Point III.a of the Provisional Agenda



Rome, 4-5 July 2001


Table of Contents



1. This paper makes a brief assessment of the measures that have been implemented by governments in relation to the three sets of commodities that are subject to policy guidelines: (i) rice; (ii) oilseeds, oils and meals; and (iii) livestock and meat1. In their review of policy changes, the Secretariats of the Groups dealing with those commodities have drawn from various sources of information, including government replies to questionnaires2. A more detailed description of the measures implemented can be found in the Basic Foods Policy Review, which will be tabled at the joint meeting. The periods covered in the review correspond to 1999-2000 for rice and to 1998-2000 for the other two commodity groups.


2. The world rice economy in 1999 and 2000 bears little resemblance with the situation prevailing in the 1996-1998 period of the preceding policy review, when a dynamic import demand for rice boosted global trade and kept international prices firm. A turnaround happened in mid-1999, when prices started to decline, a tendency that has persisted until 20013, notwithstanding a fall in global rice production in 2000. The passage from a tight to an easy world rice supply/demand balances and from high to low prices prompted substantial changes in government rice policies, as their focus shifted from securing affordable and stable rice supplies for consumers to guaranteeing reasonable incomes to producers. However, there were major differences in the measures adopted across countries.


3. Given the thinness of the rice international market, the majority of the large rice producing/consuming countries has continued to pursue a high degree of self-sufficiency as a means to achieve food security.

4. Notwithstanding a fall in international prices, many governments have maintained expansionary policies. They were in prevalence in net rice importing countries, such as Bangladesh, Bolivia, Brazil, Colombia, Indonesia, Malaysia, Nigeria and the Philippines, but were also pursued in net exporters, such as Cambodia, Myanmar and India.

5. While some of those countries supported the extension of paddy cultivation to new areas, efforts were mostly directed towards an intensification of the sector, for instance by promoting the adoption of improved varieties or hybrid rice or the cultivation of dry season crops under irrigation.

6. In a number of major exporting countries, including China, Thailand and Vietnam, governments reacted to the low international prices by encouraging a shift of rice cultivation from marginal lands and toward high quality rice production.

7. Several countries reported their complete abstention from direct market intervention. In such instances, support to the sector was mainly conveyed through research, provision of basic infrastructure, subsidized credits and border protection.

8. Only a few of the governments that implemented support price policies let these prices fall in real terms (table 1) and most of them increased substantially the quantities purchased to sustain the market. Such interventions were not always sufficient to prevent farm prices from dropping below support levels. In many cases, price support policies were complemented with import restrictions.

9. Declining price support was the main factor underlying the large drop in paddy production in 2000 in China, and hence rural incomes were adversely affected.

10. Among developed countries, Japan and the EC launched or proposed new programmes to curb excess production, while raising compensatory payments. In the case of the EC, however, member countries have so far rejected the Commission's proposal for a reform of the rice regime, as no agreement could be reached on the proposed elimination of the intervention system.

11. In the United States, monetary outlays to rice producers rose considerably between fiscal years 1998 and 2000, due to Special Supplementary Market Transition payments which supplemented payments under the Production Flexibility Contract. Producers also received large marketing loan benefits to offset the drop in prices (table 2).

12. The volatility of the rice market encouraged countries such as Thailand and India to consider new forms of assistance to producers, for instance through subsidized insurance schemes, already widely in use in the United States.


13. The number of countries that keep control over domestic rice marketing and consumer prices has fallen substantially over the past two decades, following market liberalization. However, China and India still restrict internal movements of rice, while Costa Rica, the Dominican Republic, India, Indonesia, Japan, Malaysia and St. Lucia are among the countries that continue to regulate wholesale or retail prices of rice.

14. Most of the latter countries reduced the level of the official sale prices in 1999 and 2000. A programme of free rice distribution to the "poorest of the poor" was newly introduced by India which contributed to lowering burgeoning stocks. A few countries provided incentives to promote the use of rice in feed rations.

