COMMITTEE ON COMMODITY PROBLEMS
Rome, 6 - 9 March 2001
ACTIVITIES ON COMMODITIES NOT COVERED BY INTERGOVERNMENTAL GROUPS
1. Much of the information collection and analysis on commodity markets and trade regularly conducted by the Commodities and Trade Division is in pursuit of its role as Secretariat of various Intergovernmental Commodity Groups. However, the Division has also undertaken work on other commodities where developments in commodity markets expose a need for analysis, particularly where those commodities either are not covered by appropriate international organizations, or where FAO's complementary expertise can make a significant contribution to analyses undertaken jointly with other bodies. In some, but not all, of these cases, studies have been undertaken at the request of member countries. The results of these analyses, which have been delivered in a number of ways, have generated considerable interest and the Secretariat therefore wishes to inform the Committee of these activities which contribute to international co-operation and market transparency in commodities outside formal intergovernmental activities. Non-IGG commodities which have been the subject of joint studies, conferences or other activities since the 62nd Session of the Committee include roots and tubers; sugar; coffee; cotton; tobacco; and dairy products.
2. The organisation of a number of meetings and conferences has been prompted by the need for a better understanding of the future of commodities, particularly in the light of the liberalisation of markets and other policy changes implemented since the conclusion of the Uruguay Round Agreements. These events have typically been supported by sponsors, or financed at least in part by the payment of fees by participants, and have at most involved only a small cost to FAO. Results of the conferences have been made available to FAO members.
3. The 1999 China International Cotton Conference was organised by the Government of China, at whose request technical support was provided by the Commodities and Trade Division of FAO, supported also by the World Bank, the World Trade Organization, the UN Conference on Trade and Development, the International Cotton Advisory Committee, and the United States Department of Agriculture. It focussed on the challenges facing the world cotton market, and the Chinese cotton industry, particularly in the light of the Uruguay Round Agreements on Agriculture and on Textiles and Clothing, and of the implementation of a new set of policies governing cotton marketing in China. It brought together over 100 experts on various aspects of textiles, including man-made fibres and cotton, from government and industry from major cotton producing and consuming countries, as well as from international organizations. The papers presented at the Conference covered a broad range of important issues facing the cotton industry, including the latest market developments, the effect of the Asian financial crisis, and the new marketing reforms in China's cotton industry.
4. In order to provide a broad, well-informed review of the possible outcomes of the next round of WTO negotiations, particularly the prospects for further liberalization of trade, support was extended to an international symposium on International Prospects For Dairying in the Next WTO Negotiating Round in June 1999 This symposium was hosted by the Argentine National Committee of the International Dairy Federation and Argentine Dairy Industry Federation and was supported by, in addition to FAO, the Pan-American Dairy Federation (FEPALE) and the International Dairy Federation (IDF).
5. An Advisory Consultation on Sugar Policy and Trade of ACP (African, Caribbean and Pacific) countries was held in Mbabane, Swaziland in September 1999, prior to the Sixth ACP Ministerial Conference. Seventy-nine representatives from those ACP countries which are signatories of the Sugar Protocol (SP) and Special Preferential Sugar Agreement (SPS) attended. The Consultation analyzed complex sugar policy and trade issues and formulated strategies aimed at economic and social welfare improvement of these countries. Proposals to minimize the adverse impact of trade liberalization on ACP countries and to improve efficiency and productivity of the sugar sectors were developed. These recommendations were adopted in entirety by the ACP Ministers.
6. The FAO/Cuba Sugar Conference held in Havana in December 1999, with the co-operation of the International Sugar Organization (ISO) and the Group of Sugar Exporting Countries of Latin America and the Caribbean (GEPLACEA) examined issues likely to impact on the sustainability of the global sugar economy in the 21st Century. The Conference, which was well attended by public and private sector participants, considered recent developments in sugar policy in selected countries from all the regions in the world. Presentations were also made on the FAO/ISO Medium-term Outlook to 2005, on the Effects of Trade Liberalization on the World Sugar Market, and the implications of the record low prices on supply regions. Tentative arrangements are being made for a third FAO international sugar conference, focusing on field to factory diversification and improvement, to be held in Mozambique in August 2001.
