CCP 03/INF/8

1. This document has been prepared to provide background information so as to assist the deliberations of the Committee under Agenda Item 6(a) while discussing the report of the Consultative Sub-Committee on Surplus Disposal (CCP 03/2). The data presented in the tables included in the document are collected by the World Food Programme and made available to FAO on a regular basis to facilitate the latter’s normative and field work in areas where food aid plays a significant role (e.g. food needs assessments, situation and outlook analyses, food security indicators etc.).

2. What follows are brief notes summarising the essential features of the information contained in those tables:

Table 1: Cereal food aid shipments: calendar year

     ·  After increasing on average nearly by 9 percent per year during 1989-93, total cereal food aid provided by all donors dropped sharply by over 10 percent per annum until 1997. Since then, it reached a local peak in 1999 and has declined once again over the past three years.

     ·  On average, more than 80 percent of cereal food aid is provided by three donors: the USA, European Community and Japan; with the first contributing nearly 56 percent to the total. The changes in their contribution through time have, therefore, followed similar paths as those observed at the aggregate level.

     ·  On average, more than 80 percent of cereal food aid is delivered to low-income food-deficit countries (LIFDCs); though there have been times when that proportion has fallen below 70 percent (50 percent in 1993, 64 percent in 2000 and 68 percent in 1990).

Chart 1: Longer-term development of cereal food aid shipments - July/June

     ·  Considered over a longer period (1970-2001) there does not appear to be a significant secular upward or downward trend for total cereal shipments. Apart from the shorter tendencies noted above, a longer stretch of significant growth, averaging at 4 percent per annum, was experienced over the 1973-87 period. Moreover, year-to-year variations in food aid flows after 1987, after controlling for underlying trends, appears to have increased significantly by over two-thirds when compared to the period preceding it.

Table 2: Non-cereal food aid shipments: calendar year

     ·  With a total annual average of 1.3 million metric tonnes for 1989-2001, non-cereal food aid is much smaller in volume than total cereal food aid (e.g. 7.8 million metric tonnes). It is comprised of diverse but high valued products, such as processed diary, meat and oil products, therefore its share in the value of food aid is likely to be much larger than implied by its share in volume of flows.

     ·  As for its structure, a similar picture as that for cereal food aid emerges, both in terms of trends through time and contributions by major donors. 65 percent of this type of aid is destined to LIFDCs, though in 1999 the share was only 36 percent and in 1993, 51 percent. Moreover, 76 percent of the aid is provided by the three major donors identified above, with 57 percent of the total being provided by USA alone.

Table 3: Global cereal imports and total cereal food aid shipments - July/June

     ·  Food aid shipments have on average constituted nearly 5 percent of global cereal imports, over 6 percent of the cereal imports of developing countries and more than 11 percent of the imports of LIFDCs. Those shares, however, appear to have experienced some decline, though not continuous, for all types of recipients, with largest change affecting the LIFDCs.

Table 4: Total cereal food aid shipments and cereal exports of USA, EU and Japan

     ·  Despite the fact that USA continues to be the largest single food aid donor of cereals, in terms of the share of food aid in their cereal exports, it is roughly on par with EU, but both well below that of Japan. Despite the appearance to the contrary, statistical tests indicate that the shares do not decline significantly through the period under scrutiny.

Table 5: Share in global food aid deliveries by food aid type and commodity type

     ·  The share of emergency cereal food aid has gained significantly over the period at the expense of programme food aid, with no significant trend in the share of project food aid. For non-cereal food aid, the situation is different with no significant trend change in the three components.

Chart 2: Total cereal food aid, stocks of major cereal exporters and FAO cereal price index

     ·  There appears to be a negative relationship between volume of food aid shipments     and cereal prices index, with food aid declining as prices go up, and vice versa. These observations must be interpreted with care, however, since there is also a strong relationship between stocks and prices emanating from the manner in which the market fundamentals operate.

Chart 4: Emergency cereal food aid and FAO cereal price index

     ·  It appears from Chart 4 that emergency cereal food aid appears to be particularly sensitive to changes in international prices.