WORLD FOOD AND AGRICULTURE SITUATION

Current World Food Situation1

10. The Council reviewed the global and regional food situation on the basis of the report Current World Food Situation, and generally agreed with the assessments made and the conclusions reached. Many members provided information on their national food situation and policies.
11. The Council noted that, while a slight improvement had taken place in the current world food situation, progress continued to be very uneven among developing countries and regions. There had been a renewal of food production growth at the global level in 1992, with North America and Oceania strongly recovering from the setback of the previous year. In the developing countries, however, food production growth only slightly exceeded population growth and remained below the trend level of the 1980s.
12. The Council also noted with concern a number of unsatisfactory developments including, among others, drought, civil strife, limited inputs and lack of foreign exchange affecting the current world food situation. These led to a continued decline in food production in several countries in Eastern Europe and the former USSR, as well as the continued negative trend in food production in Africa and the disappointing food production growth in Latin America and the Caribbean for the third consecutive year. On the other hand, it noted with satisfaction the continuing progress in food production in the heavily populated Asia region, as well as the higher rate of food production growth in the Near East.
13. The Council noted the expectations of a more closely balanced supply/demand situation for cereals in 1993/94, with a slightly smaller output in 1993 and a possible drawing down of stocks following the replenishment of 1992/93.
14. The Council expressed deep concern over the serious food supply and access problems in many developing countries. Not only was per capita staple food production in Africa far below the average of other developing country regions, but it had fallen further in 1992. Millions of people were facing grave food shortages, particularly in Angola, Rwanda, Somalia and Sudan. While recognizing that the critical food insecurity situation in many countries in Africa called for urgent attention from donors and development agencies, the Council also expressed anxiety over the persisting food supply problems in other regions. Iraq, Afghanistan and several central Asian republics of the former USSR were facing serious food supply problems, and large segments of the population in Bosnia-Herzegovina were threatened by starvation. Several countries in Latin America and the Caribbean were also facing serious food supply problems.
15. The Council stressed the negative impact of the continuing decline of prices of many agricultural commodities for many developing-country economies highly dependent on agricultural exports. Many members regretted the high levels of protectionism practised by many developed countries and emphasized that, while overall agricultural trade was negatively affected, the adverse consequences for developing countries were significantly greater. In this connection, some members noted what appeared to be a growing imbalance between the liberalization efforts of most developing countries and the central and eastern Europe nations and the continuation, and even growth, of already heavy agricultural subsidies and protection programmes of many industrialized countries. The Council stressed the need for an early, balanced and successful conclusion to the Uruguay Round of Multilateral Trade Negotiations that would pave the way to a more liberal and equitable trade environment benefiting both agricultural exporters and importers. Some members cautioned that too rapid liberalization of agricultural markets could be destabilizing and could entail risks for food security in developing countries.
16. The Council noted with concern the decline in availability of cereal food aid in 1992/93 in the face of growing emergency and development programme requirements. It emphasized that food aid to Eastern Europe and the former USSR should be additional to, and not to the detriment of, aid to needy developing countries. While recognizing the need for continuing emergency aid, it reiterated the importance of food aid as an instrument for rehabilitation and development, as well as the need to ensure, in general, adequate links between relief, rehabilitation and development. Several members stressed the importance of expanding food aid availability and of channelling such aid multilaterally and bilaterally. In this connection, the Council was informed that pledges to the regular resources of the World Food Programme for the 1993-94 biennium had increased since the preparation of the document to almost US$618 million against a target of US$1 500 million. However, the Council regretted that in the previous biennium, only 77 percent of the target had been achieved.
17. The Council noted the disquieting trend of the continuing decline in world fish production due to successive reductions in catch from marine waters in recent years and called for intensified global efforts for rational management and sustainable development of marine and inland fisheries resources and aquaculture. In this context, the Council welcomed the attention to be given to an International Code of Conduct for Responsible Fishing and the Draft International Agreement on the Flagging of Vessels Fishing on the High Seas under agenda item 8.
18. Some members made suggestions for future reports. In particular, they encouraged FAO to report trade prices for food commodities in addition to cereals, to provide greater attention to the reasons for changes in food production, trade and prices, and to include prospects for the forthcoming season in the document for the Council.

Report of the Eighteenth Session of the Committee on World Food Security
(Rome. 29 March - 1 April 1993)2

