A World Food Reserve

MAC/WFY

Page-51

0230_553559_09_cha05

four-year agreements were signed with India in 1960 and Pakistan in 1961. These
long-term agreements involved the introduction of an element of planning on
the part of both the US and the recipient country but contained a clause limiting
supplies to commodities in surplus in the US at the time of shipment.

These developments intensified interest in the FAO secretariat to establish some

form of `guiding principles' to safeguard agricultural production in the developing
countries and international trade from the potential adverse effects of large-scale
food aid programmes, while seeking to obtain the potential benefits that could
be obtained in food-aid recipient countries, and an institutional arrangement to
monitor their impact. Two path breaking studies were undertaken to address both
these issues (Blau, 1954; FAO, 1955a). The first study, on the Disposal of Agricultural
Surpluses, attempted to list the `rather baffling' variety of methods that had been
devised on different occasions for dealing with surplus stocks, under three main
headings:

· holding or segregation of stocks;
· possible methods for expanding consumption; and
· restricting new supply.

Concerning stock holding or segregation, the FAO study concluded that liberal

and wisely managed governmental stockholdings were important, even essential,
elements of a balanced economy. The segregation of surplus stocks into new
reserves for special purposes could help in relieving the immediate pressure of
supplies but would not provide an enduring solution. It could be of help, however,
as a transitional measure facilitating adjustment.

The study listed an impressive array of possible methods of expanding consump-

tion the national and international uses of agricultural surpluses grouped under
two categories. The first involved measures to expand markets without conces-
sions on prices and sales. The second gave examples of sales on concessional prices
or special terms to some identified market sectors, with special safeguards in the
interests of competing sellers. Under the first category, examples were given of
education or publicity campaigns, the development of new uses, the discourage-
ment or restriction of the use of competing products, the reduction of distribution
margins, and measures to raise the general purchasing power through full employ-
ment policies, development programmes, credits and income redistribution, and
raising importers' external purchasing power through the provision of loans and
the liberalization of exporter's import policies. Under the second category, sales
of special terms to specific market sectors, examples were given of special feeding
programmes for children and other vulnerable and low-income groups, emergency
relief programmes, export subsidies, sales against importers' currencies and barter
deals. Restricting new supply could be achieved by restricting output or the crop
area planted, destruction in growth or unharvested crops, through disincentives
by taxation or lower support prices or market quotas, and by creating output
variation by other means.

Another positive potential was that agricultural surpluses could be provided to

finance economic development in developing countries. A pilot investigation was

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Useful links	A World Food Reserve MAC/WFY Page-51 0230_553559_09_cha05 A World Food Reserve 51 four-year agreements were signed with India in 1960 and Pakistan in 1961. These long-term agreements involved the introduction of an element of planning on the part of both the US and the recipient country but contained a clause limiting supplies to commodities in surplus in the US at the time of shipment. These developments intensified interest in the FAO secretariat to establish some form of `guiding principles' to safeguard agricultural production in the developing countries and international trade from the potential adverse effects of large-scale food aid programmes, while seeking to obtain the potential benefits that could be obtained in food-aid recipient countries, and an institutional arrangement to monitor their impact. Two path breaking studies were undertaken to address both these issues (Blau, 1954; FAO, 1955a). The first study, on the Disposal of Agricultural Surpluses, attempted to list the `rather baffling' variety of methods that had been devised on different occasions for dealing with surplus stocks, under three main headings: · holding or segregation of stocks; · possible methods for expanding consumption; and · restricting new supply. Concerning stock holding or segregation, the FAO study concluded that liberal and wisely managed governmental stockholdings were important, even essential, elements of a balanced economy. The segregation of surplus stocks into new reserves for special purposes could help in relieving the immediate pressure of supplies but would not provide an enduring solution. It could be of help, however, as a transitional measure facilitating adjustment. The study listed an impressive array of possible methods of expanding consump- tion the national and international uses of agricultural surpluses grouped under two categories. The first involved measures to expand markets without conces- sions on prices and sales. The second gave examples of sales on concessional prices or special terms to some identified market sectors, with special safeguards in the interests of competing sellers. Under the first category, examples were given of education or publicity campaigns, the development of new uses, the discourage- ment or restriction of the use of competing products, the reduction of distribution margins, and measures to raise the general purchasing power through full employ- ment policies, development programmes, credits and income redistribution, and raising importers' external purchasing power through the provision of loans and the liberalization of exporter's import policies. Under the second category, sales of special terms to specific market sectors, examples were given of special feeding programmes for children and other vulnerable and low-income groups, emergency relief programmes, export subsidies, sales against importers' currencies and barter deals. Restricting new supply could be achieved by restricting output or the crop area planted, destruction in growth or unharvested crops, through disincentives by taxation or lower support prices or market quotas, and by creating output variation by other means. Another positive potential was that agricultural surpluses could be provided to finance economic development in developing countries. A pilot investigation was back to top Next page
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