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RROJAS DATABANK Volumen 2, Number 6  /1996

FAO.- Agreement on Agriculture, December 1993. An assessment

ANNEX - Base Period 1987-89, Average & Projections to the year 2000

This paper has been prepared by the Commodities and Trade Division of
the Food and Agriculture Organization of the United Nations.  It
focuses mainly on the impact of the Agreement on Agriculture on trade
flows and prices for the main agricultural commodities. For any
further information please contact:

                    Commodities and Trade Division
                    Food and Agriculture Organization of the UN
                    Via delle Terme di Caracalla, 00100 Rome, Italy
                    FAX: 52254495

1.    After seven years of negotiations the Uruguay Round Multilateral
Trade Negotiations were concluded on December 15, 1993. The Final Act
of the Uruguay Round, signed at Marrakesh in April 1994, is wider in
scope than any of its predecessors. The tariff cuts are deeper; non-
tariff barriers are tackled more comprehensively; and for the first
time two major sectors, services and agriculture, have been included
in the negotiated agreement. While the Final Act covers agreements,
decisions and declarations on a wide variety of subjects several of
which will be of great economic significance to the world economy and
to the economies of the developing countries, this paper focuses
mainly on the impact of the Agreement on Agriculture on trade flows
and prices for the main agricultural commodities. 

2.    The approach to the assessment has been to re-run FAO
projections for most of the main agricultural commodities to take into
account important changes in national policies that have taken place
since the projections were last done (1/ Discussed at the last session
of the CCP, see CCP:93/18.) together with the Uruguay Round changes to
be accomplished by the year 2000 (the great bulk of developed
countries and over 60 percent of the concessions of the developing
countries making reduction commitments). These new projections confirm
earlier conclusions that prices in international markets will be 4 to
10 percent higher and point to significant changes in trade patterns.
These are analyzed in Section III of the paper. Section IV of the
paper considers the impact of these changes on the four developing
regions. Some special issues are covered in Section V.

3.    The implementation of the Agreement on Agriculture will start in
1995, and the reduction commitments of the developed countries should
be completed within six years, i.e. by the year 2000, whereas the
commitments of the developing countries should be completed within ten
years, i.e. by the year 2004. The least developed countries are not
required to make any reductions. The commodities included are most of
the products normally considered as part of agriculture (i.e. it
excludes fishery and forest products) except that it also excludes
rubber, jute, sisal, abaca and coir, which were covered in the normal
GATT tariff negotiations on goods.

4.    There are three elements in the commitment on market access:
tariffication, tariff reduction and access opportunities.
Tariffication means that specific non-tariff barriers (quotas,
variable levies, minimum import prices, discretionary licensing, state
trading measures, voluntary restraint agreements and similar border
measures) need to be abolished and converted into an equivalent
tariff. Ordinary tariffs, including those resulting from
tariffication, are to be reduced by an average of 36 percent (24
percent by developing countries), with a minimum rate of reduction of
15 percent for each tariff item. Special safeguard provisions allow
the imposition of additional duties when there are either import
surges or particularly low prices (both compared with 1986-88 levels).
Where there are no significant imports, minimum access equal to
3 percent of domestic consumption in 1986-88 will be established for
1995 rising to 5 percent of base year consumption at the end of the
implementation period.

5.    For domestic support policies, subject to reduction commitments,
the total support given in 1986-88, measured by the Total Aggregate
Measure of Support (Total AMS) (2 Total AMS means the annual level of
support provided for agricultural products or non-product-specific
support provided in favour of agricultural producers in general other
than support provided under exempt programmes (e.g. Green Box).),
should be reduced by about 20 percent in developed countries (13.3
percent in developing countries). Reduction commitments refer to total
levels of support and not to individual commodities. Policies which
amount to a small percentage transfer value to producers (less than 5
percent of the value of production for developed countries, less than
10 percent for developing countries) are also excluded under the de
minimis rule. Policies which meet certain criteria of decoupled
support together with production restraint have been excluded.
Policies which have minimal or no effect on production or trade
distorting effects ("Green Box") are excluded. The list of exempted
"Green Box" policies includes such policies as general services to
agriculture, food security stocks, domestic food aid, and certain
decoupled payments to producers, including direct payments to
production-limiting programmes, providing certain conditions are met.

6.    As regards developing countries, which have been given special
and differential treatment in the Agreement on Agriculture, purchases
for and sales from food security stocks could be at administered
prices provided that the subsidy to producers is included in the AMS.
As regards domestic food aid, developing countries are allowed
untargeted subsidized food distribution to meet requirements of the
urban and rural poor on a regular basis. Also excluded for developing
countries are investment subsidies that are generally available to
agriculture and agricultural input subsidies generally available to
poor farmers in these countries. Developing countries were allowed to
offer ceiling bindings instead of tariffication.

7.    Perhaps the most important provision is the commitment to reduce
export subsidies. The volume of exports benefiting from such subsidies
must be reduced by 21 percent and the expenditure on export subsidies
by 36 percent. Unlike the reduction commitments in market access and
domestic support, reductions in export subsidies will be implemented
on a product-specific basis. However, exporters have in certain cases
been allowed to maintain a higher level of subsidized exports in the
years up to 1999, by availing themselves of a special option (the
higher of the subsidized levels of 1991-92 and 1986-90) from which to
make reductions to the same final level by the year 2000. The Final
Act also has some provisions for prevention of circumvention of export
subsidy commitments, including inter alia disciplines on use of export
credit and credit guarantees as well as food aid (i.e. food aid should
not be tied, it should be carried out in accordance with the FAO
Principles of Surplus Disposal, and it should be provided to the
extent possible in fully grant form).

8.    Finally, in addition to the special and differential provisions
mentioned above, there are special provisions for developing countries
contained in the 'Decision on Measures Concerning the Possible
Negative Effects of the Reform Programme on Least-Developed and Net
Food Importing Countries'. The idea behind the Decision is that
agricultural trade liberalization is likely to lead to higher world
prices for food while a reduction in export subsidies will also raise
the effective price paid by importers. There is also some concern that
the volume of food aid, which historically has been closely linked to
the level of surplus stocks, could be more limited in future as the
surplus stocks are run down. The Decision recognizes these issues and
provides for some redress, via food aid, technical assistance to raise
agricultural productivity and possibly short term assistance to help
in financing normal commercial imports.

9.    The Agreement on Agriculture, although rather comprehensive and
going well beyond tariffs and border measures, still represents only a
partial liberalization agreement. The quantitative cuts in support to
agriculture are relatively small and spread over a number of years.
Overall, a large degree of distortion in the world market of
agricultural commodities will still remain even after the complete
implementation of the reduction commitments. However, the dimensions
of the commitments are still impressive. Aggregate domestic support
will be cut from US$198 billion to US$162 billion, export subsidies
will be cut from US$21.3 billion to US$13.8 billion. Virtually all
agricultural tariffs will in future be bound, i.e. ceiling rates have
been established, which adds greater security to trade.

10.   The impact on income growth is hard to estimate as considerable
liberalization has occurred in the services sector for which at
present it is not possible to quantify the effects. The GATT has made
a number of estimates ranging from gains of US$109-510 billion (3/
"The Results of the Uruguay Round of Multilateral Trade Negotiations"
GATT, Geneva, November 1994.). The World Bank/OECD has estimated gains
of around US$213 billion (4/ Trade Liberalization: Global Economic
Implications by Ian Goldin, Odin Knudsen and Dominique van der
Mensbrugghe, OECD and World Bank, 1993.). The question of the impetus
to world income deriving from the Uruguay Round is of great importance
in assessing the impact; for the purposes of this study the World
Bank/OECD figure was taken for the main scenario while double this
amount was taken for the higher income assumption. However, as the
main thrust of this paper is the revised outlook for world
agricultural markets in the year 2000, it must be noted that the
assumed effect is well below one year's growth in world income.

11.   Before turning to the commodity detail however, a word is in
order on some of the methodological assumptions lying behind these
projections. In all cases models have been developed which
simultaneously determine production, consumption, imports, exports and
world prices. All countries are covered. The existing "baseline"
projections to the year 2000 are driven by income growth, productivity
changes and demographic trends. The prices in each country are linked
to world market prices by tariffs and other policy effects and natural
forms of protection. For the "Uruguay Round scenario" the reduction in
tariffs changes these price linkages. The modelling has been done in
terms of the primary commodity (e.g. wheat) so that the tariff changes
for the derived products (e.g. wheat flour) have been aggregated into
an average wheat-equivalent tariff. It has usually been assumed that
tariff changes will reflect changes in the bound, ceiling, tariffs.
The reduction in export subsidies has been reflected in an increase in
the consumer price of the recipient country in addition to any change
in world prices due to trade liberalization. For exporters that use
subsidies for all their exports, a maximum has been introduced on the
volume of their exports. For those exporters which only subsidize a
part of their exports, no such constraint has been modelled but it is
still assumed that this will erode part of their competitiveness and
hence influence the volume of their exports. Minimum access has been
introduced in all cases where the model did not generate a sufficient
volume of imports to meet the national commitments. The value of trade
has been calculated by multiplying the volume of trade by an estimated
world average export unit value for the year 2000, which in turn was
projected as the product of the index of world prices and the base
year export unit value. Adjustments were made to take into account the
decline in export subsidies and to some extent the loss of
preferential margins.



12.   As previous reported, the overall growth in the production of the
selected commodities is projected to decline slightly compared with the
1980s (See Tables 1a to 1d below). The decrease in growth rates is
greatest in rice, meat other than bovine, dairy products, coffee and
cocoa. By contrast some increases are envisaged for tea and bananas. The
impact of the Uruguay Round is negligible on world agricultural
production. There is some reduction in the output of temperate zone
products in the developed countries and a fractional rise in the
developing countries.

13.   The growth rate for global consumption of the agricultural
commodities covered by this study is also projected to decrease, with the
exception of tea and bananas. Allowing for population growth at 1.7
percent a year, per caput consumption is expected to decrease for dairy
products, feedstuffs and coffee, while cereal use for food is expected to
stay constant. On balance, the Agreement will slightly slow consumption
growth in the Low-Income, Food-Deficit Countries.

14.   The Uruguay Round is not seen as arresting the slowdown in the
growth rate of world agricultural trade, first noted by the CCP at its
last session, despite a positive effect on the growth in trade for rice,
fats and oils and bovine meat and to a lesser extent the other
commodities. It is possible that the commodities not covered by this
study, accounting for 41 percent of the total value of agricultural
trade, will enjoy greater benefits, including cotton and some
horticultural products.

15.   For the developing countries, the import growth rate is expected to
decline for cereals, the oilseed sector, dairy and most tropical
products. The growth rate of their meat and banana imports are seen as
accelerating. By contrast the exports of the developing countries are
expected to expand more rapidly than in the eighties for cereals, meat,
dairy, sugar and bananas. Their slight (US$ one billion) net surplus in
1987-89 for the commodities studied is unlikely to change by 2000.

16.   For the developed countries, the growth rates of both imports and
exports are expected to weaken. In the case of imports, there is expected
to be a sharp decrease in growth of all the main temperate zone products
but export growth is also expected to fade. Overall the developed
countries would be small net exporters of these commodities in 2000. In
all these commodities, however, some countries will gain and others lose,
while each commodity has some particular characteristics that cannot be
captured in these overall summary statistics. In what follows, therefore,
the detailed analysis of the revised projections to the year 2000 are
described together with some observations on the impact of the Uruguay
Round which, it is worth emphasizing, is usually rather small compared
with all the other changes taking place between the base period and the
year 2000.

