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XII. Report of Commission C to the Conference

A. World Food Board
B. 1946-47 food situation

Consisting of the Reports of Committee I and Committee 11 as Approved by the Commission

COMMISSION C (World Food Policy) was set up to examine the Director-General's Proposals for a World Food Board and to review the 1946-47 world food position in the light of the most recent information available. Committee I (World Food Board) and Committee II (1946-47 Food Situation) were established by the Commission. Their reports, which follow, were adopted with certain amendments by the Commission and thereby became the Report of Commission C to the Conference.

A. World Food Board

RECOMMENDATIONS AND PROPOSALS

1. Having examined the Director-General's Proposals for a World Food Board' in the light of the discussion in the Plenary Meetings, and accepting the general objectives of the Proposals, namely:  

(1) developing and organizing production, distribution, and utilization of the basic foods to provide diets on a health standard for the peoples of all countries;

(2) stabilizing agricultural prices at levels fair to producers and consumers alike; it is agreed that international machinery is necessary to achieve these objectives and it is recommended that a Preparatory Commission be established to carry the proposals further.

 2. The terms of reference of the Preparatory Commission should cover the following matters: the Director-General's Proposals' and any alternative proposals which may be submitted to it and the preparation of concrete recommendations and propositions for international action for achieving the objectives as set out in paragraph 1.

3. It is recommended that the Preparatory Commission should consider:

 

(1) the principles and organization involved in the Proposals of the Director-General and in any other relevant proposals and documents (for example, the First Report of the Standing Advisory Committee on Economics and Marketing);

(2) particular proposals applicable to particular commodities, bearing in mind that the scope of the Commission's recommendations may cover any agricultural products including forest products and fish and marine products, and

(3) the order of precedence to be given to consideration of the different products, giving priority to essential foodstuffs.

 4. The Preparatory Commission should be composed of representatives of the following sixteen members of the Food and Agriculture Organization, subject to the additional membership proposed in paragraph 5:  
Australia Egypt
Belgium France
Brazil India
Canada Netherlands
China Philippine Republic
Cuba Poland
Czechoslovakia United Kingdom
Denmark United States of America
 

5. Because of the great importance of the Union of Soviet Socialist Republics and Argentina as producers of food, it is recommended that an invitation be extended to each of these countries to become a full member of the Preparatory Commission in addition to those listed above. Because of her great importance as a rice exporting country, it is recommended that Siam be invited to join the Preparatory Commission as a full member in respect of the discussions concerning rice.

6. The governments represented on the Preparatory Commission should appoint responsible representatives experienced in the question under consideration. Each government should be entitled to appoint one member, alternate members, and such advisers as it deems necessary.

7. The following specialized intergovernmental agencies should be invited to send representatives:

 

- International Labour Organization
- World Health Organization
- International Bank for Reconstruction and Development
- International Monetary Fund

 The Economic and Social Council should be invited to send two representatives, one of whom would speak specially for the Preparatory Committee on Trade and Employment (ITO). These various representatives should be advisers with a right to take full part in discussions, but without the right to vote or sign the report.

8. It is recommended that each government member of FAO not represented on the Preparatory Commission should be entitled to send one observer to attend the Commission with a right to submit memoranda, to participate in the discussions if invited to do so by the Commission, but without a right to vote, or to sign the report.

9. The Preparatory Commission should be authorized to invite governments who are not members of the Commission and also intergovernmental commodity organizations to submit memoranda or appoint representatives to participate in the discussions of particular items in which they have a special interest.

10. In order to secure consideration of views of all interests that are concerned in the work of the Commission, the Preparatory Commission should be authorized to seek the advice of the International Federation of Agricultural Producers, the World Federation of Trade Unions, experts, expert bodies, and other interested organizations whether national or international.

11. It is recommended that the Preparatory Commission should be left free to examine all matters relevant to the proposals under consideration.

12. It is recommended that the Preparatory Commission be located at FAO's temporary headquarters in Washington, D. C., U. S. A.

