WORLD TRADE ORGANIZATION RESTRICTED
ORGANISATION MONDIALE DUCOMMERCEG/AG/GEN/15
18December 1997
ORGANIZACI ÓNMUNDIAL DEL COMERCIO(97-5554)
Committee onAgriculture
ANNUAL MONITORING EXERCISE INRESPECT OFTHE FOLLOW-UP TO
THE MINISTERIAL DECISION ONMEASURES CONCERNING THE POSSIBLE
NEGATIVE EFFECTS OFTHE REFORM PROGRAMME ONLEAST-DEVELOPED
AND NET FOOD-IMPORTING DEVELOPING COUNTRIES
Attached arecopies ofstatements*made bytherepresentatives oftheInternational Monetary
Fund, theWorld Bank, theFood andAgriculture Organization (FAO), theWorld Food Programme
(WFP) andtheOECD atthemeeting oftheCommittee onAgriculture on20-21 November 1997(agenda
ItemPartII.Arefers).
Comité del'agriculture
EXERCICE ANNUEL DESURVEILLANCE DELASUITE DONNEE ALADECISION
MINISTERIELLE SUR LESMESURES CONCERNANT LESEFFETS NEGATIFS
POSSIBLES DUPROGRAMME DEREFORME SUR LESPAYS LESMOINS
AVANCES ETLESPAYS ENDEVELOPPEMENT IMPORTATEURS
NETS DEPRODUITS ALIMENTAIRES
Ontrouvera ci-joint lacopie desdéclarations*faites parlesreprésentants duFonds monétaire
international, delaBanque mondiale, del'Organisation desNations Unies pour l'alimentation et
l'agriculture (FAO), duProgramme alimentaire mondial (PAM) etdel'OCDE àlaréunion duComité
del'agriculture des20et21novembre 1997 (point Adeladeuxième partie del'ordre dujour).
Comité deAgricultura
EJERCICIO ANUAL DEVIGILANCIA DEL SEGUIMIENTO DELADECISI ÓN
MINISTERIAL SOBRE LASMEDIDAS RELATIVAS ALOSPOSIBLES
EFECTOS NEGATIVOS DEL PROGRAMA DEREFORMA ENLOS
PAÍSESMENOS ADELANTADOS YENLOSPAÍSESEN
DESARROLLO IMPORTADORES NETOS
DEPRODUCTOS ALIMENTICIOS
Acontinuación seadjuntan copias delasdeclaraciones*formuladas porlosrepresentantes del
Fondo Monetario Internacional, elBanco Mundial, laOrganización delasNaciones Unidas parala
Agricultura ylaAlimentación (FAO), elPrograma Mundial deAlimentos (PMA) ylaOCDE enla
reunión delComité deAgricultura celebrada losdías20y21denoviembre de1997(véase elpunto A
delaParte IIdelorden deldía).
*English only/Anglais seulement/En inglés solamente.G/AG/GEN/15
Page2
STATEMENT BYTHE REPRESENTATIVE OFTHE
INTERNATIONAL MONETARY FUND
Iamgrateful totheChairman forthisopportunity tospeak totheCommittee. InSeptember
lastyearwemade asubstantial statement andIcertainly donotwishtocover ground withwhich the
Committee isalready familiar. Iwould, however, liketomention briefly three matters: thetrend
inworld foodprices since lastyear; newFund resources tomeettheneeds ofmembers; andour
experience withnetfood-importers during thelasttwelve months.
Food prices haveweakened considerably since themeeting oftheCommittee inSeptember
oflastyear. TheIMF'sindex offoodprices, measured interms ofSDRs forOctober 1997, was
1½percentbelow thelevel ofoneyearago. When measured interms ofUSdollars, thedecline
inthisindex was6percent, thegreater dropreflecting theappreciation oftheUSdollar relative to
thevalues ofother major currencies. Thedecreases would havebeenmuch greater hadnotprice
increases forvegetable oilspartly offset thelarge decreases intheprices ofcereals. Consumption
demand forvegetable oilshasbeenverystrong, particularly inmany Asian andother developing
countries where there havebeenlarge increases inpercapita incomes inrecent years. Inaddition,
inrecent weeks, thefearisthatsevere drought inSouth EastAsia, possibly linked toElNiño, may
cutproduction ofpalmoilandcoconut oil,andhence reduce overall vegetable oilsupplies below earlier
expectations. However, in1997, cereal crops weregoodinmostcountries ofthenorthern hemisphere,
inparticular inChina, India, Kazakhstan, Russia, Ukraine andtheUnited States. In1997, alarge
increase alsooccurred inworld oilseed production, withexceptionally large crops inthecountries of
theEuropean Union andintheUnited States. Overall, therefore, weseetheproblem ofcoping with
higher foodprices asonewhich hasameliorated considerably inthelasttwelve months, andtheIMF's
index forfoodprices for1998 isexpected toremain nearthecurrent level.