Table 1a - Growth of Production of Selected Agricultural Commodities,
           Past and Projected
Note: A year marked with an asterisk (*) signifies the average of three
      years centred on the year shown.
**    including butter
                        1978*-88*     1988*-2000     1988*-2000
                                            Base           U.R.
                        .......... per cent per annum ..........

 ALL COMMODITIES           2.2            1.6            1.6      

 FOODSTUFFS **             2.2            1.6            1.6      
 Wheat                     2.1            1.7            1.6      
 Rice                      2.6            1.8            1.8      
 Total Coarse Grains       0.7            1.6            1.7      
 Fats and Oils             3.6            2.9            3.0      
 Proteins                  3.6            3.0            3.0      
 Bovine Meat               1.0            1.0            1.0      
 Pig Meat                  3.7            2.2            2.0      
 Ovine Meat                2.4            1.6            1.6      
 Poultry Meat              4.8            3.8            3.8      
 Milk                      1.5            0.7            0.7      

 OTHERS                    1.8            1.6            1.6      
 Coffee                    2.6            1.5            1.6      
 Cocoa                     4.3           -0.1            0.2      
 Tea                       2.8            3.6            3.6      
 Sugar                     1.6            1.8            1.8      
 Bananas                   1.4            3.6            2.8      
 Natural Rubber            3.0            2.7            2.7      
 Bovine Hides & Skins      0.8            0.8            0.8      

Note: A year marked with an asterisk (*) signifies the average of three
      years centred on the year shown.
**    including butter
                        1978*-88*    1988*-2000   1988*-2000
                                           Base         U.R. 
                        ......... per cent per annum .........
ALL COMMODITIES             1.1           0.2          0.2

FOODSTUFFS **               1.2           0.3          0.2
Wheat                       0.9           0.8          0.6
Rice                       -0.5           0.7          0.2
Total Coarse Grains         0.0           0.8          0.9
Fats and Oils               2.1           1.5          1.5
Proteins                    1.8           1.8          1.8
Bovine Meat                 0.5          -0.2         -0.1
Pig Meat                    2.0           0.1         -0.0
Ovine Meat                  1.6          -0.3         -0.4
Poultry Meat                3.8           2.0          2.0
Milk                        0.9          -0.4         -0.5

OTHERS                      0.6           0.0          0.0
Coffee                      0.0           0.0          0.0
Cocoa                       0.0           0.0          0.0
Tea                         1.2           0.0          0.0
Sugar                       0.9           0.9          1.0
Bananas                     0.8           1.1          0.5
Natural Rubber              0.0           0.0          0.0
Bovine Hides & Skins        0.4          -0.9         -0.8


Note: A year marked with an asterisk (*) signifies the average of three
      years centred on the year shown.
**    including butter
                          1978*-88*   1988*-2000    1988*-2000
                                            Base          U.R.
                          .......... per cent per annum ........

ALL COMMODITIES              3.8          3.1           3.1

FOODSTUFFS **                4.0          3.2           3.2
Wheat                        4.3          2.7           2.9
Rice                         2.8          1.9           1.9
Total Coarse Grain           2.2          2.9           2.9
Fats and Oils                5.4          4.0           4.2
Proteins                     6.0          4.0           4.2
Bovine Meat                  2.0          3.0           2.9
Pig Meat                     6.9          4.4           4.3
Ovine Meat                   3.1          3.0           3.0
Poultry Meat                 6.9          6.6           6.6
Milk                         3.5          3.1           3.1

OTHERS                       2.4          2.3           2.3
Coffee                       2.6          1.5           1.6
Cocoa                        4.3         -0.1           0.2
Tea                          2.9          3.1           3.2
Sugar                        2.1          2.3           2.4
Bananas                      1.4          3.8           3.0
Natura Rubber                3.0          2.7           2.7
Bovine Hides & Skins         1.4          3.0           2.9

Table 1b  -  Growth of Consumption of Selected Agricultural Commodities,  
             Past and Projected

Note: A year marked with an asterisk (*) signifies the average of three
      years centred on the year shown.
**    including butter
                           1978*-88*    1988*-2000    1988*-2000
                                              Base          U.R.
                           ......... per cent per annum ........
    ALL COMMODITIES           2.3           1.6           1.6

    FOODSTUFFS **             2.3           1.6           1.5
    Wheat                     2.5           1.3           1.3
    Rice                      2.6           1.8           1.8
    Total Coarse Grains       1.4           1.3           1.3
    Fats and Oils             3.8           2.7           2.8
    Proteins                  3.7           2.7           2.8
    Bovine Meat               1.0           1.1           1.1
    Pig Meat                  3.6           2.2           2.1
    Ovine Meat                2.5           1.7           1.7
    Poultry Meat              4.8           3.8           3.8
    Milk                      1.6           0.6           0.6

    OTHERS                    2.0           1.6           1.6
    Coffee                    2.3           1.3           1.3
    Cocoa                     3.8           2.0           2.2
    Tea                       2.9           3.3           3.5
    Sugar                     2.1           1.7           1.8
    Bananas                   1.3           3.4           3.0
    Natural Rubber            3.0           2.6           2.7
    Bovine Hides & Skins      0.8           0.8           0.8

Note: A year marked with an asterisk (*) signifies the average of three
      years centred on the year shown.
**    including butter
                             1978*-88*    1988*-2000    1988*-2000 
                                                Base          U.R. 
                             ......... per cent per annum .........
    ALL COMMODITIES             1.2           0.1           0.1 

    FOODSTUFFS **               1.2          -0.0          -0.0 
    Wheat                       0.8           0.0           0.0 
    Rice                        0.7           0.9           0.9 
    Total Coarse Grains         0.6           0.0           0.1 
    Fats and Oils               2.7           1.5           1.5 
    Proteins                    3.0           1.1           1.1 
    Bovine Meat                 0.4          -0.4          -0.3 
    Pig Meat                    1.8           0.1          -0.1 
    Ovine Meat                  1.5          -0.4          -0.4 
    Poultry Meat                3.9           2.0           2.0 
    Milk                        0.9          -0.6          -0.6 

    OTHERS                      0.4           0.8           0.8 
    Coffee                      2.4           1.5           1.5 
    Cocoa                       3.6           1.6           1.8 
    Tea                         1.3           2.7           2.7 
    Sugar                      -0.1           1.0           1.1 
    Bananas                     1.5           3.0           2.6 
    Natural Rubber              1.2           0.8           0.9 
    Bovine Hides & Skins        0.8           0.6           0.5 

Note: A year marked with an asterisk (*) signifies the average of three
      years centred on the year shown.
**    including butter
                             1978*-88*    1988*-2000    1988*-2000
                                                Base           U.R.
                             ......... per cent per annum .........
    ALL COMMODITIES             4.0           3.1           3.1

    FOODSTUFFS **               4.0           3.2           3.2
    Wheat                       4.4           2.4           2.4
    Rice                        2.8           1.9           1.9
    Total Coarse Grains         2.9           3.0           3.0
    Fats and Oils               5.4           3.9           4.0
    Proteins                    5.5           5.5           5.6
    Bovine Meat                 2.4           3.4           3.3
    Pig Meat                    6.9           4.5           4.4
    Ovine Meat                  3.3           3.0           2.9
    Poultry Meat                6.6           6.3           6.4
    Milk                        3.5           2.8           2.8

    OTHERS                      3.6           2.5           2.5
    Coffee                      2.2           0.9           0.9
    Cocoa                       5.6           4.1           4.3
    Tea                         3.9           3.6           3.8
    Sugar                       4.5           2.2           2.2
    Bananas                    -0.9           7.7           6.7
    Natural Rubber              6.0           4.4           4.5
    Bovine Hides & Skin         0.8           1.0           1.1

Table 1c  -  Growth of Imports of Selected Agricultural Commodities,
             Past and Projected
Note: A year marked with an asterisk (*) signifies the average of three
      years centred on the year shown.
**    including butter
                             1978*-88*    1988*-2000     1988*-2000 
                                                Base           U.R. 
                             ......... per cent per annum .........
    ALL COMMODITIES             2.9            1.4           1.6 

    FOODSTUFFS **               3.0            1.5           1.7 
    Wheat                       3.7            0.2           0.0 
    Rice                        1.9            3.2           3.8 
    Total Coarse Grains         1.1            0.8           1.0 
    Fats and Oils               4.0            2.8           3.1 
    Proteins                    3.6            1.8           1.8 
    Bovine Meat                 2.1            2.1           2.5 
    Pig Meat                    4.3            0.9           0.8 
    Ovine Meat                  2.0            2.0           2.0 
    Poultry Meat                6.9            5.2           5.2 
    Milk                        2.6           -0.3          -0.2 

    OTHERS                      2.6            1.2           1.3 
    Coffee                      2.5            1.4           1.5 
    Cocoa                       4.5            1.6           1.8 
    Tea                         2.6            2.2           2.2 
    Sugar                       0.7            1.0           1.1 
    Bananas                     1.3            3.4           3.0 
    Natural Rubber              2.2            1.6           1.7 
    Bovine Hides & Skins        4.6            1.0           1.2 

Note: A year marked with an asterisk (*) signifies the average of three
      years centred on the year shown.
**    including butter
                             1978*-88*      1988*-2000     1988*-2000 
                                                  Base           U.R. 
                             ......... per cent per annum ..........
    ALL COMMODITIES             2.1            0.3           0.5 

    FOODSTUFFS **               2.5            0.1           0.4 
    Wheat                       3.1           -3.0          -2.4 
    Rice                        3.8            2.3           4.0 
    Total Coarse Grains        -1.4           -2.0          -1.8 
    Fats and Oils               2.1            1.6           1.9 
    Proteins                    2.3           -0.2          -0.5 
    Bovine Meat                 1.9            1.3           2.0 
    Pig Meat                    3.9            0.5           0.4 
    Ovine Meat                  0.4            1.2           1.4 
    Poultry Meat                7.3            4.5           4.2 
    Milk                        2.3           -1.0          -0.7 

    OTHERS                      1.4            0.7           0.7 
    Coffee                      2.5            1.5           1.5 
    Cocoa                       4.6            1.6           1.8 
    Tea                         2.2            1.0           1.0 
    Sugar                      -0.7            0.2           0.3 
    Bananas                     1.5            3.0           2.6 
    Natural Rubber              0.9            0.8           0.9 
    Bovine Hides & Skins        3.0            1.1           1.1 

Note: A year marked with an asterisk (*) signifies the average of
      three years centred on the year shown.
**    including butter
                              1978*-88*    1988*-2000    1988*-2000
                                                 Base          U.R.
                              ........ per cent per annum .........
    ALL COMMODITIES              4.7           3.1           3.1

    FOODSTUFFS **                4.7           3.5           3.5
    Wheat                        4.2           1.9           1.3
    Rice                         1.3           3.5           3.7
    Total Coarse Grains          7.2           4.1           4.2
    Fats and Oils                6.5           3.9           4.2
    Proteins                    10.5           6.6           7.0
    Bovine Meat                  3.1           4.5           4.4
    Pig Meat                     8.1           3.8           3.7
    Ovine Meat                   4.6           3.1           2.7
    Poultry Meat                 6.3           6.1           6.5
    Milk                         3.1           1.0           0.6