13. FAO should provide the secretariat and should appoint a chairman for the Commission.

14. The expenses of the secretariat and meetings of the Commission should be borne by FAO, but the expenses of delegates and representatives should be borne by the governments and organizations concerned.

15. The Preparatory Commission should convene as soon as possible and' not later than 1 November.

16. The Preparatory Commission should be authorized to appoint such committees and subcommittees as it may require.

17. The Director-General is asked to expedite the completion of the work of the Preparatory Commission, having regard to the great urgency of the issues to be discussed.

18. The Preparatory Commission should be authorized to submit, if necessary, an interim report to the Director-General for circulation to governments and international agencies, and thereafter to reconvene for the purpose of considering their observations and making its final report.

19. The Preparatory Commission should present its final report to the Director-General who should circulate it to member governments of FAO and to the international agencies concerned, and obtain the views of the Executive Committee. The report should then be considered as soon as possible by the FAO Conference, which would pass it on with its recommendations to the United Nations through the appropriate channels. The suitability of Geneva as the site for such a session of the Conference should be given consideration by the Executive Committee.

 B. 1946-47 food situation

COMMITTEE II of Commission C reviewed the 1946-47 position in the light of the World Food Appraisal of 2 September and other information placed before the Conference by delegates. It reconsidered the recommendations made at the Special Meeting on Urgent Foods Problems "for utilizing the 1946 harvest supplies in such a way as to avoid repetition during 1947 of the shortages and famine which occurred in 1946.'' After taking account of such changes as have occurred in the supply position, it concluded that the gap between supplies and minimum needs was still serious and recommends that it is necessary to enforce and to continue throughout the 1946-47 year the special economy measures specified at the Special Meeting. The Committee also reviewed, and for the same reasons endorsed, the recommendations of that meeting regarding the principles to be adopted and followed in the procurement, collection, allocation, and distribution of foodstuffs in short supply. It finally noted the references in the Appraisal to likely trends of supplies and requirements in 1947-48 and made recommendations regarding the necessity for aiming at maximum production of food next year.

WORLD FOOD APPRAISAL 1946-47

The Committee examined the World Food Appraisal for 1946-47 issued by the FAO Food Reporting Service 2 September, and though it was realized that the estimates were still tentative and might in many details require revision in the light of fuller information as to crops, utilization, stocks, etc., there was no escaping the general conclusion that not only would there be continuing shortages of protective and basic foods (e.g., milk, meat, fats, and sugar), but that there would be a serious shortage of grain. Thus, on the basis of current information regarding indigenous supplies in importing countries and likely shipments from exporting countries, it is clear that world supplies fall seriously short of the quantities needed to prevent food consumption in urban and other deficit areas falling below minimum subsistence standards.

In making its estimate of a minimum subsistence standard (e.g., 2,000 calories in temperate climates), the Ad Hoc Nutrition Committee did not consider this a desirable level; indeed, it proposed a somewhat higher calorie scale as a " temporary maintenance level. " It regarded the subsistence minimum as the least that could be contemplated, especially after the acute shortages of 1945-46. The Committee notes that import needs in the main deficit regions were based on this physiological standard and not on present or likely demand, which would probably be greater than the FAO estimate of minimum need in countries wishing and able to purchase above this level, but might be lower in countries which may lack sufficient funds to purchase even up to this level. The Appraisal states, in respect to the latter, that "unless special financial arrangements can be made, the diet in these countries may remain at 1.600 calories or lower through out 1946-47." Even so, it is doubtful whether this cruel means of adjusting requirements would obviate more than a part of the overall shortage.

If, however, "steps can be taken to alleviate these financial difficulties, thus putting the deficit countries in a position to ask for enough food to provide the minimum diet, there will be further upward pressure on prices to be guarded against, and there will remain the problems of closing the gap in supplies."