7. Recognition has arisen in many countries in recent years that the provision of milk to school children has been declining, and that school milk represents an important contribution to sound nutrition and an area of potential expansion of the market for milk. Conferences on the theme of school milk have been held in South Africa, the United Kingdom, Australia, Thailand, Austria, the Czech Republic and Colombia over the period 1998 to 2000 organised by various NGOs with support from FAO. Each of these was financed by sponsorship and registration fees. While the focus of the first conference, held in South Africa in 1998, was international, subsequent conferences have concentrated on regional issues. These conferences have facilitated the exchange of ideas and experiences between policy makers and others working in the school milk sector. Further conferences in this series are planned, in Canada in June 2001, in China in November 2001, and in Lebanon in 2002.
8. Roots and tubers are vital to the food security of peoples in many developing regions. They are the main food staples and sources of income for over than 1.5 billion people in the developing countries, many of which are Low Income Food Deficit Countries (LIFDCs). Heightened concern for food security, particularly following the World Food Summit, has resulted in increased attention being paid to these crops and emphasis is currently placed on the development of a strategic plan of action for their promotion and long-term sustainability. The Global Cassava Development Strategy Validation Forum was organised jointly by FAO (AGO and ESC) and IFAD in April 2000. This forum promoted a global cassava development strategy to the main stakeholders in cassava development, informing them of current and future opportunities and soliciting future commitments to cassava development.
9. FAO has a long history of cooperation with other bodies in the conduct and publication of studies on commodity production and trade. In particular, many analyses have been undertaken in co-operation with the various International Commodity Organizations. Such studies have combined the multi-disciplinary expertise and resources of FAO with the knowledge and data of these commodities possessed by the specialist ICOs. Recent studies include a joint exercise with the International Coffee Organization (ICO) to produce a set of coffee projections to 2010. At the request of the International Coffee Council, ESC constructed a quantitative model and projected global production and trade volumes , as well as specific projections for ICO member countries. FAO and the ICO had co-operated to produce similar market projections to 2005, which were presented at the 78th Session of the International Coffee Council in July 1999.
10. Trade in sugar is heavily influenced by the policies of various countries, and the future of this commodity therefore depends very much on changes in policies such as those that have arisen under the Uruguay Round Agreements. In the light of these agreements, the Commodities and Trade Division undertook a study of the Effects of Trade Liberalization on the World Sugar Market, and, in co-operation with the International Sugar Organization completed the Medium Term Projections to 2005. In cooperation with the International Cotton Advisory Committee (ICAC), a set of cotton market projections to 2005 were produced in 1999, incorporating an analysis of the impact of the implementation of the UR Agreement on Textiles and Clothing (ATC) on the world cotton market.
11. Several studies have been undertaken on roots and tubers, in the light of their importance for food security. One, World Cassava Economy, Recent Trends and Outlook, was conducted jointly by FAO and IFAD at the beginning of the year 2000. FAO also co-operated with the Committee on Inter-Centre Roots and Tuber Crops Research (CICRTCR), with the Centre de Coopération Internationale en Recherche Agronomique pour le Développement (CIRAD) and with the Natural Resources Institute (NRI) on other analyses of the roots and tubers economy.
12. In support of the major effort being made by the World Health Organization to establish a Framework Convention on Tobacco Control, a study on tobacco is currently being undertaken with financial support from the Swedish agency SIDA, and in cooperation with WHO, the World Bank, ILO and USDA. This study, aimed both at estimating the impact which reductions in demand for tobacco would have on the economies of selected developing countries, and at providing projections of production, consumption and trade in tobacco to the year 2010, is scheduled for completion late in 2001.
