RESTRICTEDWORLD TRADE
ORGANIZATIONG/AG/W/49
19 March 2001
(01-1317)
Committee on Agriculture Original:  English
PROPOSAL TO IMPLEMENT THE MARRAKESH MINISTERIAL DECISION
IN FAVOUR OF LDCS AND NFIDCS
Submitted by Côte d'Ivoire, Cuba, Dominican Republic, Egypt, Honduras,
Jamaica, Kenya, Mauritius, Morocco, Pakistan, Senegal, Sri Lanka, St. Lucia,
Trinidad and Tobago, Tunisia and Venezuela
We are grateful to the Vice-Chairman of the WTO Committee on Agriculture for inviting
concrete proposals by the NFIDCs and the LDCs on the relevant points under paragraph 21 of the
Draft Ministerial Declaration of 18 October 1999 related to the implementation of the Marrakesh
Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform Process onLeast-Developed and Net Food-Importing Developing Countries.  We look fo rward to the following
proposals being given immediate and favourable consideration to allay the genuine concerns of the
NFIDCs and LDCs and effectively implement the relevant Ministerial Decision which is a legal
commitment of WTO Members under Article 16 of the Agreement on Agriculture.  We are confident
that the discussions in the Committee on Agriculture on this issue will  lead to the submission of
positive suggestions to the General Council for adoption.
The main objective of the Agreement on Agriculture was to decrease the structural surpluses
generated in the past by production and trade-distorting policies in agriculture.  It is, therefore,
obvious that if this fundamental objective of the AoA is successful, the effect for the NFIDCs and
LDCs will be an increase in the cost of their food imports.  The period since the UR came into being
provides a good example for examining the experien ce of NFIDCs and LDCs as regards their food
import bills.
According to the data provided by FAO (see Ta ble I), these two groups of countries are facing
much higher cereal import bills than before.  Taking the two years prior to 1995 as a benchmark
(i.e. the average of the two marketing years 1993/94 and 1994/95), the increase in the cereal importbills in 1995/96 to 1996/97 amounted to 36.6 per cent for the two groups of countries taken together.
Nearly all of this increase (35.1 per cent) was due to increases in the per unit cost of imported cereals,
as volumes changed only marginally.  Moreover, even after the world prices returned to more normal
levels since the 1997/98 marketing year, the cereal import bills of these two groups of countries
remained at a much higher level than they were prior to 1995.
In view of the above, the causality betw een policy reforms under the Uruguay Round and
higher food import bills for the LDCs and NFIDCs is clear.
Proposals for Implementation
The Ministerial Decision includes three mechanisms to respond to the difficulties faced by the
LDCs and NFIDCs:  food aid, access to financing facilities, and technical and financial assistance to
increase agricultural productivity and infrastructure.  We have the following proposals in respect of
each of these three mechanisms.G/AG/W/49
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Food Aid
Unfortunately, it has been observed that food aid is lower when world market prices are high
and hence more food aid is needed, and vice versa.  Moreover, the  new Food Aid Convention (FAC)
approved in June 1999 has lesser volume of commodity commitments (4.895 million tonnes, in wheat
equivalent) than under the previous 1995 FAC (5.35 million tonnes, in wheat  equivalent) and 1986
FAC (7.5 million tonnes).
We therefore, propose that:
(i) all food aid should be fully in grant form;(ii) donor countries should commit greater commodity volumes under the Food Aid
Convention;
(iii) the donor countries commit that the food aid volumes will increase in years of high
world market prices when such aid is most needed.  This can be achieved by
providing appropriate flexibility in the C onvention, e.g. carry forwards from periods
of low prices and hence of low demand for food aid and call forwards from next
year(s) contributions under the FAC.
Access to Financing Facilities
The NFIDCs and LDCs need access to special financing facilities to maintain the normal
volume of food imports during times of high market  prices without further jeopardizing their balance-
of-payments position. Experience has shown that the existing facilities under the Bretton Woods
institutions, due to the conditionalities attached and other technicalities, have not been used by the
countries in need of such financing.  Moreover, the required financing facility should have somecorresponding link with physical stocks of food grains.  We therefore propose that:
(i) FAO, in the light of its experience and work in this area, should be asked to provide
estimates of the volumes of normal annual food imports that are needed by individual
NFIDCs and the LDCs to maintain consumption levels, and assess the assistanceneeded to import these quantities;
(ii) an inter-agency Revolving Fund should be set up with two components.  The first,
and variable component  of this Fund (to comprise existing and/or new financing
facilities as appropriate), will be to ensure that adequate financing at concessional
terms is made available to the NFIDCs and LDCs in times of high world market
prices;
(iii) the producing countries commit, in years of plentiful supplies as we are witnessing
now, to put aside over and above volumes required for food aid, emergencies and
essential nutritional assistance projects, sufficient national food reserves in
accordance with the normal import requirements of the NFIDCs and LDCs asindicated by FAO;
(iv) these reserves should be released to the LDCs and NFIDCs at reasonable prices, in
times of high world market prices, to help them, together with available food aid,
meet their normal import requirements.G/AG/W/49
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Technical and Financial Assistance
Further, we consider it essential that technical and financial assistance be provided to the
NFIDCs and the LDCs to increase agricultural productivity and infrastructure.  This will  address
directly the very problem responsible for the heavy dependence of LDCs and NFIDCs on the world
market.  We, therefore, propose that:
(i) the second, and fixed component of the above-mentioned Revolving Fund should
provide technical and financial assistance to NFIDCs and LDCs for specific projects
linked to improving agricultural productivity and related infrastructure;
(ii) this technical and financial assistance to be provided to the NFIDCs and the LDCs
should be over and above the regular bilateral and multilateral activities of donors inthis area.