19. The Council endorsed the report of the Eighteenth Session of the Committee on World Food Security (CFS) in its entirety, which it noted had been thoroughly debated and adopted by the Committee.
20. The Council reiterated its satisfaction with the improvement in the food supply situation at the global level and its concern with the large number of acute localized food problems that existed, especially in Africa but also in other regions. It particularly regretted that per capita staple food consumption had declined in at least half of the low-income, food-deficit countries in the current year and that the gap between food production and consumption was widening in many countries. The Council was also concerned with the unfavourable economic prospects which many developing countries faced, including the declining commodity prices of several of their major agricultural exports, high prices of their agricultural inputs and the sluggish growth of the world economy.
21. The Council underlined the need for support to food production, food distribution and access to food in the developing countries. In this connection, several members noted that food security problems were sometimes associated with the implementation of structural adjustment programmes which entailed rapid withdrawal by the State from the distribution of food and inputs. The maintenance of sufficient food production potential in developed countries to respond to world demand and to support sound social and economic development in chronic food-deficit countries was mentioned. Many members stressed the importance of developing countries re-examining their agricultural production policies. The importance of giving greater support to production and processing of roots, tubers and other traditional food items, notably cassava, was stressed. Several members reiterated the Committee's suggestion that a study be conducted by the Secretariat on the possibility of extending into food-deficit developing countries the growing of the new varieties of cassava developed by the International Institute of Tropical Agriculture.
22. The Council considered the construction of a composite household food security index as an important new activity by the Secretariat. It noted that the initial effort in the construction of this index was exploratory in nature, and that future work would entail methodological improvements, as well as a broadening of the individual indicators utilized in its construction. A suggestion was made for convening a meeting of experts, including those from developing countries, to guide the Secretariat in developing the index further. The Council was informed of the initiation of related work supported by an André Mayer Fellowship on the testing of monitorable indicators of household food security, the results of which would be reported to the Committee in due course.
23. The Council reiterated its strong support for a successful outcome of the Uruguay Round of Multilateral Trade Negotiations with the objective of achieving a more equitable system of international trade. The donor community was urged to continue providing all possible assistance, including finance, food aid and technical assistance for food and agricultural production, particularly for low-income, food-deficit countries.
24. In the context of food security concerns, the Council recalled the debate on the banana regime of the European Economic Community (EEC) that took place during the Fifty-ninth Session of the Committee on Commodity Problems (CCP), 7-11 June 1993, the conclusions of which are literally reproduced below.

1. "Many members from Latin American banana exporting countries expressed serious concern regarding the restrictive nature of the EEC banana regime, notably regulation 404/93, which was to become operative on 1 July 1993. They stressed that, in their opinion, this regime was not in conformity with the General Agreement on Tariffs and Trade (GATT) regulations and was also contrary to the principles of free trade. Latin American countries had already requested that a GATT panel be established to examine the proposed EEC banana regime. They added that this regime would establish a discriminatory import system between the countries supplying the EEC market, which was contrary to the Most Favoured Nation principle. The new EEC regulations would establish a complex system of import licences which contradicted GATT principles and tended to favour monopolistic interests of a few European importers. They stated that the EEC banana tariff quota of 2 million tons at 20 percent tariff rate (or 100 ECU per ton) would reduce exports from Latin America by 30 percent in volume. In addition, a tariff rate of 850 ECU per ton for Latin American banana imports above 2 million tons would be prohibitive. The new regime was to the detriment of the economies of all Latin American countries and would create severe labour and social tensions in the region. In their statements, they also thanked certain EEC countries for their understanding of the position of the Latin American banana exporting countries."
2. "A number of members from banana exporting Caribbean countries stressed the complexity of the issues relating to banana trade in Latin American and Caribbean countries. The Caribbean countries mat enjoyed preferential access to the EEC were all highly dependent on banana exports, and removing the protection which the EEC had granted at present to African, Caribbean and Pacific States (ACP) suppliers would have a devastating effect on the economies of these countries. The social and economic importance of the banana industry in these countries made it imperative that special arrangements be continued to preserve their place in the EEC market. It was further stated that in Latin American countries the growth of production capacity had exceeded that of market demand, leading to a price decline for which ACP countries could not be blamed. Also, these countries had not yet reached the stage of economic development needed to face rigorous international competition. "
3. "The ACP countries were also grateful to the EEC countries which had shown an understanding of the position of their banana producers. The members from the African banana exporting countries supported the statement of the delegates of the banana exporting Caribbean countries and pointed out that banana exports were most important in value terms. The African exporters welcomed the new EEC regime, even if they were not fully satisfied with it. They considered it a fair compromise between the interests of different producing regions, and considered that the regime should be assessed only after it had been operative for some time."
4. "The representative of the EEC pointed out that the Community accorded serious attention to the views expressed by the Latin American countries. The questions raised with regard to preferential treatment for the ACP countries went beyond issues related to banana trade alone and required further consideration in the GATT. He then referred to the Common market regime for bananas which was to start on 1 July 1993. In the context of the single market, the new market organization had to be established in order to maintain Community production which was characterized by its insularity and disadvantaged socio-economic context. The EEC was aware of the fact that this new trade regime did not satisfy all expectations. The Community took the request by Latin American countries for a GATT panel on the new regime seriously and would respond to it in accordance with established GATT rules and procedures. Furthermore, the Community had to preserve imports from traditional ACP exporters of bananas, which were an important part of the economies of many ACP countries. The proposed market quota of 2 million tons would already take care of a large part of the recent EEC import growth. The EEC representative also expressed the view that the price decline in 1992 was the result of large quantities of Latin American bananas entering the market before the EEC regime was to become operative. He also noted mat the longer-term market prospects suggested the growth of surplus conditions resulting from production expansion programmes."