    OTHERS                       4.6           1.7           1.9
    Coffee                       1.6           0.4           0.6
    Cocoa                        2.8           1.1           1.2
    Tea                          3.3           3.5           3.5
    Sugar                        4.0           1.4           1.5
    Bananas                     -0.9           7.7           6.7
    Natural Rubber               6.1           3.3           3.5
    Bovine Hides & Skins         8.8           0.9           1.5

Table 1d  -  Growth of Exports of Selected Agricultural Commodities,
             Past and Projected

Note: A year marked with an asterisk (*) signifies the average of
      three years centred on the year shown.
**    including butter
                           1978*-88*   1988*-2000   1988*-2000 
                                             Base         U.R.  
                           ........per cent per annum .........
    ALL COMMODITIES           2.9          1.3          1.4  

    FOODSTUFFS **             3.1          1.2          1.4  
    Wheat                     3.5          0.2         -0.1  
    Rice                      1.7          2.6          3.2  
    Total Coarse Grains       0.9          0.7          0.8  
    Fats and Oils             3.6          3.0          3.2  
    Proteins                  3.6          2.0          1.9  
    Bovine Meat               2.1          1.3          1.8  
    Pig Meat                  5.5          0.8          0.5  
    Ovine Meat                1.6          1.4          1.4  
    Poultry Meat              6.6          5.1          5.1  
    Milk                      2.6         -0.5         -0.4  

    OTHERS                    2.6          1.4          1.5  
    Coffee                    2.6          1.7          1.8  
    Cocoa                     4.6          1.2          1.4  
    Tea                       2.6          2.8          2.4  
    Sugar                     0.7          1.2          1.3  
    Bananas                   1.4          3.6          2.8  
    Natural Rubber            2.2          1.8          1.8  
    Bovine Hides & Skins      4.6          1.1          1.3  

Note: A year marked with an asterisk (*) signifies the average of
      three years centred on the year shown.
**    including butter
                          1978*-88*    1988*-2000    1988*-2000 
                                             Base          U.R.  
                         ......... per cent per annum .........
    ALL COMMODITIES           3.1          0.5          0.8  

    FOODSTUFFS **             3.1          0.7          0.8  
    Wheat                     3.5          0.2         -0.2  
    Rice                      0.6         -0.2         -0.3  
    Total Coarse Grains       1.3          0.4          0.4  
    Fats and Oils             1.3          1.2          1.3  
    Proteins                 -0.1         -0.4         -1.0  
    Bovine Meat               3.3          2.0          2.6  
    Pig Meat                  5.0          0.8          0.8  
    Ovine Meat                1.5          1.0          1.0  
    Poultry Meat              5.2          3.1          3.2  
    Milk                      2.5         -0.7         -0.7  

    OTHERS                    3.1         -0.5         -0.3  
    Coffee                    0.0          0.0          0.0  
    Cocoa                     0.0          0.0          0.0  
    Tea                       0.0          0.0          0.0  
    Sugar                     3.6         -0.6         -0.3  
    Bananas                   0.8          1.1          0.5  
    Natural Rubber            0.0          0.0          0.0  
    Bovine Hides & Skins      2.6         -0.5         -0.2  

Note: A year marked with an asterisk (*) signifies the average of
      three years centred on the year shown.
**    including butter
                           1978*-88*   1988*-2000   1988*-2000
                                             Base         U.R.
                           ........ per cent per annum .........
    ALL COMMODITIES           4.0          3.0          3.1

    FOODSTUFFS **             4.7          3.9          4.2
    Wheat                     3.1          0.3          1.4
    Rice                      2.2          3.6          4.4
    Total Coarse Grains      -1.4          2.8          3.3
    Fats and Oils             6.5          4.4          4.9
    Proteins                  8.0          3.4          3.7
    Bovine Meat              -1.0         -1.1         -1.5
    Pig Meat                  8.7          0.4         -2.1
    Ovine Meat                2.2          3.9          3.7
    Poultry Meat             13.9         10.4         10.3
    Milk                      6.1          6.7          8.2

    OTHERS                    3.5          2.3          2.4
    Coffee                    2.6          1.7          1.8
    Cocoa                     4.6          1.2          1.4
    Tea                       2.6          2.8          2.4
    Sugar                    -0.8          2.3          2.3
    Bananas                   1.4          3.8          3.0
    Natural Rubber            2.2          1.8          1.8
    Bovine Hides & Skins      9.8          3.5          3.7

Impact on Trade and Markets of Basic Foodstuffs

17.   Under the Uruguay Round world trade is projected to grow to 38
million tons for oils, or by 3.2 percent annually, and to 31 million
tons, or by 1.9 percent annually, for oilmeals. The growth would be
slower than in the 1980s, particularly for oilmeals.

18.   Developing countries will have the fastest growth rates in imports
and exports for both oils and oilmeals, and they will thus increase their
shares in both sectors in the 1990s. The substantial expansion of their
imports and exports will enhance opportunities for increased trade
between them, while competition between developing and developed country
exporters for all markets will continue.

19.   The implementation of the Uruguay Round Agreement (UR), and
especially the reduction of subsidized exports, may well result in an
increase in competition, rather than a reduction. Overall, the impact of
the UR is likely to be modest for production and consumption. It is
projected to be somewhat more significant for trade as the reduction of
subsidies to production and exports would induce shifts in production and
trade to previously non-subsidizing countries. Prices for oils may be 4
percent higher than they would have been in the absence of the UR but
oilmeal prices are unlikely to be affected (See Table 2 below). For oils,
the bulk of the UR-induced increases in production and exports is
projected to be in the low-cost producing countries of the Far East and
Latin America, while the additional import demand would originate mainly
from the Far East, particularly China. For oilmeals, additional
production for export is projected mainly for Latin America. Commodity-
wise, additional production and trade would be mainly accounted for by
palm oil and soybeans. These prospects are dependent to a significant
degree on the policies of a number of countries which are not members of
GATT, including China and the area of the former USSR, which together
account for 15-20 percent of world consumption and imports of oils and

20.   Trade in livestock and meat products is projected to expand by 2
percent per annum, one percent less than in the 1980s, to 18.7 million
tons. Developing countries' exports are anticipated to rise much faster
than in the 1980s. Although developing countries are projected to gain a
higher share in total meat exports, the developed countries should still
account for 79 percent of total shipments. Major gains are expected to be
made by the United States which should shift position from a net importer
to a net exporter. Strong expansion in demand in developing countries
will, however, raise their net import requirements to the year 2000.
Consequently, large increases in imports are anticipated in Latin America
and the Far East, especially China, the Republic of Korea, Malaysia and
Singapore. Among developed countries, Japan is projected to remain a
major growth market for meat imports. 

21.   Among the various categories of meat, the strongest expansion in
trade is expected for poultry, followed by sheep and bovine meat. By
contrast, shipments of pig meat are projected to show much less dynamism
as many countries are expected to maintain policies aiming at high self-
sufficiency ratios.

22.   The implementation of the UR agreement is projected to induce a
minor rise in the volume of overall meat trade. It should stimulate an
increase in imports by countries in the Far East, North America, Eastern
Europe and the area of the former USSR as well as Japan. On the export
side, improved market access should benefit mainly countries in Latin
America, North America and Oceania. Partly as a result of commitments to
reduce subsidization, international meat prices are expected to increase
compared with the base-line projections from 8 and 9 percent for bovine
and poultry meat to 11 and 10 percent for pig and ovine meat, these
increases coming on top of expected baseline increases ranging from 3 to
13 percent, suggest small price increases by 2000 of 13-14 percent for
the meats other than sheep meat, where a 24 percent rise is foreseen (See
Table 2 below).

23.   The increase in meat prices arising from the Uruguay Round
agreement and other factors is anticipated to temper somewhat the rate of
expansion in overall demand. Countries in Oceania, Latin America and
North America are likely to be the most affected, reflecting a high
transmission of international price increases to domestic markets. As a
consequence, the value of meat trade is estimated to rise at the same
pace as the trade volume, that is 2 percent a year.  This would reflect a
change in the pattern of meat flows in favour of relatively cheap poultry

24.   The overall level of trade in milk and milk products is not
expected to change significantly as a result of the Uruguay Round, even
though prices are expected to be 7 percent higher, which is expected to
augment the baseline increase of 32 percent, suggesting 2000 prices to be
41 percent higher than during 1987-89 (See Table 2 below). However, there
will be some redistribution in terms of regional origin and destination.
The reduced volume of subsidised exports permitted to several developed
countries will to an extent be offset by increased exports from Oceania.
Some growth in export opportunities is likely to accrue to the developing
countries, especially in Latin America. A decrease in the proportion of
subsidised exports of milk and milk products is expected to result in
higher prices which could have a moderate positive impact on global
export earnings, but restrain imports by the developing countries. In
contrast, imports by the developed countries could rise as a result of
minimum access agreements under the Uruguay Round.

25.   World trade in rice is projected to expand at 4 percent annually to
reach 18.9 million tons by the year 2000, substantially faster than in
the eighties. While the imports of both developed and developing
countries would increase much faster than previously, a marked shift in
export patterns is expected to emerge. While exports of the developing
countries are projected to double their growth rate, developed countries'
rice shipments are projected to decline. These diverse developments would
stem largely from the influence of the Uruguay Round Agreement because of
the developed exporters' commitment to reduce export subsidies. Among
them, the European Community would be the most affected, as its
commitments would result in an increase in its imports from third
countries, reducing intra-EC trade.

26.   The projected acceleration in global import demand is expected to
push international rice prices significantly higher than in 1987-89. This
projected outcome assumes that countries which have agreed to establish
minimum market access would be importing the amount stipulated and that
such imports would not be subsequently released onto world markets. World
rice stocks are expected to rise by 2.5 percent per annum to reach 68
million tons or 17 percent of projected consumption requirements.

27.   Overall, the Uruguay Round would have a very marginal positive
effect on production and a similarly marginal impact on global
consumption. The impact of the Round is, however, projected to be
substantially greater on trade and international rice prices. The opening
of previously closed markets for rice would increase the volume of global
trade by about 1.2 million tons and international rice prices would rise
by about 7 percent faster than without the Agreement, leaving 2000 prices
15 percent higher than the 1987-89 average (See Table 2 below).

28.   The implications of the baseline projections of production and
consumption for world wheat trade are for slower growth during the 1990s,
compared to the previous decade. The greatest effects are expected for
the developed countries, in particular the EC, where, following the CAP
reform, feed demand is expected to increase, thus reducing export
availabilities. In the area of the former USSR and eastern Europe, feed
use is likely to be reduced sharply, and thus imports. These trends are
expected to be reinforced under the Uruguay Round scenario, which is
expected to lead to a price increase of 7 percent, more than enough to
offset the 3 percent decline foreseen in the base scenario (See Table 2
below), thus resulting in a reduced volume of wheat imports. In
particular, some countries in Asia and Latin America are likely to
produce more grains for their own requirements, leading to a slow-down in
growth of their wheat import demand.

29.   After almost no growth during the latter part of the 1980s, coarse
grain trade is projected to expand by less than one percent annually
during the 1990s. The baseline projections show a strong growth in
imports among the developing countries, primarily in the Far East and
Latin America. China, a large net exporter of maize, could become a net
importer again. By contrast, coarse grain imports are expected to decline
by the developed countries, especially in the area of the former USSR and
eastern Europe. The projected expansion of coarse grain trade is likely
to be equally shared among exporters in the developing and developed
countries. Only modest additional trade expansion is expected under the
Uruguay Round (2 million tons), with most of the increase in imports
occurring in the developed countries. Prices are forecast to be 5-10
percent higher with gains of 4-7 percent consequent to the Agreement (See
Table 2 below).

