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Appointment of chairman, vice-chairmen, general committee and credentials committee
Appointment of chairmen and vice-chairmen of commissions
Verifications of credentials
Agenda and arrangements for the session
Admission of observers

Appointment of chairman, vice-chairmen, general committee and credentials committee

1. The Nominations Committee, elected by the Council in conformity with Rule XXVI- (e) (vii) of the Rules of Procedure, recommended and the Conference approved the following appointments:

Chairman of the Conference:
The Right Honourable K. J. HOLYOAKE (New Zealand)

Vice-Chairmen:
Mr. J. Federico INTRIAGO (Ecuador)
Mr. Ajit Prasad JAIN (India)
Mr. S. L. MANSHOLT (Netherlands)

Seven elected members of the General Committee:

Members of the Credentials Committee:

Appointment of chairmen and vice-chairmen of commissions

2. The Conference, following the nominations of the Council, appointed for the COMMISSION-OF-THE-WHOLE. His Excellency Abdel RazzaK Sidky (Egypt) as Chairman and Mr. RATNAYAKE (Ceylon) and Mr. S.J.J. DF SWARDT (Union of South Africa) as Vice-Chairmen and for the COMMISSION ON PROGRAM TRENDS AND POLICY QUESTIONS Mr. Stephen TOLBERT (Liberia) as Chairman and Mr. Edmond ROCH (Jordan) and Mr. Ibrahim SARGUT (Turkey) as Vice-Chairmen.

Verifications of credentials

3. On the report of the Credentials Committee, the Conference found the credentials of all the 70 delegations from Member Nations attending the Session to be in order.

4. The credentials of the Delegation from the Holy See, Permanent Observer to FAO, of the representatives of the United Nations and the specialized agencies and of intergovernmental organizations having an agreement with FAO to exchange observers were found to be satisfactory.

5. The letters of appointment of observers sent by non-governmental organizations having consultative status with FAO and of representatives of other non-governmental organizations were found to be in order.

Agenda and arrangements for the session

6. Resolution No. 2/55

Agenda of the Session

The Conference

Adopts the provisional agenda circulated by the Director-General in July 1955 (C 55/1), subject to the amendments which the Council recommended at its Twenty-second Session.

The Agenda as adopted is given in Appendix A.

7. The Conference accepted the proposals submitted by the Council for the organization of the Eighth Session of the Conference (C55/2) and consequently established a Commission-of-the-Whole, a Commission on Program Trends and Policy Questions, Technical Committees on Agriculture, Economics, Fisheries, Forestry, Nutrition and Information and a Committee on Constitutional and Legal Questions and a Committee on Administrative and Financial Questions.

Admission of observers

8. Resolution No. 3/55

Admission of Observers

The Conference

Having noted the list of international organizations to which the Director-General extended a provisional invitation to send observers to the Eighth Session of the Conference (C55/33);

Approves the list and accepts the organization included therein as observers to the Session.

A list of observers who attended the Eighth Session of the Conference is given in Appendix J.

Current world Food and Agricultural situation
General problems of production and consumption
Commodity problems

Current world Food and Agricultural situation

9. The Conference considered the documentation prepared by the Director-General which reviewed developments in the food and agricultural situation in the ten years since FAO was established, and also the main problems which appeared to lie ahead. The broad analysis of the situation set out in these documents was generally endorsed by the Conference. It noted with satisfaction the remarkable developments of the past decade in member countries both in the technical and in the social anti economic fields, and the progress made, more rapid than before, in the technical methods of agriculture and in their utilization. Widespread schemes of land reform and especially measures of price support had given the farmers in many countries a higher degree of security and economic stability. There was an increasing awareness of the problems of nutrition, and nutritional requirements were being taken into account in both agricultural and social policies. Important steps had been taken in many countries towards the co-ordinated programming and development of agricultural, forestry and fisheries resources. This was evident not only in the more developed countries, but also in the less developed regions where schemes of technical assistance and investment had assisted the attack on their deep-seated problems of low productivity, rural poverty and under-nourishment.

10. As a result of these developments, world per caput agricultural production, which had fallen by 10-15 percent at the end of the war, had by 1952/53 regained its pre-war level in spite of an increase of nearly 25 percent in population.

