MEETING GLOBAL FOOD NEEDS: MODEST PROGRESS: CONTINUING PROBLEMS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80T00634A000400010036-3
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 9
• Document Creation Date: December 20, 2016
• Document Release Date: April 21, 2006
• Sequence Number: 36
• Content Type: MEMO

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CENTRAL INTELLIGENCE AGENCY
NATIONAL 1:ORLIGN ASSESSMENT CENTER
M QIORANDUM
MEETING GLOBAL FOOD NEEDS:
MODEST PROGRESS; CONTINUING PROBLEMS
25X1
Hunger and malnutrition continue to be a problem in almost all
developing areas of the world, even though world grain harvests have
generally been good in recent years. The World Food Conference of 1974
urged national governments and international agencies to assign greater
political priority to solving food problems within the context of domestic
development and international economic cooperation. This ambitious
shift in priorities has not yet taken place. In countries of particular
concern to the Conference--those food deficit countries that Zack foreign
exchange to finance import needs--progress in stimulating food production
has been slow, and population growth rates continue to exceed agricultural
production growth rates.
The World Food Conference was convened by the United Nations in
response to the harmful effects of the world grain shortage of 1973-74.
This article reviews the status of the institutions set up as a result
of the Conference and finds that limited progress is being made toward
Conference goals. The World Food Council functions as a forum for an
international dialogue on food and agriculture, although it is generally
recognised that the Council's limited authority is incommensurate with
its responsibility for overseeing food policy and the implementation of
international food programs. Negotiations continue on a new International
Wheat Agreement, though at a slower pace than the developing countries
would like. The OPEC- and OECD-funded International Fund for Agricultural
Development went into operation in December 1977, but it is expected to
disburse only a relatively insignificant amount of money in its first
year.
This memorandum was prepared in the International Issues Division
of the Office of Regional and Political Analysis and coordinated with
the Office of Economic Research and the Office of Geographic and
Cartographic Research. Questions and comments may be addressed to the
author,
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The key finding of this study, then, is one of modest progress amid
continuing problems in international efforts to cope with global food
needs. Despite these problems, however, a joint effort to meet global
food needs will probably be one of the few instances of productive
cooperation between LDCs and the OECD states. This record of perceptible
progress could serve as an incentive to keel) the North-South dialogue
going, even if, as now seems likely, the general tone of North-South
relations becomes more strained during the coming year.
The World Food Council
The World Food Council, the food policy oversight and evaluation
body for all agencies affiliated with the UN, was established in 1975
on the recommendation of the World Food Conference. After a slow start,
in which ministerial sessions became mired in bloc politicking, the
Council issued a comprehensive food policy statement in 1977. Both the
developing and the industrialized countries consider this document, the
Manila Communique, to be a good compromise on issues of food production,
security, aid, and trade.
The Manila Communique recommends a commitment by the developed
countries to provide $8.3 billion in agriculture production aid annually.
This is the amount of external assistance that the Council Secretariat
estimates is needed to achieve a 4 percent rate of growth in food production
sin developing countries. Traditional and potential new food aid donors
are requested. to increase their food aid commitment to ensure that a
minimum annual level, of 10 million tons in cereals is available for
delivery in 1977-79. The Communique recommends establishing an international
system of nationally held grain reserves. It calls on all countries,
particularly those that are developed, to stabilize, liberalize, and
expand world food trade, and urges national governments and international
agencies to give higher priority to nutrition and rural development in
development plans. It also recommends that governments and international
agencies support the basic human needs approach to foreign aid.*
The generally constructive pattern of the 1977 meeting in Manila,
the tone and substance of the Manila Comuunique, and the election of
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a potentially strong Council president from a developing country (Arturo
Tanco of the Philippines) raised hopes that the organization would be
able to function as the world food security agency that the World Food
Conference had envisaged. Basic structural problems which became especially
evident at the June 1978 meeting, however, now inhibit the agency from
performing a command function. In particular, the Council was not given
direct authority on food policy matters over other UN entities or members,
as the Conference had recommended. Although a number of UN agencies are
requested to make periodic reports to it, many comply only minimally.