Binding Commitments and Effective Monitoring
To ensure certainty and predictability in respect of food aid, financing, and technical and
financial assistance, it is recommended:
(i) all major developed exporting countries should put aside supplies, under national
food reserves, specifically earmarked to be released to the NFIDCs and LDCs under
reasonable prices during years of high world prices;
(ii) developed countries and international development and financial institutions (World
Bank IMF, UNDP) should contribute to the financing of the two components of the
Revolving Fund which, in turn, should be managed by an inter-agency arrangement
with the full involvement of FAO;
(iii) the commitment of WTO Members regarding volumes of food aid, volumes of
physical reserves, contributions to the two components of the Revolving Fund are
inscribed in their country schedules as binding and legally enforceable;
(iv) the WTO Members should make regular annual notifications in respect of these
commitments to the Committee on Agriculture of the WTO.
We are willing to enter into discussions with our trading partners in good faith and with a view to
reaching effective solutions.  Depending on these discussions, we will be happy to provide further
technical elaboration of the points made in this proposal.G/AG/W/49
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__________Table I
Cereal Imports of LDCs and NFIDCs (1993/94  to 1999/00) - Information as of November 15, 1999
1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00
Import bill ($ million)
LDCs 1,375 2,195 2,272 1,871 2,357 1,996 na
NFIDCs 3,775 4,559 6,265 5,857 5,397 4,617 na
LDCs+NFIDCs 5,150 6,754 8,537 7,728 7,754 6,613 na
  % change over 1993/94-94/95 -13.5 13.5 43.4 29.8 30.3 11.1 na
Total volume imported (1000 tons)
LDCs 11,167 13,310 12,273 10,753 14,390 15,380 13,108
NFIDCs 25,516 25,995 26,093 28,038 30,974 29,370 31,542
LDCs+NFIDCs 36,683 39,305 38,366 38,791 45,364 44,750 44,650
  % change over 1993/94-94/95 -3.4 3.4 1.0 2.1 19.4 17.8 17.5
Food aid (1000 tons)
LDCs 3,932 4,326 3,305 2,553 2,669 3,157 na
  % of total imports 35.2 32.5 26.9 23.7 18.5 20.5 na
NFIDCs 1,857 1,325 641 495 622 616 na
  % of total imports 7.3 5.1 2.5 1.8 2.0 2.1 na
LDCs+NFIDCs 5,789 5,651 3,946 3,048 3,291 3,773 na
  % of total imports 15.8 14.4 10.3 7.9 7.3 8.4 na
Benefit from US EEP ($ million)
LDCs 99 35 1 0 0 0 na
NFIDCs 355 88 21 0 0 0 na
LDCs+NFIDCs 454 123 22 0 0 0 na
  % change over 1993/94-94/95 57.4 -57.4 -92.4 -100.0 -100.0 -100.0 na
Per unit import cost ($/ton)
LDCs 123.1 164.9 185.1 174.0 163.8 129.8 na
NFIDCs 147.9 175.4 240.1 208.9 174.2 157.2 na
LDCs+NFIDCs 140.4 171.8 222.5 199.2 170.9 147.8 na
  % change over 1993/94-94/95 -10.4 9.7 42.0 27.2 9.1 -5.7 na
Wheat export price
US no 2 hard winter ($/ton) 143 157 216 181 142 120 110
  % change over 1993/94-94/95 -4.7 4.7 44.0 20.7 -5.3 -20.0 -26.7
1993/94-94/95 1995/96-96/97 1997/98-98/99
Averages (LDCs+NFIDCs)
Import bill ($ million) 5,952.0 8,132.5 7,183.5Total volume imported (1000 tons) 37,993.9 38,578.5 45,057.0Food aid (1000 tons) 5,719.8 3,496.8 3,532.0Benefit from US EEP ($ million) 288.5 11.0 0.0Per unit import cost ($/ton) 156.7 210.8 159.4Wheat export price ($/ton) 150.0 198.5 131.0
% change over 1993/94-94/95
Import bill 0.0 36.6 20.7Total volume imported 0.0 1.5 18.6
Food aid 0.0 -38.9 -38.2
Benefit from US EEP 0.0 -96.2 -100.0
Per unit import cost 0.0 34.6 1.8
Wheat export price 0.0 32.3 -12.7
Source:  FAO
.Figures for 1998/99 are provisional and for 1999/00 are estimates