FOOD AND AGRICULTURE ORGANIZATION OF THE ...Insecurity of tenure often leaves them no real...

I

/FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS

THE STATE OF FOOD AND AGRICULTURE 1960

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A\19 4GR

ROME 1960

F ODo

CL 34/2

FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS

The statistical material in this publication has

been prepared from the information available

to FAO up to 30 June 1960.

The designations employed and the presenta-

tion of the material in this publication do notimply the expression of any opinion whatsoever

on the part of the Secretariat of the Food and

Agriculture aganization of the United Nations

concerning the legal status of any country or

territory or of its authorities, or concerning the

delimitation of its frontiers.

© FAO 1960

Printed in Italy

CONTENTS

Foreword

Summary

World review and outlook

AGRICULTURAL PRODUCTION

,ZProduction in relation to populationPattern of agricultural productionRegional agricultural production in 1959/60 17Fishery production 20Forest prodnction 20Agricultural production outlook fbr 1960/61 21Variability of agricultural production 22Trends in crop production, areas and yields 25

CHANGES IN STOCKS 32

ECONOMIC ACTIVITY AND THE DEMAND FOR AGRICULTURAL PRODUCTS 35Short-term outlook 36

Fool) SUPPLIES AND CONSUMPTION 37

INTERNATIONAL TRADE IN AGRICULTURA L PRODUCTS ...... . . ........... . .

Regional trendsChanges in price levels for agricultural products in international tradeExports under special termsAgricultural trade of Eastern Europe and the U.S.S.R.

FARM PRICES AND INCOMES . . . . ............ . ........... . . . . . ...... . . . .

CONSUMER PRICES AND SALES

AGRICULTURAL POLICIES AND DEVELOPMENT PLANS 56

North America 58Australia and New Zealand 58

Western Europe 59Eastern Europe and. U.S.S.R 60

39

41

4849

51

54

vi

Latin America 62

Far East 64

Near East 67

Africa 69

Fishery policies 70

Forest pol.icies 71

COMMODITY SURVEY AND OUTLOOK 74

Wheat 74Coarsc arains 75

Rice 77

Sugar 78

Meat 79Eggs 8o

Dairy products 8o

Fishery products 8 I

Fats, oils and oilseeds 82

Fresh fruit 84Dried fruit and wine 85

Cocoa 86

Coffee 87

Tea 88

Tobacco 89

Cotton 89

Wool 91

Jute 92

Hard fibers 93

Rubber 94Forest products 95

III. Piograming for aglieultural develorment 99

SCOPE, OBJECTIVES AND SPECIAL PROBLEMS OF PLANNING FOR AGRICULTURAL DEVELOPMENT. I00Broad objectives of agricultural plans and policies 103

Special problems of agricultural planning to6Organization for planning 1o8

THE ESTABLISHMENT OF AGRICULTURAL TARGE' S I I

Projections of demand and their limitations 113

Targets for agricultural production 117Problems of estimating resources for agricultural development 120

THE CHOICE OF MEANS TO IMPLEMENT PRODUCTION TARGET 124

General approach to implementation policies 124Importance for agricultural planning of detailed information on the day-to-day prob-lems of farmers 125

Land tenure and the choice of methods for agricultural development 128

The fuller utilization of farm labor 131

Organization for implementation 133

TI1E AREA OF CHOICE

Investment and expenditureThe concentration of resources

SELECTED BIBLIOGRA.PHY ON AGRICULTRAL PROGRAMING

Annex tables

1 A. Indices of the volume of agricultural production.1.13. Indices of per caput food production 152

World production of major commodities 153World exports of major commodities 154Western Europe: Production of major commodities 155Western Europe: Exports and imports of major commodities 156Eastern Europe and U.S.S.R.: Production Of major commodities 157Eastern Europe and U.S.S.R.: Exports and imports of major commodities.. 158U.S.S.R.: Production and exports of forest products 158North America: Production of major commodities 159North America: Exports and imports of major commodities 16oOceania: Prod.uction of major commodities 161Oceania: Exports and imports of major commodities 161Latin America: Production of major commodities 162Latin America: Exports and imports of major commodities 163

Far East (excluding Mainland China): Production of major commodities. 164Far East (excluding Mainland China): Exports and imports of major commodities. 165Near East: Production of major commodities 1.66

Near East: Exports and iinports of major commodities 166

IoA. Africa: Production of major commodities .167

toB. Africa: Exports and imports of major commodities 168

ii. Total catch (live weight) of fish, crustaceans, mollusks 169

Variability of production and yields of selected products, by regions, 1948/49-1959/60 171

United States Commodity Credit Corporation: Quantity and value of investment. 172

Food supplies available for human consumption 173

Calorie and protein content of national average food supplies 176

.15. Regional network of trade in beverages and tobacco 179Average world export unit value of agricultural products .t8o

Average unit values of agricultural exports of the U.S.S.R., compared with theworld average

vii

138

141:

144

146

List of figures

T. Trends in regional agricultural production in relation to population growth,1948/49-1959/60 12

Regional shares of world population and agricultural production, average 1957-59 14

Trends in regional production of main commodity groups 1948/49-1959/60 16

Variability of wheat production and yields in selected countries, 1948/49-1959/60. 23

Trends in regional production, area and yield of main crops, 1948/49-1959/60. 26-27

Trends in wheat yields in selected countries, 1948/49-1959/60 30

Levels of wheat yields in selected countries, average 1948/49-1959/60 31

Estimated per caput food supplies, by region 38

Indices of the volume and value of agricultural exports, by ma n commodity groups. 40

Volume and value of agricultural imports into more and less economicallydeveloped countries 43

Gross imports and exports by regions of foodstuffs and nonfood agriculturalproducts 45

II. Average export unit values (average prices) of selected agricultural products inworld trade 46

Gross imports of selected commodities into the U.S.S.R.. from less developedregions, in relation to total imports 50

Indices of prices received and prices paid by farmers and their inten-elationship,selected countries 52

World production of margarine, compound cooking fat (shortening) and soap 83

World price and grindings of cocoa beans 87

FOREWORD

Although world agricultural production increased less in 1959160 than in 1958/59 whenthe expansion was unusually large, the rise of about 2 percent in 1959/60 remained somewhatahead of the annual rate of growth of the world's population. International trade in agricul-tural products recovered in 1959 and early 1960 from the setback resulting from the economicrecession of 1957-58 in the industrialized countries. This recovery was only partial, however,for although the volume of trade reached a netv high level, prices of agricultural products as a

whole continued to decline so that the value of world trade remained appreciably less thanII' 1957.

An encouraging feature of the recent situation is the renewed steady expansion of pro-duction in the Far East, which with over 40 percent of the world's population remains as ahvays

the central focus of want and malnutrition. As recently as 1948-52 per caput food productionin the region was some 15 percent less than before the war. It is now estima-ted to have im-proved to within 3 percent of the prewar level, while, because of laiger imports and reducedexports of food, per caput food supplies are now slightly greater than before the war.

Of the other less developed regions, per caput supplies in Africa since the war appear tohave remained close to the prewar level. In Latin America and the Near East there has beensome increase over this level, partly because of smaller net exports of food, especially in theNear East. In these regions food production has expanded .fairly rapidly, but with a slightdecline in 1959160.

Food and population are tuvo of the crucial determinants af the future of mankind. Freedom

from hunger in the less developed countries of the world, however, is not simply a matter of regain-

ing or maintaining prewar levels of per caput production and consumption. For most of thepeople of these countries these levels were far too low, both in quantity and dietary value.Much greater increases in food production in these regions are needed before any real progress

can be made in stamping out hunger and malnutrition. But increased food production mustgo hand in hand with general economic development so that consumers can afford the additionalfood and the better quality food they need. Without higher levels of income, indeed, this in-

.creased food production is unlikely ever to materialize.

A -first analysis in this report suggests that in general the impact of the striking advancesin agricultural science in this century has so far been largely confined to North America, Europe,

and Australia and New Zealand. In these regions agricultural yields and productivity haverisen rapidly since the war, in some countries so fast as to have led to the accumulation ofsurplus stocks. In the less developed regions, on the other hand, the increased production sofar achieved has come primarily from an enlargement of the cultivated area, and for most prod-

ucts the potential contribution from higher yields and productivity has as yet scarcely been

tapped. To release this immense potential is the central task, not only of FAO, but also ofthe agricultural departments and ministries of every ore of thc less developed countries.

A special chapter in last year's issue of this report examined saíne of the preconditionsfor agricultural progress, largely from the point of view afthe farmers in less developed countries.It was emphasized that all too frequently extreme rural poverty and lack of credit, except atusurious rates of interest, prevent the great majority of farmers from adopting improved prac-tices, even if they are aware of them. Insecurity of tenure often leaves them no real inducement

to improve. their holdings, while in many cases the conditions of tenure are such that the farmer

himself can count on only a fiaction (!fany additional return from an increase in output. More-over, inadequate and sometimes inequitable marketing systems, together with uncertain andsharplyfluctuating farm prices, often make it hazardous for a farmer to increase his production for

sale. Until these disabilities are remedied, or at least alleviated, it seems clear that the teachings(f the agricultural research and extension services are likely to go largely unheeded, and thatgovernment investment in agricultural development will seldom yield its full potential return.

The final chapter of this report, " Programing for Agricultural Development," takes upthe same theme, this time from the standpoint of governments. Since the war programing foragricultural and general economic development has extended to all parts of the morid, andparticularly to the less developed regions. This chapter reviews progress during this period,drawing extensively on the experience of FAO in assisting its Member Governments bothin formulating and in implementing their agricultural programs.

Agricultural programing is little more than an academic exercise unless there are goodprospects that the plans can be translated into reality within something like the period coveredby the plan. The establishment of targets, the allocation of investment resources, or even timeworking out of detailed schemes for land reclamation, .for irrigation, or for the provision (fincreased supplies of improved planting material, fertilizers and other aids to increased produc-tion, are essential, but by themselves they are not enough. They will have only a fraction oftheir potential effect unless means are found of enlisting the co-operation of thousands, oftenmillions, of farmers. This in turn implies building up an effective administrative apparatus,oficial and nonofficial, reaching down to the farmers themselves, fui' the proper implementa-tion of projects of extension,.farm credit, marketing and so fiwth. It implies also that in manyless developed countries economic and social measures are necessary to give farmers greaterincentives to increase food production fiv the market. As man's oldest settled occupation,agriculture, perhaps more than any other majar industry, is hampered by the outgrown customsand traditions of past ages.

Unless these organizational and institutional aspects receive adequate attention, andunless full account is taken of the day-to-day problems of farmers arising from the environ-ment in which they live and work, in spite of all agricultural programing, development islikely to be slow. Today, with ami accelerating growth of population and an increasingly in-sistent demand for higher living standards, no country can afi-ord any longer to be content withsuch slow progress.

2

B. R. SEN

Director-General

AGRICULTURAL PRODUCTION

Preliminary estimates indicate that the increaseof 5 percent in world agricultural production(excluding Mainland China) in 1958/59 was follow-ed in 1959/60 by a rise of about 2 percent, or a littlemore than the estimated annual population growthof 1.6 percent. Such indications as are availableat the end of June 1960 are for a larger worldproduction of most commodities in 1960/61.

The biggest increases in agricultural productionin 1959/60 were in Western Europe and the FarEast. There were smaller increases in EasternEurope and the U.S.S.R., North America, andLatin America, but in Oceania and the Near Eastproduction was at about the same level as in 1958/59,while in the African region there appears to havebeen a slight decline. In contrast to total agriculturalproduction, food production was lower than in1958/59 in Oceania, Latin Am.erica and the NearEast, as well as in Africa. In Mainland China an-other substantial rise in agricultural production wasreported in 1959/60.

The world catch of fish showed a further largeincrease in 1959, chiefly because of the continuedrapid expansion in Peru and Mainland China.The effects of economic recovery on the demand forforest products became more marked in 1959, andtotal removals of industrial roundwood are esti-mated to have risen by about 4 percent.

Per caput food production in the Far East(excluding Mainland. China) now appears to haveimproved to within 3 percent of the prewar .level,compared with a deficit of 7 percent as recently as1957/58. In Latin America, on the Other hand,where revised data indicate that the prewar levelhad been approximately regained for the previousthree years, food production per caput fell in1959/60. Per caput food production also appearsto have decreased in the Near East and in African 1959/60. Of the 48 countries for which FAO

indices of agricultural production are published,

3

production in 15 countries is estimated to havefailed to keep up with the growth of populationbetween 1952-53 and 1957-58. In 14 countriesthe production increase equaled population growthor exceeded it by up to 0.9 percent per annum;in a further 14 countries the margin was from i.oto 3.9 percent. Finally, in 5 countries the increasein production has exceeded population growth byan average of between 4 and. 6 percent a year.

Production trends' over th.e past 12 seasons in-dicate that in the more developed countries live-stock prod.uction has expanded appreciably morerapidly than crop production, reflecting the risein the demand for livestock products at higher in-come levels. In less developed countries livestoc.kproduction appears to have grown more slowlythan crop production, though in many of thesecountries statistics of livestock production are stillvery rudimentary. Among the different crops, theproduction of basic food. crops (grains and starchyroots) has tended to expand more slowly thanother crops. Especially in the less developed re-gions the latter include a high proportion of cropsgrown primarily for export and also of crops suchas sugar and oilseeds which are among the firstfor which demand increases in response to risingincomes.

A preliminary analysis has been made of theextent of annual variations in agricultural produc-tion. Adverse weath.er can have a severe effect onthe level of agricultural production, and it seemsthat declines of 5 to To percent in a single yearare quite common in a large number of countries.Bigger fluctuations, with drops in production of upto about zo percent in one year, appear to occurmainly in a few areas where the rainfall is partic-ularly- un.certain, including Northwest Africa,parts of the Near East, and certain rice-growingcountries in Southeast Asia.

The contribution of advances in agriculturaltechnology to the postwar expansion of agriculturalproduction appears to have been largely confined

Chapter I SUMMARY

Chapter II - World review and outlook

to the more developed regions. In these regionsthere has been a substantial rise in the yield perhectare of most of the major crops, while crop areashave increased more slowly, and in many casesproduction has expanded in spite of a decline inthe area. Farmers in less developed countries, how-ever, still generally lack the means to adopt theimproved methods that will lead to higher yields.While there has been some limited increase inyields in the less developed regions, the larger partof recent increases in production in these regionshas resulted from the extension of the cultivatedarca.

An examination of wheat yields indicates thatthe average level of yields and their rate of increasediffer widely both among and within countries.While it might be expected that yields would risefastest where their actual level is lowest, it seems thatthe most rapid increase in wheat yields has beenin countries where they are already fairly high.At very high levels of yields, such as are obtained insome countries of Northwestern Europe, the rateof increase begins to tail off. In the United States,however, where wheat yields are much lower thanin most European countries, they are still increas-ing with considerable momentum. This is inlarge part the origin of the accumulation of surplusstocks in that country, as well as the chief reasonwhy it has not so far proved possible to checktheir expansion by means of measures designed toreduce acreage.

CFIANGES IN STOCKS

During 1959/60 further major increases in theover-all level of stocks appear to have occurredonly for coarse grains and coffee. Cotton stockswere again reduced; those of wheat showed littlechange, and for most other major agriculturalcommodities also the expansion of stocks seems tohave been halted at least temporarily. The levelof stocks remains high, however, especiallythose of grains, which in the major exportingcountries now stand at 126 million tons, or almostfour times as much as in 1952, approximately thefirst year of the postwar accumulation of sur-pluses. United States government stocks of driedskim milk, which have proved of great value inmilk distribution schemes, were depleted in Sep-tember 1959, but by April 1960 they liad beenrebuilt and disposals resumed.

4

ECONOMIC ACTIVITY AND THE DEMAND FOR

AGRICULTURAL PRODUCTS

Recovery from the 1957-58 recession in eco-nomic activity in the industrialized countries turnedinto renewed expansion during 1959/60. The agri-cultural exporting countries have begun to benefitfrom this upswing in economic activity, but onlyto a limited degree and after the usual time-lag.

In general the level of economic activity inthe industrialized countries seems likely to remainhigh, at least during the remainder of 1960. Therecent slackening in the rate of expansion in theUnited States and some European countries hascaused earlier expectations of a boom to be scaledclown, however, and has made the outlook for1961 somewhat uncertain. Although the recentdeficit in the United States balance of payments isexpected to be reduced, preoccupation with theposition of the U.S. dollar on international marketscontinues to influence that country's trade policy.While favorable business conditions in the in-dustrialized countries have already led to someincrease in the demand for agricultural productsexported by the less developed countries, especiallyfor rubber and fibers, any further increases inaybe limited. The supply of many foodstuffsand of some raw materials continues to be morethan ample, and little improvement in exportprices is therefore to be expected as a result ofincrea sed economic activity.

FOOD SUPPLIES AND CONSUMPTION

The indices of per caput food production dis-cussed earlier are only a rough indication of theprogress of supplies in relation to population, forthey do not take into consideration the sharp chang-es that have occurred in the imports and exportsof some reoions Few accurate data are available,bespecially for the less developed countries, to in-dicate the trends that have occurred in actual foodsupplies and levels of consumption, but some gen-eral conclusions can be drawn from approximateestimates of per caput availabilities of food in themain regions.

From these data it appears that in the Far East(excluding Mainland China) per caput food sup-plies, in contrast to per caput food production,have for some years now approximately regainedthe prewar level. in Africa per caput supplies seem

to have remained close to this level throughoutthe postwar period, and in Latin America and espe-cially the Near East there has been some increaseover the prewar level. There has been a slowexpansion of per caput supplies since 1948-52 in theless developed regions except Africa, where theyappear to llave declined somewhat in recent years.

On the whole, the gap between food suppliesin the more and less developed regions has tendedto widen rather than narrow in recent years. Italso appears that per caput supplies of livestockproducts in the less developed regions have generallynot increased and in some cases have declined, sothat they probably now represent an even smallerproportion of total consumption in these regionsthan before the war. These general trends areconfirmed by the available food balance sheets,which show actual average food consumption levelsin individual countries.

INTERNATIONAL TRADE IN AGRICULTURAL PRODUCTS

Both the volume and, to a lesser extent, thevalue of international trade in agricultural productsrecovered in 1959 from the setback resulting fromthe recession of 1957-58. The volume of worldexports rose by 6 percent compared with the yearbefore, as against a risc of 7 percent in exportsof manufactured goods. Average prices on worldmarkets for agricultural products as a whole, how-ever, continued to decline and the value of exportsrose by only 3 percent and remained well belowthe 1957 level.

Raw materials had been most severely affectedby the recession and staged the strongest recovery.Exports of this commodity group in 1959 WereI I percent larger in volume than the year before,mainly because of larger shipments of wool andrubber, and io percent higher in value. Increasedprices for rubber and sisal were offset by a con-tinuing fall in the prices of most other commodities,notably cotton. Forest products fared even betterand both the volume and value of exports in 1959nearly regained the 1957 level. An increase of8 percent in the volume of exports of beveragesand tobacco, however, was accompanied by afall of some 7 percent in value, compared with1958, as a result of generally lower prices. The slowrise in the volume of exports of food and feeding-stuffs continued, but of the major groups onlyoilseeds and vegetable oils, meat and dairy products

5

exceeded in 1959 the value of world exports in 1957.The largest increase in earnings from agricul-

turai exports in 1959 (24 percent) occurred inOceania, after the particularly unfavorable resultsof 1958, while smaller increases were achieved inthe Far East and Near East regions. The agricul-tural export earnings of all other regions declinedin comparison with the preceding year, in WesternEurope because of a smaller volume of trade, inNorth America, Latin America and Africa becauseof lower prices.

Rather over 40 percent of the increase in thevolume of shipments were directed to WesternEurope, but there was also a substantial increase inNorth American imports, which reached a recordlevel. These increases, however, were reflected toonly a limited extent in the value of trade.

The more rapid growth of agricultural importsinto the less developed regions, as compared withthe more developed regions, was resumed in 1959after a decline in 1958, though in total they stillamount to only about one third of the agriculturalimports of the more developed regions. In con-trast, agricultural exports in recent years haveexpanded more rapidly from the more developedregions, partly because of surplus disposal operations.By 1959 net exports of foodstuffs from the lessdeveloped regions as a whole had fallen to aboutone quarter of their prewar volume. Net exportsof nonfood agricultural products, however, liadincreased substantially.

Prices (average unit values) of agricultural ex-ports as a whole in international trade averagedabout 2 percent less in 1959 than the year before,almost the whole decline occun-ing in the beveragesand tobacco group. Prices steadied and even re-covered somewhat in the latter part of 1959, butpreliminary indications suggest that the declinewas resumed in early 1960. Raw materials werean exception, rubber prices in particular continu-ing to rise. Grain prices remained fairly steady inearly 1960, and those of beef and mutton continuedto rise, but there were sharp falls in prices of dairyproducts and certain oilseeds. Coffee prices weresoniewhat firmer, while those of cocoa declinedappreciably.

Surplus disposal operations, mainly by theUnited States, remained large in 1959, though atan appreciably lower level than at the peak periodin 1956/57. Shipments under government programsaccowited for 34 percent of total United Statesagricultural exports in 1958/59 and 26 percent in

the second half of 1959, compared with 42 per-cent in 1956/57. The largest single agreement underPublic Law 480 was signed in May 1960 for theshipment of 16 million tons of wheat and i milliontons of rice to India over a period of four years.

The trade in agricultural products of EasternEurope and the U.S.S.R. with the rest of the worldcontinued to expand, though it remained relativelysmall in relation to their total trade. In 1958 tradewith other members of this group accounted fornearly 8o percent of the agricultural exports andover so percent of the agricultural imports of theU.S.S.R. Imports into this group from the lessdeveloped regions have increased sharply, notablyof rubber (mainly from the Federation of Malaya)and cotton (mainly from the United Arab Re-public). Imports of beverages, spices and otherproducts are also rising, though the total volume oftrade remains small. In contTast to the general trend,imports of sugar and oilseeds have been reducedbecause of greatly increased domestic production.

FATOVI RICES AND IN COMESS

In most of the relatively few countries for whichdata are available on trends of prices received andpaid by farmers, price relationships appear to havemoved slightly in favor of farmers in 1959. Themost important exceptions were the United Statesand Canada, in which net farm incomes alsofell sharply by about 16 percent and 7 percentrespectively in spite of an increase in output. Inthe United States part of the fall reflected smallergovernment payments, e.g., under the AcreageReserve Program. Farm incomes appear to haverisen sharply in Australia and New Zealand in1959/60, mainly because of higher prices for wool.and dairy products. In Europe trends were irreg-ular. Farm incom.es rose in 1959 in the UnitedKingdom, Denmark, the Netherlands and Norway,but in other countries, including Western Germany,France and Italy, they showed little improvement oreven a slight decline, in some cases partly becauseof the widespread drought of 1959.

CONSUMER 'RICES AND SALES

In some countries surpluses and the downwardtrend of agricultural prices on world markets ap-pear at last to have liad some influence on retailprices. While the trend was still upward in a

6

majority of the countries for which data are avail-able, the rise was less widespread than in the lastfew years. Iii North and Central America, and insome parts of Europe, considerable stability ofretail food prices was achieved in 1959, while soniecountries which showed strong inflationary pres-sures in 1958 and early 1959 appeared to be attain-ing greater price stability in 1959/60. In the fewcountries with statistics of retail food sales the re-cession of 1957-58 scarcely influenced their steadyrise, and this continued in 1959 though usuallyat a slightly slower rate than national incomes.

AGRICULTURAL POLICIES AND DEVELOPMENT PLANS

Agricultural policies continue to reflect the sharpcontrast between the agricultural demand and sup-ply situation in die industrialized countries andthat in. the less developed parts of the world.Because of the availability of adequate technicalknowledge and capital, supplies are generally ca-pable of fairly rapid expansion in the more devel-oped countries, but at the high levels of foodconsumption that have been reached in thesecountries the larger demand resulting froni in-creased incomes goes predominantly to nonagri-cultural products. In. the less developed countries,in contrast, it is less easy to achieve a high rate ofincrease in production, but demand is rising rap-idly with the faster growth of population in thesecountries, and a large part of any increase in in-come is spent on food. These divergent situationsalso react on one another. Markets in the industrial-ized countries for most of the agricultural exportsof the less developed regions are growing relativelysl.owly. At the same time surplus stocks of somecommodities have accumulated, mainly in the moredeveloped regions, and these are unsalable at normalcommercial terms in the less developed region.s.

The principal aims of agricultural policies inthe more developed group of countries are to adjustthe level and pattern of their agricultural productionas closely as possible to effective demand on domesticand export markets, while at the same tinie endeav-oring to narrow the gap between agriculturaland other incomes. As price support systems, whichare generally very costly, have often failed toachieve these objectives, there has been for sometime a tendency in Western Europe to seek im-provements in farm. incomes increasingly throughmeasures to raise efficiency and improve farm

structures. This has been reflected in modificationsto support policies in some countries in 1959/60,sometimes strongly opposed by farmers, as wellas in the agricultural policy proposals of the Com-mission of the European Economic Community.

In Japan, too, the costly price supports for wheatand barley may be gradually replaced by assist-ance in raising the quality and efficiency of pro-duction. In Australia and New Zealand measuresto improve efficiency are receiving still furtheremphasis, and in Canada the guarantees for twoproc-lucts have recently been limited by the intro-duction of deficiency payments with the novelfeature of a fairly low ceiling on payments to anyindividual farmer. In the United States, where theproblem of surpluses is most acute, attempts toreduce them by restrictin.g acreage have largelybeen offset by rising yields. Many different solu-tions are being proposed for these probleins, butno new measures have been passed so far in 1960.

.Most of the less developed countries are unableto afford high levels of supports, and their agricul-tural price policies are aiined mainly at the protec-tion of consumers and the avoidance of inflation.The question of incentive producer prices is re-ceiving increased attention in some of these coun-tries, however, and a few new schemes have beenintroduced for certain products in 1959/60, especiallyni the Far East. In the majority of the less developedcountries the economic development plan remainsthe principal expression. of agricultural policy, and1959/60 h.as seen a large number of new plans andmodifications to earlier ones. New developmentplans in preparation include India's third five-yearplan, c-lue to begin in April 1961, of which a draftoutline has been published.

Measures to improve the efficiency of productionare also becoming an increasingly important partof the agricultural policies of some of the lessdeveloped countries. For example, the generaltrend toward greater emphasis on the improvementof the institutional environnient of agriculture ap-pears to llave continued in 1959/60, especially insome countries of the Near East. Most agricultural

exporting countries, including those in the moredeveloped regions, are paying more attention tomeasures for the promotion of exports and forwidening their markets for agricultural products.In Latin America the gradual abandonment ofmultiple exchange rate systems has continued in1959/60, in combination with domestic stabilizationmeasures designed to combat inflation.

In the centrally-planned economies, modifica-tions in the structure of the collective farm llavecontinued in the U.S.S.R. Similar changes llavebeen undertaken in several of the Eastern Europeancountries, where there has been a renewed spurtin the pace of collectivization in late 1959 and early1960. In Mainland China there was some reorgani-zation of the rural commune system in August 1959.

The tendency toward regional co-ordinationhas again been a marked feature of the year widerreview. In Western Europe, the proposals of theCommission of the European Economic Com-munity for a common agricultural policy havebeen published, and seven countries llave establishedthe European Free Trade Association. In LatinAmerica seven countries have joined in a Free TradeAssociation, and three Central American countrieshave also set up ami economic association.

In respect of fishery policies, recent eventsindicate that international agreement on the prin-cipal aspects of these policies is still a long wayoff', although the urgency of obtaining co-ordinatedaction is increasingly recognized. In forest policy,a clearer awareness of certain problems is apparent,and this has led in 1959/60 to a more concreteorientation of these policies and related productionprograms in some countries.

COMMODITY SURVEY AND OUTLOOK

The final section of the chapter presents theusual short notes on the situation and outlook foreach of the main agricultural, fishery and forestcommodities. As they are already highly condensed,they are not further summarized here.

Chapter III - Programing for apicultural development

Proced.ures and methods of programing usedby governments to promote agricultural develop-ment in recent years are reviewed, primarily from

7

the point of view of less developed countries.In many of these countries an inadequate growthof agricultural production, and especially of food

production, has slowed the pace of general eco-nomic development. Emphasis is laid on a closeintegration of agricultural development plans withthose for the economy as a whole.

The chapter draws extensively on FAO ex-perience in assisting Member Governments inmany parts of the world in formulating and imple-menting agricultural development programs. Thegeneral approach is that programing is a barrenexercise unless there is a reasonable expectationthat the goals set can be reached. A large part ofthe chapter is therefore concerned with the choiceof measures and projects to implement agriculturaldevelopment programs, and with the economic andinstitutional conditions necessary for their success.

Programing is considered as much more thanthe establishment of targets of production, inputsand consumption, the allocation of public funds forinvestment, or the preparation of schemes for landreclamation and settlement, for irrigation, or forthe increased distribution of fertilizers, improvedplanting material and other aids to production.Important though these things are, by themselvesthey are seldom enough to ensure that the plannedincreases in output will be obtained..

To a considerable extent the prospects for carry-ing through a development program depend onenlisting the co-operation of thousands, even mil-lions of farmers, whose individual decisions largelydetermine how far the additional output plannedwill in fact be produced. Farmers, like other entre-preneurs, are not likely to make the additionalefforts and to incur the additional risks called for inincreasing their output for the market unless theyexpect to benefit by doing so. In many less de-veloped countries, however, conditions of market-ing, of land tenure, of farm credit, etc., are such asto give farmers little incentive to expand theirmarketable production, or may even largely pre-clude any substantial development. Measures toameliorate these conditions are often essential ifprojects of investment are to yield anything ap-proaching their potential return.

Throughout the chapter, stress is therefore laidon the importance in agricultural programing oftakin.g fully into account the economic, social andinstitutional environment in which the farmers ofthe country live and work. Also stressed is theimportance of choosing development projects andmeasures which can be effectively carried throughwith the organizational structures already at hand,or which could be built up in the time available.

8

This applies especially to the local organization inday-to-day contact with the farmers.

SCOPE, OBJECTIVES AND SPECIAL PROBLEIvIS OF

PROGRAMING FOR AGRICULTURAL DEVELOPMENT

This section briefly reviews the recent extensionof agricultural programing, and the nature of theplans and policies in countries at different stages ofagricultural development. In more developed coun-tries increasing emphasis is being laid on reducingdisparities between rural and urban incomes,notably by raising agricultural prod.uctivity; in-creased production is seldom a primary objective.In economically less developed countries, on theother hand, a main objective is usually to expandproduction in line with the rapid growth of urbandemand and to improve nutritional levels. Strength-ening the balance of foreign payments by reduc-ing agricultural imports or increasing exports isalso a major objective in nearly all less developedcountries.

Consideration is given to some special problemsand difficulties of agricultural programing, whichdo not arise to the same degree in other sectors.Finally the various types of organization that havebeen set up for the preparation of agricultural pro-grams are briefly reviewed. Stress is laid on theneed for close co-ordination with plans for othersectors of the economy, and between the agenciespreparing agricultural programs and those respon-sible for carrying them out.

THE ESTABLISHMENT OF AGRICULTURAL TARGETS

A wide range of targets of varying degrees ofcomplexity and comprehensiveness are used inagricultural programing. Their value and limita-tions are discussed. Methods of establishing pro-jections of requirements for food and other agri-cultural products are considered, both for theirown usefulness and as one approach to establishingproduction targets. Other approaches based ontechnical and local possibilities and on input pro-graming are also considered, including methodssuitable for countries with little basic economic andstatistical information and with little experience ofplanning. Emphasis is laid on the value of follow-ing more than one approach and of graduallyironing out in the process of planning any incon-

sistencies between them which may emerge.Because of the special problems of agriculturalprograming and the importance, especially inless developed countries, of adjusting agriculturalproduction as nearly as possible to requirements, itis suggested that it is usuall.y preferable to start withestimates of the required output. Ultimately,however, it will be necessary to estimate the in-vestment and inputs required, and to adjust theoutput targets to the resources available. Considera-tion is given to some of the special difficulties inagriculture of relating inputs to output.

THE CHOICE OF MEANS TO IMPLEMENT PRODUCTION

TARGETS

Broadly, there are three ways in which govern-ments can influence the pace and direction of agri-cultural development: by direct investment, forexample in large-scale projects of inigation orland settlement; by measures and policies to increasethe farmer's incentives to expand production,such as price stabilization, improvement of theagrarian structure, or the provision of farm credit;and by the provisi.on of improved services to agri-culture, including research and extension services,and services for the control of diseases and pests.The choice and combination of measures willdepend among other things on the objectivessought, on the financial and other resources avail-able, on the skills and limitations of the farmers,on the economic, social and institution.al environ-ment in which they have to work, and on a balanc-ing of the interests of consumers with those of pro-ducers. It is difficult to find objective criteria tochoose among the various alternative means ofimplementing agricultural development.

If agricultural development is thought of pri-marily in terms of investment and cost/benefitratios, there may be some overemphasis on newprojects -which can be evaluated easily in monetary,terms, with inadequate provision for the full useand maintenance of facilities already in existence,or insufficient attention to less easily measurableprojects such as education and extension, the pro-vision of economic incentives, or the reduction ofinstitutional obstacles to development.

Stress is placed on the importance for program-ing of obtaining objective information on the clay-to-day problems of farmers, e.g., on the pricesfarmers actually receive and pay, the extent of

9

their indebtedness, the availability of credit andthe effective interest rates, land tenure arrangementsincluding rents, and the extent of rural underem-ployment. Examples are cited of some conditions,typical of less developed countries, which leavefarmers little incentive to produce more, and ofprograms which have been successful in ameliorat-Mg these conditions.

Filially emphasis is given to the importance ofbuilding up adequate organizations, official andnonofficial, reaching down to the farmers. Organ-izational weaknesses, especially at the local level,are often a main cause for projects and measuresof agricultural development yielding only a frac-tion of their expected benefits. This applies espe-cially to the provision of improved services forextension, farm credit, price stabilization and mar-keting, to the full utilization of irrigation facilities,and to the distribution of fertilizers, improved plant-ing material and other requisites for increased pro-duction.

THE AREA OF CHOICE

The final section of the chapter considers therelationship between direct government investmenton the one hand, and on the other the provisionof economic incentives and improved services tofarmers. The latter measures do not obviate theneed for investment for increased production; theymay indeed lead to a considerably increased levelof private investment in agriculture, including par-ticularly nonnionetary investment from the unpaidlabor of cultivators on their own holdings. Suchmeasures may therefore appreciably increase thetotal investment in agriculture. Moreover, withoutincentive measures and improved services, directgovernment investment may yield only a fractionof its potential return.

The different types of measure are thus essen-tially complementary. They are also, however,competitive in their demands for the limited _fundsavailable for investment and for cun-ent budgetaryexpenditures, as well as for the usually scarceadministrative and organizational resources of acountry.

Some suggestions are made for determining anappropriate balance between the various projectsand measures. In some cases more rapid progressmay be made by concentrating a large share ofresources imito limited areas, or alternatively for

the production of certain key commodities. Thismakes possible a more integrated approach todevelopment than wou.ld be possible if the resourcesavailable were spread thinly over the whole agri-cultural sector. It can also provide an opportunityto try out on a limited scale measures which, ifsuccessful, can later be applied more -widely.

The chapter offers no rules of thumb for finding

10

a rapid and smooth path to agricultural expansion,for the situation in each country is different. It ishoped, however, that this exploration of the prob-lems involved, and of the interrelations betweenthem, will provide some perspective and perhapssuggest some new approaches to those with theheavy and complex responsibility of charting acountry's agricultural development.

Agiicultural production

Following the large expansion in 1958/59,when production was more than 5 percent higherthan in each of the two preceding seasons, thevolume of world agricultural production increas-ed more slowly in 1959/60. According to pre-liminary estimates for the world (excluding Main-land China), pr du don rose b out eThis increase is a little less than the average forrecent years, but it h_gLexceeds the estimatedannual o ulation rowth of 1.6_=nt.

The biggest increases in 1959/60 were inWestern Europe and the Far East (Table 1). In theFar East (excluding Mainland China) productionhas now increased by more than 3 percent for

Prewaraverage

TABLE I. INDICES OF AGRICULTURAL PRODUCTION

Average1918/49-1952/53

1953/54

NOTE: These indices have been calculated by applying regional weights, based on 1952-56 farm price tela ionships, to t se production figures, which are adjust-ed to allow for quantities used for feed and seed. For Mainland China no estimates are included until more complete data are available. The indicesfor food products exclude coffee, tea, tobacco, inedible oilseeds, animal and vegetable fibers, and rubber.

11

two successive seasons. In the regions where theexpansion had been particularly large in 1958/59,there were further small increases in 1959/60 inNorth America and in Eastern Europe and theU.S.S.R., but in Oceania the previous season'shigh level of production was only just maintained.The steady rise in production continued in LatinAmerica, though more slowly than in most recentyears. In the Near East renewed droughts insome coimtries limited production to the samelevel as the year before, and in the African regionthere appears to have been a slight decline. ForMainland China, data on which are not .ncludedin the over-all index, another substantial rise inproduction was annowiced for 1959/60, despitereports of widespread drought.

1954/55 1955/56 1956/57 1957/58 1958/591959/60(Prelim-inary)

ALL AGRICULTURAL PRODUCTS

Indices, average 1952153-1956157 ioo

Western Europe 82 87 100 101 103 103 107 109 113

Eastern Europe and U. S. S. R. 82 86 95 95 104 115 118 129 131

North America 70 93 99 97 101 103 98 106 109

Oceania 78 90 98 98 104 105 102 116 116

Latin America 73 89 96 100 102 106 112 115 117

Far East (excluding Mainland China) 86 87 98 100 104 107 105 109 113

Near East 72 84 100 97 100 109 112 116 116

Africa 70 88 98 100 102 106 103 107 106

ALL ABOVE REGIONS 77 88 98 98 103 107 107 113 115

FOOD PRODUCTS ONLY

Western Europe 82 86 100 101 103 103 107 109 113

Eastern Europe and U. S. S. R. 83 86 95 95 104 115 119 130 131

North America 68 92 98 97 101 104 102 110 111

Oceania 83 93 100 99 104 99 98 115 111

Latin America 70 88 96 101 101 108 111 114 112

Far East (excluding Mainland China) 85 86 99 100 103 107 105 109 113

Near East 72 84 101 97 100 109 112 115 114

Africa 73 89 99 100 101 105 102 105 103

ALL ABOVE REGIONS 77 88 98 98 102 107 108 114 115

Chapter II WORLD REVIEW AND OUTLOOK

There were divergent movements in some re-gions in 1959/60 in the indices of food productionand of total agricultural production.. Except forOceania, where wool weighs very heavily in totalproduction, these two indices generally moveclosely together. In 1959/60, however, while totalproduction was lower than the year before in oneregion of the world, food production declined inno less than four. In Africa the decline in foo:1production was greater than in production as awhole. Food production also decreased in LatinAmerica, where there was a small increase in totalproduction, and in the Near East and Oceania,where total production was unchanged. In NorthAmerica the trends of the two indices have di-verged somewhat erratically for the past three orfour seasons, though this is probably mainly areflection of changes in the various productioncontrols in the United States.

PRODUCTION IN RELATION TO POPULATION

Figure i compares the average annual ratesof growth of agricultural production and of popu-lation over the 12 year period 1948/49-1959/60.World production (excluding the U.S.S.R., East-ern Europe and Mainland China) is estimated tohave increased at an average rate nearly i percentahead of population growth during this period.In the less developed regions, the average annualmargin of production over population is estimatedas rather over i percent in the Far East (excludingMainland China) and the Near East, and slightlyless than i percent in Latin America, where popu-lation is increasing especially fast. In Africa, how-ever, it appears that agricultural production hasonly just kept up with population growth since1948/49. In the more developed regions, therelationships between the trends in production andpopulation reflect mainly the slow growth ofpopulation in Western Europe, its rapid growthin Oceania partly as a result of immigration, andin North America the efforts of the United Statesgovermnent to restrain the expansion of produc-tion in order to check the accumulation of sur-plus stocks.