15. Various countries launched programmes to enhance the quality of the rice by improving the milling and processing systems. These measures, sometimes involving the introduction of more stringent quality standards and control systems, also aimed at improving access to external markets.

16. Rice commodity exchanges have been established by some exporting countries, while electronic exchanges have been set up in others to disseminate information and stimulate trade. Such initiatives might bring, in the longer run, a transformation of rice trading and have positive effects for market transparency.

17. Many countries maintained rice reserves policies, which require stocks to cover a minimum of one to three months of domestic consumption. Rice stocks in China have recently been estimated to be much larger, sufficient to meet nine months of domestic utilization. Since 1999, the country has embarked in policies aimed at reducing rice inventories held by governments grain enterprises, first through more stringent quality specification for procurement and second, through large exports. While India also considered the possibility of exports to cut the size of its inventories, high domestic prices have rendered that option difficult to implement given the WTO limitations on export subsidies. As a result, the country opted to increase the distribution of rice to target consumer groups. As a part of a more extensive reform of the existing marketing and storage systems, incentives were given to stimulate private sector participation in the form of tax exemptions on investments in those areas. Also faced with large stocks, Japan took steps to raise the use of rice in feed and food aid programmes.

18. Rice contributions made to the World Food Programme (WFP) International Emergency Food Reserve (IEFR), after falling in 1999, rose to a record 675.4 thousand tonnes, 3 times the volume reached in 1998. Donor contributions to the IEFR followed a similar pattern, trebling in 2000 to 192.4 thousand tonnes.


Measures affecting imports

19. Importing countries benefited from falling world prices from mid-1999 onwards but, when these resulted in sharp drops in local farm prices, many of them responded by raising import barriers, especially in 2000. The resulting increases in the level of tariffs, suspension of import licensing or temporary import bans, while not necessarily contravening countries' WTO commitments, often meant reversing a process of liberalization that had prevailed in 1998 and early 1999.

20. Preferential tariff quotas were expanded in a number of importing countries such as the EC, Japan and the Republic of Korea, in line with the WTO Agreement on Agriculture (AoA). However, the EC Commission has not clearly stated the implications of its proposal of reform of the EC rice regime for the estimation of import duties, a situation that is causing special concern to traditional suppliers.

21. Under the recent EC "All But Arms" (ABA) initiative, the 48 least developed countries will be granted unrestricted and unlimited access to the EC rice market but only after 2010, following a three year transition period from 2006 to 2009. The quantities of rice that will be granted free access over that period will be small at 2 517 tonnes in 2006, rising progressively to 6 696 tonnes by 2009.

Measures affecting exports

22. Low international prices have brought major exporting countries to relax controls on exports, for instance by providing more scope for private traders' participation or by exempting exporters from levies. In some cases, prohibitions on paddy rice exports were also lifted.

23. Export subsidies have continued to be cut, in conformity with WTO commitments. However, the United States stepped up the volume of rice shipped under credit guarantee programmes, especially in 1999.

24. Depressed world prices in 2000 encouraged Thailand and Vietnam to form a rice pool to prevent them from undercutting each other's export prices. This initiative does not appear to have had a noticeable positive impact on international rice quotations.

25. Government-to-government rice transactions regained importance in the period 1999-2000, with Thailand and Vietnam on the export side and Indonesia and the Philippines on the import side, although long-term supply agreements appear to have lost popularity.


26. Shipments of rice food aid reached a record of 1.5 million tonnes in 1998, in the wake of the serious production shortfalls experienced by a number of countries. In 1999, the volume diminished to about 1 million tonnes but went up again in 2000, to 1.2 million tonnes. Food aid shipments made by Japan rose substantially in those 2 years, accounting for 20 percent and 38 percent of the total in 1999 and 2000, respectively (table 3).

