Contents
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IV. Major trends and policy questions in food and agriculture
A. World situation and outlook
B. Indicative world plan for agricultural
development
C.
World food program
D.
Freedom from hunger campaign
E. Article XI reports.
A. World situation and outlook
Salient features in the world situation
Commodity problems
Relations between CCP and UNCTAD
1970 world census of agriculture and agricultural census fund
Salient features in the world situation
a) Twenty years of FAO
b) Agricultural production
c) International trade in agricultural products
d) Agriculture development in developing countries
e) Agricultural problems of developed countries
18. The Conference discussed the world food and agriculture situation in the light of the Director General's report on The State of Food and Agriculture 1965; Review of the Second Postwar Decade (C 65/4), together with the supplementary document Regent Developments in the World Food and Agriculture Situation (C 65 Sup. 1).
19. In reviewing the first twenty years of FAO's existence, the Conference was concerned at the slow progress of world agriculture toward achieving the objectives of the Organization. Some 10 to 15 percent of the world's population were still undernourished, and up to half suffered from undernourishment or malnutrition or both.
20. While the slow pace of progress was disappointing, the Conference noted that the immense task of conquering world hunger and malnutrition had been made still more difficult by the initial need to repair the devastation of war, and by the unprecedented and largely unforeseen population explosion in the developing countries that had dominated FAO's second decade. In these circumstances it was a real achievement that widespread famine had been largely eliminated with the help of surplus food from the more developed countries and that there had been some small improvement in the dietary levels of most developing countries, though mainly as a result of larger food imports or reduced exports.
21. For some time to come, population growth in the developing countries was likely to accelerate further, making the provision of a satisfactory diet for all mankind still more difficult. At the same time, however, the Conference considered that a number of factors gave grounds for hope. There had been an explosion in scientific knowledge as well as in population. Some rethinking of attitudes to population control was in process. Virtually all developing countries were adopting a measure of planning in a sustained effort toward faster economic development. Moreover, largely because of FAO's efforts, the world's conscience had been awakened to the gravity of the problems of food and agriculture, and to mankind's collective responsibility for achieving freedom from hunger.
22. The emphasis of FAO's work had changed in response to the evolution of the problems that had to be faced. From being primarily concerned with studies and advisory work, the Organization had become increasingly involved in operational activities in agriculture in the developing countries. It had Increasingly emphasized that technical measures alone were not enough to improve the agriculture of the developing countries, but must be supplemented by the provision of investment funds and credit to facilitate their adoption, and by the establishment of an agrarian structure which would give farmers the will and the incentives as well as the financial means and the technical knowledge to embark on more productive forms of agriculture. The Conference stressed that these trends in the Organization's work would need to be Intensified in the critical decade that was just beginning.
23. In commending the work of FAO during the first two decades, the Conference adopted the following resolution:
Twenty years of FAO
THE CONFERENCE
Considering the efforts deployed by all countries of the world, and in particular by the developing countries, for their own economic and social development and the need to pursue and intensify such efforts,
Recognizing that FAO has, over me past twenty years, made an important contribution supporting international co-operation and the efforts of the countries themselves in the field of food and agriculture,
Pays tribute to the Organization for its work, during these past twenty years, in the field of food and agriculture,
Expresses the conviction that it will continue to support the efforts of the countries engaged in the process of economic and social development and to strengthen international co-operation in the field of food and agriculture, and
Requests the Director-General to examine the possibility of formally recording this stage of progress by undertaking at a suitable time and in an appropriate manner, subject to the availability of funds, a comprehensive review of FAO's contribution in the past twenty years and of the tasks still ahead of it, and to give the review adequate circulation.
(Adopted 9. 12. 65)
24. The rapid increase in production during the period of postwar recovery continued until 1958/59, when there was a large rise in world per caput production. Since then, however, per caput production both of food and of agricultural products as a whole had shown little change, and in the developing regions had receded slightly to about the prewar level. The Conference expressed its concern at the continued lag in per caput production in the developing countries
25. The limited data so far available on the current 1965/66 season suggested no Immediate improvement over the long years of relative stagnation in per caput production. Although there had been a substantial increase in production in North America, production had been affected by drought and other adverse weather in many places, including parts of Europe, the U.S.S.R., Australia, Argentina, India, and large areas of East and Southern Africa
26. In the developed regions per caput production had continued to increase during the last decade, and there were unsold stocks of many agricultural products in these regions, although their overall level, especially of wheat, had been slowly declining since 1961.