11. These developments, however, had taken place at a higher rate in the more advanced than in the less developed parts of the world, and, as a result the disparities of production and consumption between these areas, had, if anything, tended to increase. Asia, for example, with half the world's population accounted for only one quarter of the world's agricultural production, and per caput production in this continent was still below its unsatisfactory prewar level. Per caput production was also below the prewar level in Latin America, where the increased output had been outstripped by the rapid growth of population. It was not of course to be expected that the centuries-old ills of under-production and under-consumption could be cured in a decade, and it should be recognized that so far no more than a beginning had been made. Nearly as large a proportion of the world's population as before the war remained under nourished, and insufficiently clothed and housed.

12. Moreover, with the recovery of agricultural production, problems of distribution had again become urgent. Already at the time of the last Session of the Conference, side by side with the continuing under-nourishment in the less developed regions, surpluses of many agricultural commodities had emerged in some areas, notably North America. In spite of the high level of economic activity and demand, and in spite of vigorous efforts in North America and elsewhere to move surplus supplies into consumption and to curtail the production of surplus commodities, stockpiles, except of a few commodities, had not diminished but, if anything, had continued to grow. They had increased more slowly in 1954/55 than in the two preceding years, but this was due at least as much to poor crops in some countries as to increased consumption or to a planned reduction of output. The heavy crops just harvested in the Northern Hemisphere might well lead to a further considerable rise in stocks in 1955/56, and there had latterly been indications of the emergence of surplus problems in some of the under-developed regions.

13. Although commendable restraint had been exercised by the countries concerned in the disposal of surpluses, these surplus stocks inevitably gave rise to a feeling of uncertainty in world market and tended to deter further efforts to expand production.

14. Since regaining their prewar level in 1952/53, neither per caput world production nor the level of world trade in agricultural products had shown any appreciable increase. Some gains in per caput production elsewhere had been offset by reductions in North America. In general there had thus been no fundamental change in the situation since the 1953 Session of the Conference.

15. The slow progress of the last few years was due neither to lack of human needs nor to lack of agricultural resources. There was little doubt that more food could have been produced in the last few years, and in a few countries much government activity had had to be devoted to restricting rather than expanding agricultural production. This recent lack of progress was due primarily to the failure under existing national and international social and economic conditions to expand the effective demand for farm products as rapidly as it was technically possible to expand production.

General problems of production and consumption

a) Regional consultations
b) The expansion of consumption
c) Distribution and marketing
d) Greater flexibility of production
e) Farm incomes
f) Agricultural credit and investment

16. At its Session in 1953 the Conference had considered at some length the changed world food and agricultural situation, characterized by the emergence of surpluses of some commodities in some areas, side by side with continued want in other parts of the world. As a result it had proposed certain broad lines of policy, some for the disposal of existing surpluses, and some aimed at reducing the danger of new surpluses arising. The latter were set up in a series of recommendations under the general heading of the Selective Expansion of Production and Consumption. Emphasis was laid on the importance in the new circumstances of much greater attention to raising consumption levels. And while it was stressed that a further expansion of production was essential in view of the rapid growth of population and rising standards of living, it was pointed out that any further expansion should be selective, taking into account both expected market demand and nutritional needs. Although it recognized that each government must reach its own conclusions on how best to apply these general lines of policy after careful consideration of the needs and circumstances of its own country, the Conference set out a number of criteria which might help in coming to such decisions.

17. The Conference reaffirmed these general principles. While appreciating that " selective expansion " represented a long-term and continuing policy, it noted the progress which had been made, as set out in the Director-General's report. One encouraging feature of recent developments had been that governments, including many in under-developed countries, were giving more attention in planning, agricultural development to nutritional requirements and also to the need for a mole balanced and diversified agriculture.

18. While it appeared, however, that a good deal was being done by governments on a national basis to influence the course of agricultural production, and to a large extent in the general directions indicated by the last Session of the Conference, there had so far been little real progress in co-ordinating production policies between countries or in working towards a more complementary development of agricultures between countries.