27. Triangular food aid transactions followed a similar trend to total rice food aid, falling from 195 thousand tonnes in 1998 to 108 thousand tonnes in 1999, before recovering somewhat to 169 thousand tonnes in 2000. Japan remained the major donor supporting triangular food aid transactions, followed by the EC (including national aid by member countries) and Australia. Most of the benefits of the triangular transactions accrued to only 3 exporting developing countries (Thailand, Cambodia and Nepal), which supplied more than 70 percent of that trade.


28. In the past two years, some countries, including China, Vietnam and Thailand have encouraged a shift of production out of marginal lands particularly prone to erosion. China, in particular, launched a new scheme that allowed farmers to receive a determined quantity of rice for each hectare of land returned to woods (for instance, in the upper reaches of the Yangtze river, 2.25 tonnes per hectare were offered) for periods varying from five to eight years. Countries facing water shortages have also taken steps to reduce rice cultivation, for instance through area limits and/or promoted water-saving technologies, while others reported action to reduce erosion and the unwanted effects of intensive input applications.

29. In addition, the possible negative environmental impact of diverting land out of rice in traditional producing areas remains a cause for concern in some developed countries, which fear, in particular, the surge of soil salination problems, erosion and the endangering of wild bird habitats.


30. In the past two years, changes in production policies have complied only partially with the related guidelines. Counter to Guideline B-i, low market rice prices often brought governments to implement measures that have increased distortions and accentuated imbalances on the world rice market, especially where support price policies had to be accompanied with trade restrictive measures. On the other hand, several exporting countries, in particular China, have responded to the conditions of over-supply by supporting a cut in output, consistent with Guideline B-ii. Some high-cost producers also took steps to curb excess supplies. However, they often failed to meet that objective, as complementary income-support measures either helped maintain or even boosted rice production. Thus, although countries have widely complied with their WTO commitments regarding agricultural support limits, the impact of the low international prices on farmers differed widely across countries. Indeed, they were much more dramatic and far-reaching in the developing countries, most of which could not afford compensatory payments to producers nor large scale price support programmes.

31. Rice consumption policies have generally been consistent with Guideline A-ii-d, which calls for measures that stimulate consumption, except in circumstances of shortages. Major progress was also made in exchanging information and establishing contacts, in conformity with Guidelines C-iii and C-v. and in improving rice marketing. Rice contributions to the two WFP reserves for emergency and relief action both rose to record levels in 2000, with the first scheme even exceeding the 500 000 tonnes recommended in Guideline E-iii. It is to be noted, however, that, for the first time in several years, world rice consumption surpassed production in 2000, and stocks were drawn down. While the existence of large global rice inventories could be seen as a sufficient protection against large unexpected production shortfalls, this might not be the case in reality, because the bulk of world stocks is concentrated in a single country and the extent to which these would be released in case of production failures elsewhere is uncertain. A continuous draw down from stocks is also not sustainable for an extended period, a matter worthy of consideration in view of a possible further contraction of production in 2001.

32. Trade policy developments in WTO member countries have generally complied with their obligations to open their domestic rice markets through preferential access quotas and to reduce export subsidies, thereby meeting Guideline C-i. However, restrictive import measures implemented by many countries in the past two years have tended to exacerbate the global rice trade imbalance, contrary to Guideline A-ii-a. Overall, however, the export subsidization limits of the AoA have been effective in preventing countries from disposing of their excess supplies on international market. While a few countries have made extensive use of credit guarantee programmes to assist exporters, especially in 1999, the extent to which such programmes have provided an implicit subsidy to exporters is still subject to controversy.

33. The fact that the volume of rice food aid dropped in 1999, a year where generally good crops were harvested, compared with 1998 should be interpreted positively, especially as an increase took place in 2000, when several countries experienced serious crop failures. The volume of rice subject to triangular food aid transactions also rose in 2000, but only few supplying countries benefited from that trade.

34. Concerns over the environment appear to have gained importance in a number of developing countries facing problems of soil erosion, salination or desertification. The measures introduced to address those problems might denote a more balanced and sustainable approach in the pursuance of food security objectives.

