ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(77)484
Vol.1977/0151

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(77)484final.
Brussels,12October1977
COMMUNICATION FROMTHECOMMISSION TOTHECOUNCIL -
concerningthesupplyofcerealsfoodaidto
Tanzaniafortheconstitution ofastrategicreserve
COM(77)484final

Inthis communication theCommission proposes totheCouncil that food
aidbegranted toTanzania ,asrequested bytheTanzanian Government and
endorsed bytheDirector –General ofPAO ,toconstitute astrategic cereals
reserve .TheTanzanian Government wishes theCommunity tosupply 50000
tonnes offood aid onamultiannual basis scheduled i.sfollows :
30000tonnes in1976/77
10000tonnes in1977/78
10000tonnes in1978/79
1.Basic information
Thedrought inTanzania in1973 and 1974 resulted inaserious food shortage ,
1andtheGovernment hadtoimport very large quantities ofcereals •Theprices
atwhich these cereals were imported combined with thehigh prices ofraw
materials hadvery serious consequences for thecountry 'sforeign exchange
reserves ,asisevidenced bythebalance ofpayments figures (surplus of
$35million in1973 ,adeficit of$155 million in1974)•Soastoavoid
arepetition ofthis situation ,theTanzanian Government would like toestablish
astrategic cereals reserve inTanzania ;in1976 itasked FA0tosend amission
^ostudy this matter along with other aspects ofthecountry 'sfood security
problem .TheGovernment intends theconstitution ofthis strategic reserve
■sobeanintegral part ofofficial policy onthepricing andmarketing of
cereals ,which aims atincreasing local production .
Tanzania imported 272000tonnes ofcereals in1973/74and504000tonnes
in1974/75.

OnthebasisofthefindingsofthePAOmission,theGovernmentdecided
onanationalfoodsecurityprogrammeincluding:
(i)increasedproductionofsorghumandmillet,involvingthe
investmentof$15.5million,tosupplementprojectsalready -
undertaken(withtheassistanceoftheWorldBank)toincrease
maizeproductionoverafour-yearperiod;
(ii)theestablishment overathree–yearperiod,ofastrategiccereals
reserveofabout100000tonnes(60000tonnesin1977);
(iii)theintroduction ofadministrative andfinancialproceduresto
ensurethatstocksareproperlymanaged;
(iv)theestablishment ofacropsupervisionandmarketinformation
system;
(v)theorganization oftrainingprogrammesforstaffresponsiblefor
managingthecerealsreserve.
2.Themainfeaturesofthereserveanditsconstitution
(a)Ttieaimsofthereserveandhowitwouldwork
Theaimistocreateareserveof100000tonnesofcereals,corresponding
tosixmonth'surbanconsumption or,inanemergency,threemonth'surban
andruralconsumption.Thisreservewillbegraduallybuiltupovera
three-yearperiod,afterwhichitwillbereplenished fromlocal
production.Itwillbeusedtooffsetshortagesresultingfromemergency
situations.Quantitiestakenfromthereservewillbesoldthrough
normaltradingchannels,thoughinexceptionalcasestheremayalsobe
freedistributions .ThoughGovernmentproperty,thereservewillbe
managedbytheNationalMillingCorporation ,whichwillreleasecereals
fromitonlyintheabovecircumstances .(i)
(ii)