The fourth ministerial session of the Council was held in Mexico
City from 12 to 15 June of this year. The meeting was devoted almost
entirely to the line-by-line drafting of the "Mexico Declaration,"
to the intense dissatisfaction of some high-level participants.* In
informal discussions in Mexico City, the ministerial and plenipotentiary-
level delegates demanded fuller participation in substantive preparations
for the Council's Ministerial meetings by governments of developing
countries and by regional bodies, as well as the World Bank, the UN
Food and Agriculture Organization (FAO), and the UN Development Program.
They emphasized the need to develop information on internal resource
commitments to increased food and agriculture production. and on plans
to reduce food losses due to inadequate storage facilities. They
suggested that future meetings of the Council would be more productive
if they concentrated on recording varying country viewpoints rather than
producing a fully agreed text. If these recommendations are not implemented,
it is likely that a drop in the level of representation at Council
meetings will occur, thus reducing its usefulness.
Nonetheless, although there is some legitimate concern about the
Council's bureaucratic viability, and though the results of the Mexico
meeting are not expected to affect directly the production, consumption.,
transfer or stockpiling of food., it was able for the second consecutive
year to issue a coherent set of food policy recommendations. The
developing countries continued to press the advanced countries for
funds and technology, and the industrial countries continued to press
I,DCs to increase agricultural production. Although there was no sign of
The Mexico Declaration is a Zong, innocuous document that reproduces
most of the substance of the Manila Cormvnunique, but with increased emphasis
on the difficulties of increasing food production in developing countries
and in formulating national food plans.
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increased resource commitment on either side, there was an obvious
desire to sustain a discussion. The WPC has proved to be one of the
least acrimonious of forums for high-level discussion of North-South
problems, and in the next year it may be the only such meeting to pro-
ceed with relative congeniality.
Multilateral Aid for Agricultural Development
The 1974 World Food Conference heavily emphasized the need to
intensify cooperative international efforts directed toward the goal of
food self-sufficiency for developing countries. Primary responsibility
for rapid rural development and population control was declared to rest
with the developing countries, with the industrial states providing sustained
technical and financial support. The outlook for this Conference goal
is not encouraging. In 1977-78, cereal imports for all developing
countries are expected by the FAO to achieve record levels in excess of
65 million tons. More important, however, dependence on imports among
the countries the UN considers to be "most seriously affected" by recent
adverse economic conditions is projected to increase to 17.4 million
tons in 1977-78, or some 7 percent above the previous year's levels.*
According to the World Food Council, the growth of food production in
these countries fell from 2.5 percent annually during the 1960s to 2
percent during 1970-77. While a 2 percent agricultural growth rate is
historically acceptable, production has not kept pace with population
growth. Per capita production growth in these countries has thus continued
to decline in this decade.
External financial assistance for increasing food production is
still substantially below the recommended target of $8.3 billion, but
international efforts to stimulate and divert funds to food production
continue. For example, among the terms of a new economic and technical
cooperation agreement between the USSR and Ethiopia was the stipulation
that such aid be channelled to food industries and agriculture, at least
for the present. The World Food Council's most important contribution
has been its role in the creation of the International Fund for Agricultural
Development (IFAD), with a $1 billion conmiitment from the OPEC and OECD
countries. The Fund will provide grants and low interest loans to
stimulate food production in low income, food deficit countries. The
This group of 45 countries includes India, Bangladesh, Burma, Ethiopia,
and Egypt.
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Fund's contribution to agricultural investment., while not impressive in
terms of the amounts already being spent., is expected to act as a catalyst,
spurring other financial flows. Another objective of the Fund. is to
help the poor and landless by fostering the use of appropriate technologies
and generating rural employment. So far, however, the Fund's executive
board has approved only two projects, and it is expected that less than
$100 million will be disbursed in the first year of operation. IFAD
commitments are expected. to average less than $350 million a year, at
least during the first three years.