Since ourlaststatement, theFund'spotential ability tohelpitsmembers hasbeenimproved.
InHong Kong, atourAnnual Meetings, Governors agreed thatquotas should beincreased by
45percent, thatis,approximately US$89 billion, andthatthere should beaspecial SDRallocation
ofapproximately US$25 billion. Further, thereisagreement toseekratification ofaNewArrangement
toBorrow (NAB) equivalent toapproximately US$46 billion, andfinally, youwillhavereadabout
negotiations forpossible Asian finance tosupplement orsupport IMFfinancing. Allthese initiatives,
inverydifferent ways, expand thescope ofsupport theIMFcanofferitsmembers. Sowecanreiterate
whatwesaidlastyear, thattheFund considers ithassufficient liquidity (ifthese initiatives areratified
inpractice) tomeetanyadditional needs thatmayarisefrom higher foodprices.
LastyearwegaveCommittee members atableshowing howalmost half(22)ofthe46WTO
Members classified asnetfood-importers hadalready found Fundfacilities useful. Since lastSeptember,
atleastsixofthenetfood-importers haveresorted totheFund'sresources: Egypt, Ethiopia, Guinea,
Haiti, Madagascar andTanzania.
Naturally, Mr.Chairman, weareacutely aware oftheproblems faced bynetfood-importers.
Ifrequested, andifthere isabalance ofpayments need, wewillcertainly help. Itisarelief tonote
developments overthelastyear(asIhavejustdescribed) haveimproved theposition, butallow me
toreassure theCommittee thattheFund hastheresources under existing facilities, andhasshown its
willingness tousethese reserves inthelastyear, tomeetthebalance-of payments needs ofnetfood-
importers.G/AG/GEN/15
Page3
STATEMENT BYTHE REPRESENTATIVE OFTHE WORLD BANK
Review ofWorld Bank measures toassist theLeast-Developed andNetFood-Importing Countries
Assistance toovercoming foodshortages andraising agricultural productivity inpoorcountries
isanimportant component oftheWorld Bank’sstrategy forcountry assistance. World Bank lending
foragriculture andruraldevelopment wasoneofthelargest single lending sectors, withcommitments
totalling $2,577 million inFY1996, oraround 12percentoftotalBank Group lending.
TheWorld Bank continues tomonitor theprogress ofliberalization resulting from the
implementation ofcommitments made under theUruguay Round Agreement. Anumber ofrecent
studies using different methodologies andassumptions confirm thatthelongrunimpacts oftheUruguay
Round agreement onagricultural prices willberelatively small -certainly farsmaller thantheprice
increases thathavebeenexperienced inrecent years. Given thesmall sizeoftheshocks resulting from
theRound andtheBank’ssubstantial headroom above current IBRD loans outstanding, itseems clear
thattheBank willbeinaposition tomeetanyadditional demands generated bytheRound forloans
onIBRD terms.
Inresponse totheMinisterial Decision, aWorking Group involving theWorld Bank, theFood
andAgriculture Organization, theWorld Food Programme andtheIMFmetin1995 toaddress the
special needs ofleast-developed andnetfood-importing countries. TheWorking Group reviewed the
range offacilities available foradditional financing needs fordeveloping countries intheevent ofworld
priceshocks andproduction shortfalls andprovided areport totheWTO inlate1995. Given thewide
range offacilities andthesmall price impacts expected toariseasaconsequence oftheRound, and
thedifficulty involved indistinguishing Uruguay Round impacts from other shocks, itdidnotseem
appropriate toestablish aspecial Uruguay Round adjustment facility.
Itisimportant topoint outthatthesharp increases inworld grains prices thatfollowed the
completion oftheRound were related topolicy changes thatreduced public stocks tolowlevels.
However, these stock reductions tookplace independently ofandwere notrequired bytheUruguay
Round agreement, which doesnotconstrain stock purchases. Second, theincreases inworld grain
prices thatbegan in1995 havebeenlargely offset bygood harvests in1996 and1997. From ahigh
of$262/ton inMay1996, wheat prices havedeclined to$150/ton inSeptember 1997. World grain
production in1997isprojected tobeabout equal insizetothe1996levelwhich should belargeenough
tokeepprices wellbelow the1996 highs andprobably nearrecent lows.