35. In view of the above, the Intergovernmental Group on Rice might wish to recommend that:

  1. governments, when engaging in expansionary production policies, adjust them in line with the country's prospects for domestic consumption and trade, taking in due consideration its dynamic comparative advantage in producing rice;

  2. particular attention be paid to the impact of low farm prices on producers' incomes, especially in those countries confronted with a strong process of urbanization. Where possible, governments should consider resorting to compensatory measures and to the establishment of safety nets to smooth the impact of market price fluctuations and to ease the progressive shift of the rural population from agriculture to other sectors;

  3. countries refrain, as much as possible, from adopting import restrictive or export support measures that might distort international competition;

  4. donors continue to take account of changes in the rice market when making commitments for the provision of rice food aid and use of triangular transactions;

  5. the number of the developing exporting countries as suppliers in triangular food aid transactions be increased;

  6. governments take advantage of low world prices to rebuild minimum reserve stocks;

  7. developments in the world rice economy continue to be closely monitored, as global consumption might exceed production in 2001 for the second consecutive season.


36. In 1998, the world markets for oilseeds and derived products moved from a supply and demand balance to a situation of excess supply. As a result, during most of 1999-2000, world prices for oilseed products were under considerable downward pressure. Directly related to the change in global market conditions, a number of important oilseed producing and trading countries reappraised their production and trade policies.


37. A number of countries continued to apply producer price support schemes (table 4). Among developing nations, the number of countries maintaining price guarantee and state procurement programmes to support oilseed producers decreased further. In most cases, support prices were increased in nominal terms but did not keep pace with inflation and remained below domestic market price levels. Where public procurement of oilseeds occurred, volumes purchased remained small compared to total crop supplies, often because of general cuts in public spending. In some countries, government intervention in production and marketing of oilseeds was limited when compared to other food and feedcrops. Overall, price support schemes applied in developing countries provided little or no incentives to expand oilseed production. Among developed countries, the EC continued to support production of butter and olive oil based on reference support prices. In the United States, the fall in farm gate prices for soybeans below the respective loan rates in 1999 and 2000 led to a rise in support payments. These payments partly insulated producers from the impact of low market prices, while the high soybean loan rate relative to competing crops contributed to the expansion of soybean plantings.

38. Under the influence of the AoA, the number of countries using income support payments not directly related to production levels has increased. In the United States, non-crop specific income payments remained in place, while, in the EC, the oilseed-specific direct income payments introduced in 1992 are in the process of being aligned with those for other arable crops. As a result of this harmonization, future planting decisions should be increasingly based on relative market returns and costs associated with each crop. In the EC, specific area and production limits designed to reduce the unwanted effects of the various price and income support schemes remained in place.

39. In addition to the above forms of support, some developed countries increased the use of income safety net programmes. In the United States and Canada supplemental, non-crop-specific assistance was granted to farmers in 1999 and 2000, complementary to existing safety net programmes. The principal objective of these payments was to compensate farmers for losses incurred due to unfavourable market conditions (in particular reduced export opportunities) and/or unfavourable climatic conditions. Although designed to have little direct effect on production and trade, it has been reported that the granting of emergency assistance in consecutive years can influence production decisions4.

40. Among developing countries, various indirect forms of support continued to be used, principally with the objective of stimulating production and thus raising self-sufficiency levels or producing exportable surpluses.


41. As in previous years, public sector intervention in domestic processing and trade of oilseeds and derived products was adapted in several countries, particularly among developing nations in Asia and Africa. General market liberalization reforms led to the privatization of state owned production and processing facilities and the termination of state market monopolies. In some countries, while gradually withdrawing from intervention in trade of oilseeds and processed products, government bodies concentrated on facilitating commodity market operations by setting up market information systems, commodity exchanges and similar services.

