ACTIVITIES OF FAO

Preparations for the Twenty-seventh Session of the FAO Conference1

-Nominations of the Chairman of the Conference, and of the Chairmen of the Commissions of the Conference (Recommendations to the Conference)

5. In accordance with Rule VII- of the General Rules of the Organization (GRO), the Council agreed to put the following nominations before the Conference:

-Election of the Nominations Committee

6. In accordance with Rule XXIV-5 (b) GRO, the Council elected the following 11 Member Nations to the Nominations Committee: Canada, Cuba, Democratic People's Republic of Korea, Egypt, Gambia, Guinea, Kuwait, Spain, Turkey, United Kingdom, Uruguay.

Report of the Fifty-ninth Session of the Committee on Commodity Problems (Rome. 7-11 June 1993)2

7. The Council endorsed the report of the Fifty-ninth Session of the Committee on Commodity Problems (CCP). It expressed appreciation for the valuable work being undertaken by the Committee and its subsidiary bodies in the areas of commodities and trade.

8. The Council expressed grave concern at the large and extended decline in the export prices of agricultural commodities, which had decreased by over a quarter in real terms since the beginning of the eighties. The Council noted that the continuing crisis in commodity markets had a devastating effect on the agricultural export earnings and the economies of many countries, particularly of the developing countries. The Council also noted with concern the persistent problem of debt servicing, which weighed heavily on the economies of many developing countries. In this connection, the Council agreed that studies suggested in paragraphs 17 and 18 of the CCP report could contribute to a better understanding of the problems faced in the production and trade of agricultural commodities.

9. The Council endorsed the work of the Intergovernmental Commodity Groups (IGGs), as well as that of the Consultative Sub-Committee on Surplus Disposal (CSD). The view was expressed that the work of the CSD would assume increased importance after the successful conclusion of the Uruguay Round because of the need to ensure that food aid would not be used as a means for subsidizing exports. The Council stressed the unique role of the intergovernmental groups (IGGs) in providing a forum for consultations among governments of producing and consuming countries concerning market developments and prospects, as well as international and national policies on commodities. In this regard, the Council noted the increased interest of countries in participating actively in the work of the IGGs which had led to the widespread hosting of their meetings by

Member Nations. The.Council expressed appreciation for invitations that had been extended to forthcoming sessions of the IGGs on Rice, Tea, Bananas, Wine and Vine Products and Citrus Fruit by the Governments of Thailand, Morocco, Jamaica, Chile and Brazil, respectively.

10. The Council endorsed the CCP's recommendation that a special study for assessing the work of the IGGs with the objective of enhancing their efficiency be undertaken for consideration by the next session of the CCP. It agreed that the study should follow the lines agreed at the Fifty-ninth Session of the CCP, which was reflected in paragraphs 30 and 31 of the Committee's Report.³

11. The Council stressed the importance of the commodity and trade activities of the IGGs which fulfilled an essential role in improving market transparency, especially in areas where global market intelligence systems would otherwise be lacking and for commodities of concern to developing countries. In this connection, some members recommended the use of electronic media for the transmission of data. While appreciating the importance of rapid transmission of information, the Council noted, however, that timeliness in transmission often hinged on translation considerations.

12. The Council welcomed the completion of FAO's latest set of agricultural commodity projections which had been prepared bearing in mind FAO's other longer-term projections exercise Agriculture: Towards 2010. The Council recognized that the projected slowdown in the growth of world trade in the agricultural commodities covered by the study would cause significant adjustment problems for exporting countries. The Council also noted with concern that the net agricultural trade situation of the developing countries was projected to deteriorate significantly and that the cereal import gap of the developing countries was expected to grow substantially by the year 2000. The importance of re-examining the projections after the conclusion of the Uruguay Round was stressed.

13. The Council stressed the importance of the work underway by the CCP and its subsidiary bodies on the links between trade, environment and sustainable agriculture and rural development. The Council agreed that if all countries introduced appropriate environmental policies, trade liberalization would generally lead to an increase in welfare, and that environmental policy and trade liberalization could therefore be compatible. The Council reiterated the importance of countries refraining from using environmental concerns as disguised restrictions on trade.

14. The Council supported a multilateral response to widespread national environmental problems that encouraged the introduction by countries of appropriate environmental policies. The Council endorsed the work programme recommended by the CCP for the Intergovernmental Groups to initiate work on environmentally-relevant trade policy measures and their effect on trade flows, and to undertake commodity-by-commodity environmental studies. The Council stressed the importance of close collaboration with other agencies doing similar work.

15. The Council agreed that although levels of protectionism remained high, with particularly detrimental effects on developing exporting countries, there was reason for cautious optimism regarding the reduction in protectionism in the future. It stressed, however, that such improvement remained highly dependent on the Uruguay Round of Multilateral Trade Negotiations. The Council urged a speedy and successful outcome of the Uruguay Round, to provide a global and balanced result including special and differential treatment for developing countries. It also emphasized the need to take into account the interests of the net food-importing developing countries. In this connection, the importance of the Declaration on Measures Concerning the Possible Negative Effects of the Reform Programme on Net Food-Importing Developing Countries appended to the Draft Final Act of the Uruguay Round was underscored. The Council invited donor countries to intensify efforts to assist the developing countries to adjust their policies to cope with the new international trading environment that should result from the conclusion of the Uruguay Round.

16. Several members drew attention to the conclusions of the third Ibero-American Summit held recently in Salvador do Bahia, Brazil. The Heads of State and Government of the Latin American countries, Portugal and Spain highlighted the importance of developing and expanding agriculture in an effort to overcome hunger and poverty. There was therefore a pressing need for increased domestic efforts and international cooperation in agriculture by means of programmes which would include additional financial resources, transfer of technology and measures to liberalize trade in agricultural commodities.

17. The Council, recalling earlier concerns with respect to the approval of projects and related administrative matters, welcomed information provided by the Secretariat that the Common Fund for Commodities had recently approved a number of commodity development projects sponsored by the IGGs, acting as International Commodity Bodies (ICBs). The Council also noted with appreciation that the Fund's Executive Board had responded favourably to the CCP's recommendation concerning an interim arrangement for the exercise of supervisory functions by the ICBs of the projects already endorsed or in the pipeline for which FAO might be the implementing agency, and to its recommendation to make provision for project supervision functions in project budgets.

18. The observer of the Common Fund for Commodities also provided information on other activities of the Fund. He regretted that it had not been possible for the Fund to be present at the CCP session and some sessions of the IGGs where the Fund's project financing activities had been discussed. He considered that, as a result, the reports of such sessions did not necessarily reflect the Common Fund's views. He further looked forward to consolidating cooperation endeavours between the IGGs and the Fund, and hoped that the pipeline of project proposals from the IGGs for the Fund's consideration would be replenished.

¹C 93/12; CL 104/PV/l; CL 104/PV/6.

²CL 104/PV/4; CL 104/PV/7.

³CL 104/2.