Toassist least-developed countries andnetfood-importing countries toraise agricultural
productivity, theBankisstrengthening itsruraldevelopment programmes. Bank lending andtechnical
assistance programmes forrural development inthese countries include (i)encouraging appropriate
policies andstrategies; (ii)enhancing foodsupplies through intensification ofproduction systems and
through sound natural resource management; (iii)improving access tofood; and(iv)improving
utilization offood. Keyelements ofthestrategy include supporting government policies andstrategies
thatencourage investment andgrowth, andwhich donotdiscriminate against agriculture andsmall
farmers; promoting better technology andproduction techniques; investing ininfrastructure andpeople,
andpromoting appropriate macroeconomic policies andinstitutions. AspartoftheRural Strategy
Compact endorsed bytheWorld BankBoard, investments inruralpoverty reduction programmes have
beenmade inmany least-developed countries inpartasaresponse totheeffects ofliberalization on
lesscompetitive rural producers.G/AG/GEN/15
Page4
Regional andcountry activities
InAfrica, World Bank assistance in1996 included IDAfunding forCôted’Ivoire fortrade
anddomestic price reform inagriculture (US$150 million); food security assistance forKenya
(US$22 million); anAgricultural Sector Adjustment Credit forSenegal ($2.8 million); andan
Agricultural Extension andServices Project forthelivestock sector inGuinea (US$35 million). In
Malawi, adjustment lending isbeing followed upwithanAgricultural Services Project thatprovides
support services tohelpfarmers dealwithsome oftheshort-term problems andopportunities created
bymarket liberalization.
InMiddle EastandNorth Africa, theBank financed a$100million Emergency Drought Relief
andRecovery Program forMorocco in1996. Country assistance strategies include programmes to
improve thecompetitiveness ofagriculture, marketing andagro-industry inthelightofincreased global
trade liberalization.
InEastern andCentral Europe, Bank assistance includes: a$20million loantofinance an
Emergency Farm-Reconstruction Project thatwillimprove agricultural production inBosnia and
Herzegovina; aTechnology Services Project inCroatia ($17million) andtheFormer Yugoslav Republic
ofMacedonia ($7.9 million); anAgricultural Irrigation andDrainage Systems Project inKazakstan
($80million); anAgricultural Research Project inMoldova ($10million); andanAgricultural Sector
Development Project inLithuania ($30million).
InSouth Asia, World Bankoperations in1996include improvements insupporting agricultural
sector andagribusiness investments along withcritical sector reforms toincrease competitiveness.
Bank lending in1996includes: coastal embankment rehabilitation toprotect crops andinfrastructures
from cyclone damage inBangladesh ($53million); anAgricultural Research Management Project
inBangladesh ($50million); andaWater Resources andIrrigation Project inIndia ($290 million).
InLatin America, theMinisters ofAgriculture ofalltheCentral American countries haveasked
theWorld Bank fortechnical assistance tobuild institutional capacity foranalysis andtrade policy
formulation. AspartoftheRural Strategic Compact, theWorld Bank isfunding increased technical
assistance byRUTA -Agricola (Regional UnitforTechnical Assistance) fortheCentral American
countries. TheBank extended financing fortwomajor projects under theInstitutional Development
Fund: (i)National andRegional Institutional Capacity Strengthening forAgricultural Trade Policy
Management (US$488,250); and(ii)Regional Project toModernize andIncrease theCompetitiveness
ofSmall-Farm Enterprises inCentral America (US$762,550). TheBankhasmaintained itsinvestments
inproductive agriculture orrelated infrastructure asaresponse toliberalization. Inaddition, investments
inruralpoverty reduction programmes havebeenenhanced inmostLatin American countries inpart
asaresponse totheeffects ofliberalization onlesscompetitive rural producers.