42. Exceptions include Thailand, where the Government, with a view to support the oilcrop production and processing industry, retained control over domestic market prices of certain oilseed products while phasing out import restrictions. In the Republic of Korea, state-trading enterprises retained their monopoly over imported and domestically produced soybeans. And in Malaysia and the Philippines, state agencies resorted, for the first time in many years, to intervention buying of vegetable oils in an effort to stem the unprecedented fall in prices hitting domestic producers and processors.

43. With respect to measures specifically designed to protect consumers, during the period under review, public intervention in edible oil markets was downscaled and, in some countries, governments redirected their attention to such tasks as introducing packaging requirements and setting up quality control mechanisms.

44. The recent reduction in market intervention in favour of consumers was primarily triggered by the general fall in prices for edible oils and fats caused by excess supplies of vegetable oils on the world market after 1998.

45. However, a number of countries (including Ghana, India, Morocco and Thailand) continued to support consumption of edible oils and fats with the objectives of raising consumption from domestic sources and/or reducing dependency on imports. Retail prices were controlled by government bodies and public retail outlets were directed to sell vegetable oils and fats at prices below prevailing market levels. In most cases, to reduce market distortion, such operations were only of a temporary nature. Furthermore, efforts were increased to adjust consumer support measures in line with actual price movements on the domestic and international market and to coordinate such operations with trade policy measures.


46. In general, the above mentioned tendency of governments to withdraw from direct intervention in domestic markets seems to have intensified the use of trade policy measures in pursuing goals related to the crops sector.

Measures affecting exports

47. Compared to previous years, several countries, developed and developing, made intensive use of export incentive measures for oilseed products. The main reason for this was that, during 1998-2000, competition between exporting countries increased due to a steady expansion in global export supply combined with relatively sluggish growth of import demand. The unprecedented rise in export supplies of palm oil, for instance, induced Malaysia and Indonesia to engage in wide-ranging export enhancing policies in an effort to combat the glut in domestic markets and the ensuing decline in prices. Such measures included the lowering of export taxes and the provision of favourable credit and payment conditions to numerous importers. Among developed countries, the use of direct export subsidization remained limited, but more resources were devoted to export credit guarantee schemes, programmes to develop and expand export markets and special relief measures to compensate domestic producers for, inter alia, losses incurred due to reduced export opportunities.

48. Some other countries resorted to using, generally on a temporary basis and for reasons reflecting conditions unique to their domestic markets, measures to limit exports of oilseeds and products. The objectives pursued were to ensure adequate domestic supplies and/or to prevent rises in domestic prices so as to protect consumers or crushers. Some countries introduced differential export taxation in an effort to encourage exportation of higher value products.

Measures affecting imports

49. As opposed to earlier years, when a tendency towards a reduction in tariffs and other import barriers affecting trade in oilseed products had been observed, during 1999-2000, several countries tightened import control measures. One of the main reasons for this shift was the general decline in world market prices for oilseed products from 1999 onward, which, particularly in developing countries, stimulated imports, thereby negatively affecting producers. Several developing countries increased efforts to shield domestic industries from rising international competition. Governments increasingly relied on import control measures as a complement to production policies, particularly since less intensive use was being made of price guarantee schemes, government procurement and other forms of direct market intervention.

50. Import policies were primarily implemented through tariff measures, as, under the influence of the AoA, many countries had converted non-tariff barriers into ordinary customs duties. While import tariffs were applied in conformity with individual countries' WTO commitments, during the period under review some nations raised tariff rates to levels close to the maximum permitted ones.


51. During 1997-99, the amount of oils and fats supplied on concessional terms was slightly below the levels reported in preceding years. Overall, developing countries obtained no more than 1.4 percent of their oils and fats imports as food aid. Shipments destined to the group of low-income food deficit countries accounted for about 65 percent of total concessional trade (table 5).