30.   To summarize on prices, Table 2 shows the projected percentage
change in real market price compared with the base period, 1987-89. In
most cases prices are projected to be higher than in the base period,
which was a period of relatively low prices for the majority of
agricultural commodities (though not for raw materials). The Uruguay
Round effect is also positive for exporters of all the commodities listed
although the change is projected generally less than 10 percent.

31.   Compared with the base period, the prices of both the exports and
the imports of the developing countries increase in real terms. If
carried back to domestic producers and consumers, these increases should
give a boost to the traded goods sector vis-ŕ-vis the subsistence crops
and domestic services sectors, neither of which tend to be traded to any
significant extent. Both import and export volumes are therefore likely
to be affected and to impact either positively or negatively on the trade
balance of the main agricultural commodities.

Table 2 - Change in international food prices between 1987-89
          and by the year 2000
                           Base Run          Uruguay           Total (a)
                                           Round Effect
                           ................. percent ..................
Wheat                        -3                +7                 +4
Rice                         +7                +7                +15
Maize                        +3                +4                 +7
Millet/Sorghum               +6                +4                +10
Other Grains                 -3                +7                 +5
Fats and Oils                -4                +4                  0
Oilmeal Proteins             +3                 0                 +3
Bovine Meat                  +6                +8                +14
Pigmeat                      +3               +10                +13
Sheep Meat                  +13               +10                +24
Poultry                      +5                +8                +14
Milk                        +32                +7                +41
(a)  Total does not necessarily equal the sum of the two effects


Impact on Trade and Markets of Other Commodities

32.   Lower import tariffs for coffee following the Uruguay Round were
not envisaged to have a sizeable effect on the world coffee market.
Developed countries, by far the largest importers of coffee, already had
low, or no, import tariffs for the commodity and therefore reductions in
duties would be relatively modest. High import duties for coffee are
mostly applied by some producing countries which, with a few exceptions,
will not be reduced significantly.

33.   Reduced import tariffs for coffee under the Uruguay Round are
expected to boost world coffee imports by 1.8 percent to reach 5.14
million tons. Coffee imports are expected to increase most strongly in
Europe. Smaller increases are projected for the area of the former USSR,
Japan and developed countries in Oceania. Coffee imports by developing
countries are projected at 362 000 tons, 8 000 tons above the baseline

34.   In Latin America and the Caribbean and Africa, projections of
coffee exports to 2000 were revised upward, by 26 000 tons each, to 3.26
million tons and 1.13 million tons, respectively. Much smaller increases,
totalling about 6 000 tons, are projected for developing coffee exporters
in other regions, mainly the Far East.

35.   The impact of the growth in world demand for coffee is expected to
exceed that of supply, and therefore the world market prices in 2000
should to be slightly higher than the level they would have reached
without the Uruguay Round.

36.   Under the Uruguay Round import duties for cocoa products will be
reduced in several major markets. Import duties on cocoa beans, mainly in
cocoa producing countries, will also be lowered somewhat. Nevertheless,
the reductions in import tariffs for cocoa and cocoa products is not
expected to have a major impact in the world cocoa market.  

37.   Projections of global cocoa imports in the year 2000 have been
revised upward, by 4.1 percent, to 2.43 million tons. Increases would
take place mostly in Europe and North America but also in Japan, where
cocoa imports would reach 147 000 tons. Developing countries as a whole,
are expected to import 109 000 tons in 2000, 6 000 tons above the
baseline estimate.

38.   Compared with the baseline, cocoa exports from Africa are projected
to grow, by 36 000 tons, to 1.34 million tons, mainly the result of
larger exports from C“te d'Ivoire and Ghana. Increases are also expected
in the Far East, 19 000 tons, and in Latin America, 11 000 tons.

39.   The impact of additional growth in world consumer demand for cocoa
is expected to exceed the effect of growth in supply, and therefore,
world market cocoa prices in 2000 should be slightly above the level they
would have reached without the Uruguay Round.

40.   Compared with the baseline projections, the Uruguay Round is
expected to lead to an increase in world sugar imports of around 300 000
tons. Imports of developing countries would account for most of this
growth, about 180 000 tons. This additional demand should have a positive
effect on prices and hence stimulate additional production and result in
larger export availabilities. However, there should be only a small
impact from the Uruguay Round regulations on the sugar industries of two
major developed producers, North America and the EC. Following the Blair
House Agreement there is an exemption from GATT reduction requirements
for direct payments to producers under programmes to limit production.
The final result will be that consumption gains resulting from the
Uruguay Round in these two areas will be fully covered by additional

41.   Regarding developing countries, additional production and lower
tariffs should more than offset the increase in the world market price
and lead to lower consumer prices. Developments in different regions,
however, are expected to vary significantly. Latin American producing
countries should gain most from trade liberalization. Their exports
should increase by 350 000 tons or 3.5 percent, more than offsetting an
additional 50 000 tons of imports. By contrast, the expected increase in
consumption in Africa and the Far East would exceed the expected increase
in production and would lead to lower exports and higher import
requirements. Hence, while trade liberalization would certainly stimulate
sugar consumption of developing countries, it would also result in a
higher increase of import requirements compared to export availabilities.

42.   The impact of the Uruguay Round on the world tea trade would be
relatively small because trade in black tea is relatively free of tariff
and non-tariff restrictions. Also large excess export availabilities
would continue to overhang the market, thus limiting the effects on world
market prices induced by trade liberalization. An increase in the demand
for imports would mainly take place in developing countries following the
reduction in tariffs, which however will not be completed until 2004.

43.   Given the large projected export availabilities in 2000, the
additional growth in exports due to the Uruguay Round would remain
relatively small. The projections indicate that total export
availabilities in 2000 would increase by 1.2 percent due to the Uruguay
Round, reaching 1 341 000 tons. Availabilities in Africa could increase
from 334 000 tons to about 340 000 tons, while in the Far East exportable
supplies would grow by 1 percent, to 875 000 tons.

44.   Reductions in tariffs on tea would lead to a decrease in consumer
prices of tea in those importing countries which at present apply
tariffs. As a result, trade liberalization would increase world black tea
imports by nearly 3 percent, from 1 227 000 tons to 1 263 000 tons in
2000. Most additional imports would take place in developing countries
which account for more than 80 percent of the net increase. Tariff
reductions would also positively affect tea imports into Pakistan as well
as Egypt and other Near East countries which should increase from 354 000
tons to 372 000 tons in 2000. 
45.   The general impact of the Uruguay Round on the world tea economy is
likely to be small. However, its implementation would help to reduce the
projected excess export supply. The projections indicate that the gap
between exports and imports would be reduced by almost one half as trade
is liberalized.

46.   The world banana market is demand driven with import barriers
either minimal or non-existent in most major banana importing countries,
except the EC. The new EC banana regime, which became operational in July
1993 and is  included in the Community's commitments under the Uruguay
Round, is expected to affect demand significantly.

47.   From 1995 the EC would impose a 2.2 million tons tariff quota for
imports from third countries (mainly dollar bananas, but non-traditional
ACP supplies also qualify) levied at 75 ECU per ton, or approximately 10
percent of the average retail price of dollar bananas in 1993. An import
duty of 850 ECU per ton (or 750 per ton for non-traditional ACP supplies)
is imposed on quantities imported above the tariff quota. The EC is
committed under the Round to reduce this add-on tariff to 680 ECU per ton
by 2000. The regime also includes an ACP quota of 857 000 tons that could
be imported duty free and an EC quota of 854 000 tons that would qualify
for domestic support.

48.   World demand for banana imports is projected to grow by 1.6 percent
annually, from 10.1 million tons in 1993 to 11.2 million tons in 2000.
This compares with 11.8 million tons projected before changes in polices.
Tariffication would largely be responsible for this increase. Import
requirements by developed countries are projected to increase by 1.6
percent annually, mainly due to the continued increases in traditional
importing countries, while among developing countries imports are
projected to remain small (10 percent of the global total), with an
annual growth rate of 1.3 percent. For the EC, the duty levied on
quantities imported above the tariff quota is expected to prohibit any
significant incremental increases in imports.

49.   Export availabilities are expected to keep pace with demand growing
at 2 percent annually to reach 11.3 million tons by 2000. This compares
with the baseline of 12.4 million tons. The supply surplus of 0.1 million
tons (1 percent of exports) would be accounted for by quantities in
transit, shrinkage and waste. Prices are projected to strengthen slightly
over the period.

50.   It is estimated that the Uruguay Round would have a relatively
small impact on the world natural rubber trade because import duties in
most developed countries are already zero, while most developing
countries these duties are relatively low. Preliminary assessment of
changes in duties on semi processed and processed products suggest some
decline in tariff escalation (increasing protection by stage of
processing). Duties on semi-processed rubber are to decline by 40 percent
(from 5.5 percent to 3.2 percent) and duties on processed rubber by about
30 percent (from 5.1 percent to 3.5 percent). Because the tariff
reductions will be implemented in five equal cuts starting in mid-1995,
their impact will be gradual and slight.

51.   The new projection indicates that the total export availabilities
by the year 2000 would rise by 0.3 percent to 4 881 000 tons over the
baseline projection. Africa and the Far East would share equally in the
projected increase. Trade liberalization would increase global imports of
natural rubber by 0.6 percent to about 5 005 000 tons in the year 2000.
Developing countries would account for more than 80 percent of the
increased import demand, as lower effective prices in some of the
developing countries that currently impose relatively higher tariffs,
would stimulate demand. Imports are projected to rise in some countries
of the Far East, Brazil and China. Among developed countries, only Japan
would import larger quantities compared with the baseline projection.

52.   Export availabilities of bovine hides and skins are related to
production developments which in turn are determined by the slaughtering
of cattle for the production of meat. The projections for bovine meat are
discussed elsewhere in this document. Only a small fraction of the total
increase in global production of hides and skins is attributable to the
impact of the Uruguay Round Agreement although for some particular
countries it is expected to have a more significant impact. New Zealand,
Australia and the United States are all expected to increase their
production as a result of the Uruguay Round Agreement, while in many
European countries the effect will be negative.

53.   Import demand for hides and skins is derived in part from market
opportunities for leather and leather products. Growth in processing and
manufacturing of hides and skins is proceeding much more rapidly in
developing than in developed countries as lower costs and less
restrictive environmental constraints give these countries an advantage
over traditional processing countries both in domestic and international

54.   The increased processing and manufacturing activity in developing
countries is expected to be reflected in significant increases in trade
flows during the period to the year 2000. Imports of raw bovine hides by
developing countries are projected to increase by 14 percent while their
exports of leather and footwear are each projected to increase by 30
percent. The reduction in tariffs on leather and leather products
imported into the western market economies agreed to under the Uruguay
Round are expected to provide additional opportunities for developing
countries. This trade liberalization is expected to stimulate increases
of 5 percent in the net exports of light leather and 2.5 percent in net
exports of footwear from developing countries, adding US$ 43 million and
US$ 350 million respectively to earnings from these exports, although
these will be partly offset by increases in imports of raw material.