In 1959/60 there was no significant increasein world agricultural production on a per caputbasis (Table 2). The 1958/59 level of productionrepresented a considerable advance, however, andit was hardly to be expected that this rate of ex-

12

FIGURE i. TRENDS IN REGIONAL AGRICULTURAL PRODUCTIO N

IN RELATIoN 'ro POPULATION cnosxru, 1941/49-1959/60

(Average annual increase on trend line as percentage of averageproduction and population)

LATIN AMERICA,

ot

Agricuiturai Production

' Excluding U.S.S.R., Eastern Europe and Mainland China - ExcludingMainland China.

pansi n would be maintained. An encouragingfeature is that in 1959/60, in contrast to somerecent years, much of the increase in world pro-duction was in the densely populated Far East,where levels of nutrition are probably the lowestof all. Per caput food production in the Far East(excluding Mainland China) now appears to beonly about 3 percent less than before the war.While the prewar level was itself very low (abouthalf the already small world average), the 1959/60position is a substantial improvement over 1957/58,when the deficit as compared with the prewarperiod was about 7 percent and there had been nopermanent increase in per caput food productionsince 1953/54.

In Latin America, on the other hand, whererevised data indicate that the prewar level of per

ALL AGRMULTURAL PRODUCTS

Western EuropeEastern Europe and U. S. S. R.North AmericaOceania

Latin AmericaFar East (excluding Mainland China)Near EastAfrica

ALL ABOVE REGIONS

FOOD PRODUC:TS ONLY

Western EuropeEastern Europe and U. S. S. R.North AmericaOceania

Latin AmericaFar East (excluding Mainland China)Near EastAfrica

ALL ABOVE REGIONS

NOTE: See explanatory note to Table 1.

caput food production liad been approximatelyregained for the previous three years, productionper caput fell back sharply in 1959/60 with thedecline in total food production. In the otherless developed regions, total and per caput foodproduction also decreased in the Near East andAfrica in 1959/60, the continuing decline in Africaapparently taking per caput food production be-low the prewar level for the first time since theimmediate postwar years. In both these regionsthere has recently been a pronounced slackeningin the rate of increase of agricultural production.

Thus, while in the Far East agricultural expan-sion seems now to have regained some of themomentum of the period of recovery immedi-ately after the war, this has been accompanied bya temporary loss of momentum in the Near Eastand Africa. This does not mean, however, thatthere has been any real shift in the center ofgravity of the world food problem, though nat-urally the recent deterioration in the latter tworegions rn.ust give rise to some concern if it is

not soon halted. Figure 2 indicates how small

TABLE 2. INDICES OF PER CAPUT AGRICULTURAL PRODUCTION

13

a share of world agricultural output is producedin the Far East, in comparison with the large pro-portion of the world's population that is concen-trated there. Although the rate of populationgrowth in this region, estimated at 1.4 percent ayear, is comparatively slow, the sheer size of thepopulation translates this into an absolute increaseof some II million persons annually (excludingMainland China). The implications of so massivean increase, in terms of additional requirementsof food and agricultural products, need no em-phasis.

Indices of per caput food production are, ofcourse, only a rough indicator of the progress ofsupplies in relation to population. As they donot take into consideration the sharp changes thathave occurred in the imports and exports of someregions, they cannot give a true picture of themovement of actual food consumption levels.Accurate data on food supplies and consumptionare difficult to obtain, but a later section of thischapter makes a tentative analysis of recent changesin the situation.

Prewaraverage

Average1948/49-1952/53

1953/54 1954/55 1955/56 1956/57 ' 1957/58 1958/591959/60(Prelim-

inary)

93 89 101

Indices, average 1952153-1956157 soo

101 102 102 105 105 10984 91 97 95 103 111 113 122 12289 100 101 97 99 100 93 99 99

104 99 100 98 101 100 95 106 104

108 98 98 100 100 101 104 105 104110 92 99 100 102 104 101 103 10595 92 102 97 98 104 105 106 10493 95 100 100 100 102 97 98 95

96 94 99 98 101 103 102 106 106

93 89 101 101 102 102 105 106 10985 91 97 95 103 112 114 123 12287 99 100 97 99 101 96 102 101

110 102 103 99 101 95 92 105 99

103 97 99 101 99 103 103 103 100108 92 100 100 102 104 100 103 105

95 91 103 97 98 105 105 105 10396 96 101 100 99 101 96 96 92

95 94 100 98 101 104 103 107 107

FIGURE 2. - REGIONAL SHARES OP WORLD I POPULATION AND

AGRICULTURAL PRODUCTION, AVERAGE 1957-59

(Production data based on price-weighted aggregates)

Excluding U.S.S.R., Eastern Europe and Mainland China. - C ExcludingMainland China.

TABLE 3. -- AVERAGE ANNUAL INCREASE IN AGRICULTURAL PRODUCTION COMPARED wrru POPULATION, BY REGIONS AND SELECTED

COUNTRIES, AVERAGE 1952-53 TO AVERAGE 1957-58

The over-all regional indices discussed so faralso average out and conceal the differences amongindividual countries. The position on a countrybasis was briefly touched on in. The state of foodand agriculture 1959, but it seems useful to returnto it since the FAO country indices of agriculturalproduction have now been recalculated on the samebasis as the regional indices and brought up todate, though they are not yet available for 1959/60.

Table 3 compares the recent rates of increaseof agricultural production and population in thosecountries for which FAO indices are published.The indices on which the table is based are alsoshown in Annex Table 1. From these data it is

clear that the degree of success achieved by thedifferent countries in increasing their agriculturalproduction has varied widely.

' Includes Pacific territories, as well as Australia and Ncw Zealand. - C For niorç recent years the estimated rate of population growth is highcr and hasnow been revised to 1.9 ',percent.

223enfocctotal

of

50 50

45

10 rh5

40

35 5

030 -25

20 0

0 0

1 -----iN

I 1 050r1.5 W,sie,n For Ca t ' Latin Africa Near East OceeeioAmerica Europe America

EAorroultural productron

g.3. Population

Production Population Production Population

Percentage Percentage

\XTFSTEISN EUROPE 2.3 0.8 Cuba 3.1 2.1

Chile 2.4 2.5Yugoslavia 7.3 1.3 Colombia 2.4 2.2Greece 6.4 0.9 Argentina. 1.9 1.9Austria 3.6 0.2 Peru -0.2 2.5Belgium-Luxembourg 2.6 0.6 Uruguay -1.0 1.3Ireland 2.5 -0.6Spain 2.2 0.8United Kingdom 2.0 0.4 FAR EAST (excluding Mainland China) .... 2.4 1.4Denmark 1.9 0.7Germany, Western 1.9 1.1 Japan 5.2 1.1Italy 1.9 0.5 Taiwan 3.8 3.6Frunce 1.7 1.0 Philippines 3.1 2.5Netherlands. 1.5 1.3 Federation of Malaya 3.0 2.7Switzerland 1.3 1.2 Korea, South 2.5 1.0Finland 1.2 1.1 Ceylon . 2.4 2.5Portugal 1.1 0.8 India 1.9 1.3Norway 0.8 1.0 Indonesia 1.8 1.9Sweden -1.3 0.7 Pakistan 0.7 1.3

Thailand 0.3 1.9Burina -0.1 1.0

NORTH AMERICA 0.6 1.8

United States 1 . 0 1.7 NEAR CAST 3.3 2.2Canada -2.3 2.8

Israel 8.5 3.9United Arab Republic: Egyptian Region 4.0 2.4

OCEANIA 2.3 2.4 Iran 3.9 2.4Turkey 1.7 2.7

Australia 2.3 2.2New Zealand 2.3 2.2

AFRICA 1.7 2.2

LATIN AMERICA 3.5 2.4 Tunisia 2.9 1.2Union of South Africa 2.9 1.8

Mexico 7.3 2.9 Algeria 0.1 1.8Brazil 4.7 2.4 Morocco (former French zone) -1.1 1.8

In 15 (almost a third) of the countries for whichdate are available, production is estimated to havefailed to keep up with the growth of populationbetween 1952-53 and 1957-58. Most of these coun-tries are in the less developed regions, where ef-forts to increase agricultural production have beena major preoccupation of governments during thisperiod. Among them, only Ceylon, Chile andTurkey appear to have particularly high rates ofpopulation growth, and in the other less developedcountries in this group the failure of agriculturalexpansion must be blamed for the deficit.

In 14 of the countries covered, the productionincrease equaled population growth or exceededit by up to 0.9 percent per annum. In a further14 countries the margin was from 1.0 to 3.9 per-cent. This group includes, among less developedcountries, Brazil, the Egyptian Region of theUnited Arab Republic, and Iran, where theperformance of agricultural production in the faceof a very high rate of population increase is espe-cially noteworthy.

Filially, in five countries, Greece, Israel, Japan,Mexico and Yugoslavia, the production increase hasexceeded population growth by an average ofbetween 4 and 6 percent each year. Although,except for Israel and Mexico, population growthis fairly moderate, the rate of increase of agricul-tural production has been so well sustained in thesecountries that the measures employed by themto encourage and promote agricultural develop-ment might well repay careful study by othercountries where conditions are similar.

PATTERN OF AGRICULTURAL PRODUCTION

Recent changes in the world production ofthe main agricultural commodities are summarizedin Annex Table 2. The production of each com-modity is also reviewed in the usual commoditysurvey at the end of this chapter. In addition, itis of interest to compare production trends forthe main groups of agricultural products (Figure 3).

For the world as a whole, there appears to llavebeen no very significant difference over the past12 seasons in the rate of growth of the main groupsof commodities, though it seems that livestockproduction has expanded a little faster than theother groups. For the individual regions, how-ever, there llave been sharp variations, especiallyin the position of livestock products.

15

The slightly more rapid increase in livestockproduction on a world basis appears to be due en-tirely to the more developed regions of WesternEurope, North America and Oceania, where incontrast to the less developed regions livestockproducts form a large proportion of total agri-cultural output. In the more developed regionsthe increased demand resulting from higher in-comes goes niainly to the more expensive livestockproducts, which in each of these regions haveexpanded more rapidly than total agriculturalproduction. In each of the less developed regions,on the other hand, where, although the nutritionalneed for increased con.sumption of livestock prod-ucts is particularly urgent, purchasing power isinsufficient for a high level of effective demand,they have been increasing more slowly than totalproduction. Statistics of livestock production inthese regions are too incoinplete and unreliable,however, for any very fi ni conclusions to be draw,: .

The basic grains and starchy roots, which rep-resent a high proportion of total production inmost less developed countries, have been increas-ing faster than production as a whole in both theFar East and Near East. They have expandedmore slowly than total production in Latin Amer-ica and also in Africa, though it should be notedthat in the latter region statistics of basic food cropsare especially poor. In Western Europe and NorthAmerica the increase in basic food crops has beenquite close to the trend for total production, butin Oceania the trend in the:ir production has beenstatic. Per caput d.emand for basic calorie foodsin the higher income countries appears generallyto llave been satiated or even to be declining.A large part of the output in these countries isused for animal feeding, and much of such in-creases as have occurred has accumulated in surplusstocks.

The residual category of '',, iother crops nFigure 3 (sugar, pulses, oil crops, fruit, vegetables,beverages, tobacco, fibers) varies greatly in its

composition from region to region, and it is there-fore not possible to draw very useful conclusionsfrom trends for the group as a whole. It is of in-terest, however, that this group has increased fasterthan all the others in Oceania, Latin America,the Near East and especially Africa. In the latterthree regions, this commodity group contains ahigh proportion of crops grown primarily forexport.

Many countries, especially in the less developed

Percentage

FIGURE 3. - TRENDS IN REGIONAL PRODUCTION OF MAIN COMMODITY GROUPS, 1948/49-1959/60

(Average annual increase OD trend line as percentage of average production)

Livestock products 2

Basic food crops3)All agricultural products

Other crops

Other crops 4

All agricultural productsBasic food crops3) 3

Livestock products

Other cropsBasic food crops 3) 4All agriOultural products

Livestock products 3

regions, are attempting to increase the diversityof their agricultural production, both in order tolessen their dependence On a narrow range ofexports and to improve the nutritional quality ofthe diet of their population. The progress of suchdiversification cannot, of course, be ascertained

Percentage

Livestock product,s 3_Basic food crops3)All ogricultural productsOther crops 2-

Livestock productsAll agricultural productsBasic food crops 3)

Other crops

Other crops

Livestock productsAll agricultural products

Basic food crops3)

Basic food crops 3)All agricultural productsOther crops

ivestock products

0 her crops

All agricultural productsLivestock products

Basic food crops 3)

' Gross production. - Excluding the U.S.S.R., Eastern Europe and Mainland China. - Grains and starchy roots. - a Excluding Mainland China.

without a detailed examination of data for individ-ual commodities and countries. The above anal-ysis suggests, however, that the most urgentlyneeded form of diversification, an increase in theproportion of livestock products in productionand consumption, is not yet occurring in the less

developed regions. The trend in this respectappears in fact to be toward reduced rather thangreater diversity, though this conclusion must beput forward with reserve in view of the statisticalinadequacies already noted.

REGIONAL AGRICULTURAL PRODUCTION IN 1959/60

Brief notes follow on changes in agriculturalproduction in the various regions of the worldin 1959/60. For fuller details of the regional pro-duction of the rnain commodities, reference shouldbe made to Annex Tables 3-1o.

Western Europe

Following a period of relative stability from1953/54 to 1956/57, agricultural production inWestern Europe has expanded substantially overthe past three seasons. In 1959/60 the increasearn.ounted to about 4 percent, which was greaterthan for any other region, and resulted mainlyfrom large harvests of wheat, barley, maize andpotatoes.

The production of sugar beet, fodder roots andhay was affected by a severe summer drought inmost of the northern and central parts of the region,but the weather in this area proved favorable forgrains and there were substantial increases in wheatand barley crops. In the southern parts of the re-gion weather conditions were generally good, andmaize production increased by about 30 percent.A re d level of production was reached. in Yu-goslavia, where maize production rose by as muchas three quarters and wheat by two thirds overthe previous year's crop. In Italy, however, thewheat area was smaller and yields were reducedby heavy rain. After the bumper harvests of1958/59, the production of apples and pears drop-ped back sharply to more normal levels, becauseof late spring frosts as well as the summer droughts.Orange production continued to rise in Italy andSpain.

In many countries the rate of increase of milkproduction was slowed down by the dry summerof 1959, but the expansion has been resumed inthe early months of 1960. Cattle numbers haverisen in most countries, especially in Denmark,Ireland and the Netherlands. Pig numbers havealso increased substantially in the main exporting

17

countries; pigmeat production was higher in Den-mark, the major exporter, but declined cyclicallyin several other countries. The production ofeggs and poultry meat has continued to increase.Specialized broiler chicken production has con-tinued to develop rapidly, especially in the UnitedKingdom.

Eastern Europe and U.S.S.R.

In 1958/59 exceptionally large harvests in theU.S.S.R. had brought an increase of 9 percentin this region's production, in spite of crop fail-ures in some of the Eastern European countries.Preliminary estimates indicate a further increaseof about i percent in 1959/60. Crop productionwas reduced by drought in parts of the U.S.S.R.and in several countries of Eastern Europe, but witha few exceptions the season was generally favorablefor livestock production, especially in the U.S.S.R.

Total grain production in the U.S.S.R. is re-ported to have fallen by I 1 percent from the record1958/59 leVel Of 141 million tons, but stocks car-ried over from that harvest compensated for thedecline in state procurements. Drought in theUkraine, North Caucasus, Volga and. Urals wasthe main cause of the decline, while in Kazakh-stan a million hectares remained unharvested whenthe winter snows began. Sugar-beet productionfell by about zo percent because of the drought,in spite of a zo percent increase in area. The pro-duction of vegetables and sunflowerseed also de-clined, but cotton rose by 7 percent to the rec -ord level of 4.7 million tons (unginned). Therapid increase in livestock numbers continued,especially in the socialized sector, and with largequantities of feed available from the 1958/59 har-vests the production of meat, milk, eggs and woolshowed increases ranging from 6 to I 6 percent.

Grain production was larger than in 1958/59in all the Eastern European countries except East-ern Germany, but the increase was marked onlyin the Danubian countries, where yields liad beenvery low the year before. Maize production in-creased by about 70 percent in Bulgaria, 25 per-cent in Hungary and more than 50 percent in Ro-mania, and wheat by 28 percent in Hungary andaround 40 percent in Romania. Sugar-beet andsunflowerseed harvests were also large in thesecountries, but in Czechoslovakia, Eastern Germanyand Poland the production of grains, green fod-

der and sugar beet was affected by drought.Livestock production increased in 1959 in mostcountries of Eastern Europe, but in the norffiempart of the region the drought caused shortages offorage. Some countries liad severe difficulties inpigmeat production, and Poland was obliged toimport meat, introduce meatless days, and raiseprices sharply.

North America

Revised estimates indicate that in 1958/59 pro-duction in North America rose by no less than8 percent from the low level of the year before.The 1959/60 season was again a record one, witha further expansion estimated at more than2 percent. Most of the increase was in livestockproducts, maize and cotton.

Although lower yields than in thc 1958/59record season reduced the wheat crop by some25 percent, total United States farm output in the1959 calendar year was slightly above the recordlevel of the year before. There were substantialincreases in the acreage and production of maizeand cotton, following changes in support policiesfor these commodities. The production of pork,poultry meat and eggs increased, and beef pro-duction also started to rise again in 1959.

In Callada wheat production rose by more thanio percent froni the low 1958/59 level but re-mained below the 1951-59 average. Coarse grainproduction was approximately the same as in1958/59; a decline in barley was more than off-set by increased production of maize, mixed grainsand oats. Most other crops, except for sunflow-erseed and dry peas, were smaller in 1959/60.Marketings of pigs rose steeply, so that the outputof livestock products increased in 1959 in spiteof a sharp decline in cattle marketings.

Oceania

After a very large increase, now estimated at14 percent, in 1958/59, agricultural productionin Oceania appears to have approximately main-tained this high level in 1959/60. A large part ofthe expansion in 1958/59 liad come from grahiproduction, but this fell back to more normallevels in 1959/60.

Australian wheat production fell by about io

18

percent from the high 1958/59 level, and barleyand oats declined even more sharply. Sugar pro-duction was slightly reduced in Australia but in-creased in Fiji, and the prod.uction of copra in thePacific islands declined further. The productionof wool, however, which represents almost 40percent of the region's total agricultural output,again increased sharply in both Australia and NewZealand. Mutton and lamb production also show-ed a further substantial increase, but the outputof beef in Australia fell by more than io percentin 1959/60.

Latin America

Revised data show that the large increases inLatin American agricultural production in 1956/57-1958159 restored per caput production of food(though not of agricultural products as a whole)to approximately the prewar level in each of thesethree seasons. The preliminary information atpresent available for 1959/60 suggests that, whiletotal agricultural production rose by more than

percent, food production declined by about thesame percentage, so that per caput food productionis once again less than before the war.

A decline in grain production in 1959/60 wascaused by bad weather conditions in various coun-tries. Beef production also fell, largely becauseof reduced output in Argentina. Increases of 7to 8 percent in the production for rice and ground-nuts and a recovery of 70 percent in sunflowerseedproduction were insufficient to bring a rise in totalfood production. Further expansions of 18 per-cent for linseed and 36 percent for coffee, however,contributed to a small rise in total agriculturalproduction.

Countries where the production of various cropswas affected by bad weather were particularlynumerous in 1959/60, and included Argentina,Brazil, Costa Rica, Guatemala, Mexico and Uru-guay. In Argentina the wheat and maize cropsfell by nearly 20 percent and there was also a bigdecline in cotton, though the linseed harvest roseby 25 percent. Beef production fell sharply, re-flecting lower cattle numbers and the start of abuild-up of herds. Agricultural production ex-panded by nearly 7 percent in Brazil, but thiswas mainly due to sharp increases in coffee andgroundnuts, as droughts and floods caused short-ages of beans, potatoes and other staple foods.

Mexico's agricultural prod.uction probably mercased only slightly in 1959/60; there were substan-tial gains in sugar and maize, but a sharp rabiction in cotton production. In Uruguay agriculturalproduction was severely affected by the floodsof 1959; the production of wheat, oats, linseedand meat fell considerably, and imports of wheatand ineat were necessary.

Far East

One of the most encouraging features of theagricultural production situation in 1959/60 wasthat production in the Far East (excluding Main-land China) increased by more than 3 percentfor the second consecutive year. As noted earlier,per caput food production now appears to be onlyabout 3 percent less than before the war. Ac-cording to preliminary estimates, grain productionexpanded by 5 percent in 1959/60, with an espe-cially large increase for wheat. Pulses also increas-ed sharply, but the production of groundnuts andalso of jute declined, while copra productionfailed to recover completely. The slow expansionof livestock production appears to llave continued.

The "C were favorable weather conditions in mostof the region in 1959/60, although bad weatheraffected production in a few countries. In Ceylonrice yields were maintained, even though . some ofthe crop was destroyed by floods just before har-vesting. Drought and floods reduced grain produc-tion in some parts of India, but with good yieldsin other areas the decline in total grain productionwas probably small. Cotton and jute productiondeclined in that country, partly because of thecompetition for land with food grains, and theproduction of groundnuts was also lower. InIndonesia grain prod.uction increased, and therewas also a substantial increase in rubber, the steadyexpansion of which continued in the Federation ofMalaya as -well. Pakistan harvested a record ricecrop which was nearly a quarter above the previousyear's low level, but there was a slight decline injute. Copra production in the Philippines wasstill suffering from the drought of 1958. Riceharvests were large in Japan and South Korea,but were reduced in South Viet-Nam andTaiwan.

In Mainland-China, although severe droughtis said to have affected one third of the farmland

19

in 1959, agricultural prod.uction is officially re-ported to have increased by a further 17 percent.Production estimates for 1958, the year of " thegreat leap forward, " were substantially reducedin August 1959. Total " grain " production in1958 (including the grain equivalent of potatoes,sweet potatoes and pulses), was revised from theoriginal estimate of 375 million tons to 250 mil-lion tons. The first official estimate for 1959 re-ports a rise of 8 percent to 270 million tons, or 2percent short of the year's target, though produc-tion figures for the individual grain crops have notyet been published. Cotton production, for whichofficial production estimates were revised from3.4 to 2.1 million tons for 1958, iS reported tohave reached 2 4 million tons in 1959. Intensiveefforts have been made to increase pig breeding,and pig numbers are reported to have risen from16o million in 1958 (revised frOM 250 Mill.1.011)tO 18o million in 1959. Transport difficultiesappear to have persisted and to have preventedsupplies from reaching urban areas in sufficientquarairy to relieve the tight food situation.

Near East

After increasing by more than 3 percent in1958/59, agricultural production is estimated tohave remained at about the same level in 1959/60.Food production, however, declined slightly. Grainproduction fell by a further 86o,000 tons from thelow level of 1958/59, and increases in other cropswere sufficient only .to offset this decline.

As in 1958/59, Iraq, Jordan and. the Syrian Re-gion of the United. Arab Republic suffered fromdrought and their conibined production of wheatand barley in 1959/60 was again about half the1957/58 level. In Turkey rice production was20 percent lo-wer and wheat and barley nearlyio percent lower in 1959/60 than in 1958/59. Therice crop recovered in the Egyptian Region ofthe United Arab Republic, however, and totalgrain production also increased substantially inIran. Tobacco production recovered in Turkey,and there was a further remarkable rise of over40 percent in sugar production in this country.Cotton production expanded in most countriesin 1959/60. The output of livestock productsis estimated to have been about the same as theyear before.

Africa

Agricultural production in Africa, which re-covered by more than 3 percent in 1958/59 fromthe low 1957/58 level, again fell back slightlyin 1959/60. The fall in food production was some-what sharper, and per caput food productionis estimated to have fallen below the prewar levelfor the first time since the immediate postwar years.Cocoa and coffee were almost the only products toshow large increases (about io percent) in 1959/60.

Grain production was 1.3 million tons less thanin 1958/59. Small increases in wheat proc-luctionin Algeria and the Union of South Africa weremore than offset by lower crops in Morocco andTimisia. The region's barley production fell bynearly 25 percent, with a decline of half a milliontons (about 30 percent) in Morocco alone. Maize

production was reduced in the Union of SouthAfrica. Mauritius and Reunion liad large sugarharvests, but production was lower in the Unionof South Africa. Groundnut production againdeclined in Nigeria and Senegal. On the otherhand, both Ghana and Nigeria liad record cropsof cocoa, and coffee production increased in allthe main producers except Ethiopia and Madagas-car. The region's small output of livestock prod-ucts appears to have remained unchanged.

FISHERY PRODUCTION

The world catch of fish showed a further largeincrease in 1959 and according to preliminary data

probably exceeded 35 million tons (Tabl_e 4 andAnnex Table II). This Was primarily due tofurther substantial expansion in Peru and MainlandChina. Peru has now jumped to fifth placeamong the fish producing countries as a result ofintensified exploitation of its anchoveta resources.Mainland China's production is reported to haveexceeded 5 million tons in 1959, which wouldmake it the second largest fish producer in theworld.

Production also increased in most of the othermajor producing countries, with landings 5 toio percent higher in Japan, the United States,Canada asid the U.S.S.R. In some of these coun-tries, however, the value of production declinedas a result of substantially reduced catches of im-portant higher priced species. In the United States,for example, low priced industrial fish for the

20

first time accounted for a larger proportion oftotal production than edible fish.

FOREST PRODUCTION

The effects of economic recovery on the del-nandfor forest products became more marked in 1959,and total removals of industrial roundwood areestimated to have increased by nearly 4 percent(Table 5). At the same time total fuelwood re-movals declined by about the same percentage.

In North America, the total volume of round-wood production was nearly 5 percent higherthan in 1958, although still 4 percent below 1956,

TABLE 4. - ESTIMATED WORLD CATCH OF FISH, CRUSTACEANS, AND MOLLUSKS

1938 Average1948-52 1953 1954 1955 1956 1957 1958

1959(Prelim-

Mary)

Western Europe 5.44 6.19 6.77

Million

7.24

metric tons, live

7.35

weight

7.77 7.33 7.18 7.5Eastern Europe and U. S. S. R. 1.70 1.99 2.28 2.58 2.84 2.99 2.94 3.04 3.2North America 3.15 3.60 3.62 3.83 3.78 4.12 3.79 3.75 4.0Oceania 0.09 0.09 0.11 0.11 0.11 0.12 0.13 0.13 0.1Latin America 0.24 0.50 0.73 0.80 0.97 1.08 1.33 1.83 3.0Far East 9.10 7.42 9.78 10.46 11.29 11.62 13.06 13.93 15.5Near East 0.33 0.38 0.43 0.43 0.41 0.44 0.43 0.43 0.4Africa 0.45 1.03 1.52 1.56 1.60 1.71 1.82 1.81 1.9

WORLD TOTAL 20.50 21.20 25.24 27.01 28.35 29.85 30.83 32.10 35.6

the postwar peak. In the United States, saw logs,veneer logs and pulpwood all increased in 1959,by as much as 16 percent for softwood peeler logsand 8 percent for pulpwood. In Europe, however,the declining trend in the output of industrialwood since 1955 did not change in 1959, in spiteof the generally high level of economic activity.Depleted stocks, a buoyant sawnwood market,and sometimes also rising prices, led to an increasein coniferous saw log production in many -West-ern European countries, but in some countriesin Eastern Europe reduced felling programs, im-plementing long-range forest policies, have tem-porarily lessened the output of coniferous logs.There is no change in the declining trend of Euro-pean pitprop production, due to the difficultiesexperienced in most coal-mining industries. Inresponse to the heavy demand for plywood, how-ever, the production of veneer logs increased.,and an improved market for pulp and paper prod-ucts has favored the production of pulpwood inmost European countries. The steady increasein timber production in the U.S.S.R. continuedin 1959, with a 6 percent increase in removals ofindustrial wood.

Latin America , roundwood production was onlyslightly higher than in 1958; the output of saw-logs declined and the production of pulpwoodincreased. In the Near East, the most noticeabletrend in 1959 was the increased fellings in poplarand eucalypt plantations outside the forests, inwhich the output of industrial wood is relativelyhigh. Improvements in the general economicsituation in the Far East, together with measuresto improve housing, fostered a greater output ofroundwood and in particular logs, and the pro-

21

duction of all industrial wood increased by almostro percent. Low freight rates, favorable climaticconditions and a good local market led to an in-crease in the output of roundwood in Africa also.

AGRICULTURAL PRODUCTION OUTLOOK FOR 1960/61

Such indications as are available at the end ofJune 1960 are for a larger world production ofmost commodities in 1960/61. The prospects are,however, always liable to alteration as a resultof changes in weather conditions later in the season.

In Western Europe grain crops are likely todecline somewhat from the high 1959/60 levels.On the other hand, recovery from the small appleand pear crops appears probable. Livestock pro-duction is expected to continue to expand. Cattlenumbers are increasing in several countries, while1960 also started with an upswing in the pigcycle in some countries. The production of poul-try meat and milk should rise further, but somedecline in mutton and lamb production is likelyin the United Kingdom.

In the U.S.S.R. frosts and dust storms in theearly spring severely damaged -winter wheatsowings in the Ukraine and North Caucasus, partof which were lost and had to be resown. Largerareas are therefore reported to have been sown tospring grain in the eastern regions to make goodthe losses. The dust storms and spring frosts alsodamaged crops in parts of Bulgaria, Czechoslovakia,Hungary and Romania.

Agricultural production in North Americawill probably equal or even exceed the recordlevel of 1959/60. In the United States the winter

TABLE 5. - ESTIMATED REMOVALS OF INDUSTRIAL ROUNDWOOD

Average1948-52 1953 1954 1955 1956 1957 1958 1959

(Preliminary)

Million cubic noas

Europe 172.6 176.0 188.4 197.7 197.2 196.9 194.2 192U. S. S. R. 162.8 179.9 205.8 212.1 222.0 237.9 252.0 265North America 302.1 306.2 329.3 352.2 359.3 332.2 322.1 335Oceania. 10.5 12.6 13.2 14.1 14.4 14.0 14.5 14.6Latin America 23.2 25.9 26.4 29.1 28.7 28.1 28.1 28.5Africa 7.4 9.3 10.4 11.1 9.7 10.6 11.0 11.9Asia . 50.6 62.1 63.6 70.6 97.5 99.9 105.2 115

WORLD TOTAL 729.2 772.0 837.1 886.9 928.8 919.6 927.1 962.0

wheat crop is expected to be about io percentlarger and, with spring wheat production fore-cast as increasing 23 percent, total wheat pro .duction may exceed the reduced 1959/60 levelby 13 percent. In Canada wheat prospects arefavorable because of good soil moisture conditions.Plantings of the four major coarse grains in theUnited States are slightly less than in 1959/60.Pigmeat production is expected to decline in theUnited States, but cattle numbers have risen andan increase in marketings is likely. In Canadaalso, reduced rnarketings of pigmeat are expectedin 1960, and beef marketings will be larger follow-ing the expansion of cattle numbers in 1959.

With a normal season, agricultural production inOceania can be expected to resume its upwardtrend in 1960/61. The steady expansion of agri-cultural production in Latin America also appearslikely to continue. In Argentina farmers will prob-ably plant more wheat, and more favorable pricesmay lead to larger coarse grain acreages, while withhigher cattle numbers an increased beef output isexpected.. Policies to encourage cotton productionhave been discontinued in Mexico and Nicaragua,however, and in Brazil imfavorable weather atthe end of 1959 may substantially reduce the coffeeharvest from the record 1959/60 level.

In the Far East the large grain crops of the pasttwo seasons have been due, at least in part, to par-ticularly favorable weather, and it is thereforepossible that there may be some leveling off in1960/61. Extended drought early in 1960 innorthern India is expected to reduce yields ofwheat and pulses. Copra production in the Phil-ippines is recovering from the effects of the droughtwhich had reduced output to low levels in 1958and 1959. In Mainland China an expansion ofthe grain area and the further development ofthe livestock industry are planned, with evengreater emphasis on pig breeding than last year.

In the Near East the early forecasts for the1960/61 winter crops indicated a third successiveyear of drought in Iraq, Jordan and the SyrianRegion of the United Arab Republic and alsoin Israel and Lebanon. The acreage of cotton andrice has been reduced in the Egyptian Region ofthe United Arab Republic. Favorable weatherconditions are reported. from Turkey, however,and Sudan expects a record crop of millet and.sorghum.

The North African countries have had betterrains than in 1959, and wheat and barley crops are

22

expected to show an increase over the low produc-tion of 1959/60. In Southern Rhodesia and SouthWest Afi-ica a period of drought in early 1960adversely affected the livestock situation and, toa smaller extent, crop production. The cyclonedainage in Mauritius and Reunion at the beginningof 1960 will reduce the 1960/61 sugar crops byabout 25 percent.

VARIABILITY OF AGRICULTTJRAL PRODUCTION

The above account of current crop prospectsemphasizes once again the dependence of agri-cultural production on the weather. In the post-war period, governments have sought increasinglyto influence agricultural production, but the effectof their policies and measures, as also of changesin demand and prices, is chiefly on the longer-term course of production. Even if a maximumor minimum acreage is fixed for a particular crop,the final determinants of the level of productionin any given -y-ear remain the weather and othernatural factors. Technical improvements, includ-ing irrigation, the introduction of better seedsand mechanized cultivation to make the best useof available rainfall, flood control measures, andthe control of pests and diseases, can lessen theeffects of some of these natural factors, but theycannot entirely eliminate them. In any case, themajority of the world's farmers do not yet havethe benefit of such improvements and remain asmuch as ever at the mercy of the weather.

When adverse weather is widespread, it caneven have a sharp effect on the production of awhole region of the world, as for example in theFar East in 1957/58, the Near East in 1954/55,and Africa in 1957/58 and 1959/60. For an in-dividual country the fall in production may be muchmore severe. The indices of production in AnnexTable i show that declines of 5 to io percent ina single year are quite conunon. Larger fluctua-tions appear to occur mainly in a few areas wherethe rainfall is particularly uncertain, includingNorthwest Africa, parts of the Near East, and cer-tain rice-growing countries in Southeast Asia.Production is estimated to have dropped in Algeriaby about io percent in both 1955/56 and 1957/58,in Morocco by 15 percent in 1957/58, and in Tuni-sia by 21 percent in 1955/56 and 13 percent in1957/58. In Turkey production fell by nearly20 percent in 1954/55, while it is probable that

F[GuRE 4. VA It FA BILTUY OE WHEAT 1H<ODUCTION AND YIELDS IN SELECTED COUNTRIES, 1948/49-1959/60

(Average annual deviation from trend line as percentage of average annual production or yield)

2 0

15

10

U.A. R.) S

Canada

Romania

B ulgaria

TurkeyAustralia

Franco

MexicoHung ar y

PakistanE. Got many,

U.S.S.R.Belgium-

Sp oin

GreeceItalyIndia

Japan

U.

Poland

Iraq

Yugoslavia

TunilaBrazil

SwedenPortugal

MoroccoU.of S.AfricaCzechoslovakia

U.S.A.

Algeria

U.A.R.I Egypt )

AustriaIranW. Germany

Chile

fluctuations have been even greater in the so-called " fertile crescent comprising Iraq, Jordan,Lebanon and the Syrian Region of the UnitedArab Republic, where, as was noted earlier,droughts llave now caused crop failures for twosuccessive seasons and appear likely to do thesame in 1960/61. In Southeast Asia the failure ofthe monsoon brought falls of 14 percent in produc-tion in Burma in 1957/58, and of about zo percentin both 1954/55 and 1957/58 in Thailand.

Outside these especially vulnerable areas, largereductions in output have also occurred in Canada,Japan and. Yugoslavia in some recent years as aresult of bad weather. Certain arcas, especiallythe islands in the Caribbean and in the Indian ancl

23

Tunisia

Iraq'

Romania

razi I

Bulgkria

U. of S. Afnca

Argentina

SpainBelgiumGraven,.

AAul

Ialy

W.Gcr manyU.A.R. (Egypt)

Chil e

U.A.R.( Syria )

YugoslaviaCanada

PortugalTurkeyUruguay

MoroccoAustralia

HungarySwedenU.S.S.R.

U.S.A..-Pak I stein

E, GermanyMexico CzechoslovakiaIranFranco

aeonU.K.Pa load

Pacific Oceans, are particularly liable to damagefrom cyclones and hurricanes. There are alsospecific regions within many countries wheredroughts or floods are very frequent. Hardly a yeargoes by without crop failures in some areas ofIndia or Mainland China. Other examples are the" drought polygon of northeast Brazil and. someAndean localities in Bolivia, Ecuador and 1?eru.In West Africa production is fairly stable in theforest zone, where roots and tubers are the staplefoods, but in the arid areas bordering the Saharathe yields of thc staple millets and sorghums fluc-tuate widely and there is sometimes a " hungryseason before the next harvest.

Fluctuation.s in the output of individual crops

PRODUCTION

Ur 61qUEly

YIELD

35

are naturally larger than those in agriculturalproduction as a whole. Indeed, it is noteworthythat in the countries where total production tendsto fluctuate most widely it is often rather heavilydominated by one or two crops, as with wheatand barley in Northwest Africa and the " fertilecrescent, and rice in Southeast Asia. The exist-ence of a sizeable livestock industry, on the otherhand, is often a stabilizing influence on the levelof total agricultural output; this may be so evenin arid countries, where meat production tendsto increase in a drought year as a result of emer-gency slaughterings.

Figure 4 shows the average annual variabilityof the production and per hectare yield of wheatin the larger producing countries. It appearsthat the variability of output results mainly fromfluctuations in yields, though in most cases pro-duction has fluctuated slightly more than yields,as the weather also affects the area that can besown or harvested. In a few countries variationsin production have been much greater thanyields, and in some of these, notably Argentina,the Egyptian Region of the United Arab Repub-lic, France and the United States, this probablyreflects the effect on the sown arca not only ofthe weather but also of changes in price policiesand other production incentives and controls.

Wheat yields appear to have fluctuated leastin Europe, and also in Chile, in the EgyptianRegion of the United Arab Republic, where pro-duction is entirely irrigated, in India, where almosthalf the wheat output is grown under irrigation,and in Japan. The greatest variability has beenin the vulnerable Northwest African and NearEast countries discussed above, in some countriesof Southern Europe, and also in Canada. In theother three major wheat-exporting countries,Argentina, Australia and the United States, yieldshave been more stable than in Canada, but havenevertheless fluctuated considerably.

Table 6 indicates that even on a regional basiswheat production has fluctuated widely, especiallyin Oceania, Latin America and North America.The least variability has been in Western Europeand the Far East, where the fluctuations in mostindividual countries are relatively small, whiledifferent trends in the large number of producingcountries tend to stabilize the regional total. Acomparison of the fluctuations that have occurredin area, yields and production indicates thatchanges in the arca must often have been in the

24

TABLE 6. - VARIABILEFY OF WHEAT AREA, YIELD

AND PRODUCTION, BY REGION, 1948/49 - 1959/60

Harvestedarea

YieldProduction

per hectare

Percentaqe

' Average annual deviation (standard error of estimates) from trend line,expressed as percentage of average annual area, yield and production.

opposite direction to yield changes. An increase inthe area may frequently lead to lower yields,and vice versa.

Space does not permit a similar analysis for otherproducts, but regional dat for some of the maincrops are summarized in Annex Table 12. Gen-erally speaking, fluctuations in the yields of othercrops appear to have been smaller than for wheat.Among livestock products, for which no data areshown, yields of milk and wool often fluctuatesharply with the weather, especially in Oceania.The shortage of fodder and drinking water indrought years, and also outbreaks of diseases, maycause severe reductions in livestock numbers,though in most countries fluctuations in numbersresult mainly from such other factors as changesin prices.

The examples quoted are sufficient to indicatethe seriousness of the problem that a country canface in a season when its agricultural productionis badly affected by the weather. Such fluctua-tions were, in the past, the chief cause of the fam-ines that have been recorded since biblical times.There was a major famine in Bengal as recentlyas 1943, when 1.5 million people perished, butimproved storage and, above all, transport havecontributed greatly to the avoidance of furtherdisasters of such magnitude. Such famines as

have occurred more recently have usually beenconfined to limited areas within a country and havequickly been overcome by moving in suppliesfrom other parts of the country or from abroad.The availability of surplus stocks of foodstuffs,as gifts or on special terms, has been an importantnew factor in the avoidance of famine.

Even though it is much easier than in the past

Western Europe 2.8 3.5 5.5North America 8.0 7.8 12.6

Oceania 12.2 16.1 17.2

Latin America 9.2 8.8 15.3

Par East (excluding:Mainland China) 4.5 4.2 5.9Near East 3.8 7.5 8.3

Africa 5.3 7.9 8.6

to avert a major famine, crop failures can never-theless have serious effects on food consumptionlevels, especially among subsistence farmers andthe poorer groups of the urban population. Short-ages of basic foods cause steep rises in retail prices.Exports, too, are often sharply affected, and atthe same time as export earnings are reduced itis necessary to make additional food imports, tothe detriment of the balance of payments and theimport of the capital goods needed for the execu-tion of economic development plans.