52. A number of conclusions and recommendations emerge within the framework of the Guidelines and the various objectives laid down therein. During the period under review, in several countries progress was made with respect to reducing potentially market distorting, direct government intervention in the production, marketing and international trade of oilseed-based products. However, in response to specific developments in the global markets for oilseed products, production and trade policies have been adjusted in a number of major exporting as well as importing countries.

53. Market conditions prevailing during 1998-2000 induced a number of exporting countries to step up income or price support to domestic producers and to increase export promotion efforts, while some importing countries decided to raise border protection in an effort to shield domestic industries from international competition. In pursuing these policies, governments put increased emphasis on direct income support for agricultural producers and tariff measures. Support provided under the various policies remained within the boundaries set by the AoA.

54. The major policy issues, which will require continued and close monitoring, are listed below:

55. In view of the above, the Intergovernmental Group on Oilseeds, Oils and Fats might wish to recommend that:

  1. governments refrain from using production support measures that contribute to the expansion of relatively high-cost production and have a potentially distorting effect on markets;

  2. international aid-giving agencies and bilateral donors assist developing countries in their efforts to improve the efficiency of production, domestic marketing and processing industries within the sector;

  3. governments in developing countries take measures aimed at improving domestic market transparency and efficiency, with a view to enable the oilseeds sector to fully develop its production and processing potential as well as to protect producers, processors and consumers from excessive price fluctuations;

  4. developing countries maintain efforts to increase consumption of oils and fats, so as to improve nutritional standards; where appropriate consumption of oils and fats which can reasonably be produced and processed locally should be encouraged;

  5. efforts towards the reduction of tariff and non-tariff barriers potentially distorting international competition be maintained, paying special attention to the interests of developing countries that are heavily dependent on production and trade of oilseed products; and

  6. within the framework of increased economic cooperation between developing countries, governments concerned make special efforts to encourage the expansion of trade between developing countries, for example by pursuing regional trade agreements and harmonizing their respective trade policies and standards.


56. Since 1998, sharp declines in meat prices due to strong production gains in a period of constrained trade growth have led exporting countries to rapidly increase support to the livestock sector while expanding the use of export promotion programmes. In many countries, both exporting and importing, this was accompanied by the imposition of various trade restricting measures, ranging from higher tariffs, countervailing duties and safeguard measures. The escalation of trade restricting measures was aggravated in 2000 by the proliferation of animal disease outbreaks around the world which led to numerous import bans and tightening of sanitary border control measures. While many of the above measures are trade distorting, most of the changes to import regulations were not in violation of WTO rules.


57. The trend of moving from price-based market support to direct payments for support of livestock and meat industries has continued in the 1998-2000 period. A prime example is the EC beef reform measure as implemented under Agenda 2000 in July 2000. The main features of the reforms are the reduction of beef price support over three years, with compensation in the form of higher direct payments or "premia" under existing programmes and the creation of two new slaughter premia (table 6).

58. In many Western European countries, the transition to direct income support has been accompanied by animal headage payments and animal density requirements which support the transition towards a more extensive animal production system.

59. Low livestock prices during the 1998-2000 period prompted governments, mainly in developed and transitional countries, to increase market support to livestock producers. In Canada, the Agricultural Income Disaster Assistance Programme was introduced to support agricultural producers whose farm gross margin dropped below a certain level. Meanwhile in the United States, under multiyear emergency supplemental funding for the agricultural sector, nearly US$500 million were allocated for a Livestock Indemnity programme and for emergency livestock assistance. Pig producers were additionally supported through the Small Hog Operation Payment Programme. Eastern European and Baltic countries also increased market support to the livestock sector as low prices were aggravated by increased imports of low-priced subsidised meat products.

60. Higher government outlays supporting livestock sectors also resulted from the proliferation of animal disease outbreaks during 2000. The outbreaks affected all continents, developed and developing countries alike, with most affected countries incurring significant costs to contain and eradicate the diseases, which ranged from FMD, swine fever and nipan virus to BSE. Increased incidence of FMD, particularly in those countries in South America and Africa, which had made considerable progress in eradicating the disease, could disrupt the trend towards a more homogeneous beef market.