25. Some members clarified specific aspects of paragraphs (a), (b), (c) and (d) above as indicated in the Report of the Fifty-ninth Session of the Committee on Commodity Problems (CCP) and in the relevant Verbatim Records of the Council.
26. One member added mat at the CCP, a statement on behalf of banana producing countries in Latin America had been presented which stated, inter alia, that the EEC regime had caused a sharp drop in prices over a few weeks. The members also pointed out that the production of bananas in Latin America was justified according to free market principles, based as it was on the comparative advantage and the quality of the fruit from the region.
27. The ACP countries expressed their gratitude to the EEC countries which had demonstrated an understanding for the position of African banana producers. Members representing these banana exporting countries supported the declaration made by delegates from Caribbean countries and stressed the high value of these exports. African exporters welcomed the introduction of the new EEC regime, although they were not entirely satisfied with it given mat the preferential clause foreseen by the Lomé Agreement had not been respected. They stated that the regime represented a fair compromise between the interests of the various producing regions and that an appraisal could only be made following a period of operation. They expressed their disappointment with the incomprehensible attitude of certain EEC countries which had attacked the decision of the Council at the European Court of Justice, while reiterating their thanks to those who had supported the new arrangements. Furthermore, they objected to all attempts to question the quality or competitiveness of their banana production.
28. The European Economic Community pointed out that banana import prices had fallen before the new Community trade regime was known as a result of the considerable increase in banana imports from Latin American, from 1.4 million tonnes in the 1986-88 period to 2.5 million tonnes in 1992, in an attempt by the Latin American producers to position themselves in the Community market before the new import regime took effect.
29. 29. Another member, speaking on behalf of the thirteen small island states of the Caribbean, reminded the Council of the critical importance of the banana industry to some of these economies, and of the potentially devastating impact on the food security and welfare of their people from any sudden reversal of the existing trading arrangements with the EEC.
30. 30. The Council welcomed the debate of the CFS on the linkages between sustainable agricultural development and food security which had focused in the first place on fragile farming systems in developing countries. It noted with approval the Secretariat's intention to prepare another study on the potential for increasing production and marketable surpluses to feed the growing urban populations, without damaging the resource base, and also welcomed the Secretariat's proposal to conduct country case studies, in which, inter alia, the perception and avoidance of risk among farmers and land users would receive more attention. Stress was placed on the role of people's participation, human resource development and decentralized planning. The Council agreed that FAO was well placed, as a follow-up to the United Nations Conference on Environment and Development (UNCED), to help ensure that future agricultural and rural development projects incorporate sustainability concerns, and that proposed interventions were technically sound, practical and profitable for the farmers. It endorsed the priorities identified in the Committee's Report for developing FAO's programme on food security and sustainability problems.
31. The Council reaffirmed its support for the activities of the Food Security Assistance Scheme (FSAS), including the development of comprehensive food security programmes. It noted that the food security programming approach needed to be integrated into an overall agricultural policy framework, and it was informed about certain modifications to FAO's approach to food security policy and programming assistance which were being introduced as part of the ongoing process of streamlining the Special Action Programmes of the Organization. In particular, the Council noted with approval mat a new Special Action Programme (SAP) was proposed on Country Policy and Programming Assistance for Food Security and Sustainable Agricultural and Rural Development (PFS/SARD). This SAP would integrate policy advice and programming assistance incorporating the comprehensive food security programming activities of the FSAS with sector and structural adjustment policy analysis, nutrition policy and planning services, as follow-up to the International Conference on Nutrition (ICN), and related activities.
32. 32. Several members reiterated their views about the importance of the Association of Southeast Asian Nations (ASEAN) Food Security Reserve project proposal, and requested FAO to continue taking all possible steps necessary to implement this project.
33. 33. The Council noted the Committee's deliberations on the issue of the frequency of its sessions, and endorsed the Committee's decision to defer a decision on this subject in view of ongoing deliberations in the General Assembly on restructuring and revitalizing the UN in the economic and social fields. It noted, in particular, that although World Food Council (WFC) Secretariat posts were being transferred from Rome to New York, the future of the WFC itself was still under review in the General Assembly. The Council agreed that as Rome was the base for UN agencies dealing with food issues, it should remain the centre of international discussions in the field of food and agriculture, and stressed the prominent role of FAO, and the CFS as the technical committee for food security and hunger alleviation in this area. In this connection, the Council concurred with the CFS that follow-up to the UNCED and especially the implementation of the Plan of Action of the ICN, as reflected in the Programme of Work and Budget of the Organization for the next biennium, were important new factors in the work of the Committee in the future.
34. The Council noted that, for the first time, the draft Report of the CFS had been prepared by a rapporteur instead of by a drafting committee. A few members expressed the view that the new procedure was more efficient and practical, and that adoption of the same practice should be considered by other technical committees of the Council.

¹   CL 103/2; CL 103/PV/1; CL 103/PV/2; CL 103/PV/18.

²   CL 103/10; CL 103/PV/3; CL 103/PV/18; CL 103/PV/19.