Developed countries - Africa - Latin America & the Caribbean

55.   The implications for countries of the revised outlook for
agricultural commodity markets following the implementation of the
Uruguay Round by the year 2000 stem from the changes in market prices,
the new market opportunities for their exports and the extent to which
external market signals are transmitted back to producers and

56.   Before turning to the impact on the developing countries, a few
observations may be made about the effect of these changes in markets
in the developed countries. For the developed countries as a whole,
with or without the Uruguay Round, a sharp slowdown is foreseen in
growth of production and consumption of the main agricultural
commodities. An even sharper slowdown is envisaged for trade. The
reductions in growth are right across the board. The effect of the
Uruguay Round is to attenuate the decline marginally (Table 3a), where
allowance is also made for products not covered, which are assumed to
grow at the same rate.

Table 3a: Developed countries: projected agricultural trade balances
          to the year 2000
                      1987-89     2000         2000 with
                                Base Run       UR Effects
                            US $ billion 
  Selected Commodities *              102.0       116.2         125.5
  Other                               106.7       121.5         131.3
  Total                               208.7       237.7         256.8
  Selected Commodities                103.3       116.1         124.9
  Other                                95.2       107.0         115.1
  Total                               198.5       223.1         240.0
Balance (Exports-Imports)             -10.2       -14.6         -16.8
* Selected commodities are items listed in Tables 1a to 1d under
  paras. 12-16.

57.   The main change in Western Europe is a sharp increase in its net
imports of the main agricultural commodities from a net import level
(imports f.o.b.) of US$5.5 billion in 1987-89 to net imports of
US$15.3 billion by the year 2000, including a substantial increase due
to the Uruguay Round. The Region would be a smaller exporter of
cereals, oilseeds, milk and sugar, while import volumes are expected
to grow for cereals, fats and oils, some meat and tropical products.

58.   For Eastern Europe and the area of the former USSR, there is
projected to be a sharp fall in the import bill for the main
agricultural commodities, but exports would also be less. The
resulting import deficit would shrink from US$8.6 billion to US$5.8
billion. The drop in the import deficit is mainly on account of the
projected fall in consumption of cereals, milk and some meat.
59.   As regards the other net importing region "other developed"
(effectively mainly Japan), the net import deficit on account of the
principal agricultural commodities is projected to rise from US$9.4
billion to US$17.7 billion. Big increases in imports of meat, other
basic foodstuffs and tropical products are envisaged with or without
the Uruguay Round, but the Uruguay Round will significantly increase
expenditures on imports of the main agricultural commodities.

60.   The major beneficiaries among the developed countries are North
America, the net exports of which rise from US$15.1 billion to US$22.2
billion, and Oceania with net exports growing from US$11.2 billion to
US$17.9 billion. Both regions would gain from higher exports of
cereals, fats and oils, meat and milk.

61.   Turning now to the rest of the world, most African countries
tend to be importers of food, particularly wheat, rice and dairy
products and exporters of tropical products such as cocoa, coffee,
fruit and some agricultural raw materials. Most of these countries are
least developed (28 out of over 50) and low income food deficit
countries (43) and have preferential access for their exports under
arrangements such as GSP or the Lomé Convention. The increase in the
prices of the temperate zone food commodities covered in this study
point to a substantial rise in import bills. Assuming the other
commodities not covered (another 5 percent) behave in the same way the
agricultural import bill could rise from US$8.4 billion (f.o.b. basis)
in 1987-88 to US$14.0 billion in the year 2000, with an estimated 15
percent of the rise due to the Uruguay Round. The increase is mainly
an account of changes other than the Uruguay Round (particularly
population growth). The effect on production is seen to be marginally
positive at best, while consumption would fall slightly. The net
result of generally small declines in the volume of imports would be
outweighed by the rise in prices due to the Uruguay Round. In
addition, the Uruguay Round will lead to lower export subsidies on
imports of wheat and livestock products, which could boost import
bills by perhaps something under US$100 million (Table 3b).

Table 3b: African developing countries: Projected agricultural trade
          balances to the year 2000
                               1987-89       2000          2000 with
                                           Base Run        UR Effects
                                                US $ billion
 Selected Commodities          8.2         12.9          13.7 +0.1(a)
 Other                         0.2          0.3           0.3
 Total                         8.4         13.2          14.0 +0.1(a)
 Selected Commodities          6.9          9.4          10.1
 Other                         2.5          3.4           3.7
 Total                         9.4         12.8          13.8 -0.2(b)
Balance (Exports-Imports)      1.0         -0.4          -0.5
(a) Estimated effect of loss of export subsidies on the imports of the
    subsidy receiving countries.
(b) Estimated loss of the potential value of preferences provided by
    the major preference giving countries.

62.   The per caput consumption levels of basic foodstuffs by the year
2000 would remain precarious, with increases in rice, maize, oilseeds
and poultry and reductions in other coarse grains, beef, sheepmeat and
milk. The Uruguay Round would hardly change this pessimistic scenario.

63.   The possibilities for increased exports are expected to arise
for maize, millet/sorghum, fats, oils and oilmeals among the food
commodities and all the tropical products covered. Overall the value
of agricultural exports from Africa could rise from US$6.9 billion in
1987-89 to US$10.1 billion in the year 2000. The effect of the Uruguay
Round would be to add US$700 million to the value of exports, just
under a quarter of the overall growth. Also to be taken into account,
however, is the possible loss of the potential value deriving from
reduced preferential markets - a loss that may be estimated at some
US$200 million (see also para 91).

64.   The net result, therefore, for the African developing countries
is that import bills of the main agricultural commodities could rise
by the year 2000 from their level in the late eighties by US$5.5
billion plus US$0.1 billion loss due to reduced export subsidies while
export earnings from the main agricultural commodities (but excluding
many important ones) could rise by US$3.2 billion less the loss of
potential preferences of US$0.2 billion. On any interpretation this is
not a very satisfactory outcome. If allowance is made for the
agricultural commodities not covered, assuming their values to grow at
the same rate as the commodities covered, African developing countries
would move from an export surplus of US$1 billion in 1987-89 (f.o.b.
basis) to a deficit of US$500 million in the year 2000 including inter
alia the effects of the Uruguay Round.

65.   The situation varies from sub-region to sub-region. Thus North
Africa is a food importing area, its agricultural exports mainly being
horticultural products and olive oil. The countries in this sub-region
should, therefore, be faced with the prospect of slightly rising
prices of their agricultural imports but market access for their
exports may face some problems particularly for tomatoes and sweet
oranges. (5/ The problems of the horticultural sector were discussed
at FAO's Expert Consultation on the Impact of the Changing
International Trade Environment on Agricultural Trade in the Near East
Region, Cyprus, December 1994.) The changes should, however, prompt
review of the appropriate balance between food and export crops.

66.   In West and Central Africa, most countries are importers of
grains and livestock products but exporters of tropical beverages,
some oilseeds, some agricultural raw materials and tropical fruit.
There is also a significant trade in live animals within the region. A
substantial part of their exports are made under preferential
arrangements with Europe. The higher food prices and possible rather
limited gains and even possibly losses for some of their major export
commodities should encourage these countries to look afresh at the
possibilities of expanding their food crop sector. This conclusion was
also reached by an FAO/ECOWAS Expert Consultation on International
Policy Change and Agricultural Trade in Africa South of the Sahara.

67.   In Eastern Africa, most countries are importers of cereals while
they export coffee, tea, fibres and hides/skins, and in some cases
horticultural products, while Mauritius is a large exporter of sugar
and has a considerable textile and clothing industry. The rise in the
import price of cereals and oilseeds should give a stimulus to their
production providing the increases are passed on to the farmers.
Although not covered in this study, the market for textile fibres
could also expand somewhat. In the case of hides and skins much
depends on tapping the potential of this sub-region by improving the
quality of the product. Production of hides and skins should expand
substantially if the forecast rise in meat production takes place.

68.   Southern Africa is usually more self-sufficient in food but has
suffered from civil strife and droughts which have led to large-scale
imports in several recent years. Under normal circumstances, however,
the region should be largely self-sufficient and an exporter of a wide
range of agricultural products such as tobacco, sugar and fibres but
also fruit, vegetables and coffee. The landlocked nature of several of
these countries limits the extent that world price changes can affect
farmers' decisions even when they are passed on in full. A combination
of fostering intra-regional trade and relying on high value products
for export to world markets will continue to be among the policy
options to be considered.

69.   The upshot of these changes is that most African countries could
well have to give a greater weight to a strategy of (a) increasing
food production and (b) of promoting diversification for their export
crop sector. The rise in the world prices and the decrease in export
subsidies over the period to the year 2000 offers an opportunity to
African countries to pass on the increase in prices to the producers
of cereals, including part or all of the permissible degree of
protection at least for the period of implementation of the Uruguay
Round. At the least, African developing countries could consider the
feasibility of "capturing the surplus" for their farmers by raising
farm prices to offset the domestic price depressing effect of the
remaining export subsidies within the limits set by the tariff
bindings included in their schedules. The extent of the increase
should, however, be worked out on a country by country basis taking
into account changes in other sectors.

70.   As regards the other sectors it will be important for African
countries to improve the quality and competitiveness of products for
which new market opportunities may open up in for example some
horticultural products, oilseed products and hides and skins. In order
for countries to diversify their exports it is necessary for the right
enabling environment to be developed and for adequate international
support to be given for project development. However, it must be
remembered that the bulk of Africa's agricultural exports are likely
to come from traditional export crops, particularly coffee, cocoa,
sugar and rubber, which together will account for well over half of
total agricultural exports.

71.   As regards Latin America and the Caribbean, only one country is
among the least developed though 9 are low-income food-deficit
countries. The region as a whole is a net importer of cereals, even
though several countries in the region are exporters, particularly
Argentina and Uruguay. The higher prices of most agricultural
commodities are projected to lead to a substantial rise in import
bills both of food and non-food agricultural commodities, with
particularly large increases in wheat, rice, fats and oils, bovine
meat, dairy products and sugar. Most of the increase in imports to
2000 is due to factors such as growth of income and population.
However, the effect of the Uruguay Round is to boost these imports by
another US$0.9 billion, almost entirely on account of higher prices as
import volumes are not expected to change significantly and, if
anything, could be smaller than otherwise (Table 3c).

Table 3c: Developing countries in Latin America and the Caribbean:
          Projected agricultural trade balances to the year 2000
                                     1987-89      2000      2000 with
                                                Base Run    UR Effects
                                                 US $ billion
  Selected Commodities           10.4         14.9        15.7
  Other                           0.1          0.1         0.2
  Total                          10.5         15.0        15.9
  Selected Commodities           24.1         34.5        37.3
  Other                           6.8          9.7        10.5
  Total                          30.9         44.2        47.8-0.3(b)
Balance (Exports-Imports)       +20.4        +29.2       +31.6
(a) Estimated effect of loss of export subsidies on the imports of the
    subsidy receiving countries.
(b) Estimated loss of the potential value of preferences provided by
    the major preference giving countries.