61. The tendency towards increased privatization of slaughter and processing facilities, as well as veterinary services, has continued over the period, particularly in developing countries. Meanwhile, there has been further progress in developed countries on the deregulation of statutory meat boards. However, the trend of reduced public sector involvement in livestock markets was disrupted in developed countries as low prices prompted many governments to attempt to stabilize livestock markets through stepping up government purchases and storage of meat products. In the EC and Japan pork storage programmes were established aimed at bolstering wholesale prices, policies and adopted in many Eastern European countries. In the EC intervention stocks, in anticipation of beef policy reforms to be implemented in mid-2000, were reduced while providing market support through private storage ventures; however the recent resurgence of BSE outbreaks has reversed that trend.

62. In response to food safety concerns, many countries, both developing and developed, have moved towards implementing food safety regulations and increased labelling requirements to ensure stricter food quality standards. In many developing countries, this was accompanied by the development of live animal and meat grading criteria, the establishment of certification systems for animal health and increased regulation of domestic meat industries through stricter veterinary and sanitary standards.

63. Animal disease and food safety concerns have accelerated the development and implementation of new systems of animal identification and registration. Traceability schemes, originally instituted in response to importer requirements, are increasingly being recognised as beneficial to managing animal disease outbreaks.

64. Increasingly, countries are introducing legislation which establish animal welfare standards and regulate use of animals in research. Most of these regulations are enacted in developed countries; however, a few developing countries are opting to enact similar legislation to ensure compliance with developed country standards.

65. In most cases, countries have moved away from consumer support measures for meat products. Only few examples remain of consumer price controls for meat products.


66. The trend towards increased market liberalization and enhanced market access was disrupted over the review period as governments attempted to protect domestic meat industries through increased recourse to trade policy measures.

Measures affecting exports

67. The 1999-2000 period marked a sharp increase and then a decline (after the beginning of the 2001 WTO year) in the use of export subsidies, used mainly by the EC but also by some other smaller meat exporters. Intensive use of subsidies was permitted under the WTO-authorized roll-over provisions, which allowed countries until July 2000 to carry over unused portions of commitments from the previous year. Since mid 2000, however, this provision has been discontinued.

68. Additional support to meat exports was provided through the use of export credit guarantee programmes, as well as food aid shipments containing meat products to Russia in 1999. In the United States, GSM-102 funding5 served to maintain shipments of livestock and meat products, particularly to the Republic of Korea.

69. Numerous bilateral and regional trading agreements were put in place with the goal of enhanced trade flows. These arrangements include the Double-Zero Agreements between the EC and candidate countries for accession6 and numerous bilateral agreements between other countries on equivalency in veterinary inspection requirements. The strengthening of regional trade agreements, such as the West African Economic and Monetary Union (UEMOA), has led to policy changes affecting not only market access but the competitiveness of individual countries' livestock industries.

Measures affecting imports

70. The past two years have been characterised by a series of tariff hikes which, however, do not exceed bound levels established under the AoA. Increased tariff levels were evident in Central and Eastern European countries as governments attempted to protect domestic producers from low prices and increased movement of subsidized EC products into these markets. Similar moves to increase tariffs were witnessed in Vietnam, as well as many countries in Latin America. A number of countries, such as the United States with regards to lamb imports and Romania for pigmeat and poultry, implemented safeguard measures to restrict low-priced imports.

71. Heightened use of anti-dumping and countervailing duties on live animal and meat trade were registered with specific examples being observed among NAFTA countries, Argentina (with regards to Brazilian chicken) and South Africa. Meanwhile, difficulties in obtaining import documentation were reported in the Philippines and Nigeria.

72. The increased incidence of animal disease outbreaks around the globe has prompted many countries to respond by a proliferation of import bans and tightening of sanitary controls at borders. While increased transparency in import regulations has occurred in many countries, some cases of delayed issuance of import licences due to new meat inspection requirements on imported meat have been reported.