TRENDS IN CROP PRODUCT ON, AREAS AND YIELDS

Although in any single year the weather canvitiate plans and intentions to expand or reducethe production of a particular crop, the trendof production over a period of years depend-3 toa ,reater extent on the reactions of farmers toprice and demand factors and to governmentmeasures to encourage or discourage production.These are the main determinants of the longer-term trend, from which in a given year the weathermay cause the deviations discussed above. Farm-ers can influence the level of their production byvarying either the area planted or the intensityof application of such inputs as labor, machinery,seeds, fertilizers, pesticides and irrigation water,which affect the yield per unit of area. It is there-fore of interest to examine the relative contribu-tions of increases in crop areas and yields to thepostwar expansion of agricultural production.

Figure 5 brings out a striking contrast in thisrespect between the more and less developed re-gions of the world.. In the less developed regions,while there has been some limited increase in yieldsper hectare during the perioci 1948/49-1959/60,the larger part of the increase in output of themajor crops has clearly resulted from the extensionof the cul.tivated area (including double cropping).In Western Europe, North America and. Oceania,on the other hand, the rise in yields has been muchmore marked. Crop areas have increased moreslowly, and in many cases production has ex-panded in spite of a decline in the area.

There have of course been exceptions to th.is

general rule, and some notable increases in yieldshave occurred in the less developed regions. Ex-cept for Latin America, rice yields are estimatedto have increased faster than area in each of theseregions, including the Far East, where rice is

25

the predominant crop. Among the other maincrops covered in Figure 5, the increase in yieldshas also exceeded that in area for cotton in LatinAmerica, potatoes in the Far East, and maize inAfrica. Large increases in production llave alsobeen obtained for sugar and for tropical treecrops, such as cocoa, coffee and tea. The statis-tical data are generally inadequate to show therelative contributions of new planting and improv-ed yields, but in many countries recent new plant-ing and replanting have mainly been with muchhigher-yielding strains. Measures for the controlof pests and diseases llave also been greatly Un-proved, while there is a rather widespread tendencyfor higher standards of cultivation to be appliedto these export crops than to the basic food crops,especially when grown on a plantation scale.

Nevertheless, for most crops increased produc-tion in the less developed countries has come chieflyfrom the expansion of the cultivated area. Infact, the expansion of the rice area in Latin Amer-ica, of cotton and tobacco in the Near East, andof wheat in Africa appears to llave been accompa-nied by declining yields per hectare, probably inpart because of the extension of cultivation toless suitable land.

In the more developed regions, however, av-erage annual yield increases ranging from 2 to 5percent llave been obtained for almost all themain crops during the past 12 seasons. In West-ern Europe the increase in area has been lessthan in yield for each of the main crops excepttobacco, and for potatoes the area shows a declin-ing trend. Maize yields in Western Europe haverisen particularly rapidly with the increasing useof hybrid. varieties. In North America, the areahas declined sharply for nearly all major crops.Soybeans are an exception, however, with an av-erage annual increase of 8 percent in area buthardly any change in yield. In Oceania the areaof both potatoes and wheat has fallen.

Farmers in more developed countries are gen-erally in a much better position than those inless developed countries to adopt improved prac-tices that will lead to higher yields. Moreover,agricultural policies in most of the more developedcountries have for some time been designed toencourage increased productivity per hectare andper man. Where there has been a marked expan-sion in the more developed countries in the areaunder a particular crop, this has often been ac-companied by a reduction in area for another

Percentage

8 -

6

4 -

2 -

-6 -

FIGURE 5. TRENDS IN REGIONAL PRODUCTION, AREA AND YIELD OF MAIN CROPS, 190/49-1959/60

(Average annual increase on trend line as percentage of average production, arca and yield)

PRODUCTION

Wheat

-2-TobaccoPotatoes

CottonGroundnuts

PRODUCTION

' Excluding Mainland China.

WESTERN EUROPEMaizeSugarTobaccoWheatRice

Po atoes

N ORTHSoybeans

SugarRiceMaize

PotatoesMaizeSugar

Wheat

FARSugarCottonGroundnutsTobaccoMaizeSoybeansTeaWheatRicePotatoes

26

TobaccoRiceMaizeWheat

Potatoes

AMERICASoybeans

Maize

RiceTobaccoPotatoesWheat

CottonGroundnuts

A

Maize

Potatoes

Wheat

EAST1)

CottonTobaccoGroundnuSoybeansWheatMaizeRicePotatoes

YIELD

Maize

Wheat

RicePotatoes +Tobacco

Cotton

_Rice_Groundnuts-Wheat-MaizeTobaccoPotatoesSoybeans

Potatoes

MaizeWheat

-4-

PotatoesRiceMaizeCottonGroundnutsSoybeansTobaccoWheat

FIGU 5. - TRENDS IN REGIONAL PRODUCTION, AREA AND YIELD OF MAIN CROPS, 1948/49-1959/60 (concluded)

(Average annual increase on trend line as percentage of average production, arca and yield)

10-

8-

o

PRODUCTION

PRODUCTION

Groundnuts

Cotton

MaizeRice+CoffeeTobaccoWheatSugarCocoaPotatoes

Potatoes

Wheat

Cotton

TobaccoMaizeRice

TeaCof fee

AREA

NEAR EASTAREA

AREA

Groundnuts

RiceMaizeCottonTobaccoWheatPotatoes

CottonPotatoesTobaccoWheat

Maize

Rice

YIELD

YIELD

YIELD

CottonGroundnutsWheatTobaccoMaize

-PotatoesR ice

RicePotatoesWheatMaize

TobaccoCotton

Wheat

27

6- GroundnutsSugar Groundnuts

4-

2-

,CottonMaize

TobaccoWheat

-Cotton_Tobacco-MaizeRice

MaizeRiceTobaccoGroundnùtsCotton

WheatRiceCocoa

LATIN AMERICAPercentage

A C A

crop, in response to shifts in demand and pricerelationships.

Trends in crop areas and yields in North Amer-ica show the influence of the efforts of the Unit-ed States government to check the accumulationof surplus stocks of certain conunodities, partic-ularly wheat, coarse grains, cotton and tobacco.As a result of the Soil Bank measures, designed totake a considerable area of land temporarily outof cultivation, as well as changes in price supports,acreage restrictions and other controls on specificproducts, crop arcas have declined substantially,especially for cotton and groundnuts. Production,however, has either continued to increase or hasfallen much less than the area, because of a concen-tration on the better land and because the reducedarca has been more intensively cultivated. Atthe same time, some of the area has been trans-ferred to soybeans and other crops that were notcontrolled.

For wheat, the yield variability of which wasdiscussed earlier, some aspects of the trend inyields may also be examined in more detail.Figure 6A classifies al.1 the countries for whichdata are available and where the average wheatproduction exceeds 20,000 tons a year, accordingto the average annual change in wheat yieldsduring the period 1948/49-1959/60.1 In 25 ofthese countries there has been an increase in yieldsranging from o.i to 2 percent per year, in 29countries the increase has exceeded 2 percent,and in 9 countries yields have declined. Countrieswhere the increase was 2.1 tO 3.0 percent includea number of European countries, together withIran, Japan and Lebanon. Apart from Europeancountries, increases of 3.1 to 4.0 percent are record-ed for Colombia, Ecuador, the Egyptian Regionof the United Arab Republic, the United Statesand the U.S.S.R.. Increases of more than 4 per-cent a year are found mainly in those countriesmentioned earlier in this chapter as having achiev-ed :.n outstandingly rapid expansion of total agri-cultural production. At the other extreme, coun-tries showing a declining trend include Jordan, theSyrian Region of the United Arab Republic andTunisia (in these arcas the recent succession ofbad seasons has probably greatly affected the 12

It should be noted, however, that the 12-year trend lineon which thcse data arc based is subject to a very considerableinargin of error for countries where yields have fluctuatedgreatly from year to year.

28

year trend), as well as Brazil and Pakistan amongthe larger producers.

Yield trends have also varied sharply withincountries. In Argentina, for example, the averageannual increase in wheat yields has ranged from0.9 percent in Santa Fe to 6.2 percent in La Pam.-pa; in India from 0.4 percent in Bombay to 4.9percent in Rajasthan; in Italy from 0.3 percentin Sicily to 4.6 percent in Latium and Tuscany;and in the United States from 2.1 percent in Colo-rado to 5.8 percent in Texas. In the U.S.S.R. theaverage annual increase has been 2.9 percent inKazakhstan, where there have been very largeincreases in the area under wheat, and 5.9 percentin die Ukraine, where the area has declined.

The absolute level of yields also covers a verywide range. Figure 6B compares average wheatyields in 1948/49-1959/60 in the same countriesas shown in the map illustrating trends in yields.The extremes among these countries are 4.7 quintalsper hectare in Tunisia and. 37.8 quintals, or eighttimes as much, in Denmark. The world averagefor thc same period is around To quintalsper hectare, and the great majority of countriesfall between 5 and is quintals. Most of the lessdeveloped countries, and also Portugal, Spain andthe U.S.S.R., have yields of 5 to To quintals.Yields are between TO and is quintals in the fourmajor exporting countries, in the countries of South-eastern Europe, and in a few less developed coun-tries, including Kenya (where wheat is producedmainly by European farmers in the temperatehighlands), Mexico, Taiwan and Turkey. By farthe highest wheat yields are in Europe, and out-side this continent yields above i5 quintals per hec-tare are found only in the Egyptian Region ofthe United Arab Republic, where production isentirely irrigated, and in Japan and New Zealand.

Within Europe the influence of climate onthe level of wheat yields is very apparent. Yieldsare above 25 quintals only in a contiguous groupof countries in Northwestern Europe, 20 tO 25quintals in Norway, Sweden and also France,and 15 to 20 quintals in a zone stretching fromCzechoslovakia in the north to Italy in the south,as well as in Finland. A wide zone where yieldsaverage To to is quintals extend; from Polandthrough all the countries of Southeastern Europeand across to Turkey. Filially, in Portugal andSpain yields are almost as low as in Algeria and.Morocco on the other side of the Mediterranean.

As noted above in the case of the trends in

yields, the average levels of yields also differ widelywithin countries. In Argentina, for instance, theyranged in 1948/49-1959/67 from 8.2 quintals perhectare in La Pampa to 14.2 quintals in Santa Fe,in India from 4.8 quintals in Bombay to 10.3quintals in. Punjab, an.d in the United States from8.3 quintals in South Dakota and Texas to 20.2qui.ntals in Washington. In the U.S.S.R. yields av-eraged 7.2 quintals in Kazakhstan, a new wheat-growing region, as compared with 13.6 quintalsin the older producing region of Ukraine. Evenin some smaller countries the differences may belarcre as in Italy, where yields ranged from 1o.6quintals in Sicily to 29.6 quintals in Lombardy.

7. - TRENDS AND LEVELS OF WHEAT AREA, YIELD AND PRODUCTION, 15Y w4-;ION, 1. 948/49-1959/60

A comparison of the two maps reveals somesignificant relationships. It might be expectedthat wheat yields would rise fastest where theiractual levels are lowest, but this appears to be farfrom the case. In fact the most rapid increase inyields seems to h.ave been in countries where theyare already fairly high. This relationship alsoappears to apply on a regional basis (Table 7),and to arcas within a country, as for example inIndia, Italy and the U.S.S.R. Wh at yields haveshown a declining trend only in countries wherethey are less than th.e world average. Even moresignificant, however, is that in almost all thosecountries where wheat yields have declined, therehas been a very substantial expansion in the arcadevoted to the crop, presumably into places wherethe climate and soil are less suitable.

Clearly, climatic and soil factors have a verymportant influence not only on the currentlevels of yields but also on the increase that it ispossible to obtain, especially in the case of a crop

29

' Average 1941/49-1959/60. - Average annt al change as percentage of 1948/49-5959/60 average.

like wheat, which is grown so widely throughoutthe world. It seems probable, however, that therate of increase in yields may also be related tosome extent to the level of economic developmentof a country, or of an area within a country. Apartfrom climatic and physical factors, there may wellbe a certain threshold of general economic develop-ment that has to be reached before sustained andsubstantial improvements in yields can be obtained.This threshold is likely to be closely associatedwith such factors as the availability of adequatecapital and of suitabl.e organizations for the pro-vision of easily accessible agricultural credit, thead quacy of extension and educational se .vices

for imparting knowledge of improved methods,and the availability of fertilizers and other neces-sary inputs at prices which are favorable relativeto the prices received for agricultural products;the latter in turn depend largely on the adequacyof the marketing services and often on the systemof land tenure. Once this point has been reachedthe rate of increase in yields may be expected tobe accelerated through the demonstration effect.

As was indicated earlier, changes in the croparea may also have ami important influence on thetrend in yields per hectare. Table 7 suggeststhat the large increases in wheat area that haveoccurred in the less developed regions, involvingan extension on to less suitable land, have retardedthe improvement of yields. On the other hand,where the wheat area has declined, as in NorthAmerica, the concentration of production on thebetter land has contributed to the increase in yields.

It also appears, as indeed would be expected,that when yields reach a very high level the rate

1 000 ha.Average annual

percentage change100 kg./ha.

Average annualpercentage change

1 000 m.t. Average annualpercentage change 2

Western Europe 20 285 +0.8 17.0 -1-2.6 34 545 +3.4North America 33 897 -3.4 12.9 -1-3.1 43 201 -0.3Oceania 4 455 -2.8 11.2 +0.6 4 956 -1.9

Latin America 8 216 +2.1 11.3 +1.4 9 391 +3.3Far East (excl. Mainland China) 16 071 +2.9 7.9 +0.02 12 716 . 0

Near East 14 147 -1-4.0 9.6 -1-1.3 13 675 -45.2Africa 5 885 4 3.1 6.2 - 0.2 3 619 -1-2.9

Harvested area Yield per hectare Production

46.-

---

VIw

.O

NA

Pw

- '-,

*V4W

liltlk

4,t,

FIG

UR

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A. -

TR

EN

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HE

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EL

EC

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OU

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Ave

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l pro

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( 1.

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7777

11.

12.

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(-0.

9)0

2.1

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1.0

Mor

e th

an 3

.0

FIG

UR

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13. -

LE

VE

LS

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WH

EA

T Y

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DS

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EL

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TE

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194

8/49

-195

9/60

Ave

rage

whe

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Less

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5.1

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ore

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of increase begins to tail off 2 This does notmean that a physical limit is being approachedbut is the result of diminishing financial returnsfrom additional inputs. So far, however, it is

almost only in certain countries of NorthwesternEurope that this effect is apparent to any sub-stantial degree in respect of the average yield ofa whole country. In the United States, for ex-ample, where wheat yields arc much_ lower thanin most European countries, they are still increas-ing with considerable momentum. This is in largepart the origin of the accumulation of surplus stocksin that country, as well as being, as noted above,

Changes in

During 1959/60 further major increases in theover-all level of stocks appear to have occurredonly for coarse grains and coffee. Cotton stockswere ao-ain reduced. Stocks of wheat showedlittle change, and for sugar and most other majoragricultural commodities also the expansion ofstocks seems to have been halted at least tempo-rarily (Table 8).

Although production fell by nearly 25 percent,United States wheat stocks increased slightly in1959/60, partly offsetting declines in both Argen-tina and Canada. Stocks of coarse grains fell inCallada, but in the United States, where the maizecrop was again very large, the rapid accumulationcontinued and a further 8 million tons were add-ed to stocks of coarse grains in that country.

Total grain stocks in the major exportingcountries, including normal carry-overs, nowamount to the unprecedented figure of 126 milliontons, or almost four times as much as in 1952,which was approximately the beginning of thepostwar accumulation of surplus stocks. In termsof the current level of world production (excludingthe U.S.S.R., Eastern Europe and MainlandChina), these stocks represent about 40 percentof the total crop for wheat and 25 percent forcoarse grains. Relative to the level of commercialexports, the stocks would cover almost two yearsof world wheat exports and almost four years

= This slackening is less marked in absolute terms, however,for a 4 percent rate of increase on a yield of TO quintals is equiv-alent to an increase of only 1.3 percent on a yield of 30 quintals.

32

the chief reason why it has not so far proved pos-sible to check their expansion by means of meas-ures designed to reduce acreage. Over the period1948/49-1959/60 a 4 percent average annual de-cline in wheat area in the United. States has beenalmost exactly counterbalanced by the averageannual increase in yields, so that the trend in pro-duction has been only slightly downward. Thatprice supports have played a large part in stimu-lating this rise in yields is suggested by the fact thatin Canac-la, where the level of yields is approxi-mately the same as in the United States, their rateof increase has been much less rapid.

stocks

of exports of coarse grains, of which a muchsmaller proportion moves in world trade.

Latin American coffee stocks have also rimsteeply during the last few years. Coffee stocksin Brazil are likely to llave climbed by more thanduce quarters by the end of June 1960. At 2.6million tons they would be approximately cqualto the record Brazilian crop of 1959/60 and wellover the total annual exports (excluding thoseto the U.S.S.R., Eastern Europe and MainlandChina) permitted to the participating countriesin the new International Coffee Agreement.

Cuban sugar stocks, which had also risen sharplyin 1959, are expected to be more than 30 percentlarger by the end of 1960, though the -world totalis likely to remain almost unchanged. Cottonstocks llave continued the gradual decline thatbegan in 1956/57, with a further fall of about Iopercent expected in the United States. Worldstocks of cotton (excluding the U.S.S.R., EasternEurope and Mainland China) have been reducedby a quarter since 1956, but they still amount toabout half of total annual production.

Stocks of most other agricultural productsappear to llave changed little during 1959/60,though there were so me spectacular developmentsfor dried skim milk. United States governmentstocks of this commodity were depleted by Sep-tember 1959 and new disposal commitments werchalted. This situation gave rise to some concernin those countries that depenci on such stocks formilk distribution schemes, but the stocks had beenrebuilt by April 1960 and disposals resumed.

WHEATUnited StatesCanada

ArgentinaAustralia

Total 4 major exporters

RICE (milled equivalent)Asian exporters'United States

Total of above

COARSE GRAINS

United StatesCanada

Total 2 major exporters

BUTTER

United States

Canada

European countries.'Australia and New Zea-

land

Total of above

United States

CONDENSED AND EVAPO-

RATED MILK

United States

SKIM MILK

United States

LINSEED AND OIL

(oil equivalent)United StatesArgentina

Total of above

LIQUID EDLBLE VEGETABLE

OILS AND OILSEEDS

(oil equivalent)United States'

SUGAR (raw value)United StatesCuba

WoRLD TOTAL.

CoaracBrazilof which goyernment..heldUnited States

Total of above

TABLE - ESTIMATED STOCIS OF MAJOR AGRICULTURAL AND FOREST PRODUCTS

33

(Continued in following page).

Month 1952 1953 1954 1955 1956 1957 1958 19591960

(Forecast)

A alit'', ',leak tons

1 July 7.0 16.5 25.4 28.2 28.1 24.7 24.0 34.9 35.81 Aug. 5.9 10,4 16.8 14.6 15.8 19.9 17.4 14.9 13.81 Dec. 0.1 2.0 1.6 2.4 1.2 1.6 1.5 1.6 1.1

1 Doc. 0.5 i 1.0 2.6 2.6 2.4 1.1 0.4 1.8 2.0

13.5 29.9 46.4 47.8 47.5 47.3 43.3 53.2 52.7

31 Dec. 0.7 1.4 1.3 0.5 0 5 0.4 0.3 0.431 July 0.1 - 0.4 1.4 1.0 0.6 0.6 0.5 0.4

0.8 1.4 1.7 1 .9 1.5 1.0 0.9 0.9 ...

1 July ' 18.5 24.7 29.4 37.3 39.3 44.4 53.5 61.4 69.5

1 Aug. 3.6 5.1 5.6 3.7 4.3 6.6 5.0 6.5 4.2

22.1 29.8 35.0 41.0 43.6 51.0 58.5 67.9 73 7

0.03 0.13 0.17 0.07 0 01 0.04 0.03 0.01 ...0.02 0.03 0,04 0.05 0.04 0.03 0.04 0.05 ...0,04 0.06 0.05 0.04 0.09 0.09 0.06 0.05 ...

0.05 0.05 0.06 0.06 0.05 0.06 0.06 0.05 ...

31 Dec. 0.14 0.27 0.32 0.22 0.19 0.22 0.19

_

0.16 ...

31 Dec. 0.11 0 20 0 25 0.24 0 20 0.19 0.13 0.14 ...

31 Dec. 0.18 0.12 0.10 0.10 011 0.10 009 0.10 ...

31 Dcc. 0.06 0 03 0 02 0.04 0 03 0.04 0.04 0.04 ...

1 July 0.41 0.37 0.28 0.16 0.10 022 0,12 0.17 ...1 Doc. 0,30 0.23 0.08 0 03 0 06 0 06 0 07 ... ...

0 71 0.60 0 36 0.19 0.16 0 28 0.19 ... ...

1 Oct. 0 24 0.58 0.56 0 34 0 29 0 28 0 34 0 57 0.55

31 Aug. 0.8 0.9 1.0 0.9 0 9 0.9 0.8 1.0

31 Dec. 27. 1.5 1.9 1.6 07 0.7 0.5 1.2 1.6

31 Aug. 10.9 10 3 11.8 11.4 10.4 10 3 10.1 12.2 12.0

0.18 9.20 0 20 020 063 0.44 084 1.44 2.64

(--) (---) f---) (-) (0 22) (0 22) (0.72) (1.26) (2.46)

0.22 0 21 0.21 0.08 0.17 0.16 0.15 0.14 0.17

30 June 0.40 0.41 0.41 0.28 0,80 0.60 0 99 1.58 2 81

NOTE: Quantities shown include normal carry-over stocks.

' Excluding Mainland China. - Barley, oats, maize, sorghum. - Maize and sorghum, i October. - 6 Austria, Belgium, Finland, Western Germany,Ireland, Netherlands, Norway, Sweden, Switzerland, United Kingdom. - Cottonseed, t August. - Flue-cured types, i July. - Excluding the U. S. S. R.,Eastern Europe and Nlainland China, asad including estimates of cotton afloat. - Including estimates of rubber afloat, but excluding strategic stockpiles. -

United States and Canadian mills and United States consumers. - Belgium-Luxembourg, Denmark, Western Germany, Netherlands, Switzerland, UnitedKingdom. - " Austria, Norway, Sweden, Yugoslavia. - " Belgium-Luxembourg, Western Germany, United Kingdom. - Austria and Yugoslavia.

With the improvement in demand, stocks ofmost forest products had declined slightly by theend of 1959. The main exceptions were sawnsoftwood and sawn hardwood in North America.The main reason for the rise in stocks of thesecommodities appears to be that the demand forbuilding materials in the United. S ates did notrise as much as had been anticipated in the earlystages of the recovery. It should be noted, however,that North American stocks of sawnwood Bl 1959were below their postwar peak levels, while stocksof all forest products are much lower than beforethe war.

The price-weighted index of all the stocks(except forest products) included in Table 8

indicates that there was again some increase in

34

total stocks in 1959/60. Total stocks increasedby two thirds between 1952/53 and 1954/55,but the expansion was subsequently much slowerand there was a slight decline in 1957/58. In1958/59 there was a renewed increase of aboutio percent, and this appears to have been follow-ed by a further rise of about 4 percent in 1959/60,caused mainly by the sharp increases in stocks ofcoarse grains and coffee. The proportion of totalstocks located in North America is now aboutthree quarters. After declining slightly in theprevious two years, the total value of the stocksheld by the United States Commodity CreditCorporation rose by more than zo percent in1958/59 and remained at about the same level in1959/60 (Annex Table 13).

TABLE 8. - ESTIMATED STOCKS OF MAJOR AGRICULTURAL AND FOREST PRODUCTS (C0i/Chnied)

Month 1952 1953 1954 1955 1956 1957 1958 19591960

(Forecast)

M'Ilion metric tons

TOBACCO (farm weight)United States 1 Oct.' 1 .56 1.66 1.69 1.83 1.89 2.00 1.89 1.81 1.80

CorroN (lint)United States 0.60 1.22 2.11 2.43 3.14 2.47 1.89 1.93 1.71Other net exporters ... 1.00 1.08 0.78 0.80 0.56 0.65 0.84 0.73 0.63Importers 1.34 1.21 1.26 1.26 1.08 1.30 1.32 1.13 1.24

WORLD TOTAL 31 July 2.94 3.51 4.15 4.49 4.78 4.42 4.05 3.79 3.58

NATURAL RUBBER

WORLD TOTAL° 31 Dec. 0.73 0.72 0.73 0.76 0.74 0.76 0.75 0.69

NEWSPRINT

North America ° 31 Dec. 0.89 0.80 0.77 0.69 0.92 0.92 0.99 0.98

Million cubic me ers

SAWN SOFTWOOD

European importers ".... 31 Dec. 5.74 6.19 5.56 6.12 5.27 5.65 5.41 5.00European exporters " .... 31 Dec. 4.31 3.63 4.05 4.50 4.06 3.79 4.41 3.90North America 31 Dec. 14.25 16.05 14.60 14.84 16.96 16.70 15.66 16.28

SAWN IIARDWOOD

European importers ".... 31 Dec. 1.29 1.15 1.06 1.22 1.21 1.20 1.25 1.17European exporters ".... 31 Dec. O. 31 0.28 0.27 0.32 0.47 0.45 0.41 0.39Nc.rth America 31 Dec. 7.90 7.90 9.54 7.86 8.74 8.66 8.53 9.21

Economic activity and the demand for agricultural products

Recovery from the 1957-58 recession in eco-nomic activity in the industrialized countries turnedinto renewed expansion during 1959/60, althoughin some countries the rate of growth has recentlyslowed. down. The agricultural exporting coun-tries have begun to benefit from his recovery,after the usual time-lag. While most of them wereable to increase the volume of their exports in1959, the ecovery in prices has generally beenslow and for some products prices have declinedfurther. Heavy supplies of most commoditieshave continued to exert pressure on world. markets.Retail food sales in the in.dustrialized countries,which liad been barely affected by the recession,have continued to expand.

Industrial production in the United States start-ed to rise again in November 1959, after a three-month decline resulting from the steel strike.The employment situation has improved, thoughin the first half of 1960 =employment was stillabout 5 percent of the labor force. Gross nationalproduct at constant prices increased by nearly7 percent in 1959 and a rise of more than 6 percentin total personal consumption expenditures atcurrent prices brought a 3 percent increase in ex-penditure on food. With lower retail price's, percaput food expenditure also increased by about3 percent, but, as in most high income countries,much of this rise probably represented a shiftto more expensive items and increased packagingand other marketing services. In Canada, too,industrial production and national income rosesharply in 1959 but unemployment was still about9 percent of the total labor force in early 1960.Consumer expenditures increased and the domesticdemand for agricultural products remained strong.

In 1959 there was growing concern in the Unit-ed States at the deficit in the balance of payments,which ro se by 9 percent to reach U.S.$3,7oomillion. This occurred in spite of lower privateoverseas investment, lower government grants andcredits, increased foreign investment in the Unit-ed States, and accelerated repayments of govern-ment loans. In Canada the foreign trade deficitnearly trebled in 1959, as imports increased muchfaster than exports.

In Western Europe the increase in industrialproduction in 1959 ranged. from 4 percent in anumber of countries to as much as II percent inItaly. Further improvements in foreign trade and

35

payments and the absence of sharp rises in pricescontributed to the over-all expansion of economicactivity and to increased consumers' incomes,especially in the countries of the European EconomicCommunity. Gross national product at constantprices rose by 9.7 percent in Western Germany,6.6 percent in Italy, 5.6 percent in the Nether-lands, 4.3 percent in France and 2.8 percent inthe United Kingdom. The demand for agricul-tural products thus remained high, and importdemand for some products increased appreciablyas a result of the effect of the dry summer of 1959on domestic supplies. The progressive liberaliza-tion of imports from hard currency areas also causedincreased purchases from dollar countries. Con-sumers' food expenditures current prices roseby 0.9 percent in France, 2.7 percent in the UnitedKingdom, and. 2.5 percent (including beveragesand tobacco) in the Netherlands.

The upswing in economic activity was sharpestof all in Japan, where industrial production (in-cluding mining) was more than one quarter greaterin 1959 than the year before. Gross nationalproduct rose by as much as 15 percent at constantprices. With an increase of about 5 percent inagricultural production, imports of foodstuffs andbeverages (mainly rice, barley and sugar) fell by7 percent, though imports of agricultural rawmaterials climbed by about 40 percent. The foreigntrade surplus was smaller in 1959, but the continu-ing inflow of capital caused a further sharp in-crease in foreign exchange reserves.

Among th.e more developed agricultural ex-porting countries, economic conditions improvedin. Australia, New Zealand and the Union ofSouth Africa in 1959 and early 1960, and thesecountries appear to have been the major contribu-tors together with the Federation of Malaya toa rise of over 300 million in overseas sterlingholdings between March 1959 and March 1960.In Australia the volume of exports has risen, ex-port prices have improved, and manufacturingemployment has increased steadily. Rising prices,however, llave necessitated a series of anti-inflationary measures. Notwithstanding the almostcomplete freeing of imports, a sharp rise in exportvalues turned the trade deficit in 1958/59 into asubstantial surplus in 1959/60. Similarly in NewZealand industrial production recovered almostcompletely in 1959, export volumes were main-

tained and prices rose, while gold and foreignexchange reserves increased sharply. In the Unionof South Africa there was also a substantial increasein the value of exports and in foreign exchangereserves in 1959, though more recently the latterhave declined again.

In the less developed regions, improvementsin the economic situation in Latin America wereonly partly caused by the recovery- in the indus-trialized countries and resulted mainly from domes-tic stabilization programs. Stabilization measuresliad some success in Argentina, Bolivia, Chile,Colombia, Paraguay and Peru. In. Brazil, however,where deficit financing was extensively employ-ed, there was a further inflationary rise of some45 percent in retail food prices in 1959. In Ar-gentina domestic demand receded under the pres-sure of the austerity measures adopted to stopinflation.

There see.ms also to have been an improvementin general economic conditions in most other lessdeveloped countries in [959. In India, for example,industrial production increased by about 8 per-cent and, together with expanded agriculturaloutput, contributed to a rise of some 7 percentin national income in 1958/59. Pakistan's foreignexchange reserves increased sharply and, withreduced government expenditures and less moneyin circulation, inflationary trends slowed down in1959, though more recently price increases havebecome more rapid and new measures for stabiliz-ing domestic markets are in preparation. TheFederation of Malaya benefited substantially fromthe rubber boom.

On the -whole, however, the improved economicsituation in the industrialized countries appearsto have liad only a 1.imited effect on the agriculturalexporting countries. Apart from the time-lagmentioned earlier, a large part of the agriculturalimports of 'Western Europe come from NorthAmerica, rather than from the less developed re-gions. Although the total volume of importsof the industrialized countries increased by iopercent in 1959, it seems that there was a furtherslight decrease in the imports of capital goodsimito the agricultural exporting countries.

In the centrally-planned economies the maindevelopment in the demand situation appears tohave been in Mainland China, where incentivewages tied to productivity have been restored,while at the same time food grains are beingdistributed on the basis of ration quotas for each

36

individual in the communes. This suggests that,in spite of the substantial increases reported in agri-cultural production, there is a large latent demandfor foodstuffs which has to be restrained in ordernot to overtax the available supplies.

SHORT-TERM OUTLOOK

In general the level of economic activity inthe industrialized countries seems li.kely to remainhigh, at least during the remainder of 1960. Therecent slackening in the rate of expansion in somecountries has caused earlier expectations of a boomto be scaled down, however, and has made theoutlook for 1961 somewhat uncertain.

The official outlook in the United States forthe rest of 1960 is still optimistic, though theanticipated boom conditions after the settlementof the steel strike have failed to materialize, andby May 1960 industrial production was at aboutthe same level as a year before. Gross nationalproduct is expected to increase in 1960/61 bymore than 6 percent at constant prices. Higherexports, a smaller increase in imports, togetherwith increased revenues from tourism and fromoverseas investment, are expected to reduce thebalance of payments deficit by over 20 percent.Nevertheless, preoccupation with the position ofthe U.S. dollar on international markets continuesto influence the country's trade policy. In Can-ada, too, a continuation of the more favorablesituat1on of 1959 and early 1960 is anticipated,provided that costs and prices retain their recentrelative stabil.ity. There is some possibility, how-ever, of a reduced inflow of foreign capital,which up to now has more than covered theforeign trade defic.it.

Official outlook information so far availablefor Western European countries also points to acontinuing upward trend in economic activity inthe rest of 1960. Increases of 6 to 8 percent innational income are expected in France, WesternGermany and the Netherlands. In the UnitedKingdom, however, fears of `` overheating theboom have led. in jume 1960 to further creditrestrictions and other monetary measures de-signed to reduce the rate of economic expansion.Similar measures have also been adopted by West-ern Germany and Japan.

As in the past, however, the sharp increasesin national income in the industrialized countries

will have only a small effect on the demand forfoodstuffs in these countries. In the Netherlandsfor example, the 5.6 percent rise projected in netnational product is associated with an expectedincrease of 3 percent in food expenditures (includ-ing beverages and tobacco).

Similarly, recent experience suggests that thedemand for imports of agricultural ra-w mate-rials is likely to increase much more slowly thanindustrial activity in these countries. The factorsinfluencing this relationship have been examinedin several recent issues of this report, and includeincreasing domestic production in the industrial-ized countries themselves, the development of sub-stitutes, and economies in the use of raw materialsin industry.

Therefore, while favorable business cond tionsin the industrialized countries are likely to leadto some mercase in the demand for agriculturalproducts exported by the less developed coun-tries, the magnitude of this increase may be limit-

Few accurate data are available, especially forthe less developed countries, to indicate the trendsthat have occurred in food supplies and levels ofconsumption. As noted earlier, indices of percaput food production may give a misleadingimpression, as they can take no account of thechanges, sometimes quite large, that have takenplace in the imports and exports of food.

The calculation of supply indices presents manydifficulties, including the matching of productionand trade seasons, deductions for feed and seed,and changes in stocks. Some of these difficultiesare reduced by considering averages for periodsof several years, as has been done for the approxi-mate estimates of per caput availabilities of foodin the main regions shown in Figure 7. Theseindices are based on production data (net of feed,seed and waste), adjusted for imports and exports,and weighted by the same regional price weightsas are used for the production indices shown inTables I and 2 at the beginning of this chapter.Allo-wances for imports of animal feedingstuffsllave been possible only for -Western Europe,and for changes in stocks only in the case of North.

Food supplies and consumption

37

ed. In the shorter run of 12 tO 18 months the de-mand may also be decisively influenced by inven-tory pol.icies in the importing countries, and gov-ernment measures to dampen the expansionaryforces for fear of inflation or of adverse effectson the balance of payments may discourage pur-chases of agricultural raw materials, especially forinventory purposes. The supply of many food-stuffs and of some raw materials continues to bemore than ample, and no great improvements inexport prices are therefore to be expected.

Domestic demand in the less developed coun-tries will continue to expand as populations andincomes increase. This demand may make itselffelt more strongly in the future and may reduceexportable supplies of agricultural products. Theneed of the less developed countries for foreignassistance is likely to remain large, but more ofthis assistance than hitherto will probably llave tocome from industrialized countries other than theUnited States.

America, but these f-actors are of relatively minorimportance in the other regions.

The estimates also naturally suffer from the faultsin the basic statistics of food crops and livestockproducts, particularly in the less developed regions,but they should give as reliable an indication asis possible at the present time of the broad changesin over-all food supplies that have occurred ineach region. It appears that in the Far East (exclud-ing Mainland China) per caput food supplies havefor some years now approximately regained orslightly exceeded the prewar leve]. In Africa theyseem to have remained close to this level throughoutthe postwar period, and in Latin America and espe-cially the Near East there has been some increaseover the prewar level. There has been some expan-sion of per caput supplies since 1948-52 in eachof the less developed regions except Africa, wherethey appear now to have declined somewhat fromthe level of 1953-56. Especially in the Far Eastand Near East, changes in trade as -well as increas-ed production llave liad an important influenceon the trend of food supplies. Both these regionswere net exporters of fooci before the war but,

PIGURE 7. - tSTIMATED PER CAPUT FOOD SUPPLIES, BY REGION

(Price-weighted indices, world I average for all food,average 1948-52 too)

38

Much of the difference between the more andless developed regions results from the large sup-ply of livestock products and other more expen-sive foods in the former group. This shows upvery sharply in the price-weighted indices usedin Figure 7. The regional differences wouldbe much smaller if comparisons were made incalories, which reflect only the quantity of thediet and do not take its quality into account.Although not based on nutritional factors, theprice-weighted indices nevertheless give some roughindication of the quality of the diet in that livestockproducts, fruit and vegetables and other foodsimportant for health are also to a large extentthe more expensive. The indices also reflect insome deo-ree the acrricultural resources needed toproduce the diets of the different regions, sincelivestock products in particular require considerablymore in the way of agricultural resources than grainsor other basic crops of equivalent calorie value.

The trends suggested by these supply data areconfirmed by the available food balance sheets,which show actual average food consumption levelsin individual countries. Annex Table 14 showsthe food supplies available for human consump-tion and their calorie and protein content in thosecountries for -which it is possible to establish foodbalance sheets. In the more developed countriesthere llave been fairly steady increases in th.e in-take both of calories and of animal protein. Inthe less developed countries increases in calorieintakes llave been more limited, while any im-provements that llave occurred in the quality ofthe diet llave been small, and in many of thesecountries average intakes of animal protein hardlyreach the prewar level.

Regional and even national averages, however,do not accurately describe the food and nutritionalsituation. In most of the less developed countriescalorie intakes llave come closer to requirementsin the last few years, but this does not necessarilymean that some groups of the population arenot suffering from malnutrition. Even in coun-tries where average consumption levels are inexcess of estimated requirements, the food intakesof some of the poorer groups of the populationcan be far below their minimum needs. Data onthe nutritional situation of all groups of the pop-ulation are very rarely available, and furtherhousehold surveys of food consumption and ex-penditure are required to supply the necessaryinformation.

tr,34,--- i',.'7?-NORTI-I "AMERICA 19,7o c

1957. ,

1934OCEANIA

16451959ist57

WESTER!'13.6.4;.,..:,

EUROPE1 sS 5 '5 - 5

1957-5

LATINAMERICA 1948..!.

1953-1957-,

NEAR 1934-

EAST i943-521959.-561957-59

1934 -AFRICA

1946-5,1955-5U1957-5U

,I954-:FAR EAST2)

194B -51953-:.61957-5 ,

W22 Livestock

100

!'S.

150 200

2277. :e.:!?.7.:42I " r

1; V ,r ,

250 300

L

,, .::::T:7:_n,

?2,7,S,, 7:747:T7A-,,,,,,,-.,

2!.,././!

::,%,

0. /

50 100 150 200 250 300

producto EiM, Crop producto

Excluding U.S.S.R., Eastern Europe and Mainland China. ExcludingMainland China.

in the postwar years they have had a rapidly grow-ing net import. In Latin America nct exports offood declined in the earlier part of the postwarperiod but have si cemade somc recovery.

Comparisons of the level of supplies in. thedifferent regions on the basis of these data areprobably less valid than time comparisons for asingle region. Nevertheless, it seems clear thaton the whole the gap between food supplies inthe more and less developed regions has tendedto widen rather than narrow in recent years. Italso appears that per caput supplies of livestockproducts in the less developed regions llave gener-ally not increased, and in some cases have declin-ed, so that they probably now represent an evensmaller proportion of total consumption in theseregions than before the war. Statistics of live-stock production in these regions, however, aregenerally less reliablie than those of crop pro-duction.

TABLE 9. - INDICES OF THE VOLUME AND VALUE OF EXPORTS ' OF AGRICULTURAL AND FOREST PRODUCTS

International -trade in

Both the volume and value of internationaltrade in agricultural products recovered somewhatin 1959 from the setback resulting fiom the reces-sion of 1957-58. Exports of agricultural productsas a whole increased in volume by about 6 per-cent compared with 1958, to reach the highestlevel so far attained. This compares with an in-crease of 7 percent in the volume of trade in manu-factures. On the other hand, average unit values

39

agricultural products

of agricultural exports as a whole continued to fall,this time by about 3 percent, and the total valueof agricultural exports thus rose by only 3 percent(Table 9). As the United Nations index of unitvalues of exports of manufactured goods remainedunchanged. from 1958 to 1959, the latter figureprobably reflects fairly closely the increase in thereal purchasing power of earnings from agricul-tural exports, except to the extent that they may

' Excluding (except for forest products) expor s from the U. S. S. R., Eastern Europe and Mainland China. 2 At current prices. Not includedin index for all agricultural products. " Deflated by the United Nations index of average unit values of manufactured goods in world trade.