27. While appreciating the weaknesses of the statistics of some developing countries, the Conference noted that during the last decade the developing regions as a whole had succeeded in Increasing both their food and total agricultural production at an estimated rate of almost 3 percent a year, a rate comparable with that in the developed regions. Thus, the comparative stagnation of per caput production in the developing regions reflected the faster growth of their population as compared to that of the developed regions, more than the slower expansion of their agricultural production.
28. The Conference noted further that there had been wide differences in the performance of developing countries, and that in a number the rate of growth of agricultural production had significantly exceeded the low regional and world averages. This in itself was an encouraging sign, and the Conference noted that further studies on this matter were in progress.
29. It was clear that there was no fixed pattern for success in agricultural development. A good many of the countries showing the fastest rates of growth were however either countries of intermediate economic development, already approaching the take-off stage, or countries whose exports had rapidly increased. This suggested that a rapid growth of production was possible when there was a rapid growth of demand, whether on domestic or export markets. But although this was as essential prerequisite, It did not automatically lead to a rapid increase in production. Experience suggested that this was largely because deficiencies in the institutional structure tended to insulate farmers from the growth of demand, especially in towns. All too often the increased demand had had to be met by larger imports, including food aid. It was pointed out that if the demand for grain imports into the developing countries continued to grow at the rate of recent years, it would be likely to exceed any foreseeable supplies. Rapidly increased production within the developing countries was therefore imperative.
c) International trade in agricultural products
30. The Conference noted that just as the developing countries' gains in agricultural production had been all but obliterated by population growth, their efforts to increase agricultural exports had, because of lower prices, brought them very little more in foreign exchange earnings. According to the comparisons in the 1965 State of food and agriculture of the averages for 1952-54 and 1962-64, these countries increased the volume of their agricultural exports by about 38 percent, but their total earnings from these exports rose by only 13 percent. In terms of their purchasing power for manufactures, the "real" earnings of the developing countries increased by only 5 percent, while their "real" earnings per head of their population actually declined by about 16 percent during the decade.
31. The developed countries taken as a group had done much better. Their earnings from commercial agricultural exports (excluding shipments under special terms) increased by 41 percent, three times as much as those of the developing countries, between 1952-54 and 1962-64. This was both because of a greater rise in volume, and of a much smaller fall in the prices of their agricultural exports compared with those of developing countries, since the fall in prices had been steepest for beverages and agricultural raw materials, commodities chiefly exported by the developing countries.
32. The Conference noted that while agricultural export prices had fallen almost continuously during the earlier part of the decade, there had been a temporary recovery between late 1962 and early 1964 which had taken average prices of agricultural products as a whole in 1964 to fully 10 percent above the 1962 level. The Index of prices of agricultural exports as a whole had been falling slowly since the beginning of 1964, but in the third quarter of 1935 they were still somewhat above the low levels of 1961 and 1962. For beverages and agricultural raw materials, however, the decline in prices had once again been steeper than for agricultural products as a whole, and the countries exporting these products had suffered a sharp drop in their agricultural export earnings. In 1965 prices of sugar and cocoa had reached their lowest postwar levels. Failing some radical change in world markets, before long almost all of the rise in prices registered in late 1962 and 1963 would have been lost.
33. It was noted that any signs of a stronger market situation were for products exported chiefly by the developed countries, such as beef and grains. For wheat there had been large U. S. S. R. imports so far in 1965/66, and these had now been followed by further large Chinese purchases. World wheat stocks would be lower at the end of the 1965/66 season, and it was suggested by some delegates that the time might not be far distant when the "surplus" element in these stocks might largely have disappeared.
34. The Conference reiterated the need to reduce the instability and to halt the decline in world prices of agricultural commodities, both of which had serious effects on the economies of countries heavily dependent upon agricultural exports. For developing countries in particular the decline in world prices had meant that their earnings of foreign exchange were not rising at a rate commensurate with their development efforts.