73. Only limited amount of livestock and meat products are typically supplied on concessional terms; however, the economic crisis in Russia in 1998 prompted a dramatic escalation in the amount supplied as food aid in 1999. Both the United States and the EC food aid packages to Russia contained provisions for meat shipments, with the US shipping nearly US$158 million of meat (170,000 tonnes).

74. According to information collected by FAO, external assistance to livestock development in the developing countries in 1997 and 1998 declined by half from the US$332 million reported in 1996, dropping to US$154 and US$169 million respectively. As a result, the livestock sector's share in multilateral assistance to agriculture dropped to 1 percent, down from 3 percent in 1996. Provisions for 1999 indicate only US$82 million allocated for international assistance in developing countries. Multilateral support to the livestock sector was supported in 1995 and 1996 by large funding commitments by the World Bank, particularly for activities related to enhancing livestock services through support for improved nutrition, feed resources and veterinary services, among others. This funding was apparently discontinued after 1996 and despite increased commitments by other organizations, overall multilateral support to the livestock and meat sectors declined from US$270 million to $91 million. In addition, bilateral committed funds dropped compared with previous years (table 8).


75. Further progress over the review period has been made with some countries reducing government intervention in the livestock and meat sector, while improving market access. However, in a period characterized by low meat prices and the proliferation of animal disease outbreaks around the globe, the following concerns remain.

76. Low prices over the review period have revealed the tendency of developed countries to increase market support to meat sectors. This support takes the form of price support schemes and income safety net programmes which, while not necessarily trade distorting, become so when accompanied by measures to expand border protection with the goal of protecting domestic producers.

77. Animal disease outbreaks have also resulted in increases in support to livestock sectors, both for disease containment/eradication and expenditures to allow developing country exporters to adhere to tighter technical restrictions by developed countries.

78. Heightened use of domestic support measures has, in many cases, been accompanied by trade restrictive policy measures. In addition to tariff hikes, there has been increasing resort to countervailing duties and safeguard measures. In addition, recurring animal diseases have led countries to impose import bans and tighten sanitary requirements, as well as other technical barriers, such as requirements on labelling and animal traceability schemes.

79. Increasing trade disputes among member countries of regional trade agreements have been witnessed. The growing initiatives, on a regional level, to promote trade through strengthening or expansion of regional trade agreements through the harmonisation of trade policies or regional certification systems for animal health, have come under pressure as low prices heightened competition for markets.

80. Consequently, the Intergovernmental Group on Meat may wish to recommend that:

  1. countries that face over-supply should seek to adopt measures aimed at increasing domestic consumption rather than resort to market distorting use of export programmes;
  2. import bans or stricter sanitary requirements imposed by countries on imported products as a result of animal disease outbreaks should be in accordance with the provisions of WTO SPS and TBT Agreements; and
  3. the participation of developing countries in international trade of meat should be enhanced through technical assistance, particularly with regard to adhering to the more complicated and tighter technical import restrictions by all countries resulting from increased outbreaks of animal diseases.


1 Guidelines were approved by the IGG on Rice in 1971; the IGG on Oilseeds, Oils and Fats, in 1980, and the IGG on Meat, in 1976. The official text of the Guidelines is contained, together with policy supporting tables, in Document CCP: GR-RI-ME-OF 01/3 Supp.1

2 42 replies to the rice questionnaire; 21 replies to the oilseed, oils and meals questionnaire; 46 replies to the livestock and meat questionnaire.

3 As of April 2001.

4 USDA/ERS: Agricultural Outlook, October 2000

5 Export Credit Guarantee Program operated by the US Department of Agriculture.

6 This initiative, which went into effect on 1 July 2000 allows for increased trade flows, especially for pork products, through higher quotas and zero in-quota tariffs while eliminating the use of export subsidies between participating countries.