Report from WTO Agriculture Committee Meeting, 17–18 November 1998

The last few years’ decline in food aid for developing countries is coming to an end, WTO members heard during the 17–18 November meeting of the organization’s Agriculture Committee.

The committee’s chairman, Ambassador Nestor Osorio Londoño of Colombia, described as good news the prediction of a 50% increase in food aid for least developed countries and net food-importing developing countries — i.e. those relying to some degree on foreign food supplies because they import more food than they export.

The forecast came from the UN Food and Agriculture Organization, an observer in the committee. The FAO predicted that after four years of decline, the level of food aid in the current 1998/99 season will rise to at least 9 million tonnes, compared to 5.3 million tonnes in 1997/98. The share going to least developed and net food-importing developing countries could be 4.6 million tonnes, a 50% increase, the FAO said.

The turn-around is largely the result of an increase in available supplies in donor countries and a response to higher needs particularly in Asia and countries of the former Soviet Union, the FAO added.

Least developed and net food importing countries

The figures were discussed during the committee’s annual review of how least developed and net food importers among developing countries are faring during the reform of agricultural trade under the WTO.

The FAO said that the average food import bill of these countries rose about 40% in three years up to the 1996/97–1997/98 period. About three quarters of this was due to higher costs because more of the imports were bought under commercial terms instead of being supplied as food aid or subsidized sales.

Several donor countries expressed concern that current negotiations on a new Food Aid Convention are behind schedule and agreement might not be reached in time to replace the present convention which expires on 30 June 1999.

Some were also concerned about the recent decline in food aid, as were a number of developing countries who said that not enough was being done to protect the interests of the least developed and net food importers among them. These countries called for more trade finance and technical assistance.

Three issues that have been discussed on previous occasions were raised again in this meeting.

One is the question of "rollover" — countries carrying unused portions of their export subsidy commitments over for use in subsequent years. The discussions take place when members comment on the implementation of the WTO’s Agriculture Agreement in general, or on notifications individual members have supplied to the WTO.

(WTO members have to tell each other regularly through the WTO how they are implementing their commitments — to cut export subsidies and domestic supports and to provide access for imports into their markets.)

This time, the discussion was triggered by a notification that included rolled-over export subsidies for sugar. Critical members repeated their argument that roll-over conflicts with the spirit of the Agriculture Agreement even if it does not violate the letter of the law. Members defending rollover said that they have full rights to do so under the agreement.

The second issue concerns an allegation that one country is using a state-owned corporation to subsidize sugar exports. The country concerned denied that any subsidies were involved. The complaining country said the corporation is owned and funded by the government and that its export losses are underwritten by the government. The complaining country said it is considering pursuing this issue in "a broader context".

The third issue concerns one member’s subsidies for canned fruit. A number of countries expressed concern that the issue remains unresolved after several months, but several also welcomed the subsidizing member’s offer of further consultations.

The main complaint concerns alleged failure by the subsidizing member to control its programme and avoid fraud that gives suppliers an unfair advantage.

The next meeting will be in March 1999.