35. Many delegates noted that agricultural exports continued to be hampered by tariff and nontariff barriers (including high tariffs on products in processed or semimanufactured form) in many industrialized countries, which remained the main import markets. Competition from synthetics and other substitutes was increasing and extending to new commodities. Export markets for many agricultural products tended to be oversupplied, in contrast to the situation of shortage in the domestic markets of many developing countries.
36. The Conference believed that better international co-ordination of production plans would help to bring greater stability in export markets. There was need for greater co-ordination between the policies of the developed and the developing countries, and also among the developing countries themselves, without which efforts at diversification might intensify the pressure of supplies and depress prices further. One of the contributions of the Indicative World Plan for Agricultural Development now in preparation in FAO, would be to provide a. basis for such co-ordination. The information on national development plans assembled annually in The State of Food and Agriculture was also useful in keeping countries informed of the policies and plans of other countries. Some delegations suggested that FAO should consider using, perhaps in a regional context and on the basis of the Article XI reports, the review and confrontation techniques employed by GATT and OECD.
37. The Conference stressed the important role that international commodity arrangements could play in improving conditions of world trade in agricultural commodities, and noted that the possibility of linking them with production policies and with food aid was being further explored.
38. The Conference proposed that further information should be gathered and studies made, in co-operation ion with other international agencies to avoid duplication, on the possibilities of Increasing trade among the developing countries themselves, on the degree of dependence of developing countries on food imports, on the policies of regional economic groupings, on the production and prices of synthetics, on national support policies and subsidies, and on customs duties for raw and processed products. It noted that work to these ends was already under way, and requested that Information on these subjects should be included in The State of Food and Agriculture
d) Agriculture development in developing countries
39. The Conference reaffirmed that, although food aid had proved invaluable in emergencies and would continue to be essential for many years to come, it could not provide a permanent solution to the problems of hunger and malnutrition in the developing countries. The only final solution lay in increasing production in the developing countries themselves. This was both because of the sheer magnitude of the Increased supplies needed and because until agricultural productivity could be increased their farm populations would be condemned to continued poverty.
40. Agriculture should play a much more dynamic role in the
economic development of the developing countries. Its potential
contribution to economic development, including Industrial
development, was considerable. So far, however, It was in the
agricultural sector that the United
Nations Development Decade had failed
most signally.
41. In some countries the first development plans had put their main emphasis on industrialization, but most were now seeking a better balance between industry and agriculture, Including the production of food for domestic consumption. The experience of the last decade, suggested that the poor performance of agriculture stemmed largely from the economic and Institutional barriers that in many developing countries tended to segregate the farmer from the growth of demand in other sectors.
42. The Conference felt that there was an acute shortage in the developing countries of the agricultural inputs such as fertilizers, pesticides and farm implements needed to increase agriculture production.
43. The Conference stressed that, if more of the existing agricultural knowledge could be effectively applied, the production situation in developing countries would be greatly Improved. It was still necessary to expand practical research into tropical and subtropical agriculture, together with a greater exchange of research results between developing countries.
44. The application of modern techniques largely depended on efficient extension services, which should be concentrated at the farm level and closely linked with general rural education. It was important to change the mental attitudes of producers and to develop a new class of progressive farmers ready to depart from traditional practices. To this end, education in rural areas should be oriented toward the Improvement of agricultural production. Stress should be laid on the education of women in home economics and also on a wider basis in countries, including many in Africa, where they played a large part in agricultural production or marketing. (See also paras. 221 and 284.)
45. The Conference considered, however, that the lack of incentives was the main factor deterring primarily subsistence producers from increasing their production for the market. Price instability, and especially the sharp fall in prices Immediately after the harvest, unorganized markets, inequitable and outmoded systems of land tenure, no less than lack of credit or know-how, could take away most of the Incentive for farmers to increase their marketable surplus.