World Bank loans for agriculture and rural development increased
from $956 million in 1974 to an estimated $3.3 billion in 1978. This
occurred as a part of a World Bank rural development strategy, established
in 1973, which is aimed at sustaining increases in per capita output and
incomes, expanding productive employment, and achieving greater equity
in the distribution of the benefits of growth. For example, about 25
percent of the Mexican rural development program during 1977-79 is being
financed by World Bank and Inter-American Development Bank loans. Most
of this foreign money will go into directly productive infrastructure,
such as irrigation, livestock, and development credit.
Another international activity to stimulate food production is the
FAO's International Fertilizer Supply Scheme to expand fertilizer and
pesticide production in developing countries. In addition, a number of
countries have informed the World Food Council that they are willing to
provide a wide range of technical agricultural assistance, such as
irrigation, to countries with serious food shortages.
gain Reserve Ne otiations
The most important food-related issue to developing countries
probably is the attempt to establish a multilateral system of grain
reserves intended to stabilize prices and assure adequate supplies even
during bad crop years. Such reserves were first proposed in the 1940s,
and the FAO revived the idea. in 1973 when North American grain stocks
became depleted, and the United States declared its intention not to
build up government stockpiles again. The 1974 World Food Conference
recommended the establishment of food security stocks, and subsequent
meetings of the World Food Council have emphasized the importance of
establishing such a system of reserves.
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Extensive discussions of the subject of reserves have taken place
in the International Wheat Council in London, to some extent in the Multi-
lateral Trade Negotiations in Geneva, and most recently in a United
Nations Negotiating Conference held in February and March 1978 to try to
reach a new agreement to replace the International Wheat Agreement. (IWWA)
of 1971.. The proposed agreement represents a. substantial departure in
concept from earlier ones, which had no provisions for price stabilization
or buffer stocks. The emphasis in the current discussion is on specific
obligations regarding reserve stocks or other measures to influence
supply and demand on international markets, such as production adjustments
and assurance that export markets remain open. Such measures are intended
to meet the primary objectives of price stabilization and food security.
So far, about the only concurrence of views in these discussions
has been on a target for food aid of 10 million tons of wheat and other
grains annually and on the desirability of a wheat buffer stock. The
Interim Committee of the Negotiating Conference, which met in June in
London and in July in Geneva, has been trying to redraft the substantive
economic provisions of the wheat trade convention and coarse grain trade
convention; no substantive work on the food aid convention has been
undertaken since the Negotiating Conference. Some progress has been
made with the wheat trade convention on "trigger" price mechanisms by
which decisions to release from, or add to, reserves are made, but no
further progress has been made on target size and appropriate allocation
of reserve stocks. The Interim Committee will reconvene on 16 October,
and a full Negotiating Conference is planned for November in London,
unless the Interim Committee decides further progress is not possible.
Food, Aid
Food aid is a vital but relatively small element in the global
food situation. Large-scale dependence on food aid is considered an
inhibition to agricultural development, although there are cases, as
in Bangladesh and some Sahelian countries, where food aid is necessary
regardless of its effect on development. The logistics of emergency
food aid are complicated by the location of cereal stocks (which are
concentrated mainly in a few grain-exporting countries), by donor delay
in. responding to requests for food aid, by weak delivery and distribution
infrastructures in poor countries, and by a tendency on the part of
governments to delay official announcement of emergency situations.
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The UN World Food Program seeks to stimulate economic and social
development through aid in the form of food that may, for example, be
used as a partial substitute for cash wages paid to workers in development
projects. It also tries to meet emergency food needs. Allocations to
the international emergency food reserve scheme, operated through the
World Food Program, increased substantially in the last year, reaching a
level of 421,000 tons of cereals, reasonably close to the 500,000-ton
target. There was general agreement at the 1978 ministerial session of
the World Food Council on the need to establish a more permanent reserve,
with yearly replenishment and commitments by governments for more than
one year in advance.