Average1934-38

Average1948-52

1953 1954 1955 1956 1957 19581959

(Preliminary)

Indices, average 1952-53 100

FOOD AND FEEDINGSTUFFS

Volume 97 93 102 103 111 124 127 128 132Value' 33 94 100 96 99 110 116 111 115

CEREALS

Volume 102 94 97 94 100 124 120 120 124Value' 27 94. 96 79 79 94 90 88 87

SUGAR

Volume 82 89 110 99 111 112 122 118 109Value' 30 93 103 93 101 104 139 113 100

FRUIT (fresh and dried)Volume 91 83 105 107 116 106 120 120 131

Value' 42 87 104 111 118 121 143 138 136

EDIBLE OILS AND 0/LSEEDS

Volume 110 97 103 117 128 142 145 145 157

Value' 31 106 104 113 111 131 133 129 142

MEAT

Volume 103 95 105 116 120 126 139 143 144Value' 43 84 105 117 121 124 136 148 156

DAIRY PRODUCTS

Volume 90 95 102 104 113 120 122 126 136

Value' 40 95 101 99 107 115 111 100 124

BEVERAGES AND TOBACCO

Volume 86 95 104 97 106 115 114 112 121

Value' 25 81 106 120 111 112 113 111 104

AGRICULTURAL RAW MATERIALS

Volume 109 99 102 104 106 114 119 110 121

Value' 35 105 94 95 101 103 111 87 96

FOREST PRODUCTS

Volume 92 91 102 117 131 128 128 123 127

Value' 85 95 109 123 122 120 111 119

ALL AGRICULTURAL PRODUCTS

Volume 98 95 102 102 109 119 122 119 126

Value' 31 95 100 101 102 109 114 104 107

Value (in real terms)° 63 98 102 105 105 108 109 99 102

Average unit value' 32 100 97 99 94 92 94 87 85

Average unit value (in real terms)° 64 104 99 103 97 91 89 83 81

Picamt 8. NDICES OF TIIE VOLUME AND VALUE OF AGRICULTURAL EXPORTS, BY MAIN COMMODITY GROUPS I

(Indices, average 1952-53 Too)

have been affected by the recovery in ocean freightrates.

Raw materials of agricultural origin, the groupof commodities most seriously affected by the re-cession of 1957-58, also showed the strongestrecovery in 1959 (Table 9 and Figure 8). Thevolume of exports rose by to percent from the1958 level, mainly because of heavier shipments ofwool and rubber, and exceeded the 1957 peakby 2 percent. Average export unit values of rubberand sisal were appreciably higher in 1959 than in1958, but those of most other raw materials, notablycotton, were lower, though there was some re-covery toward the end of the year. For the groupas a whole there was practically no change inaverage unit values, and the total value of worldexports of agricultural raw materials in 1959 thusalso increased by about io percent from 1958and remained some 14 percent lower than in 1957.

The commodity group beverages and tobaccoalso showed a marked increase of some 8 percentin the volume of exports in 1959 compared withthe year before and reached a new high level.Increases in the volume of trade in coffee (16 per-cent) and cocoa (14 percent), following heavycrops in Latin America and West Africa, offsetsome decline in exports of tea, wine and tobacco.Prices of cocoa, however, fell back somewhatafter the recovery of 1958, while average values ofcoffee exports continued to decline. In consequence,

' Excluding the U.S.S.R., Eastern Europe and Mainland China.

40

the value of exports for the whole group wassome 7 percent lower than in 1958 despite thelarger volume of trade.

The slow rise in the volume of exports of foodand feedingstuffs as a whole continued, while invalue they almost regained the 1957 level. Withinthis group, however, there were marked differ-ences between conimodities. The volume and valueof cereal shipments showed no mark.ed changefrom the l.evel of the last few years, while boththe volume and value of sugar exports declinedfurther from the 1957 peak; most of the fall occur-red in exports from Cuba. On the other hand,exports of edible oils and oilseeds, dairy products,fruit, and to a less extent meat, continued to in-crease in volume. The value of exports of the firsttwo groups of commodities recovered sharplyfrom the decline in 1958, while the value of ex-ports of meat, which had not been reduced by the1958 recession, continued to rise. Export values offruit declined slightly in 1959, but over the pastfive or six years fruit and meat are the only majorcommodity groups for which the value of exportshas increased more rapidly than their volume.

The total volume of trade in fresh and frozenfish was not greatly different in 1959 from 1958,although United States imports from Iceland in-creased because of poor domestic catches of somespecies. Shipments of salted fish to Latin Americacontinued to decline. Fish meal exports from Peru

i50 IDFRUIT EDIBLE OILS AND OlLSEEDS /

,....."40 140 0' /130

1M)

,4, 00-

i00 i

//90 9^

,50

140

,,,_

40 -

L____ 1 , r

DAIRY PRODUCTSMEAT

i 3D- 133

120 120 -

i i 0

i00

i t ,

CO

"90 00

...1 L.l._ 1.-948-52 '55 4 755 'L '57 't'',8 '59 1949-5 , 'Si '56 '57 '55 '50

Volume .... e+ Vol.:.........

ALL AGRICULTURAL PRODUCTS FOOD AND FEEDINGSTUFFS

...o130-

o° '... .....120 .......s-0 120- I

0110- 110-

100,......s.'

f:,

.........:\00100- ....

I I

BEVERAGES AND TOBACCO AGRICULTURAL RAW MATERIALS120- ,s 120

s. I

100--,..... ,,,,,--'

90 / 90 -

130

..= I I I ,

CEREALS SUGAR

20 1..../ 120 e

10/i 10 A/ .

100 $00 /90 --=-A....7.........,...... 90 180 80

1948-52 53 '54 '5 6 7 '56 '59 1948-52 53 '54 '5 '56 '5 8 '59

...ewe. Vo /um e .......Value

in 1959 were two to three times larger than theyear before, and together with a larger output inEurope and North America led to a decline inprices toward the latter part of the year.

With the improvement in dernand, both thevolume and value of world trade in forest productsrecovered in 1959, though remaining slightly belowthe level reached in 1957. The increase in worldtrade extended to all the major groups of forestproducts. Exports of most categories of round-wood increased, especially from North Americaand the U.S.S.R., though there was a furthersharp decline in exports of pitprops from WesternEurope, reflecting the difficulties experienced bythe coal-mining industry. The expansion of sawnsoftwood exports from Europe, North Americaand the U.S.S.R. was particularly marked in 1959.Trade in woodpulp, plywood, newsprint and otherpaper and board also recovered, though newsprintexports remained below the record level of 1956.

Average e, port unit values of forest productsreturned to their 1957 level. Prices of most prod-ucts were stable or increased, though there wereprice declines in 1959 for pitprops and some hard-woods from temperate regions. The general up-swing in the volume and value of trade in forestproducts appears to have continued in 1960.

REGIONAL TRENDS

Only three regions recorded some gain in theirearnings from agricultural exports in 1959 (Ta-ble io). The largest increase was that of Oceania,which thus recovered from its unfavorable positionin 1958. Export earnings of this region increasedby 24 percent, mainly as a result of much largershipments of wool, meat, dairy products andgrain.s, but even so they did not regain the levelof 1957. Export earnings of the Far East regionalso rose substantially in 1959 (about 14 percent)although in this case the gain was largely due tothe improvement of export prices (particularly ofrubber), as the volume of exports went up byonly some 3 percent. The value of exports fromthe Near East also rose by around 7 percent owingto an increase of some 20 percent in the volume ofexports. Record shipments of cotton, the majoragricultural export of the region, some 40 percentabove the 1958 level in volume, more than offseta sharp decline in cotton prices. All other regionsincluded in Table To had lower agricultural export

41

earnings in 1959 than the year before. In WesternEurope this was due to a smaller volume of ex-ports, in spite of a slight improvement in theiraverage value. In North America, Latin Americaand Africa, on the other hand, the srnaller valueof agricultural exports resulted from lower pricesof the main export commodities, and the volumeof agricultural exports from each region increasedsubstantially. The estimates for North Americatake into account the value of exports under specialterms.

In North America, the recovery from 1958was not enough to regain the high level of exportsattained in 1957. Exports of oils and oilseeds, animalfats and grains rose substantially in volume (29,42 and 7 percent, respectively), while those of cot-ton declined by some 20 percent. The recordvolume achieved by Latin America was mainlydue to very large exports of coffee, cotton, wooland grains, which offset decreases of 8 percentin exports of sugar and 13 percent in exports ofmeat. In Africa, increases were recorded in ex-ports of cocoa, coffee, wine, cotton and wool,but there were smaller shipments of grains (especial-ly maize and wheat), sugar and bananas. Fullerdetails ofregional exports and imports by commodi-ties are set out in Annex Tables 3-:ro.

Over 40 percent of the mercase in the volumeof shipments in 1959 was directed. to WesternEurope and over 30 percent to North America,where the volume of agricultural imports for thefirst time exceeded the average for 1948-52, a

period when they were influenced by stockpilingoperations. The remainder represented increasedshipinents to the less developed regions, includingshipments wnler special terms, and to a smallerextent increased shipments to Eastern Europe, theU.S.S.R. and Mainland. China. However, officialimport statistics for the latter group of countriesin 1959 are still very incomplete.

Changes in the volume of agricultural importsby regions from 1958 to 1959 were not closely re-flected by changes in values. For example, importsinto Western Europe increased in volume by about5 percent, but in value by only i percent, whiletheir total value remained some io percent lessthan in 1957. Because of their different commoditycomposition, the rise in the volume of NorthAmerican imports of agricultural products from1958 to 1959 was rather more closely paralleled bythe rise in value; in comparison with 1957, however,their volume in 1959 was up by 13 percent and

TABLE IO. INDICES OE THE VOLUME AND VALUE OP AGRICULTURAL EXPORTS AND IMPORTS, BY REGIONS

' At current prices.

their value by only 2 percent. The sanie trendwas evident in the less developed regions. Importsinto these regions as a whole in 1959 increased involume by 4. percent, but decreased in value by

42

2 percent; in comparison with 1957 the volume ofimports was almost the same, but the value hadfallen by about TO percent.

In the last decade imports of agricultural prod.-

Average1934-38

Average1948-52

1953 1954 1955 1956 1957 19581959

(Preliminary)

Indices, average 1952-53 looGROSS EXPORTS

Western EuropeVolume 106 81 103 114 125 126 138 142 138

Value' 44 84 100 106 115 119 133 126 124

North AmericaVolume 61 101 92 89 91 126 137 123 128

Value' 24 102 90 84 83 110 117 104 102

Oceania

Volume 79 97 103 93 105 111 113 104 126

Value' 29 95 107 93 98 102 113 87 108

Latin AmericaV0111MC 105 100 109 103 108 117 110 116 125

Value' 25 92 108 110 102 105 104 98 95

Far East (excluding Mainland China)Volume 160 96 100 102 112 112 112 108 111

Value' 48 103 94 96 113 106 105 96 110

Near EastVolume 83 87 114 108 104 103 113 106 127

Value' 30 97 102 104 98 103 116 98 104

AfricaVolume 76 90 103 113 121 127 129 130 137

Value' 23 85 100 117 113 113 117 121 116

Gimsi., ((swum's

Western EuropeVolume 113 95 104 106 112 122 126 122 129

Value' 42 96 100 102 107 115 122 109 110

North AmercaVolume 80 100 99 86 94 97 97 97 109

Value' 24 91 96 94 94 94 93 88 96

Oceania

Volume 66 99 104 122 127 123 129 137 130

Value' 24 102 98 124 136 116 126 118 121

Latin AmericaVolume 58 91 102 106 106 102 120 119 110

Value' 18 88 99 100 97 88 103 97 90

Far East (excluding Mainland China)Volume 106 81 99 98 99 119 128 122 128

Value' 28 81 95 87 85 99 108 97 95

Near EastVolume 50 91 99 95 116 132 142 145 162Value' 15 90 94 87 100 107 123 110 119

AfricaVolume 66 86 103 108 118 130 134 128 143

Value' 22 86 98 106 111 117 123 116 113

FIGURE 9. - VOLUME AND VALUE OF AGRICULTURAL IMPORTS INTO MORE AND LESS ECONOMICALLY DEVELOPED COUNTRIES

(Indices, average 1952-53 = I00)

140

130

120

110

100

90

160

150

140

130

120

1 1 0

100

90

80

1948-52

VOLUME OF IMPORTS

alit4= ME 0

o aflt

o

I I

1948- 52 '53 '54 '55 56 '57 '58 '59

'53 '54 '55 '56 '57 '58 '59

OceaniaWesternEuropeAll Regions

NorthAmerica

Africa

Far East(exci,MainlandChina )

LatinAmerica

14

1 30

1 20

1 1 0

100

Near East 160150

140

130

120

110

100

90o119

VALUE OF IMPORTS

Oceania

WesternEuropeAll Regions

North America0,47 co am eta am

4ttit,

1948-52 '53 '54 '5I5 '516 '57 '5859

Bo

1948-52 '513 '54 '515 '5'6 '5'7 '5'8 '59

Near EastAfrica

Far East(e xci. MainlandChina ILatin America

ucts into the economically less developed regionshave increased more quickly than imports intothe more developed regions, partly because ofshipments under special terms (Figure 9). Therecession of 1958 led to some decline in agriculturalimports into all the less developed regions exceptthe Near East, where grain production was af-fected by drought, but the rise was resumed in1959 in each of these regions except Latin America.In 1959 agricultural imports into the less developedregions as a whole liad increased in volume by 55percent over the 1948-52 average, while the com-parable figure for the more developed regions wasonly 28 percent. Even so, imports into the lessdeveloped regions in 1959 amounted to only aboutone third of those into the more developed regions.

In contrast to imports, the volume of agricul-tural exports has tended to grow more rapidly inthe case of the more developed regions. By 1959

43

the volume of exports of all agricultural productshad increased by some 38 percent over the 1948-52average in the more developed regions and byonly 29 percent in the less developed ones. Forfood and feedincrstuffs, the difference was stillmore marked, exports of the more developed re-gions rising by so percent and those of the lessdeveloped by 30 percent in the same period.The less developed regions accounted in 1959 forabout 56 percent of world exports of agriculturalproducts as a whole (excluding exports of theU.S.S.R., Eastern Europe and M.ainland China),but only 38 percent of world exports of food andfeedingstuifs.

ThUS, the trend to which attention has beendrawn in earlier issues of this report continued.Exports of agricultural products from the less

developed regions, in particular exports of food-stuffs, tend to lag behind those in the more de-

' Latin America, Far East (excluding Mainland China), Near East, Africa.

veloped regions, while their imports race ahead.In consequence, their net exports of foodstuffshave fallen sharply, while their net exports ofagricultural products as a whole have done littlemore than hold their own, though there wassome recovery- in 1959 (Table II). Food and feed-ingstuffs accounted for about 37 percent of thenet agricultural exports of the less developed re-gions as a whole in 1934-38, but only 16 percentin 1948-52 and. 13 percent in 1958-59. This trendreflects the failure of production of foodstuffsin these regions to keep pace with their growingrequirements. While the decline in net exports offood has made possible some improvement innutritional levels, it runs counter to the need ofthe less developed countries to increase their earn-ings of foreign exchange.

The indices in Tables io and ii and in Figure 9do not, of course, give any indication of the relativemagnitude of the trade of the different regions andgroups of regions. This is shown in Figure To,

which compares (in U.S. dollars at 1952-53 prices)the growth of exports and imports from each ofthe more developed regions and for the less de-veloped regions as a whole. The difference betweeneach pair of columns represents the net exports ornet imports of the region, as the case may be.Food and nonfood products are shown separatelyto bring out the different trends. The chart bringsout clearly the dominating position still held byWestern Europe as a market for agricultural ex-ports, whether of food or nonfood products. Ingeneral, Western European imports, especially offoodstuffs, appear to llave sho-wn considerablymore capacity for growth than those of NorthAmerica, the other main import market.

44

Estimates are also included in Figure io for theexports and imports of agricultural products of East-ern Europe and the U.S.S.R., including intratradewithin this group of countries, for the single period1955-58 1i order to show the approximate magni-tude of this trade in relation to the agricultural tradeof other regions. These data are not yet availablefor other periods and cannot therefore be includedin the indices shown elsewhere in this report.The recent growth of trade in agricultural productsin Eastern Europe and the U.S.S.R. is discussedmore fully below.

Further indications of the changing pattern oftrade in agricultural products between the differentregions of the world are to be found in the sta-tistics of the network of trade in the two years1953 and 1958 set out in Annex Table is. Thistable, based. on United Nations statistics, does not,however, include raw materials of agriculturalorigin; nor can all the regions customarily used inFAO statistics be duplicated because of a differentgeographical breakdown of the original data.A striking feature of the table is the sharp risein agricultural imports into Eastern Europe andthe U.S.S.R. from the rest of the world betweenthese two years. Another is the large share oftotal world agricultural trade represented by ex-changes between the more developed. regions. Inboth 1953 and 1958 about one third of theimports of North America came from withinthat region or fi-om Western Europe. About onethird of the agricultural imports of Western Eu-rope were accounted for by intraregional trade,wh.ile only about 40 percent came from less de-veloped regions. The inclusion of raw materialsof agricultural origin would, however, appreciably

TABLE II. INDICES OF THE VOLUME OF NET EXPORTS OF AGRICULTURAL PRODUCTS FROM THE LESS DEVELOPED REGIONS AS A WHOLE

Average1934-38

Average1948-52

1953 1954 1955 1956 1957 19581959

(Preliminary)

All agricultural products 132 104 110

Indices,

109

average 195 2-

117

3 = 100

115 105 110 119

Food and feedingstuffs 488 168 137 204 195 172 141 161 123

Beverages and tobacco 87 95 104 95 104 114 113 109 123

Agricultural raw materials 99 99 110 102 116 101 85 97 112

1934-38

1948-52

1953-57

1958

1959

1934-38

1948-52

1953-57

1958

1959

1934-38

1948-52

1953-57

1958

1959

1934-38

1948-52

1953-57

1958

1959

1955-58

F-00D AND FEEDINGSTUFFS

WESTERN EUROPE

YAW 4

MIMSroar

'AV

r1141:111 1 ArOX/Afee/A7.4550,/ A

NORTH AMERICA

- 2 3

Ara, W.

4

LESS DEVELOPED REGIONS

2&:1

5

2 3 4 5

EASTERN EUROPE AND U.S.S.R.

934 -38

1948-52

1953-57

958

1959

1934-38

1948-52

1953-57

1 958

1959

1934-38

1948-52

1953-57

1958

1959

1934-38

1948-52

1953-57

45

RAW MATERIALS,BEVERAGES AND TOBACCO

1958

1959

1955-58

WESTERN EUROPE

NORTH AMERICA

2 3 4 5 6

2 3

3

4

4

5

5

6

6

7

7

7

8

8 9

LESS DEVELOPED REGIONS

,_.. M M ___,..-4..

,4w, /-. , . ,o, .035f.40,

5 6 6

EASTERN EUROPE AND U.S.S.R.

I

..4.'671e//01

.14

2-7 8 1

EI= Gross Imports=21 Gross Exports

OS $per m.t

1500-

FIGURE II. AVERAGE EXPORT UNIT VALUES (AVERAGE PRICES) OF SEL ECTED AGRICULTURAL PRODUCTS IN WORLD TRADE

(serni(ogarithmic scale)

60-

TOBACCO

..,-, -..... , ,,......,.'' 44,-, , ,,,,,,

\\(.( COFFEE

7...4,

0 .4,

irkt,

COTTON

.2' .'" 4'"*,..00#0*LIVE OIL 4,-fr

04, t,

0° o.

\JUTE

200

150 ."'",0,......0

,aorm. a 0,.....0 0/ \oRICE (MILLED)

No \0 mro°44-...,-...,. -0

100- .....''11.,.,*......7 le e.,...._

m --0F774% ES

8070 N.,.roo'"''''"'4kk.,,

,k,......._W,HEAT,----=rm.,

501947 '40 '49 '50 51 52 '53 '54 '55 '56 '57 '58 '59

BEEF ANO VEAL

raise the latter figure. Trade within the less de-veloped regions appears to have declined duringthis period. Latin American intraregional trade,for instance, went down by 24 percent bemeen1953 and 1958, while intraregional trade in theFar East declined by around. 17 percent. It shouldbe borne in mind., however, that trade figuresfor single years may be considerably influencedby short-term changes: for example, the value ofLatin American exports, especially to North Amer-ica, is greatly influenced by the sharp fall in theprice of coffee between 1953 and 1958.

CHANGES IN PRICE LEVELS FOR AGRICULTURAL

PRODUCTS IN INTERNATIONAL TRADE

As already noted the general level of prices ofagricultural products as a whole declined furtherin 1959, though there were naturally considerabledifferences between individual products. Pricetrends for some major export commodities are

US {}per m.t.

2000

1500-

000-900- 0800-700-600-

500-

50-

300-*444

200- \WINE ,,

WOOL (GREASY )

QQQ"'".****s. SUGAR (RAW )_.,.VV -.ow.. att.. atm 00 eo

90 A8 0 00, ...70 \4,AIZE

%aft 1114,60-

1947 '418 '419 '5I5 '518 '59

shown in Figure II, while more detailed data,including quarterly estimates for the last two cal-endar years, are to be found in Annex Table 16.Preliminary estimates suggest that export prices(average unit values) of agricultural products asa whole and for each of the main commoditygroups, except beverages and tobacco, showed aslight upturn in the last two quarters of 1959,though as there was also a slight increase in thoseof manufactured goods the recovery may havebeen more apparent than real. For forest productsthere was a more marked recovery in 1959, whichbrought prices back to approximately the 1957level.

The comparison of export unit values for agri-cultural products with those of manufacturedgoods, usually known as the terms of trade ofagricultural exports, gives some indication of realprice levels and of the real purchasing power ofagricultural exports. The further decline in agri-cultural prices in 1959 TCCILICCd theSe terms oftrade to the lowest point since the war (Table 12).

1000-900-800-700-600-

500-

400-

300-

250

These generalized estimates of the terms of tradefor agricultural prod.ucts as a whole, or for broadgroups of commodities, are of significance inbringing out the general situation for agriculture.They do not necessarily correspond closely withthe situation for individual agricultural exportingcountries. Price trends for different agriculturalproducts vary rather widely, as i.s evident fromFigure II, so that much depends on the composi-tion of the countries' exports. Moreover, whilemanufactured goods usually represent a largeshare of the imports of agricultural exportingcountries, they are not the only constituent;as noted earli.er they include increasingly a propor-tion of raw materials and especially foodstuffs. Tojudge the influence of agricultural price movementson the external payments situation of any individ-ual country it is therefore necessary to take intoaccount the actual composition of both its exportsand imports.

Price trends in early 1960

It is not yet possible to carry the indices ofaverage unit values in Annex Table 16 beyondthe end of 1959, while the figures for that yearare still provisional and subject to revision. Pre-liminary indications based on price quotations andon trade returns for a few countries, however,suggest that the slight upturn in world p1-ices inlate 1959 lost momentum and was probably re-

TABLE 12. AVERAGE UNIT VALUE OF EXPORTS AND TERMS OF TRADE OF AGRICULTURAL AND FOREST PRODUCTS

17

'versed in the first half of 1960, though on the latterpoint not all the usual price indices give quitethe same result.

An FAO index of the more usual commodityprice quotations, weighted to correspond withthe indices of average export unit values for allagricultural products in Table 12, fell by about3 percent from December 1959 to March 1960,but recovered about half the loss by early June.The food and feedingstuffs component of theindex fell somewhat irregularly by about 4 per-cent during the first half of 1960, and that forbeverages and tobacco also by about 4 percent. Onthe other hand, the component for agricultural rawmaterials rose by about 5 percen.t, chiefly becauseof a continuing rise in the price of rubber and toa less extent of jute and sisal. The fall in the caseof food and feedingstuffs reflected mainly a rathersharp fall in prices of butter and cheese from thehigh level of late 1959 and a fall in the oil and oil-seed group of copra, coconut oil, palm kernelsand palm_ oil, though in contrast prices of ground-nuts were somewhat higher. Prices of grains,except rice, anc-I of sugar remained firm, whileexport values of beef and mutton continued torise, though bacon prices were lower. In the bev-erages group, coffee prices became somewhat firmerin the first half of 1960, but there was a seasonalfall in tea prices and an appreciable decline inthe price of cocoa. Future prospects are consid-ered in the section on individual commodities atthe end of this chapter.

' Not included in " All agricultural products. ' United Nations index: of ave -age unit value of manufactured goods adjusted to 1952-53 base.

Indices at current prices deflated by index of average unit values of manufactured goods.

1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958

1959

(P re I i m

n ary )

Indices, average 1952-53 100

AVERAGE EXPORT UNIT VALUES (at current prices)

All agricultural products 99 90 93 117 103 97 99 94 92 94 87 85

Food and feedingstuffsBeverages and tobaccoAgricultural raw materialsForest products'Manufactured goods'

116

76

87

93

101

101

73

83

81

95

90

89

102

72

84

102

99

157

114

101

101

99

109

107

102

99

101

91

93

98

93

124

91

93

96

88

106

95

94

97

89

98

91

95

101

91

99

94

94

105

87

100

79

90

105

87

88

79

94

105

TERMS OF TRADE 3

All agricultural productsFood and feedingstuffsBeverages and tobaccoAgricultural raw materialsForest products'

98

115

76

66

92

94

106

77

87

85

111

107

105

120

85

116

101

98

155

113

101

99

97

107

105

99

101

103

93

95

103

97

129

95

97

97

91

109

93

97

91

88

97

90

94

89

87

94

90

90

83

83

95

76

,6

81

83

84

75

90

EXPORTS UNDER SPECIAL TERMS

Several countries are exporting agricultural prod-ucts under special terms. Both Australia and Callada,for example, llave exported wheat under the Co-lombo Plan and the UNRWA, though their totalexports under these programs in the period 1954/55 -1958/59 amounted to only 900,000 tons of wheat.In addition Callada, but also to a smaller extent theUnited States, llave granted long-term credits toa number of countries to import wheat, underwhich Callada shipped some 1.9 million tons dur-ing the same period.

By far the greater part of the agricultural sur-pluses are held, however, by the United States,and that country has carried out much the largestpart of the special disposal operations, notablyunder the provisions of Public Law 480. Sincethe inception of that law in 1954/55 until the endof 1959, surpluses valued at $9,330 million (includ-ing ocean transport costs financed) at CommodityCredit Corporation cost llave been committed, mostof which under agreements for sale against import-ers' currencies. Of this amount, foreign grants anddomestic and foreign donations have amounted to$2,380 million and barter agreements to $1,16omillion (export market value) over the same period.

Shipments of United States agricultural prod-ucts under Public Law 480 and other govern-ment-financed programs are shown year by yearin Table 13, in relation to total export values.

TABLE 1.3. - UNITED STATES AGRICULTURAL EXPORTS UNDER GOVERNMENT-FINANCED PROGRAMS IN RELATION TO TOTAL

UNITED STATEs AclucuuruitAL EXPORTS

' The figures do not include shipments with government-financed credit, certain sales of government-owned commodities at less than market prices, andpayments to exporters in cash or kind. - u At export market prices (including Title II, PL, 480 shipments in terms of CCC cost).

They are valued at export market prices, whichare substantially lower than CCC costs, as theseinclude the cost of acquiring the produce at do-mestic support price levels, together with the costsof storage, inland transport and other costs offinancing shipments. In the calendar year 1959,shipments under Title I of Public Law 480 ac-counted for about 59 percent, and shipments underall titles for about 87 percent of all shipmentsunder government programs.

Shipments of all products under governmentprograms have declined since the peak year 1956/57, but the decline has been proportionately great-est for cotton and dairy products. Shipments ofgrains llave also been reduced, but less than thoseof some other products, and they now accountfor a considerably larger share of the total program.Wheat and wheat flour represented. around45 percent of the total value of shipments underspecial terms in both 1958159 and the second halfof 1959, against only 33 percent in 1956/57, whilefor all cereals, including rice and coarse grains, theshare was 53 percent in 1956/57 as against 57 percentin 1958/59 and 64 percent in the second half ofT959.

Shipments under government programs ac-counted for 41 percent of total United States agri-cultural exports in 1956/57, but the percentagedeclined. to 34 percent in 1958/59 and 26 percentin the second half of 1959. For wheat and wheatflour, however, such shipments still represent about70 percent of United States exports.

Total shipments under Public Law 480 andMutual Security Programs

Shipments under special programs as percentageof total U.S. agricultural exports

1954/55 1955/56 1956/57 1957/58 1958/591959

July-Dec.1954/55 1955/56 1956/57 1957/58 1958/59

1957

July-Dec.

Million dollars Percentage of total va tie

Wheat and wheat flour 323 426 657 475 554 249 66 72 69 66 72 70Coarse grains 67 235 237 119 126 79 29 61 66 37 22 26Rice 4 45 136 45 36 29 7 52 73 47 36 52Dairy products 138 204 177 159 95 35 71 75 81 79 72 54Fats and oils 66 134 167 102 113 64 23 37 40 34 39 42Cotton 221 212 455 288 260 57 32 55 41 34 63 22Tobacco 15 57 36 26 34 36 5 15 11 8 10 15Other agricultural products 32 54 93 38 42 11 4 5 8 3 4

TOTAL 866 1 367 1 958 1 252 1 260 560 28 39 41 31 34 26

SOURCE: Official United States statistics.

Public Law 480 has been extended to 3i Decem-ber 1961, with new appropriations at the annualrate of $T,soo million for transactions under Title I(exports against foreign currencies) and $300 mil-lion under Title II (famine and other emergencyrelief). TWO new programs are provided for un-der Public Law 480, though they llave not yetbeen implemented; the first a " food stamp pro-gram to increase the domestic consumption ofsurplus foodstuffs by needy families, and the seconda program of long-term credits for exports,whereby agricultural commodities may be deliveredover periods of up to io years against paymentsin dollars (including interest) which may by spreadover as much as 20 years.

The most important development in surplusdisposal operations in the first half of 1960 was theconclusion of an agreement between the UnitedStates and India which provides for the sale overa four-year period of 16 million tons of wheatand i million tons of rice. For these commodities,together with some ocean freight, India is to payin rupees the equivalent of $1,276 million underthe terms of Title I of Public Law 480. One fourthof the total export market value will be madeavailable at once to finance the first year's shipmentsof 4 million tons of wheat and 250,000 tons ofrice. Further shipments will be decided after theend of 1960. Eighty-four percent of the Indian rupeesto be acquired in payment for these cereals willbe made available by the United States govern-ment to the government of India for economicdevelopment projects, one half as loans and onehalf as grants. Five percent will be made avail-able for loans to United States and Indian privatefirms, and the remainder will be used to payUnited States government expenses in India, in-cluding the financing of other United States agencyprograms. Of total shipments, 4 million tons ofwheat and the whole of the rice are earmarked toestablish a national food reserve in India.

Although the new agreement does not repre-sent a very large increase in the level of UnitedStates wheat shipments to India (in 1958/59 theyamounted to 3.3 million tons), this iS th.e firstlareement under 1?ublic Law 480 to extend overfour years, and by far the largest single transaction.It has therefore not unnaturally caused concernto other exporters of wheat and rice. Some econ-omists, mainly in the United. States, llave alsopointed out that the very large amounts of localcurrency involved may increase the inflationary

49

pressure already evident in a country with a vastdevelopment program, and do not in fact increasethe countTy's real capacity for investment. It istoo soon to judge how far the various fears express-ed are justified. Shipments under the new agreementwill cover Inclia's current deficit in rood grains,though population growth and imploved diets areestimated to raise requirements of food grains byover 3 million tons annually. Moreover, the es-tablishment of a food reserve should be of greatvalue in stabilizing Indian grain prices and allowa breathing space for the further development ofproduction and marketing.

AGRICULTURAL TRADE OF EASTERN EUROPE AND THE

U.S.S.R.

More complete information is gradually be-coming available on the trade of these countries inagricultural products, but as it is less generallyaccessible and not always entirely comparable withdata for other countries it has been customary inrecent issues of this report to discuss it separately.

Trade within this group of countries representsmuch the largest part of their total trade. Com-prehensive figures for the group are not yetavailable, but for the U.S.S.R. alone imports fromoutside the group represented only 22 percent oftotal imports in 1955, rising to 30 percent in 1957and 27 percent in 1958. For agricultural productsthe proportion of imports froni outside the groupwas appreciably higher at about 33 percent in 1955,and 48 percent in both 1957 and 1958. About24 percent of the agricultural exports of the U.S.S.R..were directed to countries outside the group in1955, 28 percent in 1956, 18 percent in 1957,and 22 percent in 1958. The percentages for tradein agricultural products exclude forest products,and are calculated using the price weights used forthe FAO indices of trade in order to avoid anybias due to differences of pricing.

Commercial ties between the countries are rein-forced by the activities of the Council of EconomicMutual Assistance, which appears to be playingan increasingly important part in co-ordinatingthe planning of production and trade between itsmeinber countries. Trade with countries of West-ern Europe has also increased recently, and sev-eral long-term trade agreements have been signed,especially by the U.S.S.R. The trade of theU.S.S.R. with the United States has remained at

FIGURE 12. - GROSS IMPORTS OF SELECTED COMMODITIES INTO

THE U.S.S.R. FROM LESS DEVELOPED REGIONS, IN RELATION

TO TOTAL IMPORTS

ieag tat tiC:pei°C% '5 9955651957/958

195519561957l958

tildes and skins 19551956I9571958

Million tablet, f o b.O 100 200 300 400 500 600

100 200 300 400 500 600Mainland China,Mongolla,North borea,I I Neor East, AfricaNorth Mlet-Nam =1 Latin Arnerica

5fM Other For Edst I I Other Countries

a low level, but that of Poland has increasedsubstantially. In 1958, Polish irn.ports from. theUnited States were 40 times higher than in 1955and included substantial quantities of wheat, cot-ton and edible oils.

Trade with the less developed countries hasalso developed. rapidly. Recent trends of trad.efor some of the main agricultural products con-cerned are shown in Annex Table 4B, and for theU.S.S.R. alone in Figure 12. In particular, im-ports of rubber, chiefly from the Federation ofMalaya, have increased more than three times in theperiod 1955-58. Imports of cotton have also increas-ed rapidly, mainly from the United Arab Republicwhose shipments to the U.S.S.R. rose from 10,000tons in 1955 to 126,000 tons in 1958. The U.S.S.R.is both an importer and exporter of cotton, morethan 8o percent of its exports going to EasternEurope; its net exports, however, fell steadily from317,000 tons in 1955 to 169,000 tons in 1958.Rapid increases in imports may also be notedfor tea, coffee, cocoa, spices and other agricultural

50

products, though the total volume of trade is

still small. A recent trade agreement with Brazilprovides for imports of coffee into the U.S.S.R.rising from 20,000 t0115 111 1960 tO 40,000 t01151962; this compares with total imports of 4-5,000tons in recent years. On its sidc, Brazil will im-port some 300,000 tons of wheat from the U.S.S.R.Two main exceptions to the general expansionof trade with less developed regions are for sugarand for oilseeds and vegetable oils. Imports ofsugar into the U.S.S.R. have fallen irregularlyfrom 933,000 tons in 1955 to 379,000 tons in1958 and declined further to 317,000 tons in 1959(from Cuba from 441,000 tons in 1955 to 198,000tons in 1958 and 133,000 tons in 1959). Largerimports are to be expected in the next fe-w years,however, following the agreement with Cuba sign-ed. in 1959. Exports of refilled sugar from theU.S.S.R. llave remained relatively constant duringthe same period at around 200,000 tons. Secondly,imports of oilseeds and vegetable oils, chiefly fromMainland China, llave declined sharply, oilseedimports into the U.S.S.R. falling from. 760,000to 550,00o tons, and those of vegetable oils from195,000 to 73,000 tons between 1955 and 1958.Most of the decline was in groundnuts, and im-ports of soybeans llave remained fairly constant.The reduced level of imports may be associatedwith the sharp rise in the production of oilseedsin the U.S.S.R., -which rose from an average of2.5 million tons in 1949-53 to 5.1 million tons in1958.

The statistics of gross imports and exports forthe Eastern European countries and the U.S.S.R_.as a whole given in Annex Table 4B cover onlythe period. 1955-58, but for SOMC COMMOClitiCSmore recent figures are available. Thus, wheatexports from the U.S.S.R. increased substantiallyfrom 3.7 million tons (3.1 million to Eastern Ell-rope) in the trade year 1957/58 to 5.9 million tons(4.1 million to Eastern Europe) in 1958/59. Thelast figure represented nearly 8 percent of the totalcrop. Similarly, imports of wheat by the U.S.S.R.fell in the same two years from 518,000 to 212,000tons. Polish imports of wheat, however, in-creased substantially by 35 percent to over 1.3 mil-lion tons. Sugar exports of the Eastern Europeancountries, which liad doubled in 1958 to reach.810,00o tons, increased further in 1959 to 870,000tons. Exports of livestock and livestock productsby Hungary, Poland and Bulgaria increased sharplyin 1958. In 1959 the exports of live pigs and of

t,"7. '' --

.... I

III..,. ri-i- I

."ttri5.--

111

mil,,L,,,,7,1,R miInol

52a.r ^ - z*, 9,,2

a-VW=,,

"' hi____TI

.)

IL t

1 1

-1.---- I

L 1

.

I.

. ....2

-..

1

I

..,

L,-.58,,,,à.,,, ,,,...""a . ___

-cGtT: -.6,4 .. , .

..oat ITMAI'' '

Rice ,955i9561957/95S

Sugar 195519561957/958

195519561957/956

Meat and liveanimals

Cotton

Wool

1955195619571958

1955'956'957/968

Rubber /955'956'957/958

/9551956'957/958

Oilseeds andvegetable oils

butter of the first two countries declined, but ex-ports of meat and especially eggs rose substantiall-y.Imports of livestock products into the U.S.S.R.increased in 1959, Mainland China and Mongoliabeing the main suppliers.

The data in Figure 12 are in terms of millionrubles, and it may be of interest to compare av-erage unit values of the agricultural exports andimports of the U.S.S.R. with the average in worldtrade outside this group of countries, convertingrubles to U.S. dollars at the official exchange rateof 4:I (Annex Table 17). On this basis, averageunit values of imports into the U.S.S.R. appear,with some exceptions, to be fairly closely in linewith the general level of prices in world trade.It should be noted, however, that import valuesfor the U.S.S.R. are given on the basis f.o.b. fron-tier of the exporting country or at the port ofshipment, in contrast to the more usual c.i.f. basis(including the cost of freight and insurance) whichis used for the world averages. If this differenceis allowed for, the average values of imports intothe U.S.S.R. appear generally to be somewhatabove the world average at official exchange rates.Fairly substantial differences, however, occur if asimilar comparison is made of unit values for anyindividual country with those for the world asa whole, and to a large extent are accounted forby differences of quality, timing, etc. In AnnexTable 17, for example, average import unit valuesfor cotton into the U.S.S.R. are substantially aboveand those for tobacco and tea well below worldaverage values, probably to a large extent becauseof differences of quality. Other price differencesappear to reflect the influence of trade agreements.

Unit values of exports fi-om the U.S.S.R. are

Farm prices

There is, as usual, a paucity of data on farmprices and incomes and the little available relateahnost entirely to the more developed countries.Indices of prices received and paid by farmers(adjusted to a 1952-53 base) for most of the coun-tries which provide this information are set outin Figure 13, together with the ratio between theseindices. The ratio in effect represents the realprices or " terms of trade for the farmers of acountry.

51

usually higher than the average level in worldtrade. This appears to be mainly because tradeexchanges with countries of Eastern Europe aredetermined by special agreements, in -which pricesare not closely related to -world market prices butare usually at a higher level. Nevertheless, itappears that adjustments llave been made whenthese prices diverge widely from world price lev-els. Thus, prices of butter exports to EasternEurope were sharply reduced in 1958 to makethem less out of line with world price levels.For exports to countries outside this group, valuesapproximate more closely to the internationalprices, though even. here U.S.S.R_. unit values appearto be more often above than below the worldaverage; examples are given in Table 14.

and incomes

In the l.ast few years the greatest stability offarm prices relative to prices paid by farmersappears to llave been achieved in Switzerland andJapan. During the four years 1956-59 the ratiodid not diverge by more than a few points in ei-ther country from the average for the base period1952-53. Similar farm price indices for GreeCepublished from 1954 onward (not included inFigure 13) suggest that there, too, the ratio betweenprices received and paiki by farmers has been very

Converted to U.S. dollars at the official exchange rate. 2 Averagefor all countries, excluding the U.S.S.R., Eastern Europe and Mainland China.