46. The Conference laid special stress on the key role of land reform in creating a favorable climate for increased production, and welcomed the forthcoming World Land Reform Conference now being organized by FAO and the United Nations. Effective measures of land reform involved many problems, notably Improved extension services, and facilities for farm credit, marketing and the supply of production requisites. For this purpose it was necessary to promote the rapid growth of farmers' organizations, especially co-operatives. It was also necessary to provide special training for the natural leaders who would emerge in these organizations. The newly Independent farmers should be given a high sense of personal responsibility, so that they did not come to depend on government officials in the same way as they had on the landlord.
47. Measures for the better use of underemployed rural manpower were of great importance in maximizing agriculture's contribution to economic development, and the Conference requested that the Director-General should organize a session for an exchange of views on suitable techniques. New labor-intensive technologies should be developed, so as to make better use of the underemployed manpower that was the only resource not in short supply.
48. The Conference drew attention to agriculture's role in industrialization. Not only was the processing of agricultural products a starting point for Industrialization, but a prosperous agriculture also provided an expanding market both for consumer goods and for a wide range of agricultural requisites, including fertilizers, pesticides, machinery and implements. In this connection the Conference welcomed the preparation of a study of agriculture and Industrialization for inclusion in the 1966 issue of The State of Food and Agriculture.
49. Among other measures, the Conference emphasized the need for marketing improvements, the prevention of waste through improved storage, and the provision of transport and other basic services, including general administration.
50. An important lesson of the past decade was the close interdependence of measures in such fields as price policy, marketing, credit, extension, and land reform. Because of shortages of finance and trained manpower, however, it was rarely possible for developing countries to apply all of these measures at once on a large enough scale. This pointed to the value of concentrating such measures in selected areas of high potential, as had been done in a number of countries.
51. Foreign financial and technical assistance, from both bilateral and multilateral sources, had a crucial role to play in the agricultural development of developing countries. Such aid could be more effective if there was a better co-ordination among the different sources supplying it. Some delegates suggested that more Information should be provided on bilateral aid to agriculture, e. g. in future issues of The State of Food and Agriculture.
52. The Conference expressed its concern at the growing burden of debt services of developing countries, which offset an increasingly large share of the foreign aid received. It welcomed the increased emphasis of the International Bank for Reconstruction and Development (IBRD) on investment in the agricultural sector, and in particular the establishment of the FAO/IBRD Co-operative Programm. This program was already bearing fruit in the channeling of increased funds to agriculture. The provision of grants and of interest free loans by some countries was another step in the right direction.
53. The Conference considered that attention should be paid to new ways of transferring resources from developed to developing countries. For instance, once farmers in the developing countries began to adopt improved techniques there was a rapid increase in the demand for fertilizers and other inputs, and many countries had to expend substantial amounts of scarce foreign exchange to meet the increasing needs of farmers for these requisites. The Conference considered that the proposal for some form of international fund for fertilizers and other inputs merited careful study by the Director-General. It also called for more information on the trend of prices of fertilizers on world markets in relation to those of agricultural products. (See also para. 205.)
e) Agricultural problems of developed countries
54. The Conference recognized that the agricultural problems of developed countries were in many instances quite different from those of the developing countries. There were problems of market Instability; the basic dilemma of most industrialized countries remained however the inherent conflict between their efforts on the one hand to maintain farm Incomes in relation to these in other occupations, and on the other hand to keep production from outrunning the growth of demand as a result of Improved techniques aimed primarily at increasing efficiency. In the long run it was probable that the agricultural problems of the developed countries could be solved only by structural improvements and increased efficiency; these would entail further reductions in their farm populations, which, in contrast to those of the developing countries, had declined rapidly in absolute terms as well as relative to the total population during the past decade.
55. The Conference noted the flexibility of the new farm legislation in the United States of America, now on a four-year basis, which, while aiming at a further reduction in surplus stocks, made it possible for highly productive acres to be brought rapidly into production again if the need arose.
a) The world commodity situation
b) Work of-the committee on commodity problems
c) Food aid and surplus utilization
d) Individual commodity matters
a) The world commodity situation
56. In reviewing the world commodity situation during 1964 and 1965, the Conference found that in general developments had been unfavorable. The price rise of 1963/64 had been short lived. For many commodities there had also been unsatisfactory growth in the volume of exports in 1964, particularly from developing countries, and the seriousness of this had been compounded by the renewed decline in their prices during 1965. Certain basic factors, which had been a source of concern for a number of years, appeared to have reasserted themselves and, as a result, many developing countries had been experiencing shortfalls in their export earnings from agricultural commodities relative to their expectations and economic development needs. Since the outlook showed little immediate prospect of a significant improvement in world commodity markets, the Conference viewed the situation with particular concern.