19. Trends in consumption were more difficult to assess than production trends. No additional major commodities had become surplus since the last Session of the Conference, and it thus appeared that consumption had in general kept pace with production. But there were threats of surplus situations emerging in some less developed countries, and relatively little headway had been made in reducing existing surpluses of several major commodities.

a) Regional consultations

20. The work of FAO in this field had been of two main types. Assistance had been rendered to member countries on request, both under the Regular and under the Technical Assistance Programs, in establishing and implementing food and agricultural policies in line with the general principles which had been recommended. Regional consultations had been held in Latin America, the Near East and the Far East, where questions arising in the practical application of policies of selective expansion had been discussed between neighbouring countries with similar climatic, economic or cultural backgrounds and with broadly similar problems, with the object of clarifying the main issues involved, and of exploring the extent to which a complementary development of national agricultures in these regions might be possible, with a consequent expansion of trade. In Europe a similar examination of national policies on a regional basis was being made by OEEC, in order to reach a better coordination of these policies.

21. The regional consultations had been helpful in giving governments a fuller understanding of the problems and policies of their neighbors, in providing opportunities for an exchange of views and experiences between neighboring countries, both formally and informally, on methods of dealing with particular problems, and in suggesting new lines of enquiry. At the regional consultation in the Near East an expert working party had been proposed and had met recently for a more detailed examination of certain specific problems of intra-regional trade and of agricultural development. In Latin America a particularly fruitful meeting had been held jointly with ECLA, at which not only agricultural but also other departments concerned with economic planning had been represented. Arrangements were on hand for following up some of the suggestions for joint work by ECLA and FAO which had been made at this meeting.

22. The Conference endorsed the general lines of the work already undertaken and emphasized the value of a regional approach. It was generally agreed that the current problems of agriculture had to be approached within an economic framework and could not be resolved merely by attention to technical problems. The Conference approved the following proposals submitted by the Director-General for further work:

23. It was recognized that FAO regional consultations should not take the place of direct contacts by FAO with member government officials, and that consideration of intra-regional trade questions should in all cases take account of general international trade problems. As regional consultations might not be enough, problems of selective expansion should also be examined on a world basis, e.g. in the CCP, the Council or the Conference.

b) The expansion of consumption

24. The Conference emphasized the fundamental importance of measures to raise consumption levels, both for the ultimate objective of freedom from want, and more immediately for the disposal of surpluses. While a large part of the world's population remained inadequately housed, clothed and nourished, present difficulties must be considered the results of under-consumption rather than over-production. In deciding changes in national policies, not only in the specific field of food and agriculture, but in all aspects of economic and social policy which might affect the purchasing power of consumers it was considered desirable that the likely effect on consumption levels be considered by governments.

25. Since under-consumption arose primarily from lack of purchasing power, the efforts being made by under-developed countries to raise their national incomes and standards of living by balanced industrial and agricultural development formed the major attack on the problem. The possibility of using agricultural surpluses to speed such development, was considered by the Conference and is reported in paragraphs 54-59.

26. There was evidence of an increasing awareness among governments of the importance of nutritional problems and of the need for more adequate, and especially for better balanced, diets. Increased efforts were being made in these directions, but in many countries the shortage of trained staff remained a difficulty which could only gradually be overcome. Rising incomes in under-developed countries were slowly being reflected in an increased consumption of protective foods. These trends might be expected to become stronger, especially if guided by increased nutritional education, and in time to lead to considerable changes both in dietary habits and in the pattern of agriculture. FAO could assist considerably on this side through its Technical Assistance Program, by the provision of fellowships and other facilities for increased training and by arranging technical meetings on an international or regional basis.

27. The Conference also emphasized that much could be done to increase purchasing power and therefore consumption by measures to reduce the cost of food to the consumer through greater efficiency of both production and distribution. The importance of increasing efficiency in distribution could be seen from the fact that on the average, distribution costs accounted for about half the final retail price. Even in the wealthier countries with fairly high food consumption levels there was considerable response in the consumption of many foods, and of foodstuffs as a whole, to a reduction in prices.