TABLE 14. UNIT VALUES OF U.S.S.R. Expoias' TO .EASTERNEUROPE AND TO OTHER COUNTRIES IN RELATION TO WORLD

AVERAGE UNIT VALUES

1955 1956 1957 1958

Indices, urvid average export unit valuc 100'WHeATTo Eastern Europe .. 128 131 127 123To other countries . 117 114 120 106

MAtza.To Eastern Europe .. 119 121 129 136To other countries . 109 107 120 119

BUTTER

To Eastern Europe .. 124 126 144 135

To other countries . 113

COTIONTo Eastern Europe .. 114 123 109 112

To other countries . 97 99 103 105

FIGURE 13 . - INDICES OF PRICES RECEIVED AND PRICES .PAID BY FARMERS AND THEIR INTERRELATIONSHIP, SELECTED COUNTRIES

(Indices, average 1952-53 ------ too)

110

100 -

90 -

80

120

110 --

100 -

90

110

100

90

80 --

50

100

90-

AUSTRIA

150 -

140-

130-

120

110

100 %--43

CANADA

JAPAN110-

100-

4N,.00motn.r:,,clavr90,,04"

SWITZERLAND

i.e..10:Prices received

0ArtO &go

130

120

110-

100

120-

110 -

100 -

90

120-

110 -

100

90-

80-

70 -

130

120-

i 10

100

90

80

70Average1952-53 1956 1957 1958 1959 1960 1952-53 1956 1957 1958 1959 1960

Ratio of prices receivedo prices paid

(--)-° Prices paid

WESTERN GERMANY

eft.x.oo,to*4,00,4

NETHERLANDS

4:seI.I4 g

It

stable. In Switzerland, however, the ratio tendedto move against farmers in the latter half of 1959,and in the first quarter of 1960 fell sharply by nearly4 percent to its lowest point for many years.

In only two countries, Western Germany anc-IFinland, has the general run of price relationshipsin the four years to early 1960 been consistentlyhigher than in 1952/53, though this base periodhas of course no special significance. The samewas the case in Italy until 1958/59, though in thatyear the farm price relationship fell sharply byabout ii percent; more recent data are notavailable.

In Austria the price ratio has been kept ratherstable at some 90-10o percent of the 1952-53 av-erage in the past few years, and this applies alsoto Norway, though hete price fluctuations havebeen somewhat greater. In the remaining coun-tries included in Figure 13, however, the recentlevel of price relationships has usually been as muchas io to 20 percen.t below the 1952-53 average,occasionally more. In Australia there was a steadyfall in the ratio until early 1959, when some re-covery became apparent. In Canada and the UnitedStates, on the other hand, farm price relationshipsrecovered somewhat in late 1957 and early 1958,but again declined. in 1959. In Belgium . and theNetherlands farm price relationships rose slightlyin 1959 from the rather low levels of late 1958,but again fell in early 1960, in the Netherlandsvery sharply indeed.

Fluctuations in farm prices in the Netherlandshave been appreciably wider than in the othercountries included in Figure 13; this may partlyreflect the important share of horticultural products,notoriously susceptible to sharp price fluctuations,in the country's agricultural output. Nevertheless,it is evident from Figure 13 that in many countries,including Australia, Belgium, Callada, Finland,Western Germany, Norway and the United States,prices received by farmers have fluctuated appre-ciably more widely than the prices paid by them,despite the stabilizing influence of price supportmeasures. In all these countries it is clear that theshape of the curve showing the price ratio is de-termined by the movement of prices received byfarmers to a much greater extent than by changesin the prices of farm requisites.

The only available data on farm price rela-tionship in economically less developed countriesare for some Indian states: Assam, the Punjab andWest Bengal. In the last named the price rea-

53

tionship expressed as ami annual average has riseilyear by year from 1955 to 1959, though with mark-ed seasonal fluctuations. In the other two statesthe trend was less definite. It is not clear, however,how closely the farm price index reflects actualreceipts by farmers, which are particularly difficultto estimate in many less developed countries.

Data on farm incomes are restricted to a lim-ited number of more developed countries, and inmost of these the general improvement in pricerelationships appears to llave resulted in higherfarm incomes in 1959. The chief exceptions werein North America. In the United States the fallin farm incomes from 1958 to 1959 Was very con-siderable. Gross farm income is estiinated to havefallen fi-oin $38,300 to $37,000 million, and produc-tion expenses to have risen from $25,200 to $26,000million. Thus, net receipts fell from about $13,000to $11,000 million, or more than 15 percent. Asthere was a considerable rise in output in 1959,this decline was the net result of lower farm prices,higher costs, and smaller government payments,e.g., under the Acreage Reserve Program. In thefirst quarter of 1960 net farm receipts were alsoabout 16 percent less than a year earlier, and anofficial estimate for 1960 as a whole points to acontinuing decline in the net farm income. InCanada there was virtually no change in grossincome from 1958 to 1959, but the net farm in-come fell by about 7 percent because of higheroperating expenses and depreciation charges.

In contrast, farm incomes in Australia and NewZealand rose in 1959/60. In Australia gross returnsrose by 6 percent fi-om LA 1,145 million to LA 1,21 Imillion in 1959/60; ami increase of 14 percentin farm prices, mainly for wool, was partly offsetby the poor grain harvest. In New Zealandboth higher wool prices and some rise in dairyprices must have brought about a substantial in-crease in gross receipts. Estimates of net farmincomes in these countries in 1959/60, however,are not yet available.

The remaining data on farm incomes relateonly to Europe and do n.ot indicate any generalmovement up or down. In Denmark, the down-ward trend of incomes in the two preceding yearswas reversed in 1959 as a result of a rise of 6 per-cent in output (livestock products 13 percent),combined with higher export p1-ices for butterand beef. The gross value of farm productionrose by some 14 percent. Per caput farm incomeswill have been increased by a fall of 6 to 7 per-

cent in the labor force permanently engaged inacrriculture as a result of further rationalization.

The fall in the numbers of people engaged inagriculture is becoming an increasingly importantfactor in many of the more developed countries.In Western Germany, for example, the numberof farms declined by io percent between 1949 and1959, and by 23,000 or 1.3 percent in one yearfrom 1958 to 1959. Similarly, the number ofpeople employed in agriculture (in terms ofunits of full-time workers) fell from 3.7 millionsin 1950/51 to 2.6 millions in 1958/59. Neverthe-less, farm sales h.ave continued to increase, thoughthe cash balance between sales and productionexpenses is estimated to have declined in 1959/60as the drought necessitated larger expenditurefor feedingstuFfs in some parts of the country:

In France, according to official estimates, boththe gross farm output and farm sales increasedbetween 1957/58 and 1958/59 by no more than3 to 4 percent, while the net product rose onlyfrom 2,115,000 IO 2,140,000 million fi-ancs, orlittle more than a percent. Indeed, for a number ofyears, expenses have grown faster than receipts.If interest on invested capital and remuneration ofthe farmers' own work is taken into consideration,the same estimates indicate that the moderate profit

The continuing rise in retail prices during therecession of 1957-58 aroused a good deal of commentat the time. By contrast in 1959 and the earlypart of 1960, when economic activhy was con-siderably greater, there appeared to be some easingin the upward pressure on retail prices, especiallyfood prices. In some countries at least, it appearedthat the persisting surpluses of some agriculturalcommodities and the downward trend of agricul-

Consumer prices and sales

54

of the year 1957/58 would have changed into aloss in 1958/59. Investment in agricultural equip-ment has slowed down and during tlae last fouryears agriculture's indebtedness with the mutualcredit banks has doubled.

In Italy, too, the net farm product in 1959fell by 2 percent below that of 1958, although thesaleable product increased slightly from 3,400,000to 3,500,000 million lire. Agr.icultural credit hasplayed an increasing role in Italian agriculturaldevelopment during recent years. It has been esti-mated that the outstanding debt has doubled inthe last six years, while income has risen by IOI0 12 percent. Total indebtedness of agricultural.enterprises to agrarian credit institutions roseduring 1959 by some 13 percent to 446,000 mil-lion lire.

In the Netherlands, net farm incomes rosein -ach of the last three years, and in 1959 the in-crease amounted to Or million florins, or about5 percent. In Norway, too, the net farm incomein 1959/60 is estimated at 1,581.9 million kronercompared to 1,521.3 million in the preceding year,an increase of almost 4 percent as compared witha rise of about I. percent a year earlier.

Farm incomes are also estimated to llave in-creased in the United Kingdom, where the netfarm income of L356 million in 1959/60 washigher by L4a million than in the unfavorableyear 1958/59 and. only Li.s million less than in. therecord year 1957/58. Government expenses forsubsidies and deficiency payments increased from

241 million in 1958/59 to about 259 million in1959/60. On the other hand, in Ireland farmincomes c-leclined substantially in both 1958 and1959 owing to unfavorable weather, a smalleroutput and higher costs.

tural prices on international markets were filiallybeginning to influence retail mark.ets. Thus, of85 countries for which indices of retail food pricesare available there was a fall from 1958 to 1959in 29 cases, while in 1958 there were only 16 COL111trics where retail food prices were lower th:.an in

1957. On the other hand retail prices continued torise in 47 countries in 1959, though this was less thanin both preceding years, in each of which the com-

1957/58 1958/59 1959160

Thousand million D. Marks

Farm sales 17.4 18.5 19.0

Production expenses (excl. investmentand taxes) f 0.5 I I.0 12.0

Net cash receipts 6.9 7.5 7.0

parable figure was nearer 70. Falls in retail foodprices, however, were rather more widespreadthan falls in the general index for the cost of living,which fell in only 13 countries in 1959 and rose inabout Go.

Taking a longer-term view, both food pricesand retail prices as a whole have shown a persistentrising trend in recent years. Thus, comparing 1953with 1959, there were only 9 countries, out of84 for which indices are available over the fullperiod, which failed to show some rise in retailfood prices, while 33 showed increases of over20 percent and. 13 increases of OVer 40 percent.Except that all but one of the countries in thislast group were in economically less d.evelopedregions, there appeared to be no marked differencein inflationary trends between more and less de-veloped countries. The area of greatest retail foodprice stability was Central America and some ofthe adjacent countries.

In general, food price indices and price indicesfor the cost of living as a whole moved fairlyclosely together. Considerable divergences betweenthe two indices were rather more cornmon in lessthan in more developed countries, in spite of thefact that in less developed countries food is a largecomponent of the over-all cost-of-living index.Of 83 countries for which comparisons can be made,the difference between the two indices from 1953to 1959 was less than 2 percent in 31 cases. Of theremainder, food prices rose more than the generalcost of living ni 24 countries and less than the cost ofliving in 28 countries. Retail food prices usuallyshowed the largest relative increase over the gen-eral index in countries where inflationary pressureshad been strong, such as Argentina and Uruguay.In a period of general inflation and falling real in-comes, consumers may defer purchases of moredurable goods, but cannot defer purchases of food,which thus tends to absorb some of the inflationarystrain from other sectors.

In Argentina and Uruguay there was a verysteep rise in prices in 1959, -which in Argentinafollowed immediately from the devaluation ofthe currency at the beginning of that year and theabandomnent of a number of conSumer subsidies.In the second half of 1959, however, the rate ofinflation in Argentina slowed down greatly (risein retail food prices, December 1958 to June 1959:85 percent; June 1959 to November 1959: 8 per-cent) and this development continued into the firsthalf of 1960. It was accompanied by a decline in

55

real earnings and )vages, suggesting that some mainobjectives of the government policy, i.e., red.ucedconsumption to make possible larger exportsand higher prices to food producers, liad had ameasure of success. In Uruguay, too, the rise inprices slowed down in the second half of 1959,though_ not so much as in Argentina.

Outside the Latin American region there wasa sharp increase in retail food prices in 1959 onlyin Turkey, where prices rose by 8 percent in thefirst half and by 12 percent in the second half ofthe year. In Indonesia, and also in Colombia,where retail food prices had risen steeply in recentyears, much greater stability has now been achieved.In India the slowly rising trend of retail food pricessince 1955 continued in 1959 and early 1960.In Pakistan prices rose by some 12 percent duringthe year, after a temporary decline in the latterpart of 1958, and the rise continued in the firstmonths of 1960. In Japan, too, retail prices wereslightly higher.

Turning to the economically more developedregions, the slow rise in retail food prices in theUnited States was halted, and prices in 1959 andearly 1960 were rather stable slightly below peaklevels in 1958. Callada and. the United Kingdomalso achieved a high degree of price stability in1959. In continental Europe, prices remained verystable in Italy, eased slightly in Switzerland, butcontinued to climb slowly in other countries,including Western Germany and the Netherlands.A substantial slow down in the rise in the retail priceindex was achieved in France, despite the reducedsupply of milk and butter and the opposition offarmers, by means of consumer ceiling prices, acampaign for the voluntary reduction of retailprices and especially by more liberal import pol-icies. Similarly in Norway, through increasedconsumer subsidies, and in Sweden, the rise infood prices was slower than the year before.

Data on the value of retail food sales are avail-able for only 16 countries, all except Argentina andChile in the more developed regions of the world.In none of these countries did the growth of retailsales of food show any check as a result of the reces-sion of 1957-58 and the upward trend of sales conti-nued in 1959. In most countries indices of retail foodsales lagged somewhat behind indices of nationalincome and of general retail sales, as would beexpected in view of the declining income elasticitiesof expenditures on foodstuffs with rising incomes.The main exceptions occurred in countries sub-

ject to inflationary pressures, including Argentinaand Chile, where the value of retail sales of food.in 1959 rose considerably more than general retailsales. Over a longer period, but to a smaller extent,the same is true of France. While these trends

Agricultural policies continue to reflect thesharp contrast between the agricultural demandand supply situation in the industrialized countriesand that in the less developed parts of the world.These contrasting situations have been discussedin several recent issues of this report, but theymust be referred to briefly again, since they formthe essential background of such policy ch.angesas have occurred in 1959/60.

With adequate technical knowledge and capi-tal available, supplies are generally capable offairly rapid expansion in the more developedcountries. At the high levels of food consumptionthat have been reached in these countries, however,the larger demand resulting from increased in-comes goes predominantly to nonagricultural prod-ucts. In the less developed countries this situa-tion is reversed. Many obstacles, especially in theinstitutional field, have to be overcome in orderto achieve a high rate of increase of agriculturalproduction. Demand is rising rapidly, however,with the faster growth of population in thesecountries, and a large part of any increase in in-come is spent on food.

These divergent situations also react on oneanother, which is the origin of many of the mostserious and persistent problems that beset the world'sfood and agricultural economy at the present time.Markets in the industrialized countries for mostof the agricultural exports of the less developedregions are growing relatively slowly. This appliesnot only to foodstuffs, but also to industrialraw materials of agricultural origin, the demandfor which has been affected by the developmentof substitutes and by economies in the use of rawmaterials. For some products the effects of theslow growth of demand in the industrialized coun-tries have been accentuated by greatly increaseddomestic production in these countries. At thesame time, the surplus stocks that have accumu-lated. since 1952 for some commodities, mainly

Agricultural policies and development plans

56

partly reflect the rise in food prices, th.ey also

appear to confirm the common observation thatconsumers do not quickly change their dietarypattern in response to rising prices or falling in-comes.

in the more developed countries, are unsaleableat normal commercial terms in the less developedregions, where, in spite of the vast potential in-creases in consumption, effective demand is limitedby the low level of incomes.

Against th.is background, the principal aims ofagricultural policies in the more developed groupof countries are to adjust the level and patternof their agricultural production as closely as pos-sible to effective demand on domestic and exportmarkets, while at the same time attempting tonarrow the gap between agricultural incomes andthose in other occupations. Price support systemshave been the main instrument in these countriesboth for maintaining farm incomes and for influenc-ing the output of the different agricultural products.It is becoming increasingly realized, however, thatthese systems have not only contributed to theexcessive expansion of the production of somecommodities but have also often failed, in spiteof their high and rising cost, to have sufficienteffect on farm incomes, and especially on the in-comes of the smaller farmers.

There has therefore been for some time a ten-dency in Western Europe to seek improvementsin farm incomes increasingly through raising theefficiency of the farm units, in particular by reduc-ing the agricultural population and increasing theaverage size of farms. This is reflected to an in-creasing degree in recent modifications to supportpolicies in some countries, which have sometimesbeen strongly opposed by farmers. It is alsoapparent in the agricultural policy proposals ofthe Commission of the European Economic Com-munity. More far-reaching changes in the nearfuture in some Western European countries areforeshadowed by the rather widespread re-ex-amination of agricultural policies that has been amarked feature of the period under review andhas resulted particularly from the implicationsof the new regional economic groupings. In

Australia and New Zealand also, measures to im-prove productivity and efficiency are receivingstill further emphasis than in the past, and. in Japanthe costly price supports for wheat and barley maybe gradually replaced by assistance in raising thequality and efficiency of production. In Calladaa com.prehensive system of price supports hasonly recently been introduced on a permanentbasis, but it has already been found necessary tomodify the guarantees for some products. Theprinciple has been introduced, so far only for pigsand eggs, of limiting direct support payments toany individual farmer to a relatively low level ofoutput, both to save expense and to lessen the riskof overproduction.

In the United. States, where the problem ofsurpluses is most acute, attempts to reduce them byrestricting acreage llave largely been offset by ris-ing yields, as discussed earlier in this chapter.So far the chief effective limitation on the furtheraccumulation of surplus stocks has been their large-scale disposal under special terms. Many differentsolutions are being proposed for these problems.Most of the recent proposals have advocated areduction in price supports, combined with therelaxation of acreage restrictions and other controls,while others llave proposed even tighter acreagerestrictions for wheat as well as ceilings on produc-tion rather than crop area. So far in 1960, however,no new measures llave been passed.

Most of the less developed countries are unableto afford high levels of supports for the improve-ment of the low incomes of their farming popula-tion, and their agricultural price policies are aimedmainly at the protection of consumers and theavoidance of inflation. The question of incentiveproducer prices is receiving increased attention insome of these countries, however, and a few newschemes llave been introduced in 1959/60, especiallyin the Far East.

In the majority of the less developed coun-tries the economic development plan remainsthe principal expression of agricultural policy.The year 1959/60 has seen a large number of newplans and modifications to earlier ones, while stillmore are at present in preparation, including In-dia's third five-year plan, of which a draft outlinehas been published. In 1958/59 several countriesin the Far East and Near East undertook a substan-tial reorganization of the government machineryfor agricultural and general economic planning,but during the year under review th.ere have been

57

few further major changes in this respect. Somecountries are now paying more attention to thecareful evaluation of the progress of their develop-ment programs, but except in its most elementaryform this is so far confined to a very small numberof countries.

The less developed countries too are attemptingto adjust to the buyers' market for agriculturalproducts, and measures to improve efficiency andproductivity are becoming an increasingly importantpart of the agricultural policies of some of them.Agrarian reform measures were a prominentfeature of the agricultural policy developmentsof 1958/59, and although few new measures ofthis kind have been introduced in 1959/60, thegeneral trend toward greater emphasis on the im-provement of the institutional environment ofagriculture appears to llave continued, especiallyin some countries of the Near East.

The gradual abandonment of multiple exchangerate systems in Latin America, which has contin-Lled. in 1959/60 in combination With dOMCStiCstabilization measures designed to combat infla-non, also represents an adjustment to world marketconditions for agricultural products. Similarly,most agricultural exporting countries, includingthose in the more developed regions, are payingmore attention to measures for the promotion ofexports and for widening the markets for theiragricultural products. For coffee, for example,aggressive export policies are being pursued inthe markets not covered under the new Interna-tional Coffee Agreement.

Changes in agricultural organization and struc-ture have continued rapidly in the centrally-planned economies of Eastern Europe and theU.S.S.R., and in .Mainland China there was somereorganization of the rural commune system inAugust 1959. The structure of the collective farmis undergoing considerable modification in theU.S.S.R., and similar changes are under wayin several of the Eastern European countries, wherethere has been a renewed spurt in the pace ofcollectivization.

The tendency toward regional economic co-ordination, which has been such a marked featureof the last few years, has continued in 1959/60,though there have been few major developmentsoutside Western Europe and Latin America. Inthe former region the proposals of the Commis-sion of the European Economic Community fora common agricultural policy llave been published.

After the failure of negotiations for the establish-ment of a wider free trade area, seven OEECcountries established the European Free TradeAssociation; while this excludes agricultural prod-ucts, special arrangements are envisaged to facil-itate agricultural trade. In Latin. America sevencountries have established a Free Trade Associa-tion, and. three Central American countries haveset up an economic association as part of the Cen-tral American Integration Scheme.

These main agricultural policy developmentsin 1959/60 are discussed in more detail below ona regional basis. Brief accounts are also given ofthe principal changes in fishery and forest policies.

NORTH ANIERICA

United States

There have been no significant changes inagricultural policy in the United States in 1959/60.Various solutions to the problem of surpluses con-tinue to be sought and proposed., but the viewson price support policy are still so divergent thatit is unlikely that any basic changes will be enactedbefore the presidential election in November 1960.

Th.e President's Farm Message to Congress inFebruary 1960 stated that any new program mustfulfill three main conditions. First, price supportlevels should be realistically related to productioncontrols, so th.at the higher the support the stricterthe controls and vice versa. Secondly, supportsshould not be so high as to stimulate still moreexcess production, reduce domestic sales and in-crease the subsidies required to hold world mar-kets. Thirdly, direct subsidies for crops in surplusshould be avoided, as well as programs that wouldinvite countermeasures by other countries or assistone group of farmers at the expense of others.

The Faun Message also reiterated. the Administra-tion's preference for a system which would gearsupports to the market prices of the immediatelypreceding years, and which would eliminate acre-age allotments and marketing quotas. The re-sponse to the two new schemes introduced for the1959/60 crops of maize and cotton had indicateda preference among some large and efficientfarmers for the relaxation of prod.uction controls,even though combined with lower prices. TheAdministration also advocated the gradual expan-sion of the Conservation Reserve, the remainingpart of the Soil Bank Program, up to some 24

58

million hectares, the main expansion to be direct-ed to the areas of greatest need. Proposals involvinga ceiling on production rather than on crop areahave also been discussed.

Public Law 480, the principal legislation cov-ering surplus disposal operations, has again beenextended. Details are given in an earlier sectionof this chapter concerning exports on special terms.

Canada

The price support program introduced in Can-ada from the 1958/59 crop season has resultedin a sharp rise in govemment-held stocks and inthe cost of assistance to farmers. It is feared thatthe permanent unlimited support system may lead,as in some other countries, to continued excessproduction, and the government has thereforeintroduced some modifications of the support meas-ures. Guaranteed prices for pigs were reduced inOctober 1959 to thc legal minimum, and from Jan-uary 1960 government purchases at support priceswere replaced by deficiency payments limited to Toopigs per prod.ucer. Similarly for eggs the formersupport system was replaced in October 1959 bydeficiency payments limited to 4,000 eggs perproducer. It is hoped in this way to reduce retailprices and increase consumption, as well as dis-courage the excessive expansion of production,though it has been suggested that the new systemmay tend to favor the smaller producer as againstthe generally more efficient larger producer.

The federal agricultural credit system was ex-tended, and an act was also passed, enabling thegovernment to subsidize any provincial crop in-surance schemes that may be introduced.

AUSTRALIA AND NEW ZEALAND

Both Australia and New Zealand have furtherintensified efforts to promote exports. Researchon production, processing and marketing is beingexpanded, and there have been some small changesin guaranteed price levels.

Australia

For 1960/61 the guaranteed price for wheathas been increased slightly. Unless the exportprice improves, it is likely that this will resultin the government's subsidizing wheat exports for

the first time, though the commitment is not anindefinite one but is limited to the duration of thepresent price stabilization scheme.

A futures market for raw wool was opened inSydney in May 1960. While such a market hasoperated in London for sonae years, Australianproducers made very little use of it, and it is pos-sible that the new market may help to smoothout the very large fluctuations in their incomes.

New Zealand

Wh.ile the guaranteed price for butterfat forbutter was left unchanged, the differential for but-terfat for cheese was raised in order to induce fac-tories to expand the production of cheese at theexpense of butter and casein. At the beginningof the 1959/60 season it was agreed that half ofany annual trading surplus in the Dairy IndustryAccount (in effect, any surplus on export sales)should be retained as reserves and th.e other halfpaid out to producers. Because of the high exportprice over most of the 1959/60 season, this arrange-ment will result in a rise in the effective producerprice for dairy products.

WESTERN EUROPE

Although there were no major changes in agri-cultural policies in Western Europe in 1959/60,this period has seen considerable re-examinationof these pol.icies and their principles in many coun-tries. This has arisen partly because of the risingcost of support measures, though with little im-provement in the incomes of small farmers, andpartly because in some countries the productionof certain commodities, notably milk, is tendingto outgrow dem.and at present price levels. Astill greater impetus to the rethinking of agricul-tural policies comes from the implications of thenew regional economic groupings.

Increasing stress is being laid on problems offarm structure, especially those arising from thesmall size of farms, both in individual countriesand in the agricultural policy proposals of the Com-mission of the European Economic Community.New measures are being considered to facilitateth.e transfer of manpower out of agriculture and tocreate supplementary sources of income for farm

59

Domestic agricultural policies

The Green Plan for 1960 in Western Germanyrepresents a further shift in government outlayfrom farm income support to measures for theconsolidation of farms and the rationalization ofproduction. Increased sums have been allocatedto subsidize the old-age indemnity for farmers,which is expected to expedite the improvementof the farm structure. In Italy the Council of Min-isters has put forward an agricultural plan. for1960/61 to 1964/65, aiming at the formation andconsolidation of efficiently organized farms and theorganization of a more rational marketing system.

In the Netherlands new guide lines have beenworked out for a revision and improvement ofthe agricultural support system. The link betweenprice guarantees and costs of production is to bemade looser, and in order to encourage the improve-ment of efficiency and farm structure larger farmunits are to be used as the basis for the calculationof support levels. Price guarantees are to be con-tinued for wheat and for a limited quantity of milk.Also in Norway, although the present agreementwith the farmers' organizations does not end untilJune 1961, a conunittee has already been establishedto work out a new policy for the future, in par-ticular in regard to structural and social problems.In Switzerland, too, a gradual change is proposedfrom the present reliance on price supports togreater emphasis on measures to increase produc-tivity, through the development of family farms ofadequate size and a reduction in the farm population.

Some of these proposals have been stronglyopposed by farmers, as have a number of reduc-tions in guarantees that have already taken placein some countries. Farmers in France asked fora return to the automatic link, abolished at theend of 1958, between agricultural prices and timeprices of certain cost-of-living items and meansof production. While this was refused becauseof the danger of inflation, prices of the main prod-ucts will be adjusted to some extent to productioncosts, and may also be increased in years when thegap widens between fitrm incomes and those inother sectors. A draft long-term agricultural de-velopment plan, including pleasures to improve thefarm structure and the marketing system, has beenprepared in France. In the United Kingdom,too, the 1960 Price Review showed a considerablearea of disagreement between the government,which aims to reduce farm subsidies as production

increases, and the farmers organizations. For 1960/61the fertilizer subsidy has been reduced and smallcuts imposed in the price guarantees for a numberof products, but guarantees for potatoes and pigshave been increased.

In other countries there have been few changesin price guarantees. In Denmark the producerprice of butter was reduced in December 1959 andagain in February 1960, in line with the decliningprices on world markets. In Sweden, where underthe new agricultural agreement that began inSeptember 1959 import duties on certain agricul-tural products depend on industrial wages, worldprices and farm costs, duties on meat, cheese, eggs,potatoes and bread grains llave been raised fromMarch 1960.

Under Greece's preliminary economic develop-ment program for 1959-63 it iS proposed to reducethe area under wheat, which is costing the govern-ment large sums in subsidies, to increase productionand reduce imports of feed grains, and to increasethe production and consumption of livestock prod-ucts. Sugar beet is to be introduced as a new cropand sugar refineries built. The program countson larger European outlets for cotton, sultanas,citrus fruit and tobacco, and this was an importantfactor in the decision to apply for association withthe European Economic Community. Greeceis also seeking larger markets for agricultural prod-ucts in the Eastern European countries.

Regional economic co-ordination

Towa tiletae end of 1959 the Commission ofthe European Economic Community preparedproposals for a common agricultural policy. Itsproposals stress the need to create efficient and viablefarm units, through new vocational opportunitiesfor part of the farm population, better educationfor farmers, and the establishment of industriesin rural areas. It is proposed to make an 'annualreport on the agricultural situation and to rec-ommend how measures for structural reform canbe intensified and financed.

It is also proposed gradually to harmonize theprice levels of basic agricultural products in thesix countries, and to achieve a unified market with-in six years. Common marketing organizationsare envisaged for grains, sugar and dairy products,while for meat and eggs it is proposed to co-ordinate the existing marketing arrangements. Forfruit and vegetables the main emphasis is on corn-

60

mon quality standards, with competition govern-ed by certain rules. For all the main commodities,except fruit and vegetables, it is proposed to setup stabilization funds, financed from importlevies intended to bring import prices up to certainminimum levels.

These proposals do not ami at self-sufficiencyfor any agricultural product, but the principleof raising farm incomes to the level of those inother sectors entails farrn price supports whichare likely to continue to stimulate production andreduce imports.

After the failure of the negotiations betweenthe European Economic Community and theother members of OEEC for the establishmentof a wider free trade area, seven countries (Austria,Denmark, Norway, Portugal, Sweden, Switzerlandand the United Kingdom) set up the EuropeanFree Trade Association. It aims at a progressiveabolition of tariffs on goods originating in the area,beginning on i July 1960, but there is to be nocommon outer tariff for products froin the restof the world. Agricultural and fishery productsare not included., but a special agreement to facili-tate trade in these products between member coun-tries is envisaged. Already the United Kingdomhas agreed to waive tariffs on Danish bacon, bluecheese and canned cream. Switzerland has increas-ed imports of Danish butter and promised great-er imports of other products from Denmark.Sweden is to grant tariff preference to importsof Danish dairy prodyucts, meat and potatoes, andwill restore part of the duties collected on food-stuffs imported from Denmark for reimbursementto Danish producers.

Proposals have been made for the reorgani-zation of OEEC; they are concerned mainly withcloser participation by Callada and the UnitedStates and increased emphasis on the co-ordinationof aid to less developed countries.

EASTERN EUROPE AND U. S . S . R.

There have been further adjustments to long-term plans and objectives in Eastern Europe andthe U.S.S.R. during 1959/60. Modifications inagricultural structure and organization llave con-tinued in the U.S.S.R. and also in some countriesof Eastern Europe, where there has been a furtheracceleration of the collectivization drive in mostcountries.

Development plaits

Long-term plans for agriculture in EasternEurope and the U.S.S.R.. are framed on the basisof five or seven-year periods and are fitted into" perspective plans running until 1975 or 1980.Particularly in the U.S.S.R. flexibility is soughtby making adjustments of detail in the seven-year plan on the basis of the progress achieved unclerthe annual plans.

Because of the success achieved in the livestocksector in 1959, the 1965 U.S.S.R. target has beenraised from. the 16 million tons in the seven-yearplan to 20-21 Mill1011 WM, which correspondsto the objective announced. in 1957 to exceed theper caput meat production of the United States.The target for grain production in 1965 is set at164-I 8o million tons, and i.t is now hoped to achievethe higher of these two objectives. Maize produc-tion is being especially promoted, and oats andother products are to be replaced by higher-yield-ing and more nutritious feedingstuffs. Follow-ing the campaign for the greater use of artificialfertilizers, the more rational use of organic manuresis receiving special emphasis, while in order toreduce losses of stored grains and other productslarge investments are to be made for the construc-tion of silos.

While it was originally planned to achieve the1965 grain target almost entirely through higheryields, it is now intended to enlarge the sown areaby the productive use of 12 million hectares offallow and by opening up a further 15 millionhectares of virgin land. There have been greatdifficulties, however, concerning immigration intothe newly cultivated areas in the cast of the U.S.S.R.where vast numbers of seasonal workers h.ave beentransported each year but the number of perma-nent immigrants has not been sufficient.

Greater regional agricultural specialization is

receiving considerable emphasis, and recommenda-tions llave been made for each of the 39 agricul-tural zones of the U.S.S.R. They are to be imple-mented partly by the abolishment or reductionof deliveries of grain to the state in arcas wherecosts are high. Steps toward greater agriculturalspecialization have also been proposed for thecountries of Eastern Europe. Agricultural col-laboration between the U.S.S.R. and the countriesof Eastern Europe already covers such matters asthe exchange of seeds, technical information andfarm machinery, while there is also some co-or-

61

dination among the plans of the different countries.A number of Eastern European countries llave

revised their long-term plans or have prolongedthem so that they finish in 1965, the same yearas the U.S.S.R. seven-year plan. During 1959and 1960 new or modified plans running until1965 were published in Czechoslovakia, Hungary,Poland and Romania. As in the U.S.S.R., theplans in the Eastern European countries emphasizelivestock production and fodder crops (especiallymaize), and increased yields per hectare and peranimal. Also large investments are to be madein means of production, especially chemical fer-tilizers and machinery. Some countries, especiallyin Southern Europe, are attempting to increasethe cultivable area by means of reclamation, drain-age and irrigation.

Agricultural organization

In the U.S.S.R. the proportion of the livestockpopulation in the socialized sector was furtherreinforced in 1959, and the kolkhozes (collectivefarms) and sovkhozes (state farms) are now re-sponsible for nearly half of the total production ofmeat and milk. This is chiefly due to the reductionof the privately-kept livestock of the sovkhozworkers, who have been invited to dispose ofthem over two to three years, and to the prohibi-tion of livestock raising in several large townsfrom October 1959. Kolkhoz members are beingencouraged to sell their privately-owned calvesfor fattening by the kolkhoz, and in some areasthe maximum number of livestock that they mayown has been reduced.

New sovkhozes are to be established in theU.S.S.R. during 1960. The evolution of the kol-khozes has continued along the lines begun in 1958and described in last year's issue of this report.3At the beginning of 1960 it was announced thatthe sale of agricultural machinery to the kol-khozes by the Machinery and Tractor Stations(MTS) had been completed. In order to achievethese purchases more easily, about 17,000 collec-tive fauns have been amalgamated, and they nownumber about 6o,000. The repair stations (RTS)that replaced the MTS have in some cases passed

3 See also Alexander N. Sakoff, Current trends in col-lective farming in the U.S.S.R. Monthly bulletin of agricultural

CC0110IlliCS and statistics, Vol. IX, No. 5, FAO, Rome, May 1960.

to th.e kolkhozes or to groups of them, and itseems that this system is to become general.

The establishment of uniform prices from 1958for compulsory deliveries and sales to the statebenefited the smaller kolkhozes and enabled someequalization of the revenues of the kolkhozes.At the session of the Communist Party CentralCommittee in December 1959 it was decided toreduce the prices of certain products (industrialcrops, fruit, grapes, tea) to bring them more inline with those of other commodities, and this toowill contribute to evening out the revenues of thedifferent kolkhozes. For the remuneration of theirmembers, an increasing number of kolkhozes arereplacing the trudoden (conventional work day)b-.), a system of fixed wages, but this system entailsthe possession by the kolkhoz of relatively largefinancial resources. The kolkhoz is increasinglycoming to resemble a commercial agriculturalenterprise, with a salaried labor force and realizingvariable net profits, and in the U.S.S.R. it is ap-proaching the sovkhoz in structure.

Enterprises for construction, electric power, agri-cultural processing, etc., organized and financedby interkolkhoz associations, are increasing rap-idly, and in some cases the sovkhozes participatein them. It has been proposed that district kolkhozunions should be set up to control these enterprisesand co-ordinate the activities of the kolkhozes.Sovkhoz unions are also to be established. Be-cause of the increasing importance, noted above,of financial problems in the kolkhozes, modifi-cations in the agricultural credit system were intro-duced in 1959 in ord.er to SeCUre closer control.Formerly long-term credit was obtaineci from theAgricultural Bank (Selkhozbank) and short-ternicredi.t from the State Bank (Gosbank), which holdsthe cash balances of the kolkhozes. The formerbank has now been abolished and all credit is tobe obtained fron the State Bank, except for creditfor building, for which a new bank has been set up.

The col.lectivization drive has been intensifiedin most of the countries of Eastern Europe, andSOIIIC of the same structural modifications as in theU.S.S.R. are taking place in these countries.Bulgaria and Czechoslovakia have decided totransfer the agricultural machinery to the collec-tive farms by 1962, and in Czechoslovakia morethan half of this machinery had been purchased bythe autumn of 1959. In Eastern Germany themachines are to be loaned, rather than sold, tothe more advanced type of co-operative. In Bul-

62

gana very large co-operatives associated with ir-rigation works have been organized since 1958,and 3,290 co-operatives were amalgamated. into640 units averaging more than 6,500 hectares ofarable land, or much more than the average of2,200 hectares in the U.S.S.R. By th.e end. of1959, however, the number of units had risenagain to 950, with an average size of 4,5oo hectares.

Collectivization is now almost complete inBulgaria. In Eastern Germany the collectivizationdrive was very rapid in 1959 and early 1960, andthe proportion of socialized land (co-operativesand state farms) rose from 37 percent in 1958 tomore than 85 percent in March 1960. In Albaniathe socialized sector covers 8o percent and inCzechoslovakia 86 percent of the arable land. InRomania its share rose from 55 percent in 1958to 81 percent in _June 1960, primarily because ofthe expropriation (against compensation) of allland not cultivated directly by the owner and theabolition of the renting of land and the employ-ment of hired labor. In Hungary the share ofarable land in the socialized sector rose from 29percent at the end of 1958 to 72 percent in March1960.

The position in Poland remains different fi-ornthe other countries of Eastern Europe. Collectivecontrol of private farming is exercised to someextent through the `` agricultural circles, anancient form of local farmers' association datingfi-om the beginning of the nineteenth century.In mid-1959 about 13 percent of the farms weregrouped in 19,000 of these circles. They admin-ister the Special Fund for Agricultural Develop-rnent, which was established in September 1959from the difference between market prices and theprices paid for deliveries to the state. They canalso undertake the collective cultivation of landsold to them by various organs of the state, andit is likely that about i million hectares may beused for this new form of collective enterprise.

LATIN AMERICA

In Latin America a main feature of 1959/60 hasbeen the success of the stabilization programspursued in a number of countries to check theinflationary rise in prices that had hitherto been sopersistent. Notable progress has also been madein the movement toward regional economic co-ordination.

Price policies

Some progress in reducing inflation and balanc-ing exports and imports was made in Argentina in1959 and the first half of 196o under the Stabiliza-tion Plan adopted in December 1958. In July 1959the government sought the co-operation of theretail trade in the stabilization program, and 6o,000retail stores agreed to sell certain essential consumergoods at cost price.

Over the last few years many Latin Americancountries have abandoned the multiple exchangerate system, and in December 1959 Uruguayreplaced it by a single rate involving the devalua-tion of the currency from 1.5 to 6.5 pesos per U.S.dollar. Exchange retentions up to so percent wereintrod.uced as a transitional measure for majorexport commodities, part of which was earmarkedfor subsidies on imported food. Earlier, in October1959, the prices of essential consumer goods hadbeen frozen until the end of the year at the levelof 31 July and retail price margins limited to 25percent. In early 1960 a price ceiling was establishedfor retail sales of bread.

In contrast to most other countries in LatinAmerica, Brazil has not embarked on an over-alleconomic stabilization plan, but ad hoc measuresare taken as the need arises. Following the crop fail-ures of 1959/60, price controls were imposed on anumber of basic food products. The failure to reachthe production target for wheat, partly because ofunfavorable weather but also because of rising pricesfor various production requisites and the lack ofadequate storage, led to a modification of thewheat price policy, and growers now receive a basicprice plus a premium (so percent of the basic price)which is paid only if it is used for the purchase ofproduction requisites.

A new coffee policy was begun in Brazil in1959, wider which, instead of defending the price,the volume of exports is to be expanded withoutconsideration of the price in new markets such asEastern Europe, the U.S.S.R. and Japan. Ontraditional markets prices are supported by therecent International Coffee Agreement. Brazil andalso Colombia are seeking to barter coffee,especially with Eastern European countries andthe U.S.S.R. Brazil's new coffee policy also

resulted in a step toward the simplification of themultiple exchange rate system, as there are nowonly two instead of three export exchange rates.The export price pol.icy, however, is not reflected

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in d.omestic prices. The `` coffee dollar was raisedfroni 76 to 90 cruzeiros in July 1960, which stillinvolves a substantial exchange tax in relation to thefree market rate. On the other hand, the governmentis obliged to purchase all of the export quota whichcannot be sold at a minimum price, and financesthe entire crop through credits up to 8o percent ofthis price. The 1959/60 minimum price of 2,100-2,200 cruzeiros per bag is expected to be raised toabout 3,000 cruzeiros for the 1960/61 crop. InColombia also, both the coffee dollar rate and thepurchase price of the Federation of Coffee Growerswere raised in May 1960.

