CCP 03/INF/4



Opening Statement
to the 64th Session of the
Committee on Commodity Problems

Mr David A. Harcharik
Deputy Director General


Mr Chairman, Excellencies, Distinguished Delegates, Ladies and Gentlemen,

Good morning and welcome to the 64th Session of the Committee on Commodity Problems (CCP).

I am pleased to see so many of our member governments represented here. I would also like to extend a particular welcome to the representatives of so many of the international commodity organisations and other international organisations with an interest in commodity issues. Your direct involvement in commodity markets will be most relevant to the Committee’s discussions.

I would also like to welcome representatives of NGOs and CSOs. We have made a special effort to encourage your participation in the CCP, and have also arranged a side event on food sovereignty which I hope many delegates will be able to attend.

The role of CCP is to review commodity problems of an international nature, to survey the world commodity situation, and to develop appropriate policy recommendations for the FAO Council. The CCP is the only truly global platform for the discussion of problems facing commodity producers, exporters and importers and for identifying appropriate solution to them.

Commodity market issues have been much in the news since the last session of CCP, though perhaps for the wrong reasons: namely the sharp fall in prices across most commodities in the second half of the 1990s. Although some prices have recovered in recent months, market imbalance persists in many cases, and prices in general remain at historically low levels. This situation was addressed by a special commodity price consultation last year, and some of you will have attended the follow-up event held yesterday to explore certain policy issues and international actions for commodity development in more detail.

Low international prices for basic foodstuffs, such as cereals and oilseeds, should slow the growth in food import bills of importing developing countries. These include many of the poorest countries in the world. Because the food trade deficit of developing countries as a group is expected to increase significantly, low import prices may be seen as a positive development. However, unremunerative prices of agricultural export commodities are obviously of concern to those countries/regions dependent on these commodities for export earnings. Many of these are also low-income food deficit countries which depend on export earnings from one or a few commodities to finance their imports of food and broader development. Indeed, there are clear links between commodity prices and food security in developing countries, be they food importers or commodity exporters. The food security implications of international commodity market developments are an important recurring theme of your agenda.

The Committee will also discuss recent market trends and the factors lying behind them, including changes in trade patterns, increasing market concentration, new technologies, and consumer concerns over food safety and environmental and social impacts of agricultural production systems. To assist the Committee in its consideration of the future development of commodity markets, we have prepared medium-term projections for each major commodity. These suggest continuing growth in per caput production but a slowdown in growth of trade. They also suggest slow progress in reducing undernourishment in the most food insecure countries. The Committee will have an opportunity to express its views on this new analysis and further development of the underlying methodology.

As in previous sessions the Committee will review recent trade policy developments. This is particularly relevant in the context of the ongoing Doha Round of multilateral trade negotiations. Two papers will be presented which review protectionism in agricultural trade and other recent policy developments having implications on the agricultural exports and imports of developing countries.

Developing country exporters face serious obstacles in trying to diversify and enhance their export earnings. This stems from the continuing high level of protection and support to agriculture in developed countries, but also from the need to comply with sanitary, phytosanitary and technical requirements of importing countries. Increasing market concentration and the market power of food marketing and distribution companies are further challenges for exporters of some commodities.

In addition to analyzing specific trade policy issues, FAO is continuing and expanding its work in capacity building and support to member governments in relation to the ongoing WTO negotiations, and in its technical assistance to individual member governments in relation to commodity policy. A new programme called Trade-Related Capacity Building Programme for Agriculture, Fisheries and Forestry (the Umbrella II programme) has just been launched and presented to interested donors. I use this occasion to call for your support to this programme, which aims to make developing countries well-informed and equal partners in the multilateral trade negotiations.

Among the reports received by the Committee, that of the Consultative Sub-Committee on Surplus Disposal (CSSD) is particularly important. The Committee will note from data presented in the report the failure of some major donors to notify officially the CSSD of food aid transactions which results in only partial information on global food aid and its impact on commercial trade. Various aspects of the provision of food aid are currently being debated in WTO, including definition, notification and distinction between food aid and subsidization of exports. Any discussion of these issues here in the Committee on Commodity Problems could be useful to that process in WTO.

Mr Chairman, Excellencies, Distinguished Delegates, Ladies and Gentlemen,

Your participation in this session of the CCP is much appreciated. You have a varied agenda but all the items concern issues of crucial importance to commodity trade and development and the full participation of developing countries in the international trading system. Your discussions here will make an important contribution to the international debate and will provide guidance for FAO’s commodity-related work programme over the next biennium and beyond. I wish you a constructive and successful meeting.