Current andplanned studies
Theimplementation ofthecommitments made under theUruguay Round willdetermine both
thelong-run economic impact oftheRound, andthebasefromwhich future trade liberalization will
beundertaken. Acurrent study ontheimplementation oftheUruguay Round draws onthenotifications
totheWTO made byeachmember toassess theextent andmanner inwhich keyagricultural trade
policy reforms havebeenimplemented ineachcountry. Theanalyses dealwithtwoissues: (i)how
havecountries beenimplementing theircommitments inmarket access under theUruguay Round
Agreement inAgriculture, and(ii)based onactual implementation, what hasactually happened in
agricultural tradeliberalization? Further research onwaysinwhich countries canincrease thebenefits
thattheyobtain from agricultural trade liberalization, particularly inthecontext oftheforthcoming
agricultural negotiations, isplanned forthecoming year.G/AG/GEN/15
Page5
SUMMARY OFTHE STATEMENT BYTHE REPRESENTATIVE OF
THE FOOD AND AGRICULTURE ORGANIZATION (FAO)1
TheFood Situation intheLeast-Developed andNetFood-Importing Developing Countries
FAO hasundertaken ananalysis ofthefoodsecurity situation inthe48Least-Developed
Countries (LDCs) andthe18NetFood-Importing Developing Countries (NFIDCs) which areeligible
forassistance under theMarrakesh Ministerial Decision onMeasures Concerning thePossible Negative
Effects oftheReform Process ontheNetFood-Importing Developing Countries. Themain findings
ofthestudy areasfollows.
Thesocio-economic profile oftheDecision countries
Thetwogroups together amounted to956million people in1995, 21percentofthetotal
population ofdeveloping countries. Onaverage, these countries arebelow other developing countries
asregards mostindicators ofsocial development. Forexample, comparing theirpercapita income
tothatoftherestofthedeveloping countries, fortheLDCs itisonly17percentofthatoftherest,
andfortheNFIDCs itamounts totwothirds ofthatoftherestofthedeveloping countries.
Thepercentageofundernourishedpopulation(basedonFAO’slastWorldFoodSurvey,published
in1996) remains notonlyhighbutalsoithasbarely changed since theearly 1970s -atabout 40per
centfortheLDCs and20percentfortheNFIDCs. Inabsolute numbers, outofthetotal840million
people estimated byFAO asundernourished inthedeveloping countries, 280million (onethird of
thetotal) arefound inthese twogroups ofcountries. Theaverage daily supply ofkilocalories was
estimated at2100 fortheLDCs and2560 fortheNFIDCs, compared to2720 kilocalories forthe
developing countries asawhole. Moreover, notonlyistheaverage leveloffoodsupplies lowbut
alsotheyear-to-year variability insupplies ishigh.
Performance ofdomestic foodproduction
Cereals provide roughly 52percentofthetotalenergy supplies fortheLDCs and45percent
fortheNFIDCs. Average percapita cereal production inthese countries isover100kgs.lessthan
therestofthedeveloping countries. Overall, about twothirds ofthese countries haveexperienced
adeclining percapita cereal production trend during the1980to1996period. Moreover, theysuffer
fromsubstantial year-to-year variability incereal production. Inthecurrent marketing year(1997/98)
some 20LDCs areexperiencing shortfalls intheirfoodsupply, requiring exceptional and/or emergency
foodassistance. Among theNFIDCs, fivecountries haveunfavourable prospects forcurrent crops
withonecountryrequiringexceptionalfoodassistance.Slowfoodproductiongrowthandhighproduction
variability remains amajor andchronic problem forboththeLDCs andtheNFIDCs. Inturn, this
contributes toahighdependence onimports aswellassharp year-to-year fluctuations intheircereal
import bills.
Dependence onfoodimports
Thetotalvalue ofimports ofallfooditems increased fortheLDCs asawhole byover50per
centfromtheearly 1980s to1995andfortheNFIDCs byover40percent. Intheearly 1980s, food
imports accounted forabout 17percentofthetotalmerchandise imports oftheLDCs andthisshare
hadincreased toover20percentby1995. FortheNFIDCs, theshare declined somewhat from17per
1Copies ofthefullstatement areavailable from theSecretariat, Agriculture andCommodities
Division, CWR, Room 1035.G/AG/GEN/15
Page6
centintheearly 1980s to14percentin1995, although evenforthatgroup ofcountries itwasmuch
higher thantheshare oftherestofthedeveloping countries which was6percentin1995, down from
10.5percentintheearly 1980s. Oneother dimension oftheproblem isthatinsome years theratio
ofthefoodtototalmerchandise imports risestomuch higher levels, implying thatthesecountries have
tocurtail other vitalimports inorder tomeet theirfoodimport needs. Cereals andvegetable oils
dominate thefoodimport billsofthese countries, accounting forroughly 40percentand20percent
ofthetotalduring recent years, compared to28percentand15percent, respectively, fortherest
ofthedeveloping countries.
