A World Food Reserve

MAC/WFY

Page-48

0230_553559_09_cha05

194570. Early Attempts: FAO's Pioneering Work

stockholding policies, which they might be reluctant to internationalize by trans-
ferring their stocks to a world buffer pool. In addition, there were significant finan-
cial and management problems to overcome, problems of individual commodity
bargaining, and lack of guarantees for securing stability in terms of real purchasing
power and not merely in monetary terms.

The difficulties, although complex and considerable, were not insurmountable.

But because of the lack of political support shown so far for the far-reaching
institutional changes that would be involved in adopting even the more modest
versions of arrangements for reducing excessive price fluctuation, `their adoption
cannot at this stage be regarded as being within the realms of practical politics'. Six
points were made for improving the technical, economic and political conditions
for concluding international buffer stock arrangements:

· lessening the technical obstacles through national and international action to

improve standardization of grades, contracts and other market practices;

· reducing the range of trading risks against which insurance was sought by

means of international bargaining by co-ordinated development of national
stabilization measures, adoption of liberal national stockholding policies and
acceptance of a code of international behaviour;

· further close study of the effectiveness of alternative types of stabilization tech-

niques in terms of the different types of risks (original emphasis) against which
insurance was sought on the international plane;

· better insight into the possible conflict between some existing national policies

and international stock arrangements;

· setting realistic expectations for international commodity agreements such as

the operation of international buffer stocks and not expect them to solve too
many problems; and

· better understanding of the complicated technical, economic, and political

issues involved.

Food surpluses and their possible uses

The fourth main objective of a WFR referred to in the UN General Assembly resol-
ution was to `promote the rational disposal of intermittent agricultural surpluses'.
The FAO secretariat had been forced to address the issue of the disposal of agri-
cultural surpluses with the growth of large food stocks, particularly in the United
States, and pressures to release them (FAO, 1964). Wheat stocks in the four major
exporting countries (United States, Canada, Argentina and Australia) had reached
over 34 million metric tons by 1955 and were to grow to over 58 million tons in
1961. Stocks of coarse grains (barley, oats, maize, sorghum and rye) in the United
States and Canada alone were 32 million metric tons in 1955 and increased to
almost 82 million metric tons in 1961. In addition, there were accumulating stocks
of rice, dairy products, vegetable oils and oil seeds, cotton and coffee.

This called for the need to establish some kind of `code of conduct' to avoid

the potential disruptive effects of surplus disposal on agricultural production

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Useful links	A World Food Reserve MAC/WFY Page-48 0230_553559_09_cha05 48 194570. Early Attempts: FAO's Pioneering Work stockholding policies, which they might be reluctant to internationalize by trans- ferring their stocks to a world buffer pool. In addition, there were significant finan- cial and management problems to overcome, problems of individual commodity bargaining, and lack of guarantees for securing stability in terms of real purchasing power and not merely in monetary terms. The difficulties, although complex and considerable, were not insurmountable. But because of the lack of political support shown so far for the far-reaching institutional changes that would be involved in adopting even the more modest versions of arrangements for reducing excessive price fluctuation, `their adoption cannot at this stage be regarded as being within the realms of practical politics'. Six points were made for improving the technical, economic and political conditions for concluding international buffer stock arrangements: · lessening the technical obstacles through national and international action to improve standardization of grades, contracts and other market practices; · reducing the range of trading risks against which insurance was sought by means of international bargaining by co-ordinated development of national stabilization measures, adoption of liberal national stockholding policies and acceptance of a code of international behaviour; · further close study of the effectiveness of alternative types of stabilization tech- niques in terms of the different types of risks (original emphasis) against which insurance was sought on the international plane; · better insight into the possible conflict between some existing national policies and international stock arrangements; · setting realistic expectations for international commodity agreements such as the operation of international buffer stocks and not expect them to solve too many problems; and · better understanding of the complicated technical, economic, and political issues involved. Food surpluses and their possible uses The fourth main objective of a WFR referred to in the UN General Assembly resol- ution was to `promote the rational disposal of intermittent agricultural surpluses'. The FAO secretariat had been forced to address the issue of the disposal of agri- cultural surpluses with the growth of large food stocks, particularly in the United States, and pressures to release them (FAO, 1964). Wheat stocks in the four major exporting countries (United States, Canada, Argentina and Australia) had reached over 34 million metric tons by 1955 and were to grow to over 58 million tons in 1961. Stocks of coarse grains (barley, oats, maize, sorghum and rye) in the United States and Canada alone were 32 million metric tons in 1955 and increased to almost 82 million metric tons in 1961. In addition, there were accumulating stocks of rice, dairy products, vegetable oils and oil seeds, cotton and coffee. This called for the need to establish some kind of `code of conduct' to avoid the potential disruptive effects of surplus disposal on agricultural production back to top Next page
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