72.   Reflecting the relative rapid growth in per caput incomes,
consumption per head is expected to rise for a broad range of
commodities particularly poultry, fats and oils, some other meat, and
the feed use of grains. The Uruguay Round effect on consumption is
small; higher incomes and higher prices appear to have offsetting

73.   The most encouraging aspect of the revised projections concerns
export earnings, which are expected to grow substantially by the year
2000. For the commodities covered in this study exports could grow by
3.8 percent a year from their base level in 1987-89. Assuming the
exports of other agricultural commodities to grow at the same rate,
the total value of agricultural exports for the region would reach
US$48 billion compared with US$31 billion in the base period. The
Uruguay Round would be expected to boost such exports by US$3.3
billion, even allowing for a loss of the potential value of
preferences of around US$0.3 billion. Significant gains are expected
for the exports of grains, oilseeds, oilmeals and some livestock
products by Argentina, Brazil and Uruguay. By contrast, the export of
bananas is projected to be lower than trend, although still higher
than in 1987-89, as is poultry, reflecting the rapid growth of

74.   The net result of these developments is the expectation that the
positive agricultural export balance of US$20 billion that the region
obtained in 1987-89 should expand to an estimated US$32 billion in
2000, with US$2.4 billion of the increment ascribed to the Uruguay

75.   At the sub-regional level, in South America most countries are
significantly involved in agricultural trade. The sub-region includes
both temperate zone countries that import tropical products and export
cereals, livestock products, oilseeds and fruit and vegetables, and
more tropical region countries which export a wide variety of products
such as coffee, cocoa, fruit, oilseeds and cut flowers, and import
grains and dairy products. The main feature of this sub-region is the
highly diversified structure of trade - often countries both import
and export related commodities. Overall, the sub-region stands to make
considerable trade gains but some of the net food importers face
increased food bills for which assistance may be required. 

76.   Central America is an important exporter of coffee, cocoa,
cotton, fruit, sugar and an importer of some basic foodstuffs such as
cereals, dairy products and meat. The production of some cereals e.g.
maize, could no doubt be increased, but not wheat. Overall there would
appear to be some improved trade opportunities to be realized but no
major shifts. The main impact will be higher prices for imported
cereals, dairy products and meat, which will have an adverse impact on
consumption and nutritional status. 

77.   The Caribbean sub-region depends extensively on food imports,
the prices of which will rise, and relies on a rather limited range of
agricultural exports mainly sugar, fruit, tobacco and beverages, a
significant part of which are exported under preferential
arrangements, which are estimated to lose part of their value. For
this sub-region the importance of the Decision on the interests of the
net food importing developing countries is to be underscored, as the
net impact of the Agreement will be decidedly negative. Also in view
of the land shortage in these countries, it will be necessary for them
to seek fresh opportunities to diversify their agricultural production
towards high value products for export and to supply their expanding
tourist industries.

Near East - Far East - Asia and the Pacific

78.   The Near East region is predominantly a net importer relying
extensively on food imports and having a variety of horticultural and
cotton exports. Only two countries are in the least developed group.
However, only a minority of countries in the region are GATT/WTO members
and although non-members will be affected by changes in international
markets, their own policies will not necessarily change. The rise in the
prices of basic foodstuffs should give all the countries in this region
the chance of passing on the higher prices to their farmers and hence
giving a fillip to output, but they are likely to remain large net
importers even though unit prices will be significantly higher. For
horticulture there are problems of market access; although some
improvements have been made by importing countries, in other cases there
could be reduced possibilities and several countries are likely to lose
part of the value of their preferential arrangements.

79.   The cost of agricultural imports is projected to rise substantially
from US$18 billion in 1987-89 to US$27 billion 2000 (Table 3d). The
increase is particularly large in basic foods, the bill for which could
rise by US$5.5 billion or 47 percent. The growth is due partly to fairly
large volume increases of products for which little is produced
domestically and partly to the impact of higher prices.

Table 3d - Developing countries in the Near East: Projected agricultural
           trade balances to the year 2000
                                  1987-89       2000        2000 with
                                               Base Run     UR Effects
                                             US $ billion
  Selected Commodities           13.8         19.6         20.6
  Other                           4.0          5.7          6.0
  Total                          17.8         25.3         26.6 +0.1(a)
  Selected Commodities            1.2          1.3          1.5
  Other                           5.3          5.7          8.0
  Total                           6.5          7.0          9.5
Balance (Exports-Imports)       -11.3        -18.3        -17.2
(a)  Estimated effect of loss of export subsidies on the imports of the
     subsidy receiving countries.

80.   Consumption per head is not expected to increase greatly - in most
countries it is already at relatively high levels - but there are expected
to be some changes: consumption per head of cereals and milk is projected
to fall but utilization of feeds is projected to rise as is that of fats
and oils and to a lesser extent meat.

81.   The region earns relatively little from agricultural exports and the
bulk of this is in products not covered by these projections (fibres and
horticulture) and, therefore, the value of the assessment is somewhat
limited. However, it is likely that agriculture will still remain a
relatively minor contributor to foreign exchange earnings for most
countries. Accordingly the gap between agricultural exports and imports is
forecast to widen considerably from US$11 to US$17 billion by the year
2000. One of the interesting possibilities that may, however, open up is
the increased scope for intra-regional trade if there is a growing move
towards eliminating non-tariff barriers.

82.   The Far East overall is a net exporter of rice, fats and oils and
tropical products, and a net importer of other cereals and milk products.
Particularly large increases in imports are envisaged for feed stuffs for
the thriving livestock sector where output is expected to grow by over 5
percent a year. A large increase is also envisaged in imports of dairy
products and sugar. Overall, agricultural imports are projected to expand
by 60 percent (Table 3e) to reach US$48 billion. The effect of the Uruguay
Round itself is to boost the agricultural import bill by US$3.3 billion.

Table 3e - Developing countries in the Far East: Projected agricultural
           trade balances to the year 2000
                                   1987-89       2000       2000 with
                                               Base Run     UR Effects
                                               US $ billion
  Selected Commodities            23.8         35.1        37.6 +0.1(a)
  Other                            6.3          9.3        10.0
  Total                           30.1         44.4        47.6 +0.1(a)
  Selected Commodities            25.1         38.2        39.8
  Other                            9.9         15.1        15.7
  Total                           35.0         53.3        55.5 -0.3(b)
Balance (Exports-Imports)         +4.9         +8.9        +7.5
(a) Estimated effect of loss of export subsidies on the imports of the
    subsidy receiving countries.
(b) Estimated loss of the potential value of preferences provided by the
    major preference giving countries.

83.   The generally rapid economic growth in this region that underpins
the growth in imports would be boosted further by the Uruguay Round. As a
result the per caput consumption of agricultural commodities is projected
to grow, particularly for meat, fats and oils and feeds, and all the
tropical products covered.

84.   The sharp growth in consumption is not expected to harm agricultural
exports, the growth of which is projected at US$20 billion between 1987-89
and 2000. Notable export increases are expected in rice and sugar (+US$2
billion), bovine hides and skins (+US$3 billion), fats and oils (+US$4
billion), poultry, cocoa and rubber (+US$1 billion). Among the commodities
not covered it is likely that cassava will suffer a reduction but cotton
could be boosted. The effect of the Uruguay Round is estimated to boost
export earnings by around US$2 billion.

85.   Overall the surplus on the balance of agricultural trade is expected
to improve from US$5 billion to US$ 7.5 billion. However, in this region
in particular, increased absorption of agricultural raw materials, from
domestic or imported sources for processing industries, is reflected in
rapid growth of exports of semi/processed or processed manufactured goods.

86.   Looking at the sub-regions, South Asia, where four countries are
least developed, is largely self-sufficient in basic cereals although a
net exporter of rice and a net importer of wheat. It is also a net
importer of oilseeds and dairy products but a major exporter of a number
of agricultural commodities such as tea, spices, cotton, jute, tobacco and
fruit. On balance the region may be a small loser in net trade in the
basic foodstuffs except for possible gains in the rice sector although the
concentration of gains in rice would favour Japonica rice exporters more
than the Indica rice exporters of this sub-region. Bigger gains may be
expected from textiles under the Multifibre Agreement liberalization,
which could give a boost to the production of fibres domestically.

87.   South East and East Asia, where two countries are least developed,
shares a similar pattern to South Asia and could lose from higher world
prices of wheat and coarse grain, which would more than offset possible
export gains from higher rice prices. With some significant exceptions,
most countries in the region will stay relatively close to food self-
sufficiency and the main result of the Uruguay Round price changes would
be to reinforce this tendency. The sub-region enjoys a wide and
diversified range of exports including rice, oilseeds, fibres, tropical
beverages, fruit, sugar, cassava and hides and skins. Probably few gains
can be expected from the tropical beverages, the market for cassava may
contract. Fibres may be boosted somewhat as a result of increased demand
from the textile sector while oilseeds, fruit and hides and skins could
benefit from market expansion.

88.   Finally as regards the Pacific islands (four countries of which are
in the least developed group), they are generally like the Caribbean
countries, net importers of food and net exporters of sugar (Fiji), and
palm and coconut products. The shortage of land in most of the countries
will presumably limit the possibilities of a major increase in domestic
food production so that a careful focusing on high valued products,
exploiting the possibilities for diversification where feasible, will
still be important options. Food imports will cost more.


Lower Value of Preferences
89.   The widespread reduction in standard tariff rates (i.e. the Most
Favoured Nation or MFN rates) combined with unchanged rates under the
various tariff preference schemes (GSP, Lom‚, Caribbean Basin Initiative)
signifies a reduction in the preference margin. The basic idea behind
preferential schemes is that a recipient exporting country can sell
products into the preference giving country either at a lower price than
non-preference receivers and so capture increased sales or sell at the
same market price but get a higher return (the difference equal to the
preference margin). Typically, preferential access is given on a limited
range of agricultural commodities and usually not for unlimited amounts.
The quantities benefit from preferential rates are limited either by
quota or by rules-of-origin.

90.   To calculate the value of preferences it would theoretically be
necessary to know whether countries choose to lower prices and increase
the volume or take the full benefit of the preference margin. Because,
however, in most markets with preferential access the developing country
recipients can be assumed to be relatively small suppliers and hence
"price takers", it has been assumed that the recipient countries do not
normally use price discounts but rather take the preference margin.
Essentially this approach defines a preference margin potential, the
maximum that could be obtained. The potential value of such preferences
was taken to be the product of the percentage preference margin and the
value of imports from the preference receiving exporting country. Only
significant flows of such trade are reported, which indicates an
underestimate of the value of preferences. However, some tariff receiving
countries apparently sell some goods at the preferential rate and others
(of the same type) at the MFN rate indicating an overestimate of the
value of preferences. With possible sources of both over and under-
estimation, it may be concluded on balance that this method of estimating
the potential value of preferences is reasonable.

91.   Using this method, the potential value of preferences given by the
European Union, Japan and the United States in the agricultural sector in
1992, was US$1.9 billion, one third going to Africa, 40 percent to Latin
America and the Caribbean, and the rest mainly to the Far East and
Oceania developing countries. The Near East is estimated to have
benefited very little. After the Uruguay Round reduction in MFN rates,
the potential value of preferences is estimated to fall by US$0.8 billion
with losses of US$billion 0.2, 0.3, 0.2 and 0.1 for Africa, Latin America
and the Caribbean, the Far East and others respectively. On a commodity
basis the biggest losses are estimated for fruit and nuts, sugar, coffee
and tea.

Higher Income Growth
92.   The range of estimated impacts on world income of the Uruguay Round
is quite wide. The GATT estimates these to be between US$100 billion and
US$500 billion. The present study has been based on the World Bank/OECD
estimate of US$213 billion. In order to see the possible effect of a
higher income assumption it was chosen to take a figure double the
original level. The effect on the projections is relatively small: the
value of world agricultural trade would be boosted by just over one
percent, half due to higher prices and half to increased trade volumes.
The pattern of trade would not change significantly as the percentage
increase in income postulated would be much the same for all regions
compared with the lower income growth variant.

