Nicaragua, where severe losses to foodcrops have been incurred, and production of major export commodities in 1999 is expected to be sharply reduced. El Salvador, Guatemala and some south-western parts of Mexico, as well as Costa Rica and Panama, also suffered the effects of the hurricane.

40. In the CIS, the financial crisis in the Russian Federation has disrupted the economies of most of the countries in the region and increased hardship. Vulnerable populations including the internally displaced, refugees and elderly in Armenia, Azerbaijan, Georgia and particularly Tajikistan continue to need targeted food aid. Following a poor harvest in 1998, food aid shipments to provide relief to the most affected people and areas of the Russian Federation are just getting underway.


41. Estimates of cereal food aid shipments under programme, project and emergency activities conducted by the World Food Programme (WFP) intensified, leading to an increase in food aid shipments by about 9 percent to 5.8 million tonnes in 1997/98 (1 July through 30 June) compared with 1996/97. Despite this increase, which was mostly due to expanded shipments from the US and the EC, total deliveries were still considerably lower than the average shipments over the last five years. Other donors also responded to the higher food aid needs in 1997/98 and have increased their shipments of cereal food aid during this period. About 5.3 million tonnes, or 90 percent, of the total cereal food aid went to the LIFDCs, especially those in Asia, which accounted for about 52 percent of the total shipments in 1997/98. In Sub-Saharan Africa, food aid rose slightly, while a small decline was recorded for shipments to Latin America.

42. FAO's forecast of cereal food aid shipments in 1998/99 (July/June) now points to a total of 8.5 million tonnes, a 2.7 million tonnes rise over those estimated for the previous year. The greater availability of grain supplies among the major donor countries combined with higher food aid requirements, particularly from Asia, Central America and the CIS, is expected to account for this impressive boost in global cereal food aid shipments after the more modest increase in 1997/98. In fact, the bulk of the increase is expected to be due to the announced food aid packages signed between the Russian Federation and the EC and the US, although delays in implementing the agreements may prevent the full volumes from being shipped. Furthermore, the ongoing financial and economic turmoil, especially in Asia, together with unfavourable climatic conditions and civil strife in a number of food-deficit countries, have raised the need for food aid. However, actual deliveries could be interrupted by restraining factors associated with such hostilities and impede access of vulnerable groups to food aid donations, such as in Kosovo, Sierra Leone, Angola and parts of Central and Eastern Africa.

43. For non-cereal food aid, shipments fell for the fifth consecutive year, reaching a low of 721 000 tonnes, down by 7 percent, or 51 000 tonnes. While donations from the United States were about 94 000 tonnes higher in 1998 compared to 1997, the EC donated 35 000 tonnes, or 28 percent down, and lower shipments from other donors more than offset the increase in non-cereal food aid shipments from the United States. Of the total non-cereal aid shipments for 1998, over 40 percent went to Asia; Africa received about 30 percent and the balance went to the CIS and Latin America and the Caribbean.


44. Cereal import bills are expected to continue to decline for the third consecutive year in 1998/99 (July/June) due to reduced import volume, lower international prices and larger food aid shipments. The most pronounced reduction is forecast for the developing countries whose import bill is expected to decline by 16 percent from US$ 27 000 million in 1997/98 to US$ 22 800 million in 1998/99, which is similar to the nominal import costs estimated in the years just before the high import bills of 1995/96. The LIFDCs, as a group, are likely to save over US$3 000 million, a reduction of 24 percent compared to the previous season. For the Least Developed and Net Food-Importing Developing countries, the group covered by the Uruguay Round Ministerial Decision, the forecast for the cereal import bill in 1998/99 is for a decrease of 19 percent, amounting to about US$ 1 500 million. In the case of these developing countries, the smaller cereal import cost has more to do with reduced imports due to a recovery in domestic output as well as lower import prices than with larger food aid shipments.


45. Medium term prospects for world food and agriculture as well as global food security are to a large extent influenced by the international economic environment. As a result of the international financial crisis prospects for global economic activity have significantly weakened in the short run. According to World Bank estimates and projections3 world economic growth declined to a mere 1.8 percent in 1998, with 2.0 percent estimated for the developing countries as a group. At the same time the growth in the volume of world trade has decelerated and many developing countries have suffered terms of trade losses. Although economic growth slowed in 1998 in all developing country regions, the most affected region was nevertheless East Asia, where the financial crisis originated. Short-to-medium term prospects still appear very uncertain, in particular as concerns the strength and timing of the recovery in the countries most affected by the crisis. Overall, the World Bank projects only a modest recovery in world economic growth in 1999 to 1.9 percent (2.7 percent for the developing countries), but a further strengthening in 2000 to 2.7 percent (4.3 for the developing countries). In the medium term, the World Bank projects a recovery to an average rate of growth for the period 2001-2007 of 3.2 percent globally and 5.2 percent for the developing country group. These projections are, however, highly uncertain and the World Bank points to major downside risks to the projections. The impact of slower economic growth on incomes, employment and the capacity of poor households to feed themselves adequately can only be underlined.

46. The economic slowdown is particularly felt in the developing countries, and especially those that are heavily dependent on weakening export markets, primary commodity exports and private capital flows to finance current account deficits. The large declines in international commodity prices since mid-1997, and expectations of less than buoyant markets for most commodities in the years to come, are reasons for concern for them4. In 1998 alone, lower commodity prices resulted in terms of trade losses representing nearly 1 percent of GDP in the developing countries as a whole (5 percent in the Near East, affected in particular by the decline in crude oil prices; around 0.8 percent in Latin America and the Caribbean; 3 percent in East Asia; and 1.5 percent of GDP in Africa South of Sahara5). On the other hand, grain prices at low levels are easing the burden of food imports for the deficit countries in general.

47. The world index of nominal export prices of principal primary agricultural products declined by almost 13 percent in 1998, dropping below the high levels of the mid-1990s but remaining well above the average for early part of the decade. Because of the different commodity composition of their agricultural exports, the index for the developing countries fell by 14 percent while that for the developed countries fell by 11 percent. Despite the relatively steep decline in 1998, the index for the developing countries remained considerably above the average for the 1990s, reflecting the relatively strong prices for tropical beverages, rice and vegetable oils and the higher weights associated with these commodities in the exports of developing countries. In contrast, the index for developed countries reached its lowest point of the decade in 1998, almost 15 percent below the average for the 1990s, reflecting the considerable declines in the prices of grains, meats and other basic foods.

48. Although commodity prices may be expected to stabilize somewhat after the pronounced falls since mid-1997, a substantial recovery appears unlikely in the short and mid-term in view of overcapacity in many commodity markets, and the depressing effects of the financial crisis on world economic activity and import demand. The balance of the contrasting effects of the economic slowdown on income and food prices will yield uncertain results in terms of access to food for the poor consumers.


1  Including Estonia, Latvia and Lithuania.

2  FAO, Commodity Market Review, 1998-99.

3  World Bank, Global Economic Prospects and the Developing Countries, 1998-99.

4  It is recalled that primary commodities account for roughly one-third of the developing countries' export earnings; agricultural commodities account for about 10 percent of total export earnings in the developing countries as a whole, and over 20 percent in both Africa and Latin America and the Caribbean.

5  World Bank, op. cit.