57. The Conference recognized that 1964-65 had been a period of particularly intense activity in the commodity field. International consultations both on general and specific commodity matters in the United Nations Conference on Trade and Development (UNCTAD), the General Agreement on Tariffs and Trade (GATT) and the commodity councils, as well as in FAO, had gone forward on a broad front. Much new thinking had been developed regarding approaches to commodity problems, including the consideration of broader types of commodity arrangements and agreements. The Conference noted in particular the discussions currently under way in UNCTAD on possibilities for introducing some international organization of commodity trade at remunerative prices, and the studies already undertaken or in course of preparation on possible financial measures alternative or supplementary to commodity stabilization schemes. The biennium had seen a wide recognition of the need for International commodity arrangements not only to achieve agreement on prices and trade but to cover, in addition, national production policies, stockholding and utilization of surpluses. At the same time, an attempt was being made in GATT to bring concessions on national agricultural price and production policies into wider negotiations covering the whole field of trade. It had been generally agreed that in these negotiations reciprocal concessions from developing countries would not be required. Some delegates stressed the need to study the structural problems of agricultural production.
58. The Conference regretted that the international consultations on cocoa and sugar, commodities facing critical situations during 1964-65, had not so far reached the stage of concrete action, but noted that negotiations were to be further developed in 1966. It recognized that the incorporation of new ideas, for example, on the development role of commodity agreements as distinct from stabilization alone, required time to gain acceptance, while detailed study of their actual implications was also necessary. A step-by-step approach toward the attainment of the new objectives might prove successful.
59. Many delegations held the view that Member Governments of developed countries should discontinue differential tariffs and remove other barriers that protect their industries processing raw materials from the competition of manufactured and semimanufactured products of developing countries. Other delegates, while not denying the importance of this proposal, considered that action on this matter was outside the competence of FAO or that it was more appropriate to leave it to GATT or to UNCTAD.
b) Work of-the committee on commodity problems
60. The Conference reviewed the activities of the Committee on Commodity Problems (CCP) and its subsidiary bodies, and expressed its satisfaction at the work which had been accomplished. It felt the Committee had responded to the changing needs of governments and that, in general, Its activities were proceeding on the right lines and in accordance with its role as the Organization's main Instrument for consideration of problems and possible solutions in the agricultural commodity field.
61. CCP's annual review of the agricultural commodity situation and outlook was agreed to be an essential part of its activities, enabling commodity Issues and problems requiring the consideration of the Committee. Its subsidiary bodies and governments to be regularly identified and reviewed. CCP Is analysis of critical commodity situations as they arose was also a key task, and the further development of such analyses with more timely attention to deteriorating commodity situations was of great importance.
62. The Conference noted the analytical review of experience with international commodity arrangements in the postwar years which was being undertaken as a special study in the commodity field. It was felt by many delegates that this work would contribute to the development of more effective methods of international action on commodity problems; at the same time a search for new methods was needed.
63. CCP had continued to evaluate developments in national agricultural price stabilization and support policies, and to review thair Impact in terms of the FAO Guiding Principles on National Agricultural Price Stabilization and Support Policies. The Conference, while recognizing the complex nature of some of the questions connected with national stabilization and support policies, noted that they remained a key question in any examination problems of international trade in agricultural products. The factual analyses of such policies by CCP were of great value as a basis for International consultations on such matters.