For foodstuffs such as milk, meat, fats, and sugar, current consumption levels, which in most importing countries range from not more than 75 percent to as low as 40 percent of prewar standards, there is little prospect of much improvement during 1946-47 except to the extent that (a) more supplies can be made available from exporting countries by restrictions in consumption and special procurement, transportation, and price policies, or (b) in the less developed food-exporting countries, quicker rehabilitation of food export trade can be obtained by providing from the industrial countries more consumer incentive goods, processing machinery, transport equipment, etc.

Thus the problem is largely one of agricultural and general industrial rehabilitation in most countries, and not merely a search for larger exports or a redistribution of such supplies. Even before the war, world production provided a relatively low dietary standard to vast masses-over 70 percent-of the world's population (as in Asia, Africa, and tropical America) and the effects of the postwar dislocation of agriculture, combined with droughts, can be offset to only a limited extent by stretching supplies available from the exporting countries. Nevertheless, human beings must not only be kept alive and free from disease during the period of postwar convalescence (that is, at the "minimum subsistence standard"), but they must have more food if they are to achieve a normal work output.

Attention must therefore be concentrated on making available the maximum supplies of the great staple "breadgrain" - wheat, rye, or other suitable cereals. It is probably true that even today the total volume of cereals grown in Europe and the four major cereal-exporting countries is theoretically enough to give diets adequate in calories in those areas-this probably does not apply to Asia-but the greater part of this supply consists of coarse grains fed to livestock, on which largely rests the agricultural and nutritional economy of those regions. Under war conditions of blockade shortages of ships, etc., continental Europe and the United Kingdom had to shift considerably nearer to a breadgrain production basis. In contrast, the major wheat-producing exporting area-North America-was able, up to 1944, somewhat to restore the balance, that is, to maintain its breadgrain production and yet to produce record supplies of livestock products for its civilians, for its military forces, and for export to the other United Nations. But even this area has been compelled, since 1944, to switch more from feed to bread production in order to make its contribution to meeting the abnormal wheat requirements of the liberated areas.

Desirable as it is, therefore, to revert to more normal agricultural practices in these areas and to improve the quality and variety of diet, there is no escape from the conclusion, as expressed in the Appraisal, but the "closing of the gap" (between needs and supplies of grain) "must be sought chiefly in making more grain available for human use and in effecting greater economies in all grains so used." The gap is estimated in the Appraisal at about 8 million tons of breadgrain-not much less than indicated in the earlier appraisal made last May, but, to quote the new appraisal: "In one respect the prospect is brighter than in May: There is an exceptionally large crop of coarse grains (maize, barley and oats) in the United States. The expected world export surplus of 61/2 million tons will be keenly demanded as livestock feed, but if part of this, together with certain additional amounts of grain otherwise destined for animal feeding or for stock rebuilding, could be made available for human use it might go far to close the gap. For the rest it will be necessary and important to bring into operation various economy measures recommended by the Special Meeting on Urgent Food Problems, and to follow closely the principles of allocation there agreed. "

INTERNATIONAL ACTION REQUIRED

Several months have elapsed since the Special Meeting, and there are reasons for believing that the measures recommended have not been fully implemented by some of the countries concerned; moreover, reports of more favorable crops in one or two major producing countries may have prompted the feeling that considerable relaxation of these measures might be possible, particularly in respect to diverting grain from human consumption to livestock. The Committee is, therefore, strongly of the opinion that maximum publicity should be given, for producers and consumers alike, to the findings in the World Food Appraisal and in this report, namely, that the situation does not warrant any such relaxation, and that the recommendations of the Special Meeting are still necessary and must be enforced throughout the year.

RECOMMENDATIONS AND PROPOSALS

1. Measures to Ensure Maximum Availability and Optimum Distribution of Human Food in 1946-47

The Committee has examined the World Food Appraisal for 1946-47 issued on the 2nd of September 1946. It accepts the general conclusion that despite the recent improvement in crop prospects in certain countries there will remain during that year a serious gap between prospective export supplies and import needs of bread and other grains, as well as continuing short-' ages of fats, meat, sugar, and other essential' foods.