There llave been few price policy changes inthe other countries of the region during 1959/60.Mexico introduced an export subsidy for maize inNovember 1959, in order to check the accumula-tion of surpluses. In Peru meat subsidies and con-trols have been abolished in order to stimulatecattle raising.

Development plans

While in the Latin American countries there arefew formal economic development plans of thetype that is now ahnost universal in the other lessdeveloped regions of the world, agricultural de-velopment activities are pursued under sectoral,regional and commodity programs in most coun-tries. In Brazil, for example, a special developmentagency was created for the drought-ridden north-east of the country in December 1959. Its programincludes irrigation works and the development ofindustries and mining.

Other agricultural programs include the agri-cultural diversification prograin in Nicaragua, forwhich a loan of U.S.$8 million has been obtainedfrom the Export-Import Bank, and the programfor the development of the cattle industry inUruguay, for which the International Bank forReconstruction and Development granted a loanof U.S.$7 flhilli011 in A.pril 1960. In Chile a ten-year economic development plan is in preparation.In Guatemala $41 million are to be invested in thedevelopment of 40,000 hectares of rubber on thePacific coast. Measures under way as part of Mex-ico's Rural Welfare Program include the revisionof land tenure legislation, the expansion of the cropand livestock insurance scheme, and the resettle-ment of excess rural population in new agriculturalareas.

In Venezuela recommendations for a long-terni.development program are being mac-le by a missionof the International Bank for R.econstruction andDevelopment. In February 1960 an agrarian re-form law was passed; voluntary donations of landh.ave been abundant, and it appears that expropria-tion will not be necessary. Peru also plans toundertake agrarian reform measures, and programsof this kind are being studied in Colombia, Ecuadorand Uruguay.

Regional economic co-ordination

Further progress has been made with economicco-ordination programs in Latin America. InFebruary 1960 Argentina, Brazil, Chile, Mexico,Paraguay, Peru and Uruguay signed the MontevideoTreaty establishing a Free Trade Association. Thetreaty provides for the elimination over a 12-yearperiod of all trade restrictions among these coun-tries, while other objectives are the free convert-ibility of currencies and a thorough review ofpayment and credit systems to eliminate any discrim-inatory practices among the member countries.The seven countries are to negotiate, within fiveyears, an Agricultural Development Agreement,designed to achieve a better co-ordination of theiragricultural production and trade policies. TheFree Trade Association is open to any other LatinAmerican country to join if it wishes, and alread.yBolivia, Colombia and Ecuador have expressedthe desire to do so. It therefore appears to be a sub-stantial first step toward the establishment of theLatin American Common .Market that has beenunder study for some years.

As part of the Central Anierican IntegrationScheme, an agreement was signed early in 1960by Guatemala, Honduras and El Salvador, estab-lishing an economic association. The agreementprovides for the free circulation of persons, goodsand capital, and for the establishment of a Develop-ment and Assistance Fund to finalice developmentprojects.

The Inter-American Development Bank of-ficiall.y came into existence on 30 December 1959,after 18 countries liad ratified its charter. The bankhas a capital of U.S. $1,0oo million and will extendloans ($850 million repayable in dollars and $15omillion repayable in other currency) for the financ-ing of projects of economic development.

FAR EAST

A number of important new development plansare in preparation in the Far East, including India'sthird five-year plan, which is due to begin in April1961. An important new departure in India, whichmay also have valuable lessons for other less de-veloped countries, is the Intensive AgriculturalDistrict Program, under which a wide range of thematerials and services needed by farmers to achievesubstantial increases in agr.icultural production areto be concentrated in selected pilot districts. Therehave also been some further changes in agriculturalprice policies in several countries of the region.In Mainland China there has been some reorgan-ization of the rural communes.

Development plans

New economic development plans have beenannounced in Cambodia, Ceylon, Laos, Pakistan,Sarawak and Taiwan, and new plans are beingdrafted in India and Thailand. Changes in develop-ment plans in the centrally-planned economies arediscussed in a separate section.

The National Planning Council of Ceylon hasmade public a To-year development plan for 1959-68, under which agriculture is expected to provide89 percent of domestic requirements of agriculturalproducts in 1968 as against 71 percent in 1957.It is planned to increase rice production by 144percent OVer the 1957 level, rubber and coconutsby more than a third and tea by nearly a third.The plan is expected to prov.ide ami over-all frame-work for three-year implementation programs inthe various sectors. The Planning Council hasalready appointed. a Committee on Export Cropsto examine the rehabilitation programs for tea,rubber and coconuts for the period 1961-63, andadditional committees are to devise programs forimplementing other aspects of the plan.

Most of the targets of Pakistan's first five-year planliad not been achieved on completion of the planperiod in June 1960. Although this plan was neverformally adopted, it was used by the ministries as aguide ni the implementation of projects. Per caputincome had failed to increase, and targets for irri-gation and drainage, the expansion of the crop area,the use of fertilizers and disease control were notrealized. Rural credit was recognized as havingbmi ins ifficient, and in East Pakistan the number

and membership of co-operativc societies haddeclined. As a result of this situation a Food andAgricultural Commission, assisted by several inter-national experts, is now reviewing the country'sagricultural policies. In June 1960 the EconomicCouncil approved the second five-year plan, underwhich agriculture and in-igation are to receive thehighest priority, amounting to 22 percent of allpublic and private investment, a much larger sharethan in the first plan. Self-sufficiency in basicfoods is aimed at and the production of food grainsis to be increased by one fifth. The quality of thediet is to be improved through substantially largerproduction of protein foods, fruit and vegetables.

In Cambodia's first five-year economic andsocial development plan for 1960-64 a major aimis to increase the output of rice, rubber and cotton,while the diversification of production is plannedthrough the promotion ofjute, sugar cane, coconut,tea, coffee, oil palm and other crops. In Indonesiaa three-year agricultural program for 1959/60-1961/62 has been formulated, under which it is

planned to achieve self-sufficiency in rice by theend of 1962. Laos has approved a five-year plan(1959/60-1963/64), in which the development ofagriculture has an important place. Under Sarawak'snew development plan for 1959-63 agriculture is toreceive 27 percent of the total planned expenditure.More emphasis is to be given to the developmentof cash crops, especially rubber and coconut, proc-essing industries are to be set up, and among newcrops priority is to be given to the development ofoil palm. In Taiwan most of the agricultural pro-duction targets for 1959 under ale second four-yearplan were achieved or exceeded with the excep-tion of rice, which was affected by floods. A thirdfour-year economic plan for 1961-64 has beenformulated, and a ten-year agricultural developmentprogram to begin this year has also been announced.The latter provides for a 25 percent increase in riceproduction and the cultivation of 2.5 million hectaresof marginal land. In Thailand a short-term plancovering three years is being drafted as the initialphase of a six-year plan which is scheduled to beginin October 1961. It is proposed to bring morepaddy land under inigation and to increase ferti-lizer supplies, so that rice exports can be maintainedat 1.2 1111111011 tons a year.

India began the final year of the second five-yearplan reasonably confident that the revised expendi-ture targets of about five sixths of the originalproposals would be implemented. Because of

65

reverses in the agricultural sector, however, nationalincome increased by only 5.2 percent during thefirst three years of the plan, and the sharp upwardrevision of the estimated annual populationgrowth to 1.9 percent indicates that per caputincomes probably did not increase during thisperiod. Substantially higher production of foodgrains has been obtained in the past two years,because of favorable weather and some accelerationof schemes such as minor irrigation and seed farms.Only about five sixths of the planned expansion ofirrigation is expected to be achieved, however, andthe availability of fertilizers has fallen far shortof demand.

In addition to the detailed annual reviews ofthe progress of the plan that are carried out by theIndian Planning Commission itself, a team ofexperts from the Ford. Foundation in 1959 surveyecithe progress that had been made in agriculture andstudied the country's food needs for the period ofthe third plan. Following a recommendation of thisteam, the Ministry of Food ancl Agriculture is tobegin during 1960 the Intensive Agricultural DistrictProgram (generally known as the " packageprogram "). In selected districts, covering severalthousand hectares each and having a relativelyreliable water supply and functioning communitydevelopment facilities, special attention will begiven to assuring the timely availability to farmers ofproduction requisites, credit, marketing and otherservices. By this con.centration of effort it is hopedto achieve substantial increases in agricultural pro-duction. The number of districts in the initialprogram is seven, which may be increased eachyear until there is at least one in each state.The initial seven projects were to be financedpartly by the Ford Foundation and partly underthe third. plan.

A draft outline of proposals for India's thirdfive-year plan for 1961/62-1965/66 has now beenpublished. A major factor influencing the proposalsis the upward revision noted above in the estimatedrate of population Mercase, and it is significant thatthe draft plan provid.es for an increase in the numberof family planning centers fi-om 1,800 to 8,200.The estimated cost of the plan is 102,000 millionrupees, of which about 32,000 million is in foreignexchange; three fifths of the planned investmentare in the public sector. The target for food grainsis 100-105 million tons, as compared with the figureof Ho million tons recommended by the FordFoundation team and with the 75 million tons

expected in the last year of the current plan. Ex-ports, includin.g cotton, jute, tea, coffee, tobaccoand oilseeds, are to be sharply stepped up. Thetarcrets include 8 million hectares of additionalirrigation and much greater use of fertilizers. ThePlanning Commission emphasizes that the presentproposals are tentative, partly in order to achievethe necessary flexibility. The proposed programfor the development of co-operative farming, forexample, is still under examination, but additionalfinance may later be made available to begin itsimplementation.

Price policies

There have been important changes in food andagricultural price policies in a number of countriesduring 1959/60. In India sugar prices were raisedin November 1959, and for all production in excessof the average of the last two years a rebate of halfthe excise d.uty is to be shared by growers andmanufacturers. A permanent Agricultural Com-modities Price Advisory Committee is under con-sideration to advise the government on producerprices and price relationships between competingcrops. The Planning Commission, in presentin.gits proposals for the third five-year plan, empha-sized that price stability was an essential prerequisite,and stated that both fiscal and physical controlswould be imposed if necessary. It is hoped toachieve greater stabi.lity of prices to prod.ucers andconsumers through the establishment of reservestocks of food grains from supplies obtained underthe recent agreement with the United States, dis-cussed earlier in this chapter in connection with sur-plus disposal operations.

In Japan a new ten-year program for wheat andbarley has been formulated which proposes a

gradual shift from price supports to measures de-signed to improve productivity and quality. Be-cause of its high price and inferior quality thedemand for domestically-grown wheat and barleyhas hitherto remained lo-w.

As a result of the good harvests of 1959/60 itwas possible to relax some control measures inPakistan. In East Pakistan statutory rationing in 16out of 19 towns and also all nonstatutory rationingwas withdrawn in January 1960, together with allrestrictions on the free movement and sale of riceand paddy. Similarly, all controls on the distribu-tion of sugar were removed. Prices, however,

66

remain under strict control. Price controls havebeen maintained for sugar, for instance, and inDecember 1959 maximum prices were introducedfor a number of products, including staple grains,vegetables, meat, milk and fats. From April 1960all controls on the movement of wheat and also itsrationing were abolished in West 1?akistan. Wheatprices are to be allowed to fluctuate in a fairly widerange between the guaranteed floor price to pro-ducers and the ceilin.g pr.ice to consumers, theseprices to be implemented through governmentpurchases and sales on the basis of a reserve stockof 500,000 tons. Monopoly procurement and statetrading in the superior varicti.es of rice was alsoaband.oned in West Pakistan, but restrictions onmovement remain in force in order to ensure thatthe entire output is channeled into exports by thepri.vate trade. Floor prices to producers have alsobeen fixed, to be implemented by governmentpurchasing.

In Thailand the rice price stabilization scheme,implemented by a variable tax or premium on riceexports, failed to prevent a fall in domestic pricesafter the large harvest of 1958/59. It was thereforesupplemented early in 1960 by a scheme wherebythe government guarantees minimum prices togrowers. The Government Warehouse Organiza-tion, as well as provincial companies and market-ing co-operatives, are to purchase rice at minimumprices corresponding to the average purchasingprices of rice mills in Bangkok in a normal year.In addition, a comprehensive policy for the stabili-zation of prices of rice and other agricultural prod-ucts has been announced, involving permanentminimum price guarantees for these crops. It isenvisaged that this policy would be implementedby means of buffer stocks.

Mainland China and other centrally-planned economies

In Mainland China increased grain productionremains the main objective of agricultural produc-tion plans. A ten-year plan for agricultural mech-anization, initially in the main zones producinga marketable surplus of grain, lias been announced.As in the U.S.S.R. much emphasis is being givento the use of organic manures. While last year itItad been planned to reduce the sown area, thisyear's increase in output is to come a-01-n an ex-pansion in arca as well as from the further improve-ment of yields. Last year's emphasis on the expan-

sion of vegetable and pigmeat production in thesuburban areas is to be continued, with the additionof oilseeds, fi-uit, fish and other products. In thefrontier areas large-scale irrigation and reclamationare to be continued. In Tibet land redistribution isunder way, and the organization of collective farmshas beo-unb -

There are now 24,000 rural communes in Main-land China, each grouping a large number of vil-lages and an average of 5,000 families, in placeof the 700,000 small co-operatives that existed in[958. The countryside appears to llave been trans-formed by the elimination of the former tinyplots of land and by the planting of trees. A re-organization of the communes was found necessaryin August 1959, as food supplies for the communekitchens had fallen below the previous year's level,and as overcentralization with the pooling of allincome had meant that the more efficient " bri-gades were supporting the rest. Small plotswere handed back to families for the cultivation ofvegetables and the raising of poultry to improverural food supplies. At the same time the productionbrigade of zoo to 300 families became the basicunit of ownership of land, animals and equipment.Each brigade is now allowed to distribute most ofits revenues among its members, contributing acertain share to the capital funds of the conumme.Incentive wages, tied to work perfornied, wererestored; in addition food grains are distributed ona ration basis. A new development reported thisyear is the organization of urban communes.

North K.orea has abandoned the first five-yearplan for 1957-61, in which the development ofheavy industry was emphasized, because it wasrecognized that the goals could not be achievedand because insufficient development liad beenallowed for in other sectors. A new plan is inpreparation for 1961-65, in which mechanizationis to be the chief factor in raising agricultural pro-ductivity. Collectivization is now complete inNorth Korea. In North Viet-Nam. 42 percent ofthe peasant families were grouped in 26,800 agri-cultural co-operatives in 1959. 1960 is the finalyear of the three-year plan, and a new five-yearplan is in preparation.

Radical changes are under way in Outer Mon-golia. At the beginning of 1960 it was announcedthat 99.7 of the nomad families and 75 percent ofthe livestock liad been collectivized into 389 ruralco-operatives with an average of 475 families and43,000 head of livestock. One of the objectives of

67

the rapid collectivization is the eradication ofnomadism, but this does not appear yet to llave beenachieved to any great extent. At the same timethe small cultivated area was raised from 107,000hectares in 1958 to 153,000 hectares in 1959, andby 1961 it is planned to open up virgin land inorder to bring the total to 300,000 hectares. NeWprocessing facilities are being established, especiallyfor hides and skins and wool.

NEAR EAST

The main agricultural policy development inthe Near East has been the signing of the NileWaters Agreement for the division of the Nileflow between the United Arab Republic andSudan. In addition, a number of countries have 11CAV

and more comprehensive development plans inpreparation. There have been further changes intrade policies designed to promote exports, andalso a continuation of the tendency to pay moreattention to the institutional environment of agri-culture. In respect of the proposed. Arab COMIT1011Market, however, there are no significant newdevelopments to report.

Development plans

'Under the Nile Waters Agreement signed inNovember 1959, Sudan iS to receive 14,50o millioncubic meters and the Egyptian Region of theUnited Arab Republic 7,500 million cubic metersof the additional water that will be stored when theHigh Aswan Dam is completed. This will bringthe total shares of the two countries to 18,50omillion and 55,50o million cubic meters, respec-tively. The United Arab Republic has agreed topay LErs million toward the resettlement of theSudanese population of the areas to be inundated asa result of the High Dam. A joint PermanentTechnical Body has been established to studyand execute projects in the Sudan to prevent thewaste of water in the Nile marshes, the costs andbenefits to be shared equally by the two govern-ments.

In the Sudan this agreement paves the wayfor the construction of the Roseires Dam under thenew long-term development plan that is in prepa-ration. Aid is being sought from the InternationalBank for Reconstruction and Development for

this dam, in addition to the U.S.$15.5 million thathave been obtained to help finance the completionof the Managil Irrigation Scheme. Another dam,costing L. S20 million, is also under considerationon the Atbara River, to irrigate foo,000 hectaresfor the resettlement of the population. of WadiHaifa when th.e town is submerged because of theHigh Dam.

In the Egyptian Region of the United ArabRepublic the construction of the High AswanDam was begun in January 1960, with U.S.S.R.assistance. The original two stages of the projecthave been merged, and it is now to be completedby 1968. The total cost is estimated at , E367million, plus a further LEI8o for ancillary work.When completed it will bring 420,000 hectares ofnew land under inigation and transform 300,000hectares from basin to perennial irrigation, as wellas providing very substantial supplies of electricity.New comprehensive development plans for boththe Egyptian and Syrian Regions were formerlybeing worked out with the objective of doublingnational income in zo years; now both regionsare preparing plans on the basis of achieving thisaim in a io-year period. An autonomous body,the Major Projects Institute, has been establishedin the Syrian Region to implement major irriga-tion works, including those on the Euphrates, whichare expected to double the present irrigated areaby 1970.

In Afghanistan the first five-year plan is to endin September 1961, and the second plan is alreadyin preparation. An agreement has recently beensigned with the U.S.S.R. for the development ofthe jalalabad irrigation and power scheme, whichwill in-igate 25,000 hectares. In Iran the EconomicBureau of the Plan Organization has prepareda comprehensive review of progress under the firsthalf (September 1955-March 1959) of the secondseven-year plan. The review indicates that muchof the apparent investment in agriculture has actual-ly gone to the construction of dams used largely forthe supply of electric power and drinking water.With rising costs an.d the temporary reduction to55 percent of the proportion of the oil revenuesdevoted to development, it appears that the planis unlikely to be completed in time unless addi-tional foreign loans are obtainable. A loan ofU.S.$42 million has recently been granted by theInternational Bank for Reconstruction and De-velopment to meet the foreign exchange cost ofthe multipurpose Dez Scheme in Khuzistan. The

68

Economic Bureau is now engaged in the prepara-tion of the third plan.

While development activities in Iraq continueon the lines laid down in the six-year developmentplan for 1956-61, a new three-year interim plancosting I.D.39 I million (including the U.S.S.R.loan of I.D.5o million extended in 1959) has beenannounced and is to serve as a link between theformer plan and a much more comprehensive planto be launched in 1963. The interim plan givesmuch less emphasis than in the past to large-scaleirrigation projects and more to industrial and so-cial development. Agriculture and irrigation re-ceive only 12 percent of total investments, and pro-posed new schemes include the control of part ofthe Euphrates, extensive drainage works, four largestate farms specializing in various crops, tractorstations, grain silos and a fertilizer factory.

In Israel a five-year plan has been prepared bythe Finance Ministry and the Bank of Israel. Theplan envisages an annual investment of LII,000 to

,Ioo million, which would result in an increaseill national income of 8 percent per year. Priority isgiven to the development of exports and to importsavings.

The government of Lebanon has asked a privateorganization, the International Center for Economicand Social Development, to study the resources ofthe country with a view to preparing a develop-ment plan before the end of 1960. Libya has as-signed 70 percent of its future oil revenues todevelopment purposes and is likely to prepare along-term development program on the basis ofthe recommendations of the mission of the Inter-national Bank for Reconstruction and. Develop-ment that has recently visited the country. Thesuccess of Saudi Arabia's austerity progranl is

also likely to lead to economic planning, and amission from th.e International Bank has visitedthis country too.

In Turkey policy modifications are expected asa result of the recent changes in government. It isproposed to set up ami Economic Planning Officein the Prime Minister's Office, and also a unit foragricultural economics and planning in the Min-istry of Agriculture.

Other policy changes

Although, as indicated above, large-scale irri-gation projects still play a large part in the develop-ment plans of the region, the trend noted in 1959

toward increased emphasis on institutional im-provements has continued during the period underreview. A land reform law has been introduced inIran. In Iraq a new Law of Farm Societies is de-signed to facilitate co-operative farming and theprovision of production requisites. Co-operativetraining centers have been established in the SyrianRegion of the United Arab Republic, and inJordan a Co-operative Central Union has beenformed to function as a hank for all registeredco-operatives, to make bulk purchases of theirproduce and to facilitate marketing.

Export promotion policies have included theabolition of the export duty on all cotton exceptshorter-staple Ashmouni in the Egyptian Region ofthe United Arab Republic. The barter trade incotton has also been abolished and the discountrate on cotton exports to transferable currencyarcas has been reduced from 35 to 6 percent. AFederation of Cotton Exporters has been establishedto regulate exports and avoid violent fluctuations onspot and futures markets, by allocating a quota toeach exporter and arranging for its disposal througha state trading concern. In conjunction with theNile Waters Agreement Sudan and the UnitedArab Republic signed a trade and payments agree-ment involving transactions worth LEH million.Iraq has made several barter agreements for theexchange of dates against various essential imports.

AFRICA

With the very rapid pace of political evolutionin 1959 and especially 1960 it is a little difficult tokeep track of recent agricultural policy changes inthis region and of the exact status of the variousdevelopment plans that were under way. During1959/60 a number of new development plans havebeen announced and others are in preparation.In respect of the financing of development plans andprojects a significant event is that the InternationalBank for Reconstruction and Development, whoseloans to countries in Africa have hitherto beenalmost entirely for transport, electric power andmining, has granted three loans for African agricul-tural development.

Development plans

In the Congo the development budget for1960/61 represents the first instalment of the secondten-year plan. With the recent independence of

9

this country, it is not yet clear whether the plan,which devotes a greatly increased share of totalinvestment to agriculture, will be adopted in itsentirety or modified, while the extent of the aidto be furnished by Belgium is not yet known.A loan of U.S.$7 million has been obtained fromthe International Bank for Reconstruction and De-velopment for the improvement of African agricul-ture. The Congo has also been allotted B.Fr.r,000million from the Development Fund of the Euro-pean Economic Community for 1958-62 for proj-ects additional to those already included in existingdevelopment plans. The over-all proportion ofthis fund to be used for economic as against socialprojects has been greatly increased, and in the Congoa number of agricultural projects financed in thismanner are already under way.

In the French Community the Fonds d'aide etde cooperation (FAC) has replaced the formerFonds d'investissement pour le d6veloppement eco-nomique et social (FIDES) in respect of French aidfor the development plans of the members of theCommunity. For 1960 it is expected that FACresources will amount to Fr.85,000 million (oldfrancs), of which 5o,000 million will be for economicand social development and the remainder forbudgetary assistance. The Development Fund ofthe European Economic Community made grantsamounting to Fr.r3,000 million to overseas mem-bers of the French Community during 1959.

Further details have become available of theConstantine Plan for Algeria, which runs from 1959to 1963. The agricultural sector of the plan en-visages an increase of 75,000 hectares in the irri-gated area, the redistribution of 250,000 hectaresof land, and the modernization of traditional agri-culture through iinproved methods and throughthe construction of infrastructure works whichwill be carried out with the participation of thepeasants themselves. Agriculture is to receiveFr.34o million out of the total planned investment(public and private) of Fr.2,5oo million. Half ofthe investment allocated to agriculture will go toirrigation, soil conservation, forestry, agriculturalresearch and land reform.; the other half will bedevoted to the drive for the modernization of tra-ditional agriculture.

Most of the members of the French Communityare still preparing their new development plans, fulldetails of which are not yet known. In the planfor the Congo Republic agricultural productioni.s expected to be doubled by 1965. The new ro-year

plan of Dahomey also provides for the doublingof agricultural production, which is expected tobring a fourfold increase in export availabilities.

Kenya has received a loan of U.S.$5.6 millionfrom the International Bank for Reconstruction andDevelopment for the improvement of African agri-culture and for the development of transport. Thiswil.1 enable the continuation of the SwynnertonPlan for African agriculture beyond the five yearsoriginally envisaged, in view of the encouragingresults obtained so far. It will cover the foreig,nexchange requirements of an accelerated three-yearplan running until June 1963, including land sur-vey, farm consolidation, agricultural extension,pilot farms, schools, and agricultural credit, as

well as the further introduction of cash crops andlivestock improvement. The International Bank hasalso loaned Southern Rhodesia U.S.$5.6 millionfor the development of African agriculture. In theSouthern Cameroons a /.:,3 million loan has beenobtained from the Colonial Development Corpo-ration for the improvement of the plantations ofbananas, rubber, oil palm, cocoa and tea owned bythe Cameroons Development Corporation. InMauritius the development program is being re-vised to take account of the reconstruction neededas a result of the cyclone damage in early 1960.

The Nigerian Federal Government has adopteda proposal for the construction of multipurposedams costing LI 2.1.5 million on the Niger andKaduna Rivers. The newly irrigated lands will be.used not only for food crops to supply the rapidlyincreasing populations of Western and EasternNigeria but also for cocoa and other cash crops.The new five-year plan for 1960-65 of the WesternRegion of Nigeria involves a total capital outlayofL68 million, of whichL2I million are to be pro-vided by the Marketing Board. Planned expendi-ture for agriculture amounts to LI3.8 million...L5 million are to be devoted to the development ofco-operative farm settlements; selected young menwill be trained and established on settlements wherethey will develop their holdings with the assist-ance of the extension service. Funds llave also beenallocated for equity participation in new plantationsestablished through foreign investment, the im-provement and extension of existing plantationschemes, new planting and replanting of cocoa,rubber, oil palm, etc., and agricultural creditfacilities.

Guinea has obtained a loan of 140 million ru-bles from the U.S.S.R., repayable at 2.5 percent

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interest over 12 years. The country is also to receiveassistance from Mainland China in the improvementof rice production. A three-year plan is in prepa-ration under which the aim will be to double agri-cultural production.

A draft has been prepared of Morocco's five-year plan for 1960-64. The Development LoanFund has provided. U.S.$23 million for the develop-ment of the Oujda and Berkane regions of easternMorocco, including the irrigation of about 30,000hectares. In Tunisia a five-year plan for 1960-64has been c-lrawn up within the framework of aten-year perspective plan.

Other policy changes

There have been changes in agricultural priceand marketing policies in several countries of theregion during 1959/60. A fund to support the pro-d.ucer price of cotton was established at the be-ginning of 1960 by Dahomey, the Ivory Coast,Niger, the Soudanese Republic and Upper Volta,replacing the former Caisse de stabilisation des

prix du coton de l'A.-0. F. A Cereals Office hasbeen established in the Soudanese Republic. InSenegal an agricultural marketing organization hasbeen established with the main object of replacingthe present barter economy based on groundnutsby a modern and diversified market economy.

After the abolition of Tunisia's customs unionwith France an agreement was signed in September1959 covering the foreign exchange reserves ofTunisia, quotas of Tunisian -wine on the Frenchmarket and of hard wheat to be purchased at French.support prices.

In Ethiopia a scheme has been announced bywhich long-term credit on easy terms can beobtained by landless farmers for the acquisition ofland.

FISHERY POLICIES

The experience of the past year has shown thatinternational agreement on the principal aspectsof fishery policy is still a long way off, althoughthe urgency of obtaining co-ordinated action inthis field is more and more clearly recognized. TheSecond United Nations Conference on the Lawof the Sea, held in March-April 1960, was, insubstance, a failure like its predecessor in 1958.

The Conference was unable to come to an agree-ment on the breadth of th.e territorial sea andfishery limits, the principal task for which it washeld. The only proposal adopted was one recom-mending joint international action in providingtechnical assistance to underdeveloped countriesin the development of their fisheries.

Attempts to obtain agreement on improvedco-ordination of policies at a working group ofOEEC, constituted in 1958 for the purpose of re-viewing fisheries policies of member and associatedcountries, have also been wisuccessful. Severaldelegations expressed serious objections to pro-posals contained in the draft report of the workingparry.

As additional countries have joined Iceland inextendincr the breadth of the territorial sea andbfishery limits, countries whose fisheries are primarilyaffected have tried to adjust to the new situation.Exploration for new grounds has been extended tomake up for the fi.shing grounds from which theyare barred and bilateral negotiations begun toobtain specific concessions in particular fisheries.

Other bilateral negotiations have aimed at reach-ing agreement on catch quotas in fisheries withspecial conservation problems. Thus, within thefi-amework of the Northwest Pacific FisheriesCommission, the U.S.S.R. and Japan establishednew quotas for the Pacific salmon fishery. Bilateral,ao-reements have also been sio-ned under whichmajor fishing powers are to provide technical and/orfinancial assistance to countries with less developedfisheries.

New fishery development programs have beenstarted in Portugal and Spain. The government ofSpain has approved plans to provide a five-yearcredit of 5,000 million pesetas for the moderniza-tion of the fishery and allied industries. Portugal'sdevelopment plan for 1959-64 envisages a substantialinvestment in vessels and shore facilities to promotethe production of dried salted cod.

Many of the new countries in Africa have aspecial interest in fishery development because ofopportwiities to exploit relatively untouched re-sources an.d to meet serious protein deficiencies inthe diets of their inhabitants. The rapid politicalevolution has drawn attention to the need forsound national and regional fisheries policies.In response to this need, efforts are at present underway to constitute regional bodies of fisheries ex-perts in this region as well as in Latin America,where problems are not unlike those encountered

71

in Africa, in order to ensure proper co-ordinationof national and regional policies.

In respect of government financial assistance tofishery industries, some countries appear to bereaching the conclusion that the time has cometo review schemes with a view to the possiblereduction or discontinuance of special public as-sistance. In other countries, in contrast, the graveeconomic problems faced by fishermen haveprompted governments to extend additional as-sistance. In Norway, for instance, the governmentwas obliged to request the parliament to approvean increase in the subsidies given to cod fishermen.Discussions of fishery policy in this and other coun-tries are trying to establish, among other matters,the relative merits of vertical integration of opera-tions versus functional specialization and flexibilityin price determination at the various stages ofdistribution, and the relationship of preferentialtreatment to certain groups (e.g., working fisher-men) in th.e determination of ownership rights,allocation of public credits, etc., to the movementof capital into and out of the industry.

FOREST POLICIES

A clearer awareness of certain problems offorest policy has become apparent during 1959/60,which has led to a more concrete orientation ofthese policies and related production programs.In North America and Europe the increased con-sumption of water, due to indusiTialization andurbanization, and the development of recreationhave led to a new trend in forest policy, which isincreasingly concerned on the one hand with theplace of the forest in land planning and on the otherwith the creation of green belts for town-dwellers.In the Mediterranean and the Near East plans andprograms for forest development are increasinglybeing formulated. In the Far East also the forest isconsidered more and more as ami important factorin economic development plans and programs,while its role in providing products for local com-munities and in erosion control is not overlooked.In Latin America renewed interest is taken in therational exploitation of forests. This exploitationis sometimes carried out simultaneously with col-onization schemes, prescribed forest stands of eco-nomic -value being maintained in selected areas,while other stands, to be replaced by agriculturalcrops, are economically exploited. In Africa the

emergence of newly independent states and theincreasing pace of social and economic developmentraise acute problems of forest reservations, shiftingcultivation and wildlife management.

This trend toward more concrete policies andthe establishment of more detailed plans and pro-grams requires institutional, administrative andtechnical measures if they are to be effectivelyimplemented, and this aspect still lags behindthe formulation of forest policies. In addition,specific problems are raised for which research isnecessary.

In Western Europe the need to define the placeof the forest in land use has resulted in meetings,some at the international level, between agricul-turists and foresters. The establishment of the newregional economic groupings has led to furtherexchanges of views, and forestry problems areoutlined in the agricultural policy proposals of theCommission of the European Economic C0111-munity. A joint forestry policy is being formulated,contacts have taken place between producers andconsumers, and agreements are taking shape. Thecontinuing rural exodus in both North Americaand Western Europe is likely to open up ne-wpossibilities for the forest. It seems that the newopen spaces, once freed from direct utilization, willplay an essential part in leisure, recreation and tour-ism, and that forest production will be increasinglyconcentrated in the best quality stands and in plan-tations of quick-growing species, situated near theconsumer industries.

In the Mediten-anean region (covering SouthernEurope, the Near East and North Africa), theplanting of quick-growing trees is gaining mo-mentuni every year. Through careful selection ofplanting material, intensive cultivation, increasinguse of fertilizers and sometimes irrigation, and pre-cise methods of felling which ensure maximumproduction, yields are being obtained which are12 to 20 times higher than those of the naturalMediterranean forests. A total of more than 600,000hectares has already been planted with eucalyptsand poplars, and this area will probably be at leastdoubled in the near future. In 1960 the growingconcern with securing a steady and sufficient supplyof exotic seeds of quick-growing species led to pro-posals for the establishment of a MediterraneanSeed Board, and the technical and economic prob-lems posed by the cultivation and utilization ofthe new tree plantin.g arcas have given rise toproposals for the unification and co-ordination of

72

forestry research and for the joint establishment oftimber and pulp industries calling for large invest-ments. The planting of quick-growing trees ap-pears to be the main hope of alleviating the difficultsituation which will face the region in the nearfuture as regards timber consumption. Importsof forest products already amount to more thanU.S.$300 million a year, and it has been estimatedthat by 1975 the figure could rise as high as $85o mil-lion. As a result of the considerable shortening ofthe cycle of production in quick-growing treeplantations, the substantial annual investmentsrequired and the high yields per hectare obtained,studies of the industrial utilization of forest productsand of marketing anci distribution problems occupya much more prominent place than hitherto inthe activities of the forest administrations in theregion.

One of the gravest problems of silviculture inthe region still remains to be solved, however,namely th.c economic utilization of the traditionalMediterranean forest stands, mainly those composedof various types of oak. While in some parts ofthe region, notably North Africa and the NearEast, the remains of the indigenous forests arebeing exhaustively exploited to satisfy requirementsof fuelwood, in the rest of the region their economicvalue is steadily declining with the fall in the de-mand for fuelwood and lower quality hardwood.No special effort has yet been made in this regionto apply modern techniques for the utilization ofhardwood timber by the pulp industries. Livestockpressure continues to impede the efforts of forestadministrations to apply modem criteria to themanagement and eventual transformation of theseforest stands, and together with the scarcity oftrained personnel in the Near East and NorthAfrica this remains the major obstacle to betterforest utilization in this part of the world. Theeventual opening, after many difficulties, of theRegional Rangers School in the Syrian Region ofthe United Arab Republic should do much toimprove the supply of trained personnel.

In the U.S.S.R. current plans provide for a

further shift of exploitation and forest industriesto the eastern regions. Much attention is beingpaid to the development of new methods of woodconversion, especially to the production of fibre-boards and particle boards, and the output of thesewood-based sheet materials will expand rapidlyduring the coming years. In sonie countries ofEastern Europe, such as Czechoslovakia, Hungary

and Poland, forest policy is trying to dearwiththe declining wood balance that is becoming moreand more evident as industrial and general eco-nomic development proceeds. In these countriesalso much attention is paid to the partial substitu-tion of wood in th.e building industry. \X/hilethere is a surplus of certain special assortments,on the whole extensive action is being taken toeconomize in wood consumption and to increasethe output of modern wood products. The in-creasing demand for wood and the principle ofsustained yielci determine forest policy in theEastern European countries. In Poland and Czecho-slovakia, for instance, the annual harvest sincethe war liad been higher than the allowable cut,and this problem is being solved by graduallydecreasing the annual cut of wood. At the sametime attempts are being made to expand futurewood production by increasing the annual growthof existing forest and by planting quick-growingspecies. Development in the -woodworking in-dustry are directed mainly toward increased out-put of fibreboarcis, particle boards, and pulp andpaper products.

Latin America provides a typical exainple of thedifficult problems facing forestry at present in theless developed regions. As in most of the SouthernHemisphere, the central problem of forestry is toadjust the shape, type and location of the ratherlo-w-yielding natural forests to the needs of thevarious national economies, but until recently,no methodical attempts to deal with this problemhave been made. The characteristic lack of plan-ning in forest policy in Latin America leads to greatwastage cf forest resources and to uncontrolledalienation. The region as a whole remains a netimporter of timber. In. the past year, however,promising colonization and settlement projects havebeen undertaken in many countries, aimed at de-fining the patterns of land use best suited to theeconomic and social circumstances of fairly extensiveregions. In the framework of these projects, theestablishment of forest reserves, the transformationof the present natural stands, and eventually theestablishment of new plantation.s would be theoutcome of surveys of soil capabilities and forest,water and pasture resources, carried out by agri-culturists, foresters and livestock experts workingin collaboration. Unless help is forthcoming frominternational sources, the shortage of forestrytechnicians and the absence of well-organizedforest services will continue to be a major obstacle

73

to the implementation of these projects. In thisconnection it is significant that a Latin AmericanAdvisory Group for Forestry Research and Edu-cation has been set up, with the task of assisting,govern.ments in formulating, programs in foresteducation and research and of co-ordinating na-tional efforts. Also the Latin American ForestResearch Institute has now been established on apermanent basis.

Lack of staff or insufficient funds still hamperthe iinplementation of programs in the Far East,and problems relating to forest administration,especially the training of executive personnel, seemto be given insufficient attention. Increased effortsllave been made, however, for a greater integrationof forestry and agriculture iii the uplands of Southand Southeast Asia, where shifting cultivation iswidespread. Soil conservation is receiving partic-ular attention, especially in South Asia, where manypilot projects llave been set up to demonstrate theextent to which yields may be increased by appro-priate conservation measures. Forest improvementworks have continued, either directly through theintroduction of species of greater economic value,or indirectly through the regulation of shiftingcultivation. Forest roads and the mechanization ofoperations have received considerable attention,especially in Southeast Asia. Forest range manage-ment has been started on a large scale in East Asia,especially in Japan, and intensive research work isbeing carried out.

The improved utilization of forest productshas made little progress in the Far East, becauseof difficult terrain and lack of equipment, trainedoperators anci maintenance facilities, and sometimesbecause of the need to find employment for rurallabor. However, research work is developing at amore satisfactory rate. An iniportant achievementover the past two years has been the establishmentof the Asia-Pacific Grading Rules, under whichseveral countries have already started exporting.Most countries in the Far East are considering theexpansion of their training facilities, not only forforest administrations, but also in. the field of utili-zation techniques and forest industries.

In Africa there is an increasing tendency toformulate medium- and long-term forest policiesand programs, giving due attention to general landuse policy and to future needs. Such programs in-volve adequate knowledge of forest resources andemphasize the importance of forest inventory. Inthe implementation of these forest policies, impor-

tance is-attached to soil and water conservation bymeans of watershed management, while moreintensive silviculture and afforestation with care-fully selected species are carried out to alleviate theuneven distribution of forest resources and meetindustrial and fuel needs. The concept of combin-ing forestry and agriculture, in a way similar tothe so-called taungya system, has become morewidely accepted, with a view to controlling theencroachment of agriculture on forest reserves.The local approach to economic and social prob-lems through community development underlinesthe role of forestry in rural life through farm wood-lots and direct supply of forest products to theconsumer, especially in the arid and semiarid zonesof Africa where windbreaks and shelterbelts can

Again in 1959/60 there were substantial increasesin the production of most of the main commodities.The expansion was especially large for maize, cocoa,coffee, cotton, Wool, and rubber. World wheatproduction was lower, however, for the first seasonsince 1956/57. There was a temporary setback inthe output of dairy products in the second half of1959 and butter prices rose steeply for a time.The production of copra and coconut oil remainedlow, and for apples and pears there was a sharpreduction from the bumper crops of 1958/59.Sugar exports were lower, while prices declinedconsiderably. Jute production also fell.

Present prospects are for larger production ofmost commodities in 1960/61, though an exceptionis coffee, which is likely to fall below the veryhigh level of 1959/6o. Stocks, especially of coarsegrains and coffee, are expected to be larger at theopening of the 1960/61 season. Although a con-tinued high level of demand is likely to prevail inmost importing countries, with the continuation ofample supplies of most commodities, prices of rawmaterials are not likely to show any major generalincrease, while those of the majority of foodstuffsand beverages will probably remain under pressure.