28. The Conference attached great importance to maintaining and further developing FAO's technical assistance work on improving methods of production with the object of reducing costs, particularly by such relatively inexpensive methods as the better control of plant and animal diseases and pests. Such assistance could sometimes be organized effectively on a regional basis, as had been done for locust control. It was recommended that efforts to improve the efficiency of production should give attention to organizational as well as technical methods. Reference was made to the importance of measures, including co-operative buying, to reduce the cost of farm requisites.

29. So far most attention had been given to the production rather than the distribution side of reducing costs. In many countries for example, extension services were giving greatly increased attention to ways of reducing production costs by greater productivity. But, however valuable in protecting farm incomes in the face of falling farm prices, efforts to reduce production costs had often had little influence on consumption levels because reductions in farm prices had in many instances been offset by higher distribution costs and profits. In a good many cases retail prices had shown little change for some years in spite of declines in farm and wholesale prices.

c) Distribution and marketing

30. The Conference therefore stressed the importance of greater attention, both in member countries and in the work of FAO, to measures to increase the efficiency of distribution and marketing. There were indications in some countries that gradually more attention was being given to marketing. Farmers and farm organizations, as well as governments, were showing increasing recognition of the need for greater efficiency in distribution if consumption levels were to be increased. But so far there was little tangible development to report, and there appeared to be relatively few examples of systematic efforts to reduce the cost of distribution and marketing.

31. Further work by FAO in distribution and marketing was particularly important on the technical assistance side. Although a broad knowledge of the structure of costs was necessary in order to evaluate priorities and to see where economies might be possible, the work should be aimed at the practical objectives of increasing efficiency and reducing costs rather than the assembly of statistics on price spreads. Such work should be closely linked with technical assistance to increase production efficiency.

32. Improved marketing through co-operative or other producer organizations or by the provision of more adequate marketing facilities and properly organized markets, could go far to reconcile the twin aims of more assured and stable prices to producers and lower prices to consumers. Much could be done to improve marketing and reduce wastage by better transport, storage and processing facilities. In under-developed countries especially, losses in stored products through weather and pests were sometimes very great, and farmers incurred heavy cash losses from dumping their products on glutted markets as fast as they were harvested, because of lack of storage and credit facilities. It was important to broaden the work of extension and advisory services, often exclusively concerned with production problems, to cover also the problems of preparation for the market, the assembly of farm products and the provision of market information.

33. Attention was also drawn to the large part played by freight charges in the final cost of bulky foodstuffs such as grains, and more information on changes in tramp freight rates would be helpful. The provision of national reserve stocks of bulky commodities such as grains, might help to reduce fluctuation in the demand for shipping space and thus tend to stabilize freight rates.

34. The Conference approved the following resolution on the expansion of consumption:

Resolution No. 4/55

Expansion of Consumption

The Conference

Recognizing the fundamental importance of increasing the consumption of agricultural products, both to improve levels of nutrition, clothing and housing, particularly in under-developed countries, and to aid in the prevention and disposal of agricultural surpluses;

Recognizing that inadequate knowledge among consumers of nutritional requirements and of the best methods of preparing and preserving food-stuffs is one obstacle to this objective;

Recognizing also that undue spreads between prices received by producers and paid by consumers and changes in the relations between retail prices and consumers purchasing power may adversely affect the balance of supply and demand and add to the difficulties of increasing consumption and planning a selective expansion policy for agricultural production:

Recommends to governments that in reaching decisions on questions of food and agricultural policy, and in related social and economic questions which may affect the purchasing power of consumers for agricultural products, regard should be given to the likely influence on domestic consumption levels and nutritional needs:

Requests the Director-General:

Member Governments were requested to cooperate with the Director-General in the provision of the necessary information for these tasks.

d) Greater flexibility of production

35. The Conference also gave considerable attention to means of making agricultural production more responsive to changes in demand. In considering developments since its previous Session, it noted that in some countries, where it had been thought necessary to scale down the production of certain commodities, considerable difficulties of adjustment had been experienced. Where however, a strong demand had made possible increased output, agricultural production had often shown a very marked response, as in the case of some livestock products in Western Europe and some other parts of the world. Although such developments were largely due to normal economic forces, in many countries they had been considerably encouraged by government action. It was important for governments to help farmers to adjust their output to changes in demand or in accordance with the economic and other needs of the country, in particular by removing such obstacles as restrictive trade practices and the lack of technical knowledge and by modifying price policies favouring expansion in directions where it was no longer required.