The Committee has noted the conclusion of the Special Meeting on Urgent Food Problems, called by FAO in Washington 20-27 May 1946, that the gap between prospective export supplies and import needs of breadgrains could be " closed only if economies in the consumption of grains are enforced throughout the whole of the crop year. " It has also noted with approval the specific recommendations made by that Meeting designed to ensure that the maximum quantity of food for direct human consumption was made available even at the expense, if necessary, of deferring the rebuilding of depleted livestock herds in Europe and elsewhere.

The Committee recommends:

(1) That, in accordance with Recommendation 16 of the Report of the Special Meeting on Urgent Food Problems, no material relaxation should be made in the economy measures taken by the various countries to husband scarce foodstuffs in order  

(a) to avoid the repetition of the acute shortages of 1945-46, and

(b) to ensure that, subject to the satisfaction of essential consumption needs, adequate stocks are carried into the 1947-48 season against the contingency of a decline in yields in some major producing countries below the very favorable levels which have prevailed since 1940.

 (2) That in particular all countries should carry out as far as practicable the specific measures recommended by the Special Meeting on Urgent Food Problems designed to secure substantial economies in the use of breadgrains. These specific measures include a minimum extraction rate of 85 percent for wheat and rye, the dilution of flour, the restriction on the usage of breadgrains for beverages and other nonessential purposes, and the restriction of the feeding of breadgrains to animals.

(3) That all member countries of the International Emergency Food Council report regularly, at least at quarterly intervals, to that organization on the measures which they are taking to implement the recommendation of the Special Meeting on Urgent Food Problems and that countries not members of IEFC report on this subject to FAO.

(4) That FAO and IEFC should jointly make public at quarterly intervals reports on the world grain position, with special reference to the continuance or modification of these measures.

(5) That exporting countries continue to consider urgently the special action which may need to be taken in regard to inland transport and port facilities, procurement, and other relevant matters in order to make more food available for export.

 The Committee has reviewed and noted with approval the recommendations made at the Special Meeting of May 20-27 regarding the principles to be adopted in the "procurement, collection, allocation, and distribution of foodstuffs in short supply, " and endorses the statement in the recommendations that "The objective of the new intergovernmental allocation body should be to develop a sense of corporate responsibility between the different countries in respect of the needs of other countries as well as their own. Member countries of the allocating body should accept the full responsibility of implementing the recommendations to which they have agreed." The Committee (a) reaffirms the necessity for following these principles of world distribution of scarce foods and wishes to emphasize that "consideration of urgent need should be paramount," as, for example, in the case of countries which by reason of famine or other afflictions are likely to be, at least temporarily, gravely short of food; and (b) welcomes the formation and development of IEFC and recommends that this or some other appropriate international agency continue its operations with respect to any essential basic commodity so long as import needs are in excess of exportable supplies.

2. Urgent Need of Incentive Goods by Primary Food Exporters

The Committee notes that in many areas, particularly in the liberated areas of the Far East but also in Africa and other regions, recovery in export supplies of rice, copra, ground nuts, and other food, as well as animal protein feed, is severely handicapped by the still very inadequate supplies of consumer and incentive goods needed by primary producers, by lack of agricultural implements, railway engines, motor trucks, barges and coastal craft for transportation, pumping units, and spare parts for milling and other machinery. There is an appreciable time lag in agricultural production involved in certain instances, and hence the longer the delay in providing more consumer goods, machinery, etc., the more prolonged will be the shortage of food supplies from these areas.

The Committee therefore recommends:

(1) That member governments of FAO particularly the industrial countries-consider urgently what further action they can take to make available more supplies of essential merchandise and materials;

(2) That the United Nations Economic and Social Council be requested to consider this matter urgently at its present session, especially in regard to such international economic or financial problems as may be involved.