Anydrawings made onthereserve during thethree years itis "being
constituted will hemade upfrom local resources orcommercial imports
orpossibly food aidonthe "basis ofaMinistry ofAgriculture decision
which PAOwill help prepare .Aworking fund will becreated toenable
theGovernment toensure that thereserve functions properly .This
fund will bemade upoftheproceeds from the sale ofcereals released
from the reserve .
Thedetailed arrangements fortheturnover ofstocks aretobe
determined bytheMinistry ofAgriculture inconjunction with FAO .Stocks
will beturned over byselling cereals from thereserve onthe local
market andreplacing thequantities released byimported orlocal cereals .
(b)Thesupply _ofcereals (assessed at$15*6 million forthereserve )
Thereserve cannot besupplied from local resources ,since not enough is
produced even tomeet consumption needs .Thecountry 'sproduction shortfall
was180000tonnes in1976/77» projections forthenext twoyears show
shortfalls of120000tonnes in1977/78and -80000tonnes in1978/79*
Thereserve will thus have tobeconstituted bymeans ofimports ,and in
particular bymeans offood aid ,considering theprecarious situation of
Tanzania 'sexternal finances (balance ofpayments deficits of$155 million
in1974 and$18million in1975 )and -ofthegeneral economic situation
(gross national product of$160 percapita in1974 )«
Todate ,contributions announced byother donors forthefirst year
are asfollows :
Australia :6000tonnes ,Canada :10000tonnes ,and (probably )
Federal Republic ofGermany :6000tonnes .

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(c)Storage^capacity
Therequisitecapacityalreadyexistsforthefirstphase,whentheaim
istoconstituteareserveof60000tonnes.Ofthisstoragespace,a
capacityof23000xc/uieswillmoreoverbesetasidepermanentlyforthe
secondandthirdphases,whichmeansthatsilosandstoreswitha
capacityof77000tonnes,costinganestimc/ied£6.6million,willhave
to"be"built.TheUnitedKingdomhasdecidedtograntfinancialaidto
thisprojecttofinancetheconstruction ofastoragecapacityof40000
tonnes(plusroads).
3.Commissionproposal
Inviewoftheusefulnessoftheinvestmentto"becarriedout,andgiven
thattheprojectworkedoutinagreementwithFAOhasbeenwellprepared,
theCommissionproposesthatfoodaidbegrantedtoTanzaniatoconstitute
c.strategiccerealsreserve.Althoughitwouldhavebeendesirableto
enterintoathree-year commitmentrunningparalleltotheconstitution
ofthereserve,theCommissionisconfiningitsproposalto1977»this
operationshouldbeconsideredasaninitialexperiment ,andtheCommission
reservestherighttopresentfurtherproposalsunderfutureprogrammes.
Furthermore ,sincethetotalquantitiesofcerealsattheCommunity *s
disposalforuseasfoodaidarelimited,theCommissionconsidersthat
thesecerealsshouldbeearmarkedfirstandforemostforimmediate
consumption.Consequently ,whiletheCommissionconsidersthatthe
TanzanianGovernment'srequestshouldbegranted,x/.oquantityallocated
cannotbeasmuchasthe30000tonneswhichtheGovernmenthasrequested
for1976/77.

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TheCommissionthereforeproposestoallocatetothisproject5000tonnes
Mofcereals'probablymaize),tobedeliveredtotheportofloading,
fromthe1977programmereserve,whichstandsat58320tonnes;this
operation,whichisestimatedtocost420000u.a.attheworldprice,
wouldnotinvolvetheCommunityinadditionalexpenditure sinceit
wouldbecovered "byaprogrammeandappropriations thathavealready
beenapproved.
TheCommunityshouldgrantthisaidonconditionthatanadvisory
committeebesetup,composedofaGovernmentrepresentative ,FA0
representative andrepresentatives ofdonorcountriessoastoensureas
faraspossiblethattheprojectisproperlyrun,whichwouldjustify
itscontinuation .TheGovernment wouldhavetoconsultthecommittee
beforetakinganydecisiontousethereserve,andthecommitteewould
berequiredtogiveitsopinion:•
(i)onwhetherthereservewasbeingusedfortheproperreasons;
(ii)onhowthereserveshouldbereplenished (localresources,
commercialimports,foodaid).
Conclusion
TheCouncilisrequestedtoapprove,undertheaboveconditions,the
allocationtoTanzaniaof5000tonnesofcerealstobedeliveredto
theportofloading,fortheconstitution ofastrategiccerealsreserve.
Thisisinadditiontothe5000tonnesallocatedtoTanzaniaforimmediate
consumption underthe1977programme.
2Thisoperationisthuscoveredbythedetailedfinancialrecordattached
tothecerealsfoodaidprogrammefor1977(C0M(76)546finalof
20October1976).