Stability of Prices
93.   One of the more important anticipated benefits accruing from the
Uruguay Round is the expected reduction in price instability. The idea
behind this view is that by increasing the number of countries that are
open to world price signals, "shocks" (arising say from unexpected
production shortfalls) would be absorbed by a greater number of markets,
thus cushioning the effect of such shocks on world prices. However,
liberalization is also expected to lead to a decline in government
stockholding, a decline that is unlikely to be compensated by an
expansion of private stockholding, so that total stocks could well
decline. This second consideration is not captured by the way that the
modelling has been done (nor could it easily be done, as the matter is
highly complex). The approach that was followed, therefore, relied
essentially on examining the impact of production shocks on world price
stability to see whether the tariffication and reduction of tariffs had
the expected effect. The production shocks chosen for examination were a
generalized 5 percent decline in cereals output in the year 1999 and
their effect on world prices in the year 2000. The result of the
simulation is that trade liberalization as modelled in this study appears
to have almost no effects on the stability of cereals.

Tariff Escalation
94.   The problem of tariff escalation is that importing countries may
and often do put a higher effective tariff on the more processed products
and a lower effective tariff on the raw materials thus encouraging
imports of the latter and discouraging those of the processed product,
potentially depriving the exporting countries of the chance to increase
the value added on their primary products. This question has not been
examined in the present study but has been analyzed by the GATT
Secretariat for hides and skins and leather, rubber, jute and tobacco
among agricultural commodities. Their study shows a degree of reduction
in tariff escalation for the four importers concerned (Canada, the EC,
Japan and the United States). However, in about half the cases the
decrease in the tariffs on intermediate agricultural processed goods has
been larger than the decrease in the final goods tariffs, implying an
increase in tariff escalation at the final stage. These cases include
rubber in the EC, Japan and the United States; jute in Canada, the EC and
the United States and hides and skins and leather in Japan (6/ The
results of the Uruguay Round of Multilateral Trade Negotiations: GATT, 10
November 1994.). This is a subject on which more research is required. 


95.   The outlook for commodity markets even after all the ongoing trade
liberalization efforts is still for a slowdown in growth rates compared
with the eighties. The Uruguay Round is estimated to have a positive
effect on the value of trade as the small boost to volumes is coupled
with a positive effect on prices, but it will not overturn the slowdown
that is caused by decreased import growth in the main developed country
markets. World agricultural market prices are generally expected to be
higher than in the 1987-89 base period, the growth due significantly to
the effects of the Uruguay Round.

96.   Overall the global value of world trade of the principal
agricultural commodities is expected to rise by US$53 billion between
1987-89 and 2000, US$14 billion of which may be attributed to the Uruguay
97.   Among the developed countries there would be large increases in the
net imports of the principal commodities by Western Europe and Japan, a
decline in the deficit of Eastern Europe and the area of the former USSR.
By contrast, large export gains will be made by North America and

98.   As regards the developing countries, their overall agricultural
export earnings are expected to keep pace with the rise in import bills.
However, the gap between the value of imports and exports is expected to
widen substantially for the Near East while in Africa it is projected to
go from a small surplus to a small deficit. Net exports are expected to
improve for the Latin America and the Caribbean region and for the Far
East. The Uruguay Round, though only accounting for a part of these
changes, will affect the agricultural import bills of all developing
regions adversely and boost exports to a lesser extent. Apart from higher
prices and shifts in market shares towards the more efficient exporting
countries, the Uruguay Round will raise food import bills because of the
reduction in export subsidies on these products and will lead to a
sizeable fall in the value of preferential trading arrangements.

99.   The slowdown in the growth of world agricultural trade, despite the
positive effects of the Uruguay Round, is a disappointment to
agricultural exporting countries. However, agricultural trade
liberalization per se does not necessarily boost the volume of world
trade especially when the protectionism being reduced is concentrated in
countries that are exporters of agricultural goods. The effect of reduced
protectionism in these cases is more on world prices and on trade shares;
and, as has been noted, these are expected to change as a result of the
Uruguay Round.

100.  Moreover, the Uruguay Round only represents a partial reduction in
protectionism. Only a relatively small cut in domestic support is
envisaged though more substantial cuts in border protection are to be
made. The CCP may wish to note that the Uruguay Round Agreement on
Agriculture calls in Article 20 for the continuation of the reform
process and reiterates that the long term objective remains that of
"substantial progressive reductions in support and protection resulting
in fundamental reform". The Committee may wish to have this issue
addressed at the World Food Summit.

101.  One of the side-effects of the reduction in tariffs will be the
erosion of the value of preferential margins, the potential loss of which
has been estimated at US$0.8 billion. As many of the recipients of
preferential schemes are among the poorest of the developing countries,
this is a loss that should be examined in depth by the preference giving
countries with a view to restoring the value of the preferences by other
trade concessions or by other forms of compensation.  Regarding the rise
in food import bills and the effect of lower export subsidies on such
bills, the Committee may wish to note that the Committee on World Food
Security will be examining this issue at its next session in April 1995.

102.  Though this document is concerned with the assessment of the impact
of the Uruguay Round and other developments on agricultural markets, it
should be noted that the Uruguay Round Final Act is also a milestone in
the development of agricultural policy. The implications for national
policy formulation are manifold and can only be listed in a very summary
way here. They are, however, the focus of FAO's normative and operational
policy work at present and will continue to be in the future. FAO has
organized four regional expert consultations on the subject and a number
of requests for policy assistance have been approved; others will be
undertaken subject to resources being available. Briefly the following
are the main areas where policies may need to be re-examined:

(i)   the expected increase in food and agricultural prices in
      international markets may call for modifications in national food
      security and nutrition enhancement policies and strategies, including
      price policies for food;

(ii)  although the rise in prices at the world level, coupled with use of
      tariffs, can lead to more appropriate incentives to producers, most
      developing countries will need to evolve targeted and decoupled
      (Green Box) forms of assistance that can be implemented at low 
      budgetary costs;

(iii) tariffication may introduce greater instability to domestic prices,
      which may require reconsideration of producer price policies and
      modifications in "price bands" or other instruments to prevent
      excessive instability;

(iv)  countries will need to assess carefully the extent to which
      countervailing measures may be required to offset the internal
      price depressing effects of gradually declining but continuing high
      levels of protectionism elsewhere, and use the financial resources
      captured to increase food production and enhance food security in 
      accord with their comparative advantages in a protectionism-free

(v)   following tariffication, and hence the elimination of non-tariff
      barriers, there may well be increased scope for intra-regional or
      sub-regional trading arrangements based on tariff concessions;

(vi)  countries not members of the GATT/WTO will need to assess carefully
      the costs/benefits of membership in view of the changed
      international trading environment; and

(vii) countries will need to strengthen their technical services in the
      sanitary and phytosanitary areas.

103.  Developing countries will be facing considerable changes in world
market conditions while also confronting a complex policy agenda. They
may require a variety of assistance to capture potential benefits from
new market opportunities and to cope with new problems and exigencies.
The relatively sluggish growth of world markets for the principal
agricultural commodities should encourage them into diversification and
further processing of their primary agricultural commodities. More
thought needs, therefore, to be given to questions of tariff escalation
and targeted tariff reduction in areas of potential market growth of
interest to developing countries. New forms of assistance to replace loss
of preferences need to be considered and technical assistance in policy
formulation and sanitary and phytosanitary measures will need to be
stepped up. In all this, the particular needs of the least developed
countries will need to be given priority consideration. 

104.  In the light of these conclusions, and recalling that the Committee
on World Food Security will be looking at questions relating to food
import bills and food security at its 20th Session in April 1995, the
Committee may wish to make recommendations on the role of FAO with
respect to inter alia the following subjects:

(i)   monitoring, assessing and reporting on the levels of agricultural
      protection and the effects on agricultural trade;

(ii)  assisting developing countries in taking advantage of the market
      opportunities arising out of the Uruguay Round and in assessing the
      need to change their food and agricultural policies;

(iii) assisting developing countries in assessing the impact of
      preferential trading blocs on their agricultural sectors and in the
      design of arrangements for sub-regional and regional harmonization of
      agricultural policies;

(iv)  encouraging member countries to prepare themselves for the
      continuation of the reform process as envisaged in Article 20 of
      the Agreement on Agriculture;

(v)   providing policy and technical assistance to the developing
      countries in preparing for the next round of trade negotiations on
      agriculture, including on new subject areas, notably sustainability
      and environmental issues, which are gaining in importance;

(vi)  conducting further studies on selected agricultural commodities not
      covered in the present study as well as on issues such as the
      effects of changes in tariff escalation.

ANNEX:  Base Period 1987-89 average and Projections to the year 2000,
        Base-line and GATT simulation

        Table 1 - WORLD

Annex Table 1:  WORLD
                     Base period 1987-89 average and Projections
                   to the year 2000, Base-line and GATT simulation

                                1987-89 BASE PERIOD     
                          Product. Import  Export  Cons.  
                          (....... million tons .......)
    Total Cereals          1638.8   235.3   239.2  1689.0 
     Wheat                  519.5   114.3   115.5   537.6 
     Rice                   324.4    12.1    13.0   323.9 
     Coarse Grains          794.9   108.9   110.7   827.4 
       Maize                441.8    71.2    71.5   467.8 
       Millet and Sorghum    91.9     9.3     9.6    96.7 
       Other Coarse Grains  261.3    28.4    29.5   263.0 
    Fats and Oils            76.5    26.8    26.2    77.7 
    Oilmeals                 50.2    24.9    24.5    51.6 
    Total Meat              164.2    13.9    14.7   163.3 
     Bovine Meat             52.4     5.9     6.5    51.9 
     Sheep and Goat Meat      9.0     1.1     1.2     8.9 
     Pig Meat                65.9     4.5     4.6    65.6 
     Poultry Meat            36.9     2.4     2.4    36.9 
    Milk                    522.6    55.9    57.5   527.2 
    Butter                    7.5     1.7     1.7     8.0 

    Coffee                    6.0     4.3     4.2     6.1 
    Cocoa                     2.3     1.9     2.1     2.1 
    Tea                       1.7     0.9     1.0     1.7 
    Bananas                   8.1     8.6     8.1     8.6 
    Sugar                   103.8    22.6    22.0   104.4 
    Bovine Hides and Skins    5.2     4.4     4.4     5.1 
    Rubber                    5.1     4.1     3.9     5.2 

                                   2000 BASE-LINE           
                           Product. Import  Export  Cons.  
                           (....... million tons .......)
    Total Cereals          2003.1   255.8   255.8  1999.0 
     Wheat                  632.5   117.8   117.8   631.3 
     Rice                   403.3    17.7    17.7   401.8 
     Coarse Grains          967.3   120.4   120.4   965.9 
       Maize                589.4    80.1    80.1   588.1 
       Millet and Sorghum   108.7    10.5    10.5   108.8 
       Other Coarse Grains  269.2    29.8    29.8   269.0 
    Fats and Oils           107.5    37.2    37.2   107.3 
    Oilmeals                 71.2    30.9    30.9    71.1 
    Total Meat              213.3    18.4    18.4   213.3 
     Bovine Meat             59.0     7.6     7.6    59.0 
     Sheep and Goat Meat     10.9     1.4     1.4    10.9 
     Pig Meat                85.4     5.1     5.1    85.4 
     Poultry Meat            58.0     4.4     4.4    58.0 
    Milk                    564.9    54.2    54.3   564.9 
    Butter                    7.8     1.6     1.6     7.8 