 3. Abnormal Financing of Food Needs in UNRRA Countries

The Committee notes that

(1) The UNRRA Council at Geneva on August 16 recommended "That the General Assembly of the United Nations, after consideration of the relief and rehabilitation problems to be dealt with in 1947, forthwith establish or designate such agency or agencies as it may deem appropriate, whose functions shall include: (a) a review of the needs in 1947 for financing urgent imports of the basic essentials of life, particularly food and supplies for agricultural production, after the termination of UNRRA programs to the extent that they cannot otherwise be met and (b) the making of recommendations as to the financial assistance that might be required to meet such needs as are found to exist as a result of foreign exchange difficulties which cannot be dealt with by existing agencies. "

(2) FAO's World Food Appraisal for 194647 states that "One of the most disturbing factors in the present situation is the difficulty which certain countries now face in financing their food imports. During 1945-46 a number of countries had their food imports financed through UNRRA, whereas from the beginning of 1947 they will have to make their own financial rangements.... It can already be predicted that some countries will not receive enough food to provide the physiological minimum unless they are equipped with loans, credits, or other financial facilities. "

(3) Much of the progress in rehabilitation and recovery, particularly in countries where food imports since liberation have been primarily financed by UNRRA, may be lost if, because of the lack of financial resources, the work cannot be continued and carried to completion.

(4) No organization now exists which, after the termination of UNRRA (within 100 days in respect to Europe and shortly after in Eastern countries), will be in a position to determine the need for further financial assistance, the kind of assistance appropriate to the circumstances, or provide such assistance to the extent it is required.

(5) Moreover, in respect to food, fertilizers, and seeds, the International Emergency Food Council, in the absence of undertakings by importing countries that they will be able to finance their stated import requirements, cannot make provision for such countries in recommendations dealing with a distribution of available supplies, nor, where special procurement measures may still be necessary, can it reasonably be expected that these could be continued under such conditions.

(6) There is danger of potential supplies of food being lost, since the lack of purchasing power constitutes a real obstacle to increases in production in 194647 or even its maintenance at current levels. The assurance of markets is essential if produces are to plan maximum production.

 The Committee therefore recommends:

That the FAO Conference endorse this resolution of the UNRRA Council, and urges the General Assembly of the United Nations to regard this as a matter of urgent importance and to place this resolution on its agenda for consideration and disposition at the earliest possible moment during the forthcoming session.

4. Necessity of Maximum Production for Consumption Year 1947-48

The Committee notes that it is stated in the World Food Appraisal that " Looking beyond 1946-47, there are signs that the world food balance may continue tight for some time, since import demand will be larger than prewar, and export supplies of many foods, notably livestock products, can only expand slowly, " and that there seems likely to be in 1947-48, and possibly for longer, a keen demand for all the basic foods. It notes also that the year 1946-47 has opened with a virtual exhaustion of stocks throughout the world and that adequate stocks should be carried over to 1947-48 against the contingency of a decline in yields in some major producing countries below the very favorable levels prevailing since 1940.

The Committee, therefore, wishes to record its opinion that it is to the interest of both producting and consuming nations to encourage and plan for the maximum production of the basic foods of the world during the 1947-48 season. It wishes to draw attention to the recommendations of the Special Meeting on Urgent Food Problems on the conservation and expansion of supplies in the 1947-48 consumption year, and to reaffirm strongly the necessity for implementing the measures specified therein. Similarly it draws attention to the warning given at that meeting that despite the encouragement being given to farmers to maintain production "food producers in many countries fear that satisfactory prices may not continue beyond the period of shortage. The Committee attaches importance to creating a feeling of confidence in regard to price stability. It believes that ultimately the problem of surpluses can only be resolved within the framework of an expanding world economy including full employment and maximum industrial production at home, expansion in international trade, the stabilization of currencies, and the resumption of international lending. Nevertheless, national guarantees of price stability need to be supplemented by international measures to serve the same end. "

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