Experience during the1995/96 price spike
From 1993/94 tothepeakof1995/96 bothgroups ofcountries experienced asubstantial increase
intheircereal import bills, amounting to85percentfortheLDCs and68percentfortheNFIDCs,
largely asaresult ofthesubstantial increase intheworld cereal prices during 1995/96. However,
theircereal import billpersists atarelatively highlevel, despite thedecline incereal prices sincethen.
Thisislargely duesubstantial reductions infoodaidandexport subsidies inrecent years. During
1997/98, foodaidincereals would account for23percentofLDCs cereal imports compared to
36percentin1993/94 and64percentinthemid-1980s. Thedecline intherelative contribution of
foodaidtocereal imports oftheNFIDCs isevensharper, from22percentinthemid-1980s to7.6per
centin1993/94, down to2percentin1997/98. Similarly, thevalue ofimports under subsidies which
accounted forasmuch as26percentoftheircereal import billsfortheLDCs and46percentfor
theNFIDCs in1994/95, dropped tovirtually nilsince 1995/96.
Theimplications ofbothofthese trends, although largely anticipated inthecontext ofthenew
policy environment under theUruguay Round, isthatamuch greater volume ofcereals isnowimported
under commercial terms.
Theability toimport
Theabove trends forboththeLDCs andNFIDCs raises thequestion oftheirability topay
fortheirgrowing import bills. Ability topayisabroad concept withmany dimensions which require
adetailed analysis. However, trends insome relevant indicators ofimport capacity reveal certain
difficulties forthesecountries. Thevalue oftheirexports fromgoods andservices (inpercapita terms)
hadadownward trend untilthemid-1980s and,despite anupward trend since then, itisstilllower
in1995thaninthebeginningofthe1980s.Also,agriculturalexports,whichincludeprimarycommodity
exports, arenolonger alargecomponent ofthetotalexport earnings (20percentforLDCs and10per
centforNFIDCs). Thus, while itisoften thecasethathighworld market prices inbasic food
commodities coincide withhighprices inprimary agricultural exports, thecompensating effect ofthis
correlation isdampened significantly inviewofthedeclining share oftheiragricultural exports intotal
export earnings. AllLDCs andnearly allNFIDCs hadanegative balance ofpayment (BOP) position
during mostofthe1980s anduptothepresent timeandtheirBOPdeficits haveworsened. Also, another
indicator ofthedifficulty these countries arefacing inmeeting theirfoodimport needs istheirdebt
toservice ratios (theratiooftotaldebtservice toexports ofgoods andservices). In1995, thesimple
average ofthedebt-service ratios was23percentfor41LDCs forwhich dataareavailable. Forthe
NFIDCs thisratiostood at20percent. Although debttoservice ratios improved somewhat fromthe
highlevels ofthe1980s, formany countries, especially among theLDCs, thisratiostillremains high,
with10ofthem above 25percent.
Insummary, alltherelevant statistics differentiate clearly theLDCs andtheNFIDCs from
therestofthedeveloping countries asregards foodavailability andcapacity toimport. Thefoodsecurity
situation inboththeLDCs andtheNFIDCs remains precarious andFAO willcontinue tomonitor
thissituation asitevolves.G/AG/GEN/15
Page7
STATEMENT BYTHE REPRESENTATIVE OFTHE WORLD FOOD PROGRAMME (WFP)
Iampleased tohavetheopportunity toinform theCommittee onWFP activities withrelevance
totheMinisterial Decision.
TheDecision stipulates theneedtoreview theleveloffoodaidtoensure thatitissufficient
tomeetthelegitimate needs ofdeveloping countries during thereform programme. According toWFP's
global foodaidinformation system, INTERFAIS, thelatest developments infoodaidflows areas
follows:
Food aiddeliveries toLeast-Developed andNetFood-Importing Developing Countries have
fallen drastically since 1994, theyearofsignature oftheUruguay Round Final Act,when 7.3million
tonnes wereprovided. In1995 foodaidtothecountries covered bytheDecision fellto4.9million
tonnes, areduction almost identical withthecutindonors 'minimum commitments under thethen
renegotiated Food AidConvention 1995. In1996foodaidflows dropped further to3.9million tonnes
andnowin1997 deliveries toLeast-Developed andNetFood-Importing Developing Countries are
forecast toonlyreach 3.4million tonnes.
There islittleevidence thatsuchadramatic reduction offoodaidflows isjustified bythegains
intrade andagriculture inthese countries orthatthislosshasbeenmade upbyincreases inother aid
programmes listed intheDecision.