    Coffee                    7.2     5.0     5.1     7.1 
    Cocoa                     2.7     2.3     2.4     2.7 
    Tea                       2.6     1.2     1.3     2.5 
    Bananas                  12.4    11.8    12.4    11.8 
    Sugar                   127.9    25.4    25.5   127.8 
    Bovine Hides and Skins    5.7     4.9     5.0     5.6 
    Rubber                    7.0     5.0     4.9     7.1 

                               2000 GATT SIMULATION
                          Product. Import  Export  Cons.
                          (.......million tons .........) 
    Total Cereals          2005.6   256.0   256.0  1999.8
     Wheat                  630.9   114.8   114.8   629.5
     Rice                   404.0    18.9    18.9   402.4
     Coarse Grains          970.7   122.3   122.4   967.8
       Maize                592.4    82.3    82.3   590.1
       Millet and Sorghum   109.3     9.6     9.6   109.3
       Other Coarse Grains  269.0    30.4    30.5   268.5
    Fats and Oils           108.6    38.5    38.5   108.3
    Oilmeals                 71.7    30.8    30.8    71.6
    Total Meat              211.8    18.8    18.7   211.9
     Bovine Meat             59.1     8.0     8.0    59.1
     Sheep and Goat Meat     10.9     1.4     1.4    10.9
     Pig Meat                83.8     5.0     4.9    83.9
     Poultry Meat            58.0     4.4     4.4    58.0
    Milk                    565.3    54.6    54.5   565.3
    Butter                    7.7     1.6     1.6     7.8

    Coffee                    7.2     5.1     5.1     7.2
    Cocoa                     2.8     2.4     2.4     2.8
    Tea                       2.6     1.2     1.3     2.6
    Bananas                  11.3    11.2    11.3    11.2
    Sugar                   129.0    25.7    25.8   128.9
    Bovine Hides and Skins    5.7     5.0     5.2     5.6
    Rubber                    7.0     5.0     4.9     7.2


                       Base Period 1987-89 average and
         Projections to the year 2000, Base-line and GATT simulation

                                  1987-89 BASE PERIOD    
                           Product. Import  Export  Cons. 
                           (....... million tons ........)
    Total Cereals           813.8   119.1    30.3   908.8
     Wheat                  216.3    68.6     8.5   280.8
     Rice                   306.6     9.1     9.0   306.7
     Coarse Grains          290.9    41.4    12.8   321.3
       Maize                189.7    26.5     9.6   206.2
       Millet and Sorghum    68.9     3.5     2.1    72.2
       Other Coarse Grains   32.2    11.4     1.2    42.9
    Fats and Oils            38.8    12.8    13.1    38.2
    Oilmeals                 24.1     5.5    13.8    15.8
    Total Meat               63.3     3.3     2.8    63.8
     Bovine Meat             17.9     1.3     1.5    17.6
     Sheep and Goat Meat      4.9     0.4     0.1     5.2
     Pig Meat                27.7     0.5     0.6    27.6
     Poultry Meat            12.9     1.0     0.5    13.4
    Milk                    141.1    20.3     1.1   160.2
    Butter                    1.8     0.4     0.0     2.2

    Coffee                    6.0     0.3     4.2     2.2
    Cocoa                     2.3     0.1     2.1     0.3
    Tea                       1.7     0.4     1.0     1.2
    Bananas                   7.4     0.6     7.4     0.6
    Sugar                    60.3    13.9    13.2    61.0
    Bovine Hides and Skins    2.0     1.4     1.5     1.9
    Rubber                    5.1     1.2     3.9     2.3

                                   2000 BASE-LINE          
                           Product. Import  Export  Cons. 
                           (....... million tons ........)
    Total Cereals          1092.2   167.3    40.6  1215.1
     Wheat                  298.3    86.1     8.8   374.3
     Rice                   384.0    13.8    13.8   382.6
     Coarse Grains          409.8    67.4    18.0   458.2
       Maize                284.9    46.5    13.5   317.0
       Millet and Sorghum    81.1     6.5     2.9    84.7
       Other Coarse Grains   43.9    14.4     1.6    56.5
    Fats and Oils            62.3    20.1    22.1    60.3
    Oilmeals                 38.8    11.9    20.7    30.0
    Total Meat              106.6     5.7     3.8   108.4
     Bovine Meat             25.4     2.2     1.3    26.2
     Sheep and Goat Meat      7.0     0.6     0.2     7.4
     Pig Meat                46.5     0.8     0.6    46.7
     Poultry Meat            27.6     2.1     1.6    28.0
    Milk                    203.5    22.8     2.5   223.8
    Butter                    2.7     0.5     0.2     3.1

    Coffee                    7.2     0.4     5.1     2.4
    Cocoa                     2.7     0.1     2.4     0.5
    Tea                       2.5     0.6     1.3     1.8
    Bananas                  11.5     1.5    11.5     1.5
    Sugar                    79.7    16.5    17.3    78.9
    Bovine Hides and Skins    2.8     1.6     2.3     2.1
    Rubber                    7.0     1.8     4.9     3.9

                                2000 GATT SIMULATION
                           Product. Import  Export  Cons.
                           (....... million tons .......)
    Total Cereals           1099.8   162.8    44.3  1213.9
     Wheat                   303.4    80.5    10.0   372.7
     Rice                    385.7    14.2    15.0   383.3
     Coarse Grains           410.7    68.1    19.3   458.0
       Maize                 284.8    47.9    14.5   317.0
       Millet and Sorghum     81.6     5.6     2.7    84.5
       Other Coarse Grains    44.2    14.7     2.1    56.4
    Fats and Oils             63.3    20.9    23.3    60.9
    Oilmeals                  39.4    12.5    21.4    30.5
    Total Meat               105.5     5.8     3.6   107.7
     Bovine Meat              25.2     2.1     1.3    26.1
     Sheep and Goat Meat       7.0     0.6     0.2     7.4
     Pig Meat                 45.8     0.8     0.5    46.1
     Poultry Meat             27.6     2.2     1.6    28.1
    Milk                     203.9    21.9     2.9   222.9
    Butter                     2.6     0.7     0.2     3.1

    Coffee                     7.2     0.4     5.1     2.4
    Cocoa                      2.8     0.1     2.4     0.5
    Tea                        2.5     0.6     1.3     1.9
    Bananas                   10.5     1.3    10.5     1.3
    Sugar                     80.3    16.7    17.3    79.6
    Bovine Hides and Skins     2.8     1.7     2.3     2.2
    Rubber                     7.0     1.8     4.9     4.0


                Base period 1987-89 average and Projections to the
                     year 2000, Base-line and GATT simulation

                                 1987-89 BASE PERIOD    
                           Product. Import  Export  Cons. 
                           (....... million tons .......)
    Total Cereals           825.0   116.2   208.9   780.2
     Wheat                  303.2    45.8   107.0   256.8
     Rice                    17.8     2.9     4.0    17.2
     Coarse Grains          504.0    67.5    97.8   506.1
       Maize                252.0    44.6    62.0   261.5
       Millet and Sorghum    22.9     5.8     7.5    24.5
       Other Coarse Grains  229.0    17.1    28.4   220.1
    Fats and Oils            37.7    14.1    13.1    39.5
    Oilmeals                 26.0    19.4    10.7    35.8
    Total Meat              100.9    10.6    11.9    99.5
     Bovine Meat             34.5     4.6     4.9    34.3
     Sheep and Goat Meat      4.1     0.6     1.0     3.7
     Pig Meat                38.2     4.0     4.0    38.0
     Poultry Meat            24.1     1.3     1.9    23.5
    Milk                    381.5    35.6    56.4   367.0
    Butter                    5.7     1.2     1.7     5.8

    Coffee                    0.0     3.9     0.0     3.9
    Cocoa                     0.0     1.8     0.0     1.8
    Tea                       0.0     0.5     0.0     0.5
    Bananas                   0.7     7.7     0.7     7.7
    Sugar                    43.5     8.7     8.8    43.3
    Bovine Hides and Skins    3.2     2.9     2.9     3.2
    Rubber                    0.0     2.9     0.0     2.9

                                   2000 BASE-LINE           
                           Product. Import  Export  Cons.  
                           (....... million tons .......)
    Total Cereals           910.9    88.5   215.3   783.9 
     Wheat                  334.2    31.7   109.0   257.0 
     Rice                    19.3     3.9     3.9    19.2 
     Coarse Grains          557.4    53.0   102.4   507.7 
       Maize                304.6    33.5    66.6   271.1 
       Millet and Sorghum    27.6     4.0     7.6    24.0 
       Other Coarse Grains  225.2    15.5    28.2   212.5 
    Fats and Oils            45.2    17.1    15.1    47.0 
    Oilmeals                 32.3    19.0    10.2    41.0 
    Total Meat              106.7    12.7    14.6   104.8 
     Bovine Meat             33.6     5.4     6.3    32.7 
     Sheep and Goat Meat      3.9     0.7     1.1     3.5 
     Pig Meat                38.8     4.2     4.5    38.6 
     Poultry Meat            30.4     2.3     2.7    30.0 
    Milk                    361.4    31.4    51.8   341.1 
    Butter                    5.1     1.0     1.4     4.7 

    Coffee                    0.0     4.7     0.0     4.7 
    Cocoa                     0.0     2.2     0.0     2.2 
    Tea                       0.1     0.6     0.0     0.7 
    Bananas                   0.8     9.4     0.0    10.3 
    Sugar                    48.2     8.9     8.2    48.9 
    Bovine Hides and Skins    2.8     3.4     2.8     3.4 
    Rubber                    0.0     3.2     0.0     3.2 

                                   2000 GATT SIMULATION
                             Product. Import  Export  Cons.
                             (....... million tons .......) 
    Total Cereals            905.8    93.2   211.7   785.8
     Wheat                   327.4    34.3   104.8   256.8
     Rice                     18.3     4.7     3.9    19.2
     Coarse Grains           560.0    54.2   103.1   509.9
       Maize                 307.6    34.4    67.8   273.1
       Millet and Sorghum     27.7     4.0     6.9    24.7
       Other Coarse Grains   224.8    15.8    28.4   212.0
    Fats and Oils             45.2    17.6    15.2    47.4
    Oilmeals                  32.3    18.3     9.5    41.1
    Total Meat               106.3    13.0    15.1   104.2
     Bovine Meat              34.0     5.9     6.7    33.1
     Sheep and Goat Meat       3.9     0.7     1.1     3.5
     Pig Meat                 38.0     4.2     4.5    37.7
     Poultry Meat             30.4     2.2     2.8    29.8
    Milk                     361.4    32.7    51.6   342.5
    Butter                     5.1     1.0     1.4     4.7

    Coffee                     0.0     4.7     0.0     4.7
    Cocoa                      0.0     2.3     0.0     2.3
    Tea                        0.1     0.6     0.0     0.7
    Bananas                    0.8     9.9     0.8     9.9
    Sugar                     48.7     9.0     8.5    49.2
    Bovine Hides and Skins     2.9     3.4     2.9     3.4
    Rubber                     0.0     3.2     0.0     3.2
======================RRojas Research Unit/ 1995=======================