RESTRICTED
WORLD TRADE G/AG/GEN/2
7July1997
ORGANIZATION(97-2822)
Committee onAgriculture
STATEMENT BYTHE EXECUTIVE DIRECTOR OFTHE INTERNATIONAL GRAINS
COUNCIL ATTHE 26-27 JUNE 1997 MEETING
OFTHE COMMITTEE ONAGRICULTURE (PART II,AGENDA ITEM B)
Iampleased toprovide youwithareport onrecent andplanned activities bytheFood Aid
Committee inrelation totheDecision oftheWTO Singapore Ministerial Conference concerning the
question ofNetFood-Importing Developing Countries.
Background
Toputtheactivities oftheFood AidCommittee insome perspective, Iwould likebriefly to
recall afewpoints.
First, thepresent Food AidConvention (FAC) came intoeffect on1July1995, foraduration
ofthree years, unless extended initspresent form orotherwise modified.
Second, since then, there havebeenanumber ofdevelopments which havetaken place inthe
areaoffoodaid:
- theroleoffoodaidwasdiscussed bytheWorld Food Summit inthecontext ofworld food
security objectives;
- thefinancial impact ofworld grain prices ontheimport billsofdeveloping countries wasdrawn
totheattention ofinternational financial institutions bytheWTO Singapore Ministerial
Conference.
- foodaidpolicies havebeenunder review inanumber ofdonor countries. These reviews are
taking placeinthelightofbroader longer-term foodsecurity concerns, thefactthatanincreasing
proportion offoodaidisgoing toemergency humanitarian assistance asopposed toprogramme
foodaid,aswellasmounting budgetary pressures onODA's.
- world wheat prices arecurrently intheUS$140-US$150 range, compared toaUS$250 peak
about oneandahalfyears ago.
Third,overtheyears,foodaidlevelshavegenerallyexceededtheminimumannualcommitments
under theFAC. Since theyarenowatabout theminimum levels setintheConvention, thissituation
effectively increases thevalue oftheinternational foodsafety netwhich isbeing guaranteed tofood
deficitandpoordevelopingcountries.Becausetheobligationsareinvolumeterms(ofwheatequivalents)
notinvalue, thisminimum levelfoodaidismade available irrespective ofworld grain prices.G/AG/GEN/2
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FAC activities
InJanuary 1997, Ireceived aletter fromtheDirector-General oftheWTO asking metoinform
members oftheFood AidCommittee about theoutcome ofyourSingapore Ministerial Conference,
inrespect offooddeficit developing countries.
FACmembers immediately started meeting todevelop anapproach, which would bothrespond
totheWTO Decision andtheirownrequirements bearing onthefuture oftheConvention.
Asapractical matter, FAC members havearranged meetings along fourlines:
1. With potential newFAC members asfoodaiddonors. On9April, ameeting washeldwith
some 16non-FAC members. About onethirdhavesubsequently shown interest infollow-up
activities. Intheautumn, dialogue withall16governments willcontinue.
2. Second, withrelevant international organizations. On16June, theFood AidCommittee held
discussions withrepresentatives oftheWFP andFAO, onthebasis ofwritten submissions
setting outtheirviews onthecurrent Convention aswellasonelements thatshould becovered
byanewConvention. Discussions willcontinue oncertain matters ofparticular interest to
FACmembers. Attheappropriate time, similar discussions willalsotakeplacewiththeWorld
Bank, theIMF, aswellasUNCTAD andtheOECD.
3. Third, withfoodaidrecipients. Allrepresentatives ofcountries andterritories ontheWTO
listofNetFood-Importing Developing Countries wereinvited toameeting withtheFood Aid
Committee on17June. Inattendance, there were18representatives, 10fromAfrica, 4from
Asia Pacific, and4from theCaribbean andSouth America. Themain elements ofthe
Convention wereexplained andtheviews ofrecipients expressed onwhatafuture Convention
might include.
Theimmediate follow-up todiscussions withfoodaidrecipients include thisbriefing ofthe
WTO Committee onAgriculture concerning FAC activities, andaninformation letter Iwill
sendshortly toparticipants ontheoutcome oftheFood AidCommittee onthefuture ofthe
Convention. Ifandwhen FAC members formally decide toopen theconvention to
modifications, further discussions willtakeplace onmatters ofmutual interest. Itwasagreed
tomaintain liaison inLondon through theHigh Commission ofMauritius.
4. Fourth, among members oftheFood AidCommittee themselves. Atits17Junemeeting, the
Committee decided tomaintain themomentum created bytheactivities ofrecent months. It
agreed thatadecision onwhether toopentheFACforpossible modifications oncertain elements
would betaken atitsnextregular meeting inDecember 1997. Inthemeantime, members
willcontinue theirexamination ofwhat thespecific issues forpossible modifications could
be,theterms ofreference foranyreview andthetime-frame forcompleting it.
AreasofparticularinterestmentionedbysomemembersincludethelistofpotentialFACdonors,
thelistofdonable products, thelistofeligible recipients, astrengthening oftriangular and
localtransactions, improving thecoordination andeffectiveness offoodaid,theterms ofaid,
theroleandobjectives ofanewFood AidConvention intheworld foodsecurity andtrade
liberalization context.
Members alsoagreed, inprinciple, thatsubject toaformal decision inDecember 1997, the
FACshould beextended foroneyear. Thiswould avoid anylegalvacuum after30June1998,G/AG/GEN/2
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when theConvention expires, andallow timeforthenecessary legislative approvals and
ratification procedures bymembers.
Throughout these activities, liaison between theSecretariats oftheIGCandtheWTO isbeing
actively maintained.