The following notes also attempt to look beyondthe immediate outlook for 1960/61. According topresent indications, including special studies that havebeen conducted by FAO for some conunodities,the tendency for the production of a number of com-modities to grow somewhat faster than consump-tion may continue in the next three to five years.

Commodity survey and outlook

74

increase crop production, while contributing atthe same time to the fuelwood and timber needsof the rural population. Wildlife management,either for the provision of additional food or forthe development of tourisin, is given particularattention by governments, though careful super-vision has proved necessary in some countries toensure adequate protection of agricultural crops.The regional approach to forestry problems inAfrica will develop markets and underline the needto valorize secondary species. This approach, how-ever, could impede the economic establishmentof forest industries, because of the smallness ofmarkets in the region, and also have an adverseimpact on the overseas earnings of certain exportingcountries.

WHEAT

World4 production in 1959/60, at 136 milliontons, was above average, but still about 4 milliontons less than the previous year's record crop(Table 15). In the Northern Hemisphere, gainsin Western Europe (3.5 million tons) and

TABLE 15. - WHEAT: PRODUCTION

razil, India, Japan, Pakistan - Algeria, Iraq, Morocco, Tunisia,Turkey, United Arab I?..epublic. - a Excluding the U. S. S. R., EasternEurope and Mainland China.

4 Excluding the U.S.S.R., Eastern Europe and MainlandChina.

Average 1959/601952/53- 1958/59 (Prelim-1957/58 inary)

Alilliot: metric torts

Argentina 6.6 6.7 5.6

Australia 4.5 5.9 5.3

Canada 14.3 10.1 11.3

United States 28.8 39.8 30.7

Total 54.2 62.5 52.9

Western Europe 35.6 39.1 42.6

Four importing countries out-side Europe' 13.6 13.3 16.3

North Africa and Near East' 13.2 14.4 13.4

Others' 9.2 10.2 10.3

Wom.D. 125.8 139.5 135.5

TABLE 16. - WHEAT AND WHEAT FLOUR:

EXPORTS BY TRADE SEASON (JULY-JUNE)

' Including exports from the U. S. S. R., Eastern Europe and MainlandChina to the rest of the world, but excluding trade within this group.

Canada (1.2 million tons) were insufficient to off-set the 9 million tons decline in the United Statesoutput. Production in the Southern Hemisphere alsofell, both Australia and Argentina harvesting smallercrops. A heavy crop (12.8 million tons) was re-ported for Eastern Europe, but the U.S.S.R.failed to maintain the previous year's high level ofproduction.

Despite the larger volume of world wheattrade in 1958/59, stocks in the four main exportingcountries rose by JO million tons to 53.2 milliontons at the begirming of the 1959/60 season. Aslight decrease is expected in opening stocks for1960/61.

World trade may prove notably larger in 1959/60(Table 16). Owing to the very dry summer thecrop in North.west Europe was of unusually highquality, and as a result a smaller quantity of highgrade wheat has been imported into the region; thedemand for feed wheat, on the other hand, hasexpanded. Imports into Asia and Latin Americaincreased. Among exporters, shipments fromArgentina and the U.S.S.R. were smaller, owingto reduced crops, but those from the UnitedStates, Australia and France were larger thanin 1958/59.

Prices in international transactions were steadyexcept for feed qualities, which like some coarsegrains experienced a short period of higher pricestoward the end of 1959 owing to heavy Europeandemand. The spread between low and high qual-ity wheats narrowed temporarily, but returned tonormal in the following months. Among coun-tries with lower guaranteed or fixed producer

75

prices for the 1959/60 crop were the United States,Callada, the United Kingdom and Greece; higherprices were reported from Argentina, Australia,Belgium, Chile, Denmark, Finland, France, Japan,the Netherlands and Turkey.

The 1960/61 crops may be slightly higher thanthose of 1959/60. Six million tons more wheat areexpected to be harvested in the United States, de-spite reduced winter wheat acreages. In Argentinafarmers intend to plant a larger acreage. Cropsin Western Europe and India, on the other hand,are likely not to exceed their 1959/60 record level.Trade, however, may increase if transactionsunder special terms are extended. In May 1960 afour-year agreement was concluded between theUnited States and India for the delivery of 16million tons of -wheat under Public Law 480.

The existence of large stocks seems to precludean upward movement of international prices, whilethe export policies in all principal exporting coun-tries will continue to prevent serious price falls.The national support price for wheat in 1960/61will be slightly lower in the United States and theUnited Kingdom, and there may also be changesin producer prices in couritries of the EuropeanEconomic Community in order to narrow thep1-ice discrepancies among them. Surpluses persistas a chronic feature of the world wheat economy,and measures of surplus disposal are likely to con-tinue to account for a substantial proportion ofwheat exports.

COARSE GRAINS

The record crop of coarse grains in 1958/59was followed by another in 1959/60, -when therewas a further increase of about 4 percent (Table 17).There was an increase of about 5 percent in theUnited States owing to a larger acreage under maize,and in Western Europe excellent yields brought anincrease of 13 percent. The maize crop was one-fifthsmaller in Argentina; the aggregate crop of coarsegrains was only about half the previous year's levelin Australia. Eastern Europe reported a largeroutput, mainly of maize, but in the U.S.S.R.,production decreased because of unfavorableweather and a decline in acreage.

The exceptional increase of 17 million tons inmaize production was the result of the large cropin the United. States, where the area had increased

Average1952/53-1957/58 1958/59 1959/60

(Preliminary)

Afillion metric tons (wheat 'Trivalent)

Argentina 26 28 2.1Australia 2.5 20 3.1Canada 8.3 8.0 80United States 9.6 11.5 13.9

Total . 23.0 24 3 27.1

Others' 4.6 6.0

WORLD 27.6 30.3

TABLE 17. - COARSE GRAINS 1: PRODUCTION

' Barley, oats, maize, sorghums, millets, mixed grains. - Algeria, Iraq,Morocco, Tunisia, Turkey, United Arab Republic. - Excluding the U.S.S.R.,Eastern Europe ancl Mainland China.

by is percent after the removal of acreagerestrictions. There were also substantial gains inMexico and Yugoslavia. World production ofbarley was slightly higher, increases in WesternEurope and India offsetting reductions elsewhere.The production of oats, on the other hand, de-creased by 13 percent, with the general downwardtrend in acreage.

World coarse grain production has exceededthe total disappearance each year since 1952, addingto carry-over stocks at an average rate of about6 million tons annually. The 1959/60 season startedwith stocks of 69 million tons in the five mainexporting countries, and may end with an additionof 7.5 million tons.

World trade increased for the fifth consecutiveyear (Table 18 ). In spite of the excellent crops,import requirements in Western Europe were at arecord level, owing to the sharply reduced suppliesof other domestic feed. Trade in maize showed amarked expansion, with larger exports from. theUnited States, Argentina, Mexico and Yugoslavia.A heavier demand for oats was met mainly byadditional shipments from North America.

The heavier demand in Western Europe in theautumn of 1959 resulted in an unusual temporaryupswing of import prices for all feed grains exceptmaize. Prices for oats showed exceptional ad-vances, since an increase in demand coincided withsmaller supplies. Barley prices exceeded those ofmaize for the second time since the war, and farmersreacted by switching part of their demand from

'76

barley to maize. Prices declined somewhat afterNovember, but as at mid-1960 they llave remainedabove the levels of a year earlier.

Although the minimum support prices werelower, producers in the United States received bet-ter prices for barley and oats. Maize and sorghumprices, however, were considerably less. Maizesupport prices for the 1960 crop were again lowered,but those for all other coarse grains are unchanged.Canadian farmers received less for their 1959 barleyand oat crops, while higher prices were paid inArgentina, Brazil, France, the Netherlands, Turkeyand Yugoslavia.

lIn 1960/61 slightly smaller crops can be expectedin Western Europe. In the United States an ex-pansion of the Conservation Reserve Program willtake an additional i to 1.5 million hectares out ofcultivation. Raised prices in Argentina, on the otherhand, may lead to an extension in acreage, thoughperhaps not to a higher proportion of the area be-ing harvested for grain.

In contrast to wheat, the consumption of whichmay be expected to increase only slowly in mostof the developed countries, world consumption oflivestock products, and thus of coarse grains, is

likely to go on growing rapidly. On the other hand,technical advances in production and feeding prac-tices, together with the price policies for coarsegrains and livestock products in importing coun-tries, may reduce their dependence on externalsources. Unless changes are made in national pol-icies the accumulation of surpluses may thereforebe further aggravated in the coming years.

TABLE 18, - COARSE GRAINS 1: EXPORTS BY TRADE SEASON(juLY-JUNE)

' Barley, oats, maizc, sorg,Ilitius, inflicts. - including exports from theU. S. S. R., Eastern Es cope and Ma inla ad China to the rest of the world,but excluding trade within this group.

Average1952/53-1957/58

1958/591959/60

(Prelim-inary)

Million metric tons

Argentina 6.0 7.1 6.1

Australia 1.8 3.3 1.7Canada 13.5 13.4 13.4United States . 115.7 143.0 150.2

Total 137.0 166.8 171.4

Western Europe 43.0 44.8 50 6North Africa and Near East 11.9 12.3 10.9

Others 68.3 71.1 73.1

WORLD 260.2 295.0 306 0

Average1952/53-1957/58 1958/59 1959/60

(Preliminary)

metric ton

Argentina 1.0 2.9 3.6Australia 0.7 1.1 0.7Canada 2.5 1.7 1.4United States 16 10.4 10.8

Total . 10,8 16.1 16.5

Others 4.3 3.8

WORLD 15.1 19.9

RICE

Following a marked recovery in trade in thesecond half of the year, world exports of rice in1959 reached roughly the same level as in 1958,but they still remained considerably less than inthe previous two years ( Table 19). Since exportprices were moderately lower, the value of worldtrade was less th.an in 1958. Owing to their largercrops in 1958/59, some majOr ASlall importers,such as India and Japan, were able to reduce imports,while the Philippines ceased importing altogether.However, world import demand was sustained bythe contin.ued growth in consumption in some orthe principal Asian importing countries as well asby the increased purchases of countries in Africawhere crops were below average. Total Asianrice imports declined by about io percent (350,000tons) in 1959, but the rest of the world importedmore than in 1958. Similarly, on the export sic-le,while shipments from Burma, Viet-Nam, theUnited States and Mainland China rose markedly,this was offset by reduced exports from countrieswith poor crops, particularly the United ArabRepublic. Total world exports of domesticallyproduced rice (excluding shipments to the U.S.S.R..)are provisionally estimated at 5.4 million tons in1959, as compared with the postwar peak of 5.9million tons in 1956.

Current world supplies are larger and, althoughdemand remains generally strong, internationalmarket prices in 1960 are likely to average lowerthan last year. Paddy production is as high as,

TABLE 19. - .M1LLED RICE : INDIGENOUS EXPORTS AND RETAINED. IMPORTS IN FAR EAST AND REST OF WORLD

77

1956

or higher than, in 1958/59 in most countries in theFar East, reflecting favorable weather for the secondsuccessive season, and crops have generally re-covered in Latin America. World production ofpaddy (excluding Mainland China, North Viet-Nam and North Korea) is above last season'srecord level and is provisionally estimated. at 142million tons. Import demand is nevertheless atleast as high as in 1959, reflecting the steady ex-pansion of consumption in all regions and the desireto build up stocks in some of the major Asian im-porting countries, notably India and Pakistan.Most exporting countries have more rice availablefor sale than in 1959, but there is some reason toexpect Mainland China's exports to be consider-ably less (by June 1960 only some i6o,000 tons wereunder government-to-govemment contract, as

against 700,000 tons at the beginning of 1959),and the total increase in world export suppliesdepends greatly on what the actual size of Chinesesales will be. Some increase in stocks carried overin exporting countries will probably occur, butthere seems to be no immediate danger of a seriousimbalance developing between world supplies anddemand.

The longer-term outlook is more obscure. Onthe one hand, paddy production is still greatlydependent on uncertain rains. When bad cropyears occur, as they are bound to occasionally,world supplies may be inadequate to meet thedemand. On the other hand, world rice productionshows a marked upward trend, even though therate of growth has slowed down in recent years.

1957

Thousan i inctrie tons, milled 04 iivalent

1958 1959(Preliminary)

' Domestically produced rice only. - Including estimates for Mainland China based on returns from importing countries except the U. S. S. R. -a .Excluding re-exports - Exclsidïñg the U. S. S. R. and Eastern Europe.

3 950 4 160 3 820 4 1401 990 1 540 1 600 1 280

5 940 5 700 5 420 5 420

3 950 3 820 3 560 3 2501 350 1 580 1 440 1 600

5 300 5 400 5 000 4 850

Average1952-56

EXPORTS

Far East' 3 430

Rest of world 1 420

Total 4 850

IMPORTS

Far East 3 470

Rest of world ". 1 100

Total 4 570

Since the expansion has been concentrated in fooddeficit countries, the larger supplies have beeneasily absorbed, but the increase in output has beenaccompanied by a persistent decline in rice importsin Asia. Although demand has been well main-tained in other regions, in the longer run a continueddecline in Asian imports could be a source of concernfor countries which are planning to increase pro-duction for export.

SUGAR

World production of centrifugal sugar1959/60 iS currently estimated at 48.4 million tons(excluding Mainland China), slightly less than therecord output of 1958/59, but well above the cropsof other recent years (Table 20). The smallerfigure mainly reflects the effect of the droughtin 1959 on the best sugar output of Western Europe,which fell by 12 percent (i million tons). A sub-stantial increase in North and Central Americanproduction was mainly due to higher crops in theUnited States, Puerto Rico and Mexico. Theslight fall in South America's cane output wasmainly the result of adverse weather in Argentinaand to the limitation of production in Brazilbecause of large stocks and quota reduction underthe International Sugar Agreement. Though badweather liad caused a decline in production in theUnion of South Africa, this was compensated in

TABLE 20. - CENTRIFUGAL SUGAR: PRODUCTION

11/Cludirig Hywtjj, - ' Trade figures. Excluding Mainland China.

78

total African production by a record crop in Mau-ritius. Output was larger in all major Asian pro-ducing countries except Taiwan, which sufferedflood damage. In Turkey production rose by 43percent, with increased area and favorable weather.India's larger production of cane sugar was mostlythe result of higher domestic prices, following thescarcity of centrifugal sugar early in 1959.

Following the exceptionally good harvest in1958/59 in many importing countries, -world tradein 1959 was substantially reduced.. Preliminaryfigures indicate that world exports amounted to14.6 million tons, or about i million tons less thanin 1958. Exports from Cuba in 1959, at 5.0 mil-lion tons, were 12 percent less than the year before.Imports into -Western Europe were approximately5 percent below the volume of the previous year.

With ample supplies in the market and un-certainty in trade quarters in regard to Cuba'ssugar policy, the world price fell continuously inthe first half of 1959 to 2.55 U.S. cents per powid.in July, the lowest level since the war. Subsequentlyprices recovered, partly in response to action takenby the international Sugar Council, but also be-cause of large U.S.S.R. purchases and the prospectof a smaller European beet crop and thus higherimport requirem.ents in. 1960. By October theaverage monthly price had risen to 3.10 U.S. centsper pound.

The world price weakened again during thefollowing months, however, in spite of higherimports into Western Europe and substantial sales toEastern European countries (which appear as

exporters in the International Sugar Agreement).The average price in November 1959-March 1960was 3.00 U.S. cents per pound, as against the min-imum price of 3.15 cents of the Sugar Agreement.The International Sugar Council met in March-April 1960, and it was agreed not to raise the exportquota from the 85 percent of basic tonnage decidedearlier. This was expected to strengthen the market,as supplies and deinand appeared to be closely inbalance. Owing to various factors, however, in-cluding the sales policies of some major prod.ucingcountries, the rise in prices was only short-lived.These factors, coupled with prospects of a bettercrop in Western Europe and other areas, broughtabout a further decline in prices, particularly infutures market positions, during Tune 1960.

World sugar consumption has expanded rap-idly in the postwar period in response to bothhig,her real incomes and a decline in prices of sugar,

liillian ,retaje tons, raw value

Western Europe..... 66 7.1 82 72North and Central

America 11 2 12 5 13.3 13.8South America 44 52 6.3 60Asia (excl. Mainland

China) . 4.9 6.4 6.6 6.7Africa 20 2.1 22 26Oceania' . 2.4 22 2.5 25

Total 31.4 35 5 39.1 38.8

Eastern Europe andU. S. S. R.' 6.6 83 9.5 9.4

WORLD . 38.0 43 8 413.6 48 2

Average1952/53-1956/57

1957/58 1958/591959/60

(Prelimi-nary)

relative to other foods, in most countries. RecentFAO studies indicate that consumption will con-tinue to increase substantially in the next decade,especially in low income countries with smallper caput consumption. Production, however,will also increase. Protectionist policies, whichaim at saving foreign exchange and at diversifyingagriculture, or which have been prompted byvarious political and social reasons, are stimulatinga new wave of expansion in sugar production inmany countries and the establishment of newsugar industries in countries which until nowdepended on imports. Unless there are changes innational policies during the next decade, the in-crease in production may outstrip the growth ofconsumption.

MEAT

World5 meat production (beef, veal, pigmeat,lamb and mutton) in 1959 was more than 3 percentlarger than in the preceding year. A marked re-duction in Argentina's output of beef, followingheavy slaughterings in 1957 and 1958, was morethan offset by a large increase in the production ofpigmeat (in North America and Western Europe),beef (in Oceania) and of lamb and mutton (inOceania and Western Europe). In the U.S.S.R.meat production was more than io percent largerthan in 1958. World production of poultry meatreached a new record, with an increase of about4 percent in North America and a continued rapidexpansion in a number of other countries, parti-cularly in Western Europe.

In spite of a substantial reduction in shipmentsfrom Argentina, world trade in 1959 (includingpoultry meat) exceeded the record of the previousyear. High prices in world markets induced aremarkable increase in Australian cattle slaughterand beef exports. Exports from some other coun-tries, including Denmark, the Netherlands, Yugo-slavia, Uruguay and New Zealand, were alsolarger. United Kingdom meat imports, at 1.42 mil-lion tons, were only slightly less than in 1958, areduction in imports of beef being nearly offsetby larger receipts of lamb, mutton, bacon andoffal. For the second consecutive year there wasa decline in United Kingdom imports of cattlefrom Ireland. The United States imported 436,000

Excluding Mainland China,

79

tons of meat, which is is percent more than in1958 and an all-time record; the increase was en-tirely in beef. In Western Germany output did notincrease and, with rising consumer demand, totalmeat imports (including the meat equivalent oflive cattle and pigs) rose 45 percent above 1958,to about 445,000 tons, of which more than ioo,000tons was poultry meat. Italy imported less, how-ever, mainly because of the progress of domesticproduction of beef.

Beef and cattle prices in world markets averagedhigher in 1959 than a year earlier. Import demandwas very strong in the United Kingdom, the UnitedStates and Western Germany, whereas the totalvolume of exportable supplies remained virtually=changed. In Europe, pig prices were sustainedby the large import demand in Western Germanyand Austria and a decline in pig marketings in theUnited Kingdom in the second half of the year. InNorth America, however, pig prices declined sharp-ly, owing to heavily increased supplies. Prices forlamb and mutton in the United Kingdom marketaveraged lower than in 1958, as a result of a largeincrease in domestic production and heavy arrivalsfrom Oceania.

World meat production will expand further inthe current year. Increases in beef output areexpected. in North America and a number ofcountries in Western Europe. European productionof pigmeat and poultry meat, too, will rise. InAustralia, on the other hand, beef production inaybe below the 1959 record owing to reductions inthe number of cattle. With larger output in im-porting countries, beef prices are expected toaverage below the high 1959 levels, but as theover-all exportable supplies of beef are unlikely toexpand, the decline may be moderate. Increasingoutput of pigmeat, both in the major exportingcountries and in Western Germany, -which is animportant market, will exert pressure on prices ofpigs and pig prod.ucts. Prices for mutton and lambare expected to average above 1959 owing to ananticipated red.uction in United Kingdom pro-duction.

The demand for meat will continue to growin coming years. In high income countries there isa strong consumer preference for beef, but alsopork, particularly lean cuts, may continue to be ingood demand. Meat production is expected toexpand steadily in. most countries. United Statesbeef pro duction will rise appreciably in the nextfew years. In Argentina a build-up of cattle herds

has started, and beef production and exports areexpected to recover within a few years.

1?roduction of p Dultry meat will gain in relativeimportance, especially in Europe. The expansionof -world trade in meat will continue, though pos-sibly more slowly than in the 1950's.

EGGS

Egg production MSC further in 1959 in mostmajor producin.g countries. World trade in eggsin the shell was also larger. Western Germany'simports rose 16 percent above 1958, and accountedfor well over half of the world total. Imports intoItaly, the second largest importer, were about thesame as a year earlier. Prices were generally below1958 levels. Producer prices in the United Statesaveraged almost 20 percent less and were at theirlowest level since the early 1940's. Prices in Den-mark- and the Netherlands were 13 to 14 percentlower than in 1958.

Exportable supplies appear to have remainedlarger in the first half of 1960, as a further increasein production in the Netherlands is likely to havemore than offset a decline in Denmark. Outputis expanding also in Western Germany. Worldprices have therefore remained at low levels in thefirst half of the current year. Later, however, theymay rise, since hatchings in some European pro-ducing countries in early 1960 were below the1959 level. In Callada and the United States thenumbers of laying hens llave been reduced, andoutput in the first half of 1960 is likely to llave beensomewhat smaller. In Callada, the new system oflimited deficiency payments, replacing the formermethod of government purchases at a floor price,is expected to limit further the growth of pro-duction.

In the United States, where per caput consump-tion is highest, the demand for eggs has been de-clining slowly in recent years. Elsewhere demand islikely to grow further, especially if prices are re-duced as a result of rising productivity per hen,large-scale production methods and improvedmarketing. The volume of world trade is alsolikely to grow, even if at a slower rate than in re-cent years. In Western Germany, the largest im-port market, consumption has reached a relativelyhigh level; as domestic output is likely to expandfurther the growth of imports may slow downappreciably.

80

DAIRY PRODUCTS

World milk production (excluding the U.S.S.R.,Eastern Europe and Mainland China) increased. in1959 only fractionally over the 240 million tons of1958. Production increased in most Europeancountries, as the effects of the drought in the latterhalf of the year were mitigated by feeding largerquantities of concentrates and fodder intended forwinter feeding. Australia had a favorable seasonafter the drought of 1957/58 but production inNew Zealand remained unchanged. In the UnitedStates there was a slight decline, reflecting a shiftfrom dairy farming to beef production induced bythe high beef prices of recent years. There was alsoa change in the pattern of milk utilization in 1959,caused not only by the decline in milk output inEurope in the summer and autumn, but also bythe low butter prices in 1958, relative to other dairyproducts. Utilization as fluid milk was maintained,but less was used for butter and skim milk powder,and more for cheese and for condensed and evap-orated milk.

With the reduction in butter output after thedrought in some European countries, and season-ally low exports from Oceania, butter p1-ices in theinternational markets increased in the late summerand autumn of 1959 (Table 21). London butterprices reached a peak in November when theywere twice as high as at the lowest point in 1958.Subsequently, there were seasonally larger arrivalsfrom Oceania, and butter production in Europerose rapidly. Wholesale prices fell in London, butfrom April to June they llave been stable, mainlybecause of the sales policies of Australia, NewZealand and the Netherlands. At the same time,stocks were being accumulated in Europe, and byMay 1960 those held in the five main importingcountries were n.carly twice as large as a yearearlier. Stocks in France and Western Germanywere especially large, and imports into ContinentalEurope will be very small in the second half of 1960.

Cheese production increased in 1959 in mostmajor producing countries, and the exports of theTo main exporters were 5 percent greater. Never-theless, prices in London generally remained stablewith a slight tendency to increase toward the endof the year. Subsequently, they followed the down-ward tendency of butter prices.

6 B&gium, Western Germany, Italy, Switzerland, UnitedKingdom.

NewZealand

London

Danish Dutch

The production of condensed and evaporatedmilk increased in the Netherlands, Western Ger-many and Callada, but declined in the United States.In the majority of countries where butter produc-tion was less, the production of skim milk powderalso declined. In the United States, however, thesteady decrease in farm use of skim milk wasreflected in a slight increase in skim milk powderoutput, in spite of reduced butter production.Manufacturers' sales of skim milk powder to thegovernment were reduced, while government dis-posals for domestic donations and export salesincreased. New disposal commitments weretemporarily halted in October as stocks had beendepleted. By April 1960, however, stocks hadbeen rebuilt and disposals, including donations forspecial feeding programs abroad, were resumed.It is estimated that such donations will be onlymoderately less in 1960 than in 1957 and 1958.

The situation in butter markets does not appearcritical in mid-1960. Stocks are rising, however,and it is possible that they may be substantiallylarger at th.e end. of 1960 than a year earlier, inwhich case a heavy output next year could leadto serious difficulties.

Looking further ahead, world output of milkcan be expected to increase during the next few

81

Copen-hagen

Nether-lands Sweden Germany,

Western New York Montreal

' Ex store. - Ex quay. - Accounting price. - u Ex factory. - Free dairy. - 6 Cologne Markenbutter. - C 92 score creamery. - ° Wholesalesolids. - Converted from original units of quOtation at official rates of exchange. - January.

years. The upward trend in milk yields per cowwill continue, and national dairy policies in mostof the major producing countries entail the main-tenance of relatively high prices, which encourageproduction. The consumption of milk and dairyproducts should increase moderately in industrial-ized countries as a result of population increase andthe expansion of demand among low incomegroups. Demand for butter, however, will prob-ably continue to be held in check by the compe-tition oflow-priced margarine. In the less developedcountries, economic progress should bring an in-crease in demand for dairy products, which may bepartly covered by expansion of domestic production.Most probably, however, the increased worldoutput of dairy products will not be matched bythe growth of effective demand in the world asa whole, and surpluses of dairy products are likelyto be a feature of the next few years.

FISHERY PRODUCTS

Fresh and frozen fish

While some changes in the traditional patternof trade, which may be only of a temporary char-acter, took place in 1959, the over-all volume of

1957

U.S. cents per kilo ram.'

July-September 86 93 94 77 110 123 150 135 138October-December 76 90 88 80 110 123 152 134 142

1958

January-March 67 73 71 72 110 123 150 133 143April-June 57 62 57 52 88 99 149 129 144July-September 64 73 70 61 77 84 143 132 114October-December 73 94 90 82 96 91 148 133 146

1959

January-March 80 96 98 87 94 102 149 129 148April-June 85 96 85 88 101 147 129 146July-September 103 112 120 97 115 104 148 135 146October-December 112 127 112 147 117 155 141 116

1960

January-March 99 101 121 97 107 117 141 130 147April 80 81 82 92 137 130 147May 80 81 84 77 92 134 129 144

TABLE 21 - 13UTTER : W1-10 AJ E PRICES AT 'ECllllll) MA RKETS, QUARTERLY AVERAGES

trade in fresh and frozen fish does not appear tohave changed markedly from the level of thepreceding year. The trend in exports of frozenproducts from Denmark and some other countriesof Northern Europe has been influenced by theweakening of fish meal markets, -which has causeda shift to fishing for edible fish.

Owing to poor catches of some species on theCanadian Atlantic coast, the United States in-creased its purchases of fish from Europe to makeup for the deficit in domestic requirements. Ja-pan stepped up efforts to market greater quantitiesof frozen tuna in countries other than the UnitedStates and was able to expand exports to a num-ber of European countries. Japanese exports offrozen tuna were 'higher in the fiscal year 1959than in the preceding year.

Dried, salted and smoked fish

Imports of salted fish from the Northern Euro-pean countries into South America and the Carib-bean area have continued to decrease. There is alsoa declining tendency in the intraregional tradein dried and salted products in the Far East. Onthe other hand, countries particularly affected bythe fish meal situation, such as Angola, have tendedto place increased emphasis on the dried fish trade.The export of salted fish from Newfoundland, whichliad previously been controlled by the Newfound-land Associated Fish Exporters Limited, was freedas of i August 1959 in order to make export prac-tices in this trade conform with those for otherCanadian fishery products.

Canned fish

Although japan, under international agreements,liad to restrict its salmon catch, canned productionof salmon varieties was not affected, and onlyproduction of frozen and salted salmon liad to bereduced in volume. The poor summer albacorecatch of the Japanese fleet resulted in a drop in thevolume of Japanese exports of albacore tuna.Other countries, however, succeeded in filling thegap in the requirements of leading importers. Spainthus boosted its tuna exports to the United. Statesover previous levels. On the other hand, varioussuppliers of tuna made great efforts to expand salesof this product in European markets.

82

Fish meal

The main development of 1959 was the greatexpansion of exports from Peru. Production ofmeal in Peru was more than double that of thepreceding year. As a result, and also because ofthe increase in production of meal in several coun-tries in Europe and North America, prices, whichliad held firm in recent years, began to fall in thesecond half of 1959. This gave rise to concern inthose countries where fish meal exports constitutean important source of revenue for the fishingindustry.

FATS, OILS AND OILSEEDS

World production and trade in fats and oils in1959 more than recovered from the contractionin 1958 (Table 22). Total output is estimatedas 5 percent above the 1957 record. Most of theincrease was in the United States and the U.S.S.R.,but there was also a substantial improvement(8 percent above 1958) in Asia, reflecting higheroutput in India and Mainland China and no furtherdeterioration in copra production. African outputwas unchanged, while West European and LatinAmerican results were not quite as good as in1958. Primarily because of expansion in the UnitedStates, the strong upward trend in world suppliesof slaughter fats and soybeans continued, and cot-tonseed oil supplies finally moved upward fromthe stationary levels of recent years. World ses-ame and sunflowerseed crops were also good, andlinseed crops recovered from the poor 1957/58outturn. Olive oil supplies were excellent for an" off-season."

Coconut oil output, estimated at 1.8 milliontons, was about the same as in 1958, but still 16percent below the level of production before wide-spread drought affected coconut yields at the endof 1957. A further fall in output in the Philippineswas offset by a recovery in most other countriesin 1959, but since the Philippines are the leadingexporter there was a further moderate decline inworld copra and coconut oil trade. Larger exportsupplies of other commodities, however, more thancompensated in volume for the scarcity of copra,and world trade in all fats and oils, at 7.8 milliontons, was somewhat higher than the 1957 record.Importers substituted liquid edible oils and slaugh-terfats for coconut oil, and the ample export sup-

TABLE 22. - FATS AND OILS: WORLD PRODUCTION, TRADE AND MARKET PRICES

plies of soybeans, cottonseed oil, lard and tallowin the United States allowed that country to in-crease its fats and oils exports by one third andobtain the largest share of the expansion in worldtrade. Shipments of soybeans from MainlandChina also were higher, and world groundnutexpo ts were maintained as Nigerian stocks wereavailable to supplement current production.

Import demand was stronger in 1959, with adisposition to replenish stocks in importing coun-tries, and utilization by the manufacturing industriesstill rising. Imports into Western Europe rose by8 percent above 1958 and nearly reached the 1957

volume.World margarine and shortening manufacture

rose, but the expansion took place chiefly in coun-tries not dependent on world markets for raw mate-rials, such as the United States. Western Europeanmargarine output recovered part of the decline since1957, and shortening manufacture remained high,but some further moderate reduction occurred insoapmaking. World soap output apparently reach-ed a peak in 1957 and has declined since, indicat-ing that synthetic detergents are now depressingthe global volume of soap consumption (Figure 14).

83

' Includes butter, lard, soybean, groundnut, rapeseed, cottonseed, olive, sesame, sundowerseed, maize germ, and tea-seed oils. - 2 Includes tallow andgreases, whale (excluding sperm), palm, palm-kemel, coconut, babassu, niger-seed, poppyseed, shea nut, rice bran, mowrah, murumum and tucum-kerneloils. - 3 Includes linseed, castor, tung, oiticica, fish, hempseed, perilla, stillingia, and safflower oils. - a Includes fish oil. -3 January-May. - °Includes series forlard, groundnut, soybean, cottonseed, olive, coconut, palm-kernel, whale, and palm oils and tallow. - Includes series for linseed, castor, and tung oils.

Growth in both supply and demand affectedthe general level of prices only slightly, and theFAO price index averaged 99 (1952-54= loo), as

FIGURE 14. - WORLD PRODUCTION OF MARGARINE, COMPOUND

COOKING FAT (SHORTENING )' AND SOAP

non.9toc tons6

3MARGARINE-World *

2

SOAP-World...N

SOAP- World excluding U.S.S.R.

ARGARI NE -Western Europe

OrnIralI

\ COMPOUND COOKING FAT

1938 1948 49 50 5 52 53 54 55 5 59 60

As crage1950-54 1957 1958 1959

(Preliminary)1960

(Forecast)

VIII! ion metric tons

PRODUCTION

Total 24.0 29.1 28.9 30.7 31.1

Principally used for:

Food 16.1 19.8 20.1 21.6 21.7Food or soap' 6.2 7.2 7.0 7.2 7.4Nonfood' 1.7 2.1 1.8 1.9 2.0

INDIGENOUS F.XPO 'ES

Total 5.7 7.6 7.2 7.8

Principally used for:

Food' 2.0 3.2 3.3 3.7Food or soap' 3.0 3.5 3.1 3.2Nonfood' 0.7 0.9 0.8 0.9

Indices: average 1952-54 -,--- I oo

PRICES

All fats and oils' 114 102 96 99 '96Food and soap oils and fats' 115 101 96 101 97

Drying and technical oils" 114 102 90 85 90

' Data on compound cooking fat (shortening) relate to a limited nutnberof countries,

against 96 in 1958. While th.e lauric ac.id oil indexTOSC tO 124 (102 in 1958), the prices of most otherfats were stable or lower. Prices for the importantgroup of soft oils were on average unchanged, butlard and tallow prices fell to unusually low levels,reflecting large United States supplies. Linseedand castor oil prices averaged lower for the year, butthere was a rise toward the end of the year, follow-ing expectations of scarcer supplies from the mainexporters.

The 1960 situation is similar, but with lessstrongly emphasized features. World output isexpected to rise slightly to a little over 31 milliontons. Copra production has improved as a resultof better yields following good rainfall in mostmajor coconut areas last year. Supplies of softoils, lard and tallow are again moderately larger.Reduced supplies of groundnut oil from lastautumn's smaller crops in West Africa are morethan offset by a further rise in United States out-put of soft oils and animal fats and by olive oilfrom the large Mediterranean olive harvest of1959/60. In the U.S.S.R. the effect of a poorsunflowerseed harvest may be counterbalanced byincreases in other oilseeds and animal fats.

World trade in fats and oils in early 1960 waslarger than a year earlier and the high level ofeconomic activity in importing countries willmaintain the demand. The general atmosphere fortrade has been improved through further liberal-ization measures in several European countries inthe last year and through the extension of currencyconvertibility. United States sales for dollars areexpected to be larger. An unusual feature of tradehas been the export of about 100,000 tons of oliveoil from Spain in the first half of 1960, much morethan usual, which went mainly to Italy. A fac-tor tending to restrict the import demand in Europethis year is the increased production and lowerprice of butter. The United States import demandfor coconut oil will be affected by sales from thegovernment stockpile.

Prices of lauric acid oils decli.ned materially inearly 1960 as a result of the increase in production.The average level of prices of other oils did notshow any major change. The general level offats and oils prices in 1960 is likely to be moderatelylower than in 1959.

The import demand for fats and oils used prin-cipally for food or soap is unlikely to benefit inthe next few years from the same expanding

84

world market conditions as existed up to 1957.The slackening in the growth of world margarineproduction, and the downturn in soap outputsince 1957, probably indicate a new trend for thenext few years. Slaughter fat output is expectedto increase in North America and Western Europe,and competition with vegetable oils will be strong.Per caput food fat consumption may be close toan upper limit in major European importingcountries, while population is rising only slowlyin these countries. Butter production in the Com-mon Market countries is forecast to increase sig-nificantly, and its disposal would also llave to bein competition with vegetable oil products.

FRESH FRUIT

Apples and pears

The 1959 output of apples in major producingcountries (9.3 million tons) was one quarter low-er and that of pears (2.5 million tons) one fifthless than the bumper crops harvested in 1958.Nearly all of this reduction occurred in Europe,mainly because of late spring frosts and summerdrought. Importing countries suffered most, whileexporting countries were on balance able to main-tain the 1958 production 1CVC1S. The level ofworld production of apples and pears is becomingincreasingly determined by the pronounced fluc-tuations in Europe. Apple production in NorthAmerica was 7 percent smaller than the very good1958 crop, while United States pear productionrecovered from the low level of the previousseason. Apart from a substantial increase in appleproduction in Argentina, relatively small changesoccurred in Southern Hemisphere crops.

Owing to the reduced domestic supplies, im-port demand in Europe was stronger, and someimporting countries have temporarily removedimport restrictions. Wholesale and retail priceswere generally higher than in the previous seasonwithout, however, reaching the exceptionally high1CVC1S Of 1957/58. IMpOrt demand 1S expected tocontinue strong in the summer of 1960, and non-European exporters should be able to place greaterconsignments on European markets, especially asthere are prospects of good 1960 crops in allSouthern Hemisphere countries.

Citrus fruit

World production of citrus fruit expandedfurther in 1959/60, though much less steeply thanin 1958/59, and IS likely to have eXCCCdCd 201111111011 tons. The gain was mainly in orangesand tangerines, with only minor changes in thelemon and grapefruit crops. A record outputof oranges was forecast in Spain, and the crop inthe United. States is estimated to llave recoverednearly to the level prevailing before the Floridafrost of 1957/58. Slight reductions were likelyin Israel and Greece. Total average output inmajor producing countries is estimated as 11.3

million tons, compared with io.8 million tonsin 1958/59.

Citrus exports were larger in 1959/60. In

particular, shipments from countries supplyingthe bulk of winter citrus have risen, with Spain,Morocco and Algeria showing the largest in-creases. World exports of oranges and tangerinesin the 1959/60 marketing year may prove to be

To percent larger than in 1958/59. Export suppliesof lemons were slightly smaller in some countries,but exports of grapefruit are estimated to haveincreased by about io percent. The import de-mand appears strong enough to absorb the in-creased supplies. The effects on the pattern oftrade of the liberalization measures adopted in1959 in Denmark, France and the United Kingdomremain to be seen, but the removal of quantita-tive restrictions for various types of citrus fruitin certain periods of the year will strengthen com-petition from the dollar area in the future. Worldmarket prices of oranges and grapefruit wereappreciably lower than in 1958/59, but lemonprices were somewhat higher.

Bananas

International trade in bananas expanded fur-ther in 1959. Shipments to major inarketsEurope and North America were as much as iopercent above the figure for 1958. Total worldimports can thus be expected to have approachedthe 4. million tons mark. Prices in importingcountries were generally lower throughout 1959.In .the first quarter of 1960, shipments into some ofthe major importing countries continued to rise,and were maintained at the previous year's levelin some others. Prices, too, were somewhat higher

than a year earlier.

85

DRIED FRUIT AND WINE

Raisins and currants

World production of raisins in 1959 was IOpercent larger than the low output of 1958. Aboveaverage crops were harvested in all producingcountries, particularly in the United States, Tur-key and Greece. Production of currants, mainlyin Greece and Australia, was slightly less than in1958, but remained above the postwar average.Owing to smaller export supplies in the NorthernHemisphere, trade in raisins was lighter in 1958/59than in the three previous seasons, despite a

sharp increase in. Australian shipments. Trade incurrants remained at the previous year's level.Because of the reduced export supplies elsewhere,Australian sultanas and raisins were sold at highprices in the summer of 1959, notably in theUnited Kingdom_ and Canada. However, with theprospects of ample export supplies, there was ageneral reduction in prices from August onward.

Exports from Turkey have been facilitated in1959/60 by the abolition of the minimum exportprice system in March 1959 and the devaluationin August 1959 of the exchange rate for exportsof raisins, dried figs and filberts. Total raisinexports for the season may reach 90,000 tons,which is double the 1958/59 level. The bettercompetitive position of Turkey has been particu-larly felt in Greece. However, Greek exportsto the U. S. S. R. and Eastern Europe were in-creased through special arrangements in the fourthquarter of 1959, and the total for the season mayrise to over 50,000 tons, a third more than in1958/59. After two years of very small shipments ofCalifornia raisins, caused by short crops and un-precedentedly high prices, there has been muchinterest in Natural Thompson raisins on importmarkets now that supplies are larger and priceslower. In order to support producer prices,marketing regulations have been reintroduced forthese raisins. The market is also supported bygood export demand, however, and total UnitedStates exports are expected to rise significantlythis season, especially as Fran.ce and. Western Ger-many liberalized raisin imports from the dollararea in 1959.