The Manila Communique recommended that a Food Aid Convention of the
International Wheat Agreement be established to contribute to the attainment
of the 10 million ton target, and that negotiations provide for an
increase in the amount of food aid moved through the World Food
Program. In the IWA negotiations the US has endorsed the 10 million
ton target, and has proposed that a new "Special Provision for Emergency
Needs" be negotiated as part of the Food Aid Convention, providing for
an increase in the flow of food aid of up to 20 percent above the minimLm1
level in times of critical or exceptional food needs in developing nations.
If the Convention with this special provision is negotiated and ratified,
the US would be obligated by treaty to provide at least 4.47 million
tons of grains for food aid annually, and perhaps as much as 5.4 million
tons under extreme circumstances. To cover this possible obligation, the
Carter administration has proposed legislation that would authorize the
Secretary of Agriculture to buy and hold an International Emergency
Wheat Reserve of up to 6 million metric tons of wheat.
The food aid convention of the IWA is considered by the developing
countries to be one of the most important elements under consideration
in the political and economic dialogue between developed and developing
countries. The Group of 77, the UN caucus of the developing countries,
has expressed concern at the slow pace of the talks. The group suggested
at the 1978 World Food Council ministerial session that, in the event
a new IWA cannot be concluded by the end. of this year, a food aid
convention should be negotiated independently of the new trade con-
vention, and that it be incorporated in the trade convention when that
is concluded.
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A major component of the world food security system is the FAO's
Global Information and Early Warning System on Food and Agriculture.
This system, which operates to alert food donors to emerging critical
food shortages, worked well during the recent food crisis in Ethiopia.
Ethiopia has been on the FAO's list of food-shortage countries for the
last two years. In March the FAO, using data from monitoring stations
it had set up in Ethiopia late last year, alerted foreign donors to the
probability of a major food emergency, even though the Ethiopian Government
was still issuing optimistic reports. When foreign donors responded too
slowly to this appeal to be of immediate help--mostly because they
feared that the food they sent would rot on ships waiting to be unloaded
in Ethiopia's clogged port--the FAO quickly supplied an emergency 10,000
tons of cereal in early June.
Outlook
Several years of good crops and the accimnuiati.on of substantial
reserves in several countries have lessened the pressure on both
developed and developing countries to make the necessary changes in
national and multinational policies to solve food distribution problems.
Nonetheless, the world is somewhat better equipped to deal with another
food crisis---in terms of food aid--than it was in 1972-74: a food
policy oversight mechanism is now operating, and talks on reserves are
under way. Food production in the food-importing poorer countries is
growing, and some countries, such as India, have been able to build
substantial reserves. Food production, however, is still generally
not able to keep pace with population growth in these countries. The
aid conmiitment by developed countries to agricultural development has
increased, but a larger commitment is needed to adequately support
developing country efforts toward food self.-sufficiency. International
financial institutions have increased their efforts in rural development,
hut the increase in Cunding recommended. by the Manila Conmiunique has
not materialized. Most important, however, channels for international
cooperation, negotiation, and discussion, laboriously set up since 1974,
are now open. Progress in the coming year will be measured by develop-
ments within the IWA negotiations in London and by the World Food
Council's attempts to gain the active cooperation of governments and
agencies for its programs.
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In particular, further movement toward agreement in TWA negotiations,
which now seems possible, might have an `-mpact broader than just ameliorating
the specific grain supply and price problems Linder discussion. If the
industrialized countries can develop positions on those issues sufficiently
of interest to the developing countries to justify convening the full
Negotiating Conference in November, then this advance might encourage
the Group of 77 to limit acrimony in other international fortuns in
order to provide a cordial climate for these important talks.
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