64. On other broad aspects of CCP's work, the Conference made a number of suggestions as to particular lines of work which might be pursued, bearing other priorities to mind. The Conference felt that the new concepts and approaches that were being put forward with regard to commodity problems could usefully be taken into account by CCP in the development of its own work. Such new Ideas, after examination by CCP, might be valuable in any contribution which it might be able to make in due course to the international discussion of general principles of commodity arrangements. Some delegates felt that attempts should be Made in FAO commodity reviews, in the Indicative World Plan or in separate studies, to give factual information on the development of commodity trade relations between developed and developing countries. In this connection, attention should be given to current studies under way in GATT on the effects, particularly on less developed countries, of current obstacles to trade; to the setting up of a permanent committee in UNCTAD on competition from synthetics and substitutes; and to the role of FAO in these areas. Some delegates felt that consideration might also be given to updating existing descriptive papers on the nature and scope of the work of CCP. It was also suggested that CCP might wish to review the frequency of its sessions, in view of the growing concern of Member Governments to find solutions for International commodity problems and of the need for more timely action.
c) Food aid and surplus utilization
65. Matters relating to food aid and to the utilization of agricultural surpluses had continued to be kept under review by CCP and its Consultative Subcommittee on Surplus Disposal in Washington. The Subcommittee had continued to supervise the observance of the FAO Principles on Surplus Disposal, and remained the basic intergovernmental forum for multilateral consultations on food aid and surplus problems.
66. The Subcommittee was continuing its work on "gray area" transactions, i.e., transactions which were neither fully commercial nor completely concessional, along the lines laid down by CCP. The Conference endorsed this field of study, noting the continuing concern of certain agricultural exporting countries that harmful interference to commercial trade patterns could result from transactions of this type. It stressed that an adequate analysis of the problems in the "gray area" could not be carried out without the full support of governments, especially with regard to the provision of detailed information requested by the Subcommittee.
67. The Conference also endorsed the work done by the Subcommittee in extending its operations to World Food Program projects. The Conference noted that attention had been given to the consultation period allowed to Interested third countries in given types of surplus disposal operations. While some problems concerning the brevity of the consultation period remained, the Conference anticipated that, given goodwill and a continuance of the readiness to co-operate shown by the main donor country, a satisfactory solution could be found.
68. The Conference took note of the Argentine Government's proposals for a World Food Fund. This matter had been dealt with by the Intergovernmental Committee of the World Food Program, which had referred it to its parent bodies. The Conference endorsed the action of the Council which had pointed out that a number of the Issues involved were of major Interest to FAO, and had requested the Director-General to examine the beat way in which a comprehensive study of them could be Initiated. The Conference stressed the importance of close co-operation in this work on the part of other bodies, such as the United Nations, GATT, IBRD and the International Monetary Fund (IMF).
d) Individual commodity matters
69. The Conference welcomed the decisions taken during the biennium 1964-65 to establish a new Study Group on Bananas and to widen the terms of reference of the former Study Group on Coconut and Coconut Products to include all oilseeds, oils and fats. With regard to the latter, the Conference noted that the new Group would concentrate Its attention on commodities exported mainly by developing countries, Le. copra and coconut oil, groundnuts and their oil, and palm and palm kernel oils.
70. The Conference also endorsed the activities of the other five CCP study groups - those on cocoa, citrus fruit, rice, grains, and jute, kenaf and allied fibers. All the groups continued to provide opportunities for the analysis of the economic problems affecting the commodities covered and the consideration of possible solutions. Reference was made to the role which study groups, particularly with regard to citrus and rice, could play as a multilateral forum for reviewing the impact on world trade of the trade policies of regional economic groups of countries. The initiative of the Study Group on Jute, Kenaf and Allied Fibers in developing Informal consultative arrangements on a multilateral basis was felt to be especially interesting as being a possible form of international co-operation which could be extended to other products. International consultations on tea had been initiated by CCP and resumed on hard fibers in the form of ad hoe intergovernmental conferences.
71. On other specific commodity matters, the Conference welcomed the continuing reviews of national policies being carried out e.g. for grains, rice and dairy products, and felt that similar reviews might be initiated for other groups of commodities, such as meat. On both meat and tobacco, the Conference felt that additional work should be carried out by FAO, both commodities being of particular importance to a number of agricultural exporting countries. In view of the wide range of agricultural commodities affected by the competition of synthetics and other substitutes, the Conference was pleased to note that this question would receive more attention in FAO. The Conference welcomed the role which FAO was playing, along with the International Coffee Organization and IBRD, in the tripartite study of diversification problems affecting coffee producers, and recommended that FAO continue this co-operation.
Contents
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