Dried figs and prunes

Output of dried figs in the principal producingcountries in 1959 was substantially lower than in

the preceding season, mainly reflecting a lightcrop in Italy. No major changes are expectedin exports, however, as decreases in Italy andPortugal will be offset by larger shipments fromTurkey and Greece, where the fruit was reportedto be excellent this year, both in quality and size.

After the previous year's decline of one third,the 1959 pack of dried prunes is expected to bethe largest in several years. In the United. States,the largest producer of dried prunes, output re-covered from the unusually low level of 1958, andbumper crops were harvested in Yugoslavia andFrance. Exports, which had fallen short in 1958/59,owing to a drop of 30,000 tons in United Statessales, are expected to rise sharply in the currentseason, probably exceeding those of precedingyears.

Wine

Production in 1959, estimated at more than220 million hectoliters (excluding the U. S. S. R.and Eastern Europe), was 6 percent more than theprevious year and a new record. Nearly all ofthe increase was due to good yields in France andAlgeria, where the vintages in the preceding twoseasons had been small. There was a markeddecline in Spain, but ony minor changes in otherproducing countries. Wine imports into France,which had risen sharply in response to the reduceddomestic supplies, fell back to more normal levelsin 1959, and exports recovered. Otherwise, nogreat change occurred in the pattern of trade.Prices remained steady through 1959, although ata lower level than in 1958.

COCOA

Cocoa production, which fell steeply in 1957/58,rose in 1958/59 and again in 1959/60. The1959/60 crop is estimated at about a million tons,or around 150,000 tons above the average for thelast five years. Favorable weather in most ofthe major producing countries was probablythe dominant factor in the 1959/60 increase. Otherfactors include the marked improvement in thecontrol of diseases and pests and, in some areas,the coming into bearing of new plantations andimproved varieties. Both Ghana and Nigeriaharvested record crops (315,000 tons and 150,000

86

tons, respectively), and production in Brazil isforecast at 190,000 tons, ami increase of 9 percentover 1958/59.

The rise in production made possible sub-stantial increases in trade in 1959. Incompletestatistics inolicate that exports of cocoa beans in1959 were about 15 percent higher than in 1958.In addition, Brazil exported cocoa in the form ofsemifinished products, processed locally during thepast two years as part of a price support policyfor cocoa. Nearly all consuming countries in-creased their imports, though in the United King-dom net imports were TO percent less than in 1958.

The price of cocoa fell in January 1959 fromthe 1958 average of 44 U. S. cents a pound (SpotAccra, New York) to about 37 cents, at whichlevel it remained until October-November 1959.However, with the coming to market of the 1959/Go crop, prices fell in December 1959 and duringthe first three months of 1960, as it became ap-parent that the crop would exceed all expectationsancl that there would be a carry-over of perhapsioo,000 tons. A sharp rise at the end of April1960 proved short-lived and the average price inMay was 28.6 cents. Although there has been aconsiderable fall in prices over the past year,relative to the extent of the increase in supplies,this has been less than might have been expectedon the basis of past experience. Among thefactors contributing to this moderation in marketreaction was the Brazilian price support policyand the tendency of manufacturers to increasetheir stocks of cocoa beans.

Experience has demonstrated that there is a

FIGURE 15, WORLD PRICE ANL) GRINDINGS OF COCOA BEANS

Thousandrnetnc r0117

t100

1000

900

000

700

600

500

400

*50 1951 952 955 954 955 950 957 958 *59 960l6 run .1

Spot price, Accra, New York, deflated by he United States wholesaleprice index. Averages of 12 months beginning n April of the pmvious year.

time lag of six to nine months before changes inwholesale prices of beans are reflected in retailprices and consumption of cocoa products (Fig-ure i5). During 1958 and 1959, moreover,various techniques for economizing cocoa beanswere carried forward in many of the major con-suming countries. The relatively low prices inthe first half of 1960 are, however, expected tostimulate consumption, which should develop withincreasing momentum in 1960/61. For the year1960 the Statistics Committee of the FAO CocoaStudy Group estimated that grindings would. be6.5 percent higher than the 832,000 tons in 1959.

The production of cocoa is rising, but as yetthe long-term outlook is difficult to evaluate. Itis not yet clear how rn.uch of the recent increasein pro duction is due to new planting and how muchto measures taken against diseases and pests. Thereare considerable potentialities for further expan-sion of cocoa production in South and CentralAmerica and parts of Africa and Asia, but the ac-tual course of production will be influenced bythe trend of prices. Unless production continuesto expand in 1960/61 at the rate of the last twoyears, which is unlikely, the gap between produc-tion and consumption will become narrower in1961. Lower prices will stimulate the consump-tion of chocolate products and are likely to reducethe use of substitutes. Rising standards of livingin Africa, Asia and Latin America should makepossible considerable market expansion in theseareas. Consumption may also rise in the U. S. S. R.and Eastern Europe, where it has been depressedby very high retail prices, but the quantities in-volved would be small relative to world prices.

COFFEE

The outstanding events in 1959 were the steepincrease in world output from 3.5 to 4.5 milliontons in the 1959/60 season, and the substantialrise in world imports from 2.2 to approximately2.5 million tons (Table 23). More than So percentof the increase in world production is due to therecord crop in Brazil, unofficially put at around2.5 million tons. Large crops were also harvestedin Colombia, Mexico, the main African growingreabions7 and India.

Exports from Brazil rose by 45 percentto nearly 1.1 million tons. Colombia exported385,000 tons, 18 percent more than in 1958. World

87

consumption was stimulated by the general re-duction of retail prices, relatively low consumerstocks, and good economic conditions in the mainmarkets. An encouraging feature was the risein imports into Eastern Europe, which in 1959took so percent more coffee than a year earlier,but even so the imports of these countries are onlya little more than 40 percent of the prewar volume.

Trade with Eastern Europe is not regulatedwider the International Coffee Agreement, whichlimits exports during the Agreement year to about2.22 111111i011. t011S. The total quantity likely tobe exported (including that from nonparticipatingcountries), at 2.55 million tons, is in fairly closebalance with present world requirements. Therestriction of exports has led, however, to verysubstantial additions to stocks in producing coun-

' Crop years 1958/59 and 1959/60. - C Exeludi 1g imports for re-export. -' 30 June 1959 and 30 June 1960. - France, Western Germany, UnitedKingdom, Netherlands, Italy.

'FABLE 23. - COFFEE: PRODUCTION, IMPORTS, PRICES AND STOCKS


Percentagechange

PRODIJCTION . Thousand metric tons. . Percentage

North and Central America 466 575 -I- 23South America 2 276 3 155 + 39Africa 593 652 + 10Asia and Oceania 144 149 +3

WORLD TOTAL 3 479 4 531 + 30

IMPORTS 2

Unitcd States 1 210 1 395 + 15Other Western Hemisphere 103 90 - 13Western Europe 789 864 +9Eastern Europe 28 42 + 50Africa 58 65 + 12Asia 28 33 + 18Oceania 8 12 + 50

WORLD TOTAL 2 224 2 501 + 12

PRICES (ex dock Nev., York) . U.S. cents per pound .

Santos 4 48.4 37.0 - 24Colombian MANS 52.3 45.2 - 14Native Uganda Robusta 37.6 28.7 - 22Ivory Coast, Robusta courant 36.5 27.0 - 26

STOCKS (at end of season )3 ...7'hot jsand netric tons. .

Brazil 1 440 2 640 + 83Colomb' 250 298 + 19Ivory Coast 25 40 + 60

TOTAL ABOVE 1 605 2 978 + 86

United States 137 170

Europe 71

tries; government-held stocks in the three largestproducing countries increased by 1.4 million tons,and were on 30 June 1960 equivalent to oneyear's world consumption. On the other hand,the limitation of exports has effectively preventeda price slump. Between March and June 1960coffee prices fluctuated by no more than 5 percent.Nevertheless, 1959 average prices were about zopercent less than in 1958, and lower than in anyyear since 1949. Owing to greater demand forhigh quality coffee, prices of milds were relativelybetter maintained.

Adverse weather during the last months of1959 is reported to llave affected Brazil's 1960/61crop, now forecast at less than 2 million tons, andworld output in the next crop year is likely to besubstantially less than th.e 1959/60 record. How-CVCT, the SiZe Of the 1959/60 crop was only inpart due to favorable weather and reflects to agreater extent the coming into bearing of largenew areas planted with high-yielding strains.Barring very bad weather, this would suggest acontinuation of crops between 4.0 and. 4.5 milliontons in the -years to come. With ample stocksin importing countries, world imports are not likelyto show further gains in 1960. United Statesimports in the first six months of 1960 were5 percent lower than a year before. However, thelimitation of supplies, if economically feasible forproducing countries, may effectively stem the pricedecline in the short run.

Although world imports and domestic consump-tion of coffee will rise in the coming years, it is

unlikely that the armual increase will exceed 5percent, even at present reduced prices. The pro-posal has been advanced to extend the InternationalCoffee Agreement for another year and considerin the meantime the conclusion of an exportagreement for five years, to provide time for pro-ducing countries to enact and carry out measures ofproduction control, at present still at the planningstage. Unless such measures are taken, stockswill continue to accumulate in producing countriesand could reach twice their present size three tofour years from now.

TEA

Despite adverse weather in early 1959, worldtea prod.uction was about the same as in 1958.Slight declines in southern India and Indonesia

88

were offset by larger crops in Africa and northernIndia. The year's output is currently estimatedat 750-755,000 tons. World imports Were about30,000 tons below the 560,000 tons recorded in1958, owing to a 14 percent decline in the netimports of the United Kingdom (216,800 tons)and to smaller offtake in some North African andNear Eastern markets. Other Western Europeancountries, Callada, South Africa and Oceaniashowed no advance over 1958, whereas slightlyhigher imports were recorded in the United Statesand Eastern Europe. Shipments from India fellby about io percent, while African exports rosein une with expanding output.

Per caput consumption of tea in the main im-porting countries is thus likely to have declinedin 1959. Although consumption requirements inthe United. Kingdom were supplemented fromstocks, per caput offtake, at 9.- pounds, was about2 percent below 1958. However, the shortfallin consumption in importing markets was com-pensated by greater internal demand in producingcountries, especially India and Pakistan. Worldrequirements were thus in balance with availablesupplies, and no large carry-over stocks accumulatedin producing countries. Annual average pricesat the main auction centers llave continued re-markably stable, fluctuating by no more than5 percent in 1957-59. Larger domestic consump-tion helped, moreover, to raise the price of plaintea to more profitable levels than in the pastfew years.

Unfavorable weather reduced. the Indian cropin the first half of 1960, but indications are thatoutput will continue to rise elsewhere. Produc-tion in Africa is steadily expanding, rehabilitationplans in Ceylon are begiiming to be implemented,larger acreages llave been planted in Pakistan,and, in general, profitable prices in 1959 willstimulate improvements on existing plantations.World imports in 1960 are likely to recover orsurpass the 1958 volume. Relatively low Unit-ed Kingdom stocks at the turn of the year sus-tained trade activity in the first four or five monthsof 1960 and, if domestic demand gains furtherstrength, prices can be expected to fluctuate onlyseasonally around their present levels. In thelonger term, however, the foreseeable expansionof production may overtake the gradual improve-ment in consumption, especially if MainlandChina and Latin America enter world marketson a larger scale.

TOBACCO

World production of leaf tobacco (excludingthe U. S. S. R. and Mainland China) increasedslightly in 1959. The largest increases were inthe Federation of Rhodesia and Nyasaland, wherea record yield was obtained for flue-cured tobacco,and in the United States, where the acreage ex-panded by 7 percent following the discontinuanceof the Acreage Reserve Program. In Italy, pro-duction contin.ued its upward trend, reflecting bothrising domestic demand and the expectation oflarger exports, especially within the EuropeanEconomic Community. Production of orientaltobacco fell considerably in Greece following thereduction in area, a consequence of the stock ac-cumulation after the large 1957 crop. In Turkey,however, there was a considerable increase inacreage. Cigar leaf output continued to fall andthere are signs of a shift toward Virginia tobacco,particularly in Cuba and Indonesia.

TABLE 24. - TOBACCO: EXPORTS FROM PRINCIPAL

EXPORTING COUNTRIES

89

Exports of unmanufactured tobacco were atabout the same level as in 1958 (Table 4). Therewas a further reduction of 3.5 percent in exportsfrom the United States and shipments from Indiaalso fell. Exports from Callada and the Federa-tion of Rhodesia and Nyasaland rose substantially,especially those to the United Kingdom. Exportsof oriental tobaccos from Greece dropped, espe-cially those to the United States and WesternGermany; both countries, however, increased theirpurchases of oriental leaf from Turkey.

The large 1959 crop of flue-cured varieties inthe Federation of Rhodesia and Nyasaland wasof rather low quality and prices dropped, thuscontinuing the downward trend evident in thelast few years. Flue-cured prices in Callada, upto mid-February, averaged higher than in the sameperiod last year, but in the United States thesewere, at an average of 57.7 cents per pound,slightly below the previous year, thus breaking thetrend of the past four years. For the United StatesBurley crop, prices fell sharply because of the verypoor quality of the large harvest. The importunit value of oriental leaf in the United Statesaveraged lower than in the last two years, prob-ably owing to the slight mercase in export premiumsin Turkey since August 1959. Recently the Tur-kish government granted a further premium onexports of 1958 stocks and annoluiced that begin-ning with the 1959 crop the exchange rate wouldbe increased to the level of the general import rate.

World tobacco consumption continues to rise.United States consumption of unmanufacturedtobacco, which had decreased owing to rawmaterial saving hmovations in manufacturing tech-niques and changes in taste in favor of productsrequiring smaller quantities of tobacco per unit(filter-tip cigarettes, small cigars and cigarillos), isonce again on the increase. Total United King-dom consumption of tobacco and tobacco productsis estimated to have reached a record figure in1959/60, one fifth above the consumption of tenyears ago.

COTTON

The world supply of cotton increased in1959/60. Total opening stocks were lower but pro-duction increased, the substantially larger UnitedStates crop offsetting the reduction in output else-

1956 1957 1958 1959

Ti housand metric tons (dry w

MAfORFAPORTERSOFCIGARETTELEA'', (other than oriental)

United States 231.5 227.2 219.8 211.4Federation of Rhodesia and

Nyasaland 74.9 63.1 65.0 79.8India 42.3 36.4 48.1 37.7Canada 13.7 16.9 13.4 18.5

Total 362.4 343 6 346.3 347.4

MAJOR EXPORTERS OFORIENTAL LEAF

Turkey . 60.7 88.5 56.1 66.7Greece 48.5 69.0 62.4 55.0Yugoslavia 20.0 16.1 23.1 16.0Bulgaria 47.1 47.9 43.8

Total 176.3 221.5 185.4

MAJOR EXPORTERS OF CIGARLEAF

Brazil 31.3 29.4 30.4 28 0Cuba 21.3 25.2 26.7 26 5Indonesia 11.3 14.2 22.1 15.5Dominican Republic 13.5 11.8 11.5 12.2Philippines 10.4 10.8 14.1 7.7

Total 87.8 91.4 104 8 89.9

GRAND TOTAL 626.5 656.5 636.5

where. It seems, however, that the increase insupply has been outstripped by the upsurge inmill consumption, and the 1960/61 season mayagain open with lower stocks (Table 25).

The increase in consumption has been rela-tively steep in the more developed countries(United States, importing countries of WesternEurope, and japan). It has been accompanied bya marked expansion in the volume of internationaltrade in cotton. United States exports are esti-mated at well over double last season's volume.While this was accomplished with the aid of ahigher rate of export subsidy, the volume movedunder special financing does not appear to havebeen significantly larger. The United Arab Repub-lic, with its relatively large outlets in the U.S.S.R.,Eastern Europe and Mainland China, reduced theofficial currency discount on export sales of Egyp-tian cotton, and banned the export of certain qual-ities required for domestic mills. Other exportingcountries also appear to have moved their export-able supply with relative ease in 1959/60. Mar-ket prices rose for most groWths; those for extralong staple increased relatively steeply, and the

TABLE 25. - COTTON: WORLD SUPPLY AND DISTRIBUTION

SOURCE: International Cotton Advisory Committee Quarterly.

90

normal premium which they command overmedium staples Was restored.

Barring unfavorable weather, the 1960/61 sea-son may see some increase in cotton production-In the United States, farmers again have a choiceof either normal acreage allotments wiffi a supportprice of 75 percent of parity for the cotton mar-keted, or acreage allotments 40 percent larger witha support price of 60 percent of parity. Last sea-son the response to the larger acreage option wasrelatively small. This season basic support pricesare about 1.5 cents per pow-id lower and subjectto a maximum of U.S.$5o,000 per farm. Reportsindicate that owners of larger holdings are select-ing the option to expand and that permissibleacreage will be larger by perhaps io percentalthough actual planting may not increase on thisscale. Elsewhere, even though advances in mar-ket prices have not everywhere been fully reflectedin prices to producers (who, as in the United ArabRepublic, may also be subject to limitations onthe acreage which may be planted to cotton),the tendency for expansion may reassert itself.

On the other hand, the exceptionally high rate

Average1954/55-1956/57 1957/58 1958/59 1959/60

(Preliminary)1960/61

(Estimated)

Million metric tons

OPENING STOCKS

United States 2.56 2.47 1.89 1.93 1.71U.S.S.R., Eastern Europe and Mainland

ChinaOthercountries:0.39 0.56 0.69 0.76 0.82

Net exporters 0.72 0.65 0.84 0.73 0.63Net importers 1.21 1.34 1.32 1.14 1.24

Total 4.88 5.02 4.72 9.56 4.40

PRODUCTION

United States 2.99 2.38 2.99 3.17 3.25U.S.S.R. and Mainland China 2.70 3.03 3.40 3.53 3.70Others 3.47 3.66 3.81 3.57 3.65

Total 9.16 9.07 9.70 10.27 10.60

TOTAL SUPPLY 14.04 14.09 14.42 14.83 15.00

CONSUMPTION

United States 1.93 1.74 1.89 1.97U.S.S.R., Eastern Europe and Mainland China 2.78 3.19 3.50 3.73Other countries 4.26 4.44 4.43 4.70

TOTAL CONSUMPTION 8.97 9.37 9.90 10.40

SOURCE: FAO Commodity Bulletin No. 31, Per captit fiber consumption leveqs, 1948-1958.' Cotton, wool and man-made fibers.

of expansion in mill consumption and in trade incotton during the 1959/60 season was partly at-tributable to stocking up by consumers of rawcotton and cotton textiles. This can scarcely beexpected to continue in 1960/61. Nevertheless,the over-all level of consumption should remainhigh, and in the United States consumption mayagain increase as the domestic price of cottonmoves downward to compete more effectivelywith man-made fibers. The United States exportsubsidy is to be lowered from i August 1960 (from8 to 6 cents per pound) and there may be a reduc-6011 in eXpOrtS in 1960/61.

Over the longer term, growing populationswith rising standards of living will call for an in-creasing volume of fiber, especially in the form ofapparel, in the less developed regions -where lowpurchasing power at present restricts consumption.While technical factors affecting fiber utilizationtend to limit the expansion of consumption inthe more developed regions, expansion in themore densely populated less developed regions hasmore than offset this and should continue to do so(Table 26). With the cost of cotton and its

manufacture at competitive levels, and the productsavailable on equal terms to consumers, cotton ismore likely to share pari passu in the expansionof total fiber consumption.

WooL

The world wool clip was again larger by about4 percent in 1959/60 (Table 27). Taking intoaccount opening stocks in producing countries,

91

the total supply also was larger. Among majorpro ducing countries sheep numbers increased inAustralia, New Zealand, the United States and theU.S.S.R. Losses due to floods, however, wereconsiderable in Argentina, and especially Uruguay,where wool production fell sharply.

Despite slightly larger stocks in importing cowl-tries at the beginning of the season, the volume ofinternational trade in wool continued to expand,with increased shipments from Australia, NewZealand and South Africa offsetting reductionsfrom Argentina and Uruguay. The New Zealandand South African Wool Commissions disposedof the greater part of the remaining 1957/58 sur-pluses in the first half of the 1959/60 season, andthe advance in market prices, which liad been sucha marked feature in the early months of 1959,was replaced by a considerable degree of pricestability.

In the first three quarters of the 1959/60 seasonthe level of activity in the world's wool textileindustry was considerably higher than during thesame period of the previous season. At the sametime the proportion of virgin wool in the totalmaterials consumed by the industry was showinga slight improvement. Further expansion in theactivity of the industry in the United Kingdomand Japan offset some relaxation in France, Italyand the Netherlands, while the United States andWestern Germany showed little change.

While there is as yet little indication of thevolume of the 1960/61 clip, it is unlikely that theabove average increase of 1959/60 will be repeated.With the protective tariff and incentive price for

Average 1952-54 Average 1956-58 Averageannual change Average 1952-54 Average 1956-58 Average

annual change

Kilograms per caput Perreinage Kilograms per caput Percentage

North America 11.2 10.0 - 2.9 16.3 15.1 - 1.9Western Europe 4.1 4.7 + 3.5 7.4 8.7 -I- 4.1Eastern Europe 4.6 5.2 + 3.1 6.2 7.6 -I- 5.2Oceania. 4.0 4.3 -I- 1.8 7.5 8.0 + 1.6Latin Anierica 2.9 3.3 + 3.3 3.9 4.4 + 3.1Near East. 2.0 2.2 + 2.4 2.7 3.0 -I- 2.7Far East 1.9 2.2 + 3.7 2.2 2.6 + 4.3Africa 1.2 1.1 - 2.2 1.7 1.9 -I- 2.8

WORI 3.1 3.4 + 2.3 4.3 4.8 + 2.8

TABLE 26. - COTTON AND OTFIER APPAREL FIB R. PER CAPUT CONSUMPTION

Cotton Total apparel fibers

TABLE 27. WOOL : WORLD PRODUCTION AND CONSUMPTION

wool preducers unchanged, production may con-tinue to expand in the United States, and it mayalso increase in the U. S. S. R. The effects ofreduced flocks in South America will continue,and in Australia pasture conditions have not beenfavorable everywhere. On the other hand, thestocking up of wool goods in the more advancedcountries now appears to have rim its course, andconsumption in wool textile industries as a wholemay show little change. In the long run, however,increasing population.s and higher standards ofliving will call for an increased supply of woolgoods, especially in countries which can nowafford only limited quantities. As in the case

of cotton, technical factors may tend to restrictthe requirements of most advanced countries, butthis should be fully offset by the increase alsewhere.

JUTE

The 1959/60 season opened with larger carry-overs of raw jute in Pakistan and India, but cropswere significantly smaller in both countries, mainly

92

Thousand metric tons (clean basis)

367

155

70

100

59

1 307

154

218

41385

470

1 340

1958/59

408

169

73

103

49

1 378

141

20237273

498

1 286

1959/60(Preliminary)

1 443

179

231

390103

545

1 448

because of adverse weather (Table _8). As riceprices were relatively favorable at planting time,farmers in Pakistan reduced their jute acreage;also yields were not maintained, and output isestimated as 6 percent less than in 1958/59. InIndia the total production of jute and mesta fellby about 12 percent, also mainly in rice growingareas. A considerable increase in the production ofjute-like fibers was reported from Mainland China.

The reduced supplies in 1959/60 coincidedwith a much higher demand for raw jute. Paki-stan mills were consuming about 25 percent morefiber. The disappointing Indian crop, togetherwith a somewhat higher level of activity in Indianmills, resulted in a threefold increase in imports(of cuttings) from Pakistan. Exports to Europeand other overseas destinations from Pakistanin the first nine months of the season were downby 3 percent. Prices of raw jute advanced stead-ily from October 1959, after it became apparentthat the Indian crop would be much smaller.There was a particularly steep increase in May1960, and by June prices were 50 percent higherthan a year earlier.

Average1954/55 - 1956/57

PRODUCTION

Major exporters

Australia 367

New Zealand 146

South Africa 73

Argentina 93

Uruguay 54

Total 733

Other countries

United States 68

U.S.S.R 117

Others 343

Total 1 261

CONSUMPTION

United States 172United Kingdom 214

Other Western Europe 358

japan 62

Others 414

Total 1 220

SOURCE: COMMOnwealth Economic Cot ' Calendar year of the first part of split year shown.

751

65

143

348

802

65

159

352

438

177

75

106

45

841

68

174

360

TABLE 28, - juni ANO ALLIED PIPERS: P111)1) UCTION AND COMMERCIAL DISAPPEARA.NCE

The 1960/61 season will open with stocks inproducing countries much reduced, but kro-ercrops may be expected. The advance in juteprices earlier in the season provided an incentiveto plant more jute. In Pakistan the authoritieshave abolished the jute licensing system, except ina few special areas, and are promoting the plant-ing of good qualities. In India the jute mills haveagreed to operate a regular price support schemefor raw jute, should prices fall to levels discouragingto the growers. The outlook for consumptionis uncertain. In the first nine months of theseason Indian mills stepped up their output ofjute goods in response to rapidly growing d.omesticdemand, but some slackening in activity was re-ported toward the end of the season. There was aconsiderable reduction in mill stocks, the replace-ment of which would help to maintain Indian rawjute consumption. Reports from Europe suggestthat mills have fairly long order books, whichwill keep them active into the 1960/61 season.

HARD FIBERS

Production of all major types of hard fibers in-creased again in 1959 (Table 29) . Abaca out-put, however, made only a partial recovery fromthe setback in the preceding year. In the Philip-pines production remained at a relatively low

93

level, while the Central American output increasedprior to liquidation of the plantations. Indonesiansisal production continued to dwindle, and. Haitianoutput may have leveled off as a result of drought,but production in British East Africa continuedto rise and there was a spectacular mercase in Brazil.In Mexico, henequen production expanded stillmore.

By the beginning of the year stocks of fiber inproducing countries were already being drawn on,not only to supply the expanding local industry inthe Philippines, Brazil and Mexico, but also to meetincreasing export demand froin the United States,Western Europe and Japan. In these consumingcountries a stocking up of fibers appears to have takenplace somewhat in advance of the expansion inmanufacture which was still gathering momentumn the latter part of the year. Prices climbed sharplyin the first half of 1959 and continued firm in thesecond half; over the year the advance was gen-erally about one third.

A further, although less pronounced, rise in theproduction of hard fibers seems likely in 1960.Moderate increases may be expected in the sisaloutput of Africa and Latin America, as well asin Mexican henequen, -while abaca output willprobably be reduced, owing to the cessationof production in Central Africa. Such over-allincrease as may occur in 1960 should not resultin an excessive volume in relation to consumption,

Average1954-56 1957/58

Million metric

1958/59 1959/60(Preliminary)

tons

PRODUCTION

F'akistan 1.10 1.13 1.09 1.03

India 0.91 0.97 1.23 1.07

Total 2.01 2.10 2.32 2.1

Others 0.37 0.47 0.49 0.59

COMMIIRCIAL DISAPPEARANCE

Consumption

Indian mills 1.15 1.19 1.16 1.19

Pakistani mills 0.10 0.17 0.22 0.28

Exports overseas from Pakistan 0.73 0.71 0.77 0.74

Total 1 95 2.07 2.15 2 21

EXPORTS TO INDIA FROM PAKISTAN 0 19 0.12 0.03 0.08

in view of the expanding use of agricultural twinesand the larger demand for cordage likely to resultfrom the increasing activity in industry and ship-ping.

RUBBER

In 1959 there was a further increase of some5 percent in the output of natural rubber. Allmajor producing countries contributed to the ex-pansion, with the notable exception of Ceylon,where there hadbeen labor difficulties and exces-sive rainfall. In the Federation of Malaya the steadyexpansion in estate output continued, while theadvance in rubber prices stimulated some increasein production from small holdings. In Indonesiaalso there was increased marketing by smallholders,but on estates the declining trend continued.

Increasing activity in rubber manufacturing wasfairly general in 1959, and was especially marked inthe United States. At the beginning of the yearcommercial stocks of natural rubber in consumingcountries were relatively light, and by the end ofthe year they were reduced by a further io percent.The expansion in demand, despite an increase of

94

some 30 percent in the production of syntheticrubber, was quickly reflected in prices for naturalrubber, which in spot markets advanced about40 percent during 1959. The peak was reached inNovember, when No. I RSS at Singapore wasquoted at an average of Mal.SI.27 a pound. Therewas some easing in prices around the turn of theyear, with releases from government stockpilesin the United Kingdom and the United States,but a new peak of Mal.Si.29 a pound was reachedin May 1960, vv-hen the United States stockpilereleases were completed and the U.S.S.R. resumedpurchases in Singapore.

The monthly sales from the United Kingdomstockpile (which originally consisted of 100,000tons) va7 according to the prices paid. All limitsare removed when the price exceeds 30 1/4 penceper poimd. Spot prices up to the beginning ofJune 1960 were continuously above the upperlimit, and in January-April unlimited sales liadbeen inade to a total of about 45,000 tons. Dur-ing the same period. the United States liad soldall of the so,000 tons scheduled for release beforeJune 1960, and reports suggested that the limitmight be raised. The U.S.S.R. also announced a re-lease of 45-5o,000 tons for the first quarter of 1960.

TABI E 29. HARD FIBERS: PRODUCTION AND IMPORTS

Average 1954-56 1957

Thousand

1958

metric tons

1959

PRODUCTION

Abaca 135 141 113 121

Philippines 122 131 106 112

Sisal 468 506 532 558

British East Africa 222 230 247 265

Brazil 86 102 105 119

Henequen 120 130 132 134

Mexico 109 119 123 125

Other hard fibers 33 33 32 32

Total 756 810 1309 845

IMPORTS

Total 613 659 666 697

United States 83 175 168 147

United Kingdom 85 89 93

European Economic Community 155 132 189 187

Japan 43 53 47 55

SOMME: National statistics and Economist Intelligence Unit.

The increase in world rubber consumptionmay be expected to continue in 1960, althoughat a slower rate, while the supply situation seemslikely to become easier. Even if there shouldbe no further gain in natural rubber productionin 1960, further stockpile release could add con-siderably to supply. Moreover, synthetic rubberplants in the United States were still operatingwell below capacity early in 1960, and considerablenew capacity is planned. In Europe also syntheticproduction is gradually increasing.

There is little doubt that the long-term trend ofdemand for rubber remains upward. A mainfactor is the expansion in automobile manufactur-ing capacity which is taking place in Europe and.elsewhere. On the other hand, natural rubberproduction has for some years been rimming veryclose to capacity, without holding its share of theexpanding over-all market as against syntheticrubber. While replanting and new planting withhigh yielding materials has been considerable insome countries, it appears that such further meas-ures during a period of goverinnent stockpile re-lease would improve the prospects of holding thisshare. Legislation authorizing an eight-year pro-gram for the disposal of some soo,000 tons ofstockpile rubber has been passed in the UnitedStates.

Average1954-56

T ousand metric tons

NATURAL RUBBER

SOURCE: International Rubber Study Group " Estimate.

TABLE 30 RUBBER: PRODUCTION AND CONSUMPTION

1957

95

FOREST PRODUCTS

Roundwood

World roundwood production has remainedvery stable since 1956 (Table 31). A small in-crease in 1959 brought th.e volume of total round-wood removals to a new postwar record of approx-imately 1,670 million cubic meters. In contrastto previous years, however, fuelwood productiondeclined by about 4 percent, while the expansionin removals of industrial wood, interrupted in1958 by the recession, was resumed in 1959 witha 4 percent increase, reaching a record total of962 million cubic meters. This clearly reflectsthe favorable effects of the general economic re-covery on the forest products market, with greatlyincreased residential and other construction inmost parts of the world, and steady growth inothcr sectors of economic activity, except coal min-ing and shipbuilding.

As fuclwood barely enters foreign trade, worldroundwood trade in 1959 gained more strengththan did production, increasing by 2 percent to26 million cubic meters. In Western Europe ex-ports of coniferous logs showed no change andthose of pitprops fell by one fourth to reachthe lowest postwar level, but exports of pulpwood


1960(Estimated)

Production

Fed. of Malaya: Estates 356 374 397 415

Smallholders 271 273 277 294

Indonesia: Estates 272 257 242 217

Smallholders . 462 439 436 ." 500

Others 541 590 637 649

Total 1 902 1 933 1 989 " 2 075 2 170

Consumption

United States 607 547 492 564

Others 1 275 1 373 1 520 1 575

Total 2 012 2 139 2 1441 882 1 920

SYNTHETIC RUBBER

Consumption 994 1 278 1 267 1 582 1 778

PLYwoon

ProductionExports

W OOD PULP

ProductionExports

NEWSPRINT

ProductionExports

OTHER PAPER AND PAPER BOARD

ProductionExports

TABLE 3 1. - FOREST PPODUCTS: WORLD PRODUCTION AND TRADE

increased by one eighth and those of broadleavedlogs by as much as 40 percent, although theyfailed to reach the 1955 peak. North Americanexports of most roundwood assortments showedan increase of between 5 asid 7 percent. TheU. S.S. R. al.so expanded roundwood exports, by 14percent for pitprops and by nearly 20 percent forpulpwood, while there was a notable increase in.U. S. S. R. exports of softwood logs to some FarEastern countries. African rounclwood exportsincreased in 1959, exports of broadleaved logsexpanding by more than Io percent. Trade inroundwood in the Far East, the Near East and LatinAinerica showed little change as against 1958,although in the latter region the reduced importdemand in Argentina affected exports from Brazil,Chile asid particularly Paraguay. With the nota-ble exception of pitprops and some medium a.ndlow grade temperate hardwoods, prices of inostroundwood assortments were firm or even in-creased in 1959.

Tlae Unproved economic situation is expectedto bring an ever greater demand for forest prod-ucts in 1960. The inedium-term outlook seems

96

' including fuelwood. - Logs, pulpwood, pitprops, fuelwood, poles, pilings and posts.

1 658 1 66326.6 27.3


to be very favorable, in particular for raw mate-rials for pulping and for wood-based materials(plywood and veneers, fibreboard asid particleboard). Many forest industries have recently beenacquiring their own forest areas in order to ensurethe availability of roundwood supplies at lowprices to meet the rapidly growing deinand forforest products.

Sawnwood

With an additional output of 8 million cubicmeters in 1959, the production of sawnwood ex-ceeded the 300 million cubic meters mark for thefirst time. The increase can be largely traced toincreased construction, which absorbs about 70percent of the sawnwood consumed in NorthAmerica and Europe.

In North America, where the output of sawn-wood had dropped by nearly io percent in 1957/58and not shown any recovery in 1958/59, pro-duction rose by about 5 percent for softwood and7 percent for hardwood in 1959/60. Higher con-

Million cubic meters

ROUND WOOD

Production 'Exports

S AWNWOOD

ProductionExports

294.2 289.6 295.0

42.4 46.66.9 7.6

10.4 11.26.2 6.6

41.0 45.72.8 3.2

1953 1954 1955 1956 1957

1 552 1 601

21.3 27.0

274.5 296.332.1 35.7

9.0 10.80.8 1.0

;netric tons

49.87.8

12.07.0

48.03.2

1 66425.5

1 47018.4

267.028.7

8.30.5

33.1

13.01 .1

31.8 33.9

11.3 11.80.9 1.1

1 67026.0

303.034.4

14.11.2

39.1

6.0

9.86.0

38.62.3

51.77.9

12.66.9

52.03.7

50.27.7

12.16.8

50.53.5

50.37.8

12.36.9

49.33.6

suniption and demand for sawn softwood in 1959in almost the whole of Europe, however, have notbrought about a comparable over-all increase inproduction, which declined slightly, mainly onaccount of a fall. in Svveden and somewhat reducedproduction in. other Western European exportingcountries and in Eastern Europe. Following thedecline in demand in 1958, fellings in Finlandand Sweden were on a reduced scale, thus prevent-ing mills from expanding production when demandimproved in 1959. In Eastern Europe, the reducedfelling programs are reflected in soft sawnwoodproduction. In importing European countries,however, production has generally increased inline with the greater demand. For sawn hard-wood, there was little change in the Western Eu-ropean market, but in Eastern Europe productionincreased to compensate for the lower suppliesof sawn softwood. In Latin America, Oceaniaand the Near East, changes in sawnwood productionwere small in 1959, but production in Africa andthe Far East rose by about -to percent. The rate ofexpansion of U. S. S. R. sawnwood productionslackened somewhat, although there was still anincrease of around 5 percent in 1959.

The long-term decline in the per caput con-sumption of sawnwood continued in North Amer-ica and Europe, although in North America thechanges in price relationship between sawnwoodand competing materials have generally favoredsawnwood. since 1950, except for the year justpast. The expansion of 4 percen.t on internationalsawnwood trade was slightly higher than inproduction. The U. S. S. R. increased exportsof sawn softyvood in 1959 by almost 25 percentand North America and Europe by about 15 per-cent, though much of the increase in European ex-ports was met by drawing on the substantial stocksheld over from 1958. However, Canadian exportsto Europe fell in 1959 by 23 percent, partly be-cause of the strike on the West Coast, and partlybecause of difficulties in competing with lowerpriced European -wood. The prices of sawnwoodwere generally firm or advanced. In the UnitedStates the wholesale price for lumber rose sharplyby 12 percent between April 1958 and June 1959,in contrast to most competing materials.

Although sawnwood consumption has notkept pace with population increase, and in somecountries there was recently a decline in construc-tion activity, on the whole it appears that 1960will be no less favorable than 1959.

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Woodpulp

The steady postwar increase in woodpulp pro-duction, which was halted for the first time in1958, was resumed in 1959 with a new recordproduction of nearly 52 million tons. In NorthAmerica, the leading producing region, produc-tion increased by about 7 percent in 1959. InCallada, however, the production of dissolvingpulp for chemical conversion declined, reflect-ing the continued weakness of the dissolving pulpmarket for textiles. In Europe pulp productionfollowed the rise in demand for paper and paper-board; the expansion was most marked for mechan-ical pulp, as a result of the revival in the consump-don of newsprint. Demand for paper pulp wasmore lively in most importing countries. In thedissolving pulp sector, the recent recovery in theproduction of artificial fibers brought an improve-m.ent. In other regions, although new capaci-ties have been added and existing capacities betterused, the increases in production have been rela-tively small, except in the Far East and the U.S.S.R.

International trade in pulp was brisker in 1959.Shipments from Western Europe, the world'slargest exporter, which liad remained station-ary in 1958, rose sharply, with a striking increasein exports to the United States and. Latin America.With further substantial increases expected in theconsmnption of paper products, pulp productionand consumption should continue to expandrapidly in the coming years.

Newsprint

With an output of 12.6 million tons, worldnewsprint production resumed the upward trendinterrupted in 1958 and increased by 4 percentto set an all-time record. The greatest expansionwas in North America, where United States pro-duction increased by 12 percent. Even this ex-pansion, however, was not enough to keep pacewith consumption, and at the end of 1959 NorthAmerican stocks liad declined by 2.3 percent.The production rate, which in Canada, the world'slargest producer of newsprint, was only 83.6 per-cent in July 1959, improved steadily in the latterhalf of the -y-ear, reaching 92 percent of rated ca-pacity in November. Also in Western Europe,where newsprint production liad been particularlyhard hit in 1958, a very marked recovery was

achieved, although production was somewhatahead of the increase in consumption. Increasesalso took place in the other regions of the world,where demand is rising rapidly and many countriesare confronted with growing difficulties in meet-ing it.

Foreign trade in newsprint was hi 1__per _n 1959than the previous year. The market situation fornewsprint has been favorable in the first halfof 1960, and with growin.g population and greatadvances in literacy, medium and long-term pros-pects also appear to be good.

Other paper and board

The increase in 1959 in the production of otherpaper and board was about 3 percent for the worldas a whole. Because these products are widelyused, consumption rather closely parallels generaleconomic trends. In the United States productionin 1959 was only slightly belo-w the historic long-term trend line. As an indirect effect of the steelstrike, production leveled off in 1959, especially forpaperboard and coarse paper which are used forpackaging the parts and finished products of thesteel industries. Because of keen competition, th.eindustry intensified research to improve qualityand to develop new products and uses, and thetrend toward vertical and horizontal integrationcontinued. Particularly significant has been theintegration of pu.lp and paper mills with sawnwoodand plywood. firms. Many companies expandedinto converting operations, especially in the fieldof containers and packaging. The United States

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industry also showed a rapidly growing interestin investment in overseas mills or joint ventureswith foreign companies; the Common Marketin Europe and similar developments in Central andSouth