13. A Review of the Mozambique Sugar Sub-Sector Policy was completed in July 2000 for the Government of Mozambique, funded by the UNDP technical assistance programme. The study reviewed government policy on sugar production, consumption, and trade, and made appropriate policy recommendations for a holistic approach to the rehabilitation and development of the Sub-Sector, given the government's policy objectives of food security and poverty alleviation.
14. In addition to the electronic information exchange systems developed for some of the commodities covered by the IGGs, ESC operates e-mail fora for dairy products and pulses1. These systems allow participants from diverse parts of the world to exchange information and views on issues relevant to the national and international markets of the commodities concerned. The Dairy Outlook List, has around 800 participants, which makes it the second largest e-mail discussion forum within FAO.
15. A recent innovation which has been used only once by the Commodities and Trade Division, but which may have considerable application in the future, was the internet conference on International Prospects for Dairying in the Next WTO Negotiating Round which was held from September to December 1999. The conference reviewed possible changes to domestic and trade policies relevant to the dairy industry which might be addressed in the next round of trade negotiations. The internet conference allowed papers to be read and questions, answers and discussion to be posted on the website.
16. While the use of these electronic means of communication permits widespread sharing of information and views at very little direct cost, it does not provide the benefits of direct face-to-face contact with people from different countries. Also, while e-mail and the internet are widely available, they are by no means universally so, particularly in developing countries. These forms of communication are therefore seen as supplementing, rather than replacing, traditional meetings and conferences.
17. In addition to specific ad hoc activities dealing with emerging issues or concerns, the commodities referred to in this document (along with others, including rubber, and cocoa) are regularly covered in situation and outlook assessments published annually in the Commodity Market Review, in the Commodity Projections undertaken periodically, and in the growing volume of commodity information available on the website2. Information on dairy products, sugar and on roots and tubers is also included in Food Outlook.
18. In most of the activities referred to above, costs are shared, or, in many cases, borne entirely by other organisations. Such arrangements permit analyses of key issues and the dissemination of results with only a limited, if any, burden on the regular programme. In fact, these activities reinforce FAO's programme, particularly under sub-programme 224P4 "International Co-operation in Commodity and Trade Issues" and 224P5 "Measures to Enhance Commodity and Trade Development".
19. Conferences on these commodities have typically been convened by bodies other than FAO which pay a large part of the costs, including those for travel of FAO staff, through sponsorship or payment of participant subscriptions. While considerable staff time was involved in this work, the impact otherwise on the division's budget has been minimal or even positive.
20. In fact, while such activities have been planned to cover costs, they have at times allowed the generation of some surplus which has been used to support ESC's work on the commodities involved. Arrangements have recently been concluded for a private company to support regular programme activities in the field of school milk.
21. The Commodities and Trade Division has undertaken a range of activities associated with commodities other than those covered by its Intergovernmental Groups. These activities typically allow the Organization to contribute to the functioning of international commodity trade, to the benefit particularly of developing countries involved with those commodities. They have often also attracted extra-budgetary resources, thereby reinforcing the Organizaition's regular programme in commodity market and trade policy analysis and outlook work. The Committee may wish to take note of the activities reported in this document and make recommendations regarding the substance and approaches to be adopted for future work in this area.
1 To subscribe to an e-mail forum, send an e-mail to: [email protected] , with the subject line blank, and a one-line message, as follows:
To subscribe to the Dairy Outlook List, the message should read: subscribe Dairy-Outlook-L
To subscribe to the School Milk list, the message should read: subscribe School-Milk-L
To subscribe to the Pulses Market Network, the message should read: subscribe Pulses-L
(FAO supports over 100 e-mail conferences on a wide range of topics. Full information on these can be found on the website at: http://www.fao.org/Mailnews/Mailserv.htm.)
2 Commodities and Trade Division Website: http://www.fao.org/waicent/faoinfo/economic/ESC/comtrade.htm