Inthisregard itshould alsobenoted thatsincetheMinisterial Decision littleprogress hasbeen
made indeveloping criteria andmechanisms thatwould helptoanswer important practicalities such
as:defining "legitimate needs"; towhom andinwhatformanaffected country would make anyrequest
forassistance; whowould assess thisrequest, onwhatbasis andinwhatkindoftime-frame; how
anyrequest forfoodaidassessed as"legitimate" would beresourced; ortheoperational arrangements
under which thefoodaidwould beprovided. These arematters thatWFP hasraised initsExecutive
Board, particularly inthecontext ofthe"International Emergency Food Reserve (IEFR)", aproven
international mechanism forresponding tofoodassistance needs.
TheCommittee 'sReport totheSingapore Ministerial Conference refers totheFood Aid
Convention astheframework within which thelegitimate needs ofthedeveloping countries should
bemet.WFP hasbeenparticipating inpreparations fortherenegotiation oftheFood AidConvention.
Thesuccess ofthisprocess iscrucial; only12months agotheWorld Food Summit inRome made
itclear thatfoodaidneeds arefarbeyond theresources nowdevoted toit.
Iwould liketobriefly repeat thekeyproposals which WFP would liketoseeincorporated
intoafuture Food AidConvention (thefulltextwasalready earlier distributed toyouindocument
G/AG/GEN/4 dated 21July1997):
Promotion ofamore people-centred approach byencouraging donors tousefoodaidinways
thataremost likely togivealasting benefit topoorandhungry people (i.e.donors should
beencouraged toaccept theextra costs oftargeting foodaid);
Confining therange ofeligible commodities tothekindtypically eaten byhungry poorpeople
indeveloping countries;
Sharpening thefocus offoodaidontheneediest countries; and
Achieving greater stability infoodaidsupplies, atleastforinterventions designed tohelpthe
most hungry, particularly inyears ofvolatile world prices.G/AG/GEN/15
Page8
STATEMENT BYTHE REPRESENTATIVE OFTHE OECD
Agriculture andexports credits
Article 10.2oftheWTO Agreement onAgriculture notes thatitsMembers undertake to"work
towards thedevelopment ofinternationally agreed disciplines togovern theprovision ofexport credits,
export credit guarantees orinsurance programmes and,afteragreement onsuchdisciplines, toprovide
export credits, export credit guarantees orinsurance programmes onlyinconformity therewith".
TheParticipants totheArrangement onGuidelines forOfficially Supported Export Credits
(theArrangement) agreed in1992 andagain in1994 that,following thesuccessful conclusion ofthe
Uruguay Round, theywould negotiate oncomplementary guidelines onExport Credits onAgricultural
Products, anareacurrently exempted from theArrangement.
Following thedevelopment inanexperts 'group ofadraft Understanding withOptions,
negotiations began in1996 andarecontinuing amongst theParticipants totheArrangement (plus
Argentina) onanExport Credits Understanding forAgricultural Products.
Tothisend,theCommuniqué issued following the1997 Meeting oftheOECD Council at
Ministerial Level recorded that:
"Ministers encouraged Participants toconclude negotiations onexport credits foragricultural
products assoonaspossible andtomake areport totheirnextmeeting in1998."
Negotiations intheOECD arecurrently concentrated ontheissueofmaximum repayment terms
while recognizing thatmany other issues (such astransparency, official financing support, pricing and
aidissues) willneedtobeclarified before afinalagreement isconcluded. Additionally, itisnoted
thatprogressonothernon-exportcreditrelatedagriculturalissues(suchasSTEs)wouldhelptoeliminate
impediments towards anagreement amongst theParticipants.
TheExportCreditUnderstandingforAgriculturalProductswillconformwithotherinternational
agreements (e.g.theFAO Principles ofSurplus Disposal, theFood AidConvention, andtheWTO
Agreements). Inthisregard, theParticipants are,interalia,considering howtotakeaccount ofthe
requirement thatanyagreement relating toagricultural export credits makes appropriate provision for
differential treatment infavour ofleast-developed andnetfood-importing developing countries.
Whilst progress hasbeen difficult, theChairman oftheParticipants, Mr.Kurt Schaerer
(Switzerland) remains optimistic that,given greater flexibility among thenegotiating parties, itshould
bepossible toreport significant progress totheOECD Ministerial inApril 1998, andforanexport
credit agreement forAgricultural Products tobefinalized inthenearfuture.
Time hasbeenmade available foraSpecial Meeting oftheParticipants (plus Argentina) in
March 1998 which would allow foranyoutcome toform thebasis ofaReport toOECD Ministers
onthisissue.