36. It was appreciated, however. that adjustments to the pattern of production in line with changes in market demand could not always be made quickly. Lack of suitable alternative crops sometimes made adjustments difficult. Moreover, it was often difficult for farmers who had invested heavily in improvements and mechanization for the production of a particular commodity to change quickly to the production of another. especially at a time of declining farm incomes. Adjustments of production were also hampered by uncertainty about future trends in demand. Such trends were very difficult to predict, but the value of FAO's studies on long-term trends in production, consumption and trade was endorsed in this connection and it was considered that this work should be continued. In spite of price supports and other interventions, long term changes reflected the way in which adjustments to supply and demand and competition tended to show fundamental shifts.

37. It was pointed out that flexibility of production was made more difficult by some systems of price support, and many references were made to the international implications of national price policies. While recognizing the value of price support schemes, too high and too rigid price supports, for example. might contribute to the over-production of surplus commodities and lead to subsidized exports, or to restrictions on imports to support domestic price levels, or to the development of uneconomic production in other countries. An expansion of production particularly for export, which had developed primarily under the shelter of high support prices in other countries was likely to he precarious.

38. The Conference considered that FAO should make, with the assistance of specialists from member countries, a comparative study of the various systems of price support and other methods of maintaining farm incomes which had been adopted or proposed. It therefore adopted the following resolution proposing the setting up of an appropriate working party of specialists in this field to be drawn from member countries. This working party should include representatives of exporting and importing countries and take account also of geographical distribution, stage of economic development, and the experience of the countries represented in operating the different systems of price support.

Resolution No. 5/55

Expert Working Party on Systems of Price Support

The Conference

Recognizing the importance of achieving the greatest possible flexibility of agricultural production in response to market demand;

Recognizing at the same time the need to avoid wide fluctuations in farm prices and incomes which may create serious problems for the economy as a whole, and the need for a reasonable relation between prices and incomes in agriculture and in other sectors of the economy;

Considering that some systems of domestic price support for agricultural products, however valuable for other reasons, may reduce such flexibility, and may also tend to limit domestic consumption and to increase the obstacles to international trade in agricultural products, thus increasing the danger of surpluses;

Recognizing the important effects which such policies in any one country, whether an exporter or an importer, may have on conditions in other countries;

Requests the Director-General to convene in 1956 an appropriate working party of experts to be nominated by their governments, to analyse the various systems of price support and other methods of maintaining farm incomes, including measures to reduce costs and raise productivity, which have been employed or proposed, with particular reference to their effects on the flexibility of production, on domestic consumption levels, on the level of international trade and on the maintenance of a level of farm incomes in reasonable relation to incomes in other occupations, and to submit their findings to the Committee on Commodity Problems.

e) Farm incomes

39. In spite of the widespread adoption of price supports and of other economic and social measures to benefit agriculture and to limit fluctuations in farm prices, per caput incomes in agriculture in most countries had remained much below those in other occupations. Moreover farmers had not as a rule shared proportionately, and sometimes not at all, in the recent general rise in incomes and living standards. The Conference emphasized that it was important that farm incomes should be in reasonable relation to those in other occupations and drew attention to the serious problems which could arise for the economy as a whole from excessive fluctuations in farm prices and incomes. It drew attention also to the need for farm incomes to have some margin for investment if improved techniques were to be adopted in order to raise productivity, or if changes in the pattern of production became necessary to meet shifts in demand. It noted also that so large a proportion of the world's population, particularly in underdeveloped countries, were dependent directly or indirectly on agriculture that an increase in their purchasing power would in itself help materially in solving the problems of underconsumption.

40. Farm incomes were best assured by high levels of productivity and satisfactory prices for their products.- In many underdeveloped countries, however, the possibilities of technical improvements could not be fully utilized until urban industry could provide new outlets for agricultural products and manpower. Other barriers to increased productivity were the lack of funds for investment in improvements, the burden of indebtedness, and land tenure systems which provided little incentive or possibility for improvements. It was suggested that FAO should give increased attention to land reform measures and to the provision of adequate farm credit on reasonable terms. Attention was drawn to the problem of rural under-employment and it was suggested that the Organization should study the provision of auxiliary work, for example in village industries, for farmers who were productively employed for only part of the year. In its studies of farm incomes the situation of employed farm workers as well as farm operators should be considered. Agriculture would of course also benefit from general economic development, with rising incomes of non-farm workers and expanding demand for farm products. The resulting expansion of demand would be especially marked from economic development in the less developed countries.

f) Agricultural credit and investment

41. The Conference considered the need for greater facilities, particularly in underdeveloped countries, both for short-term credit to farmers and for long-term investment in agricultural development.

42. Statistical data assembled by FAO, as well as the recent All India Credit Survey by the Indian Reserve Bank, again emphasized how inadequate, particularly in underdeveloped countries, were existing institutional facilities for agricultural credit, and how largely small farmers and peasants in such countries still relied on high interest loans from merchants or money-lenders for working capital. This greatly reduced those farmers' real incomes and often left them in a state of chronic indebtedness. A number of countries reported vigorous efforts to improve institutional facilities, particularly through co-operative credit institutions. The limited financial resources available, however, made it impossible to supply these institutions with funds on anything like the scale necessary. This lack of funds forced existing institutions to concentrate on short-term credits, and they were seldom able to meet demands for medium term loans for soil improvement or for the adoption of improved methods. The activities of FAO in providing technical assistance in these developments were appreciated, particularly in establishing schemes of supervised credit and in organizing training centers.

43. Many large-scale schemes of agricultural development, e.g. for irrigation or land reclamation, did not attract private capital or qualify for loans from commercial banks. A large proportion of government financing was therefore necessary, but such funds were seldom available on an adequate scale, particularly in under-developed countries where they were most needed. The Conference noted that FAO was engaged in a study of the problems of domestic investment on the basis of data already provided by the International Bank. It is also noted the recent proposal for a joint ECLA/FAO Study on methods of increasing agricultural investment in Latin America.

44. M. While domestic funds usually accounted for by far the largest share of total agricultural investment, much emphasis was placed on the need for a greater flow of international investment. Efforts to increase foreign private investment in agriculture had so far had little result. Moreover, the share of public international investment funds devoted to agricultural development had been relatively low.

45. For these reasons the Conference expressed much interest in the proposal before the United Nations for establishing a Special United Nations Fund for Economic Development (SUNFED), which to a certain extent could offer a means of meeting the need of agricultural investment, and the following salient points emerged from these discussions:

46. In view of the urgent need for an international source of investment for low and slow yielding but socially valuable agricultural development project, the Conference adopted the following resolution: I

Resolution No. 6/55

Proposed Establishment of a Special United Nations Fund for Economic Development (SUN FED)

The Conference

Considering that agricultural development requires long-term non-self-liquidating investment and that so far no credits for this purpose are available on a world-wide basis and that the work of FAO would be furthered if such credits were available;

Considering that SUNFED would be likely to provide such credits;

Recalling that the SUNFED proposals are now being discussed in the General Assembly of the United Nations and that having regard to the mission of FAO it is proper for its Conference to inform the General Assembly of its view on SUNFED;

Keeping in mind that many Member Nations of FAO are not members of the United Nations and therefore have not had occasion to express an opinion on SUNFED;

Urges that SUNFED or a similar institution may soon be established and that in view of the importance of agricultural development FAO shall be closely associated with its work;

Requests the Director-General to bring this resolution as soon as possible to the attention of the Secretary-General of the United Nations.

Commodity problems

a) Disposal of agricultural surpluses
b) Methods of surplus disposal
c) Commodity trends and policies
d) Inter-Governmental commodity machinery and consultations
e) Activities and membership of the CCP

47. The Conference, in the course of its review of agricultural commodity problems, gave special attention to matters which had been referred for its consideration in the Reports of the Twenty-fifth and Twenty-sixth Sessions of the Committee on Commodity Problems (C 55/22 and C 55/23) and which had been summarized in the Council's comments on these Reports (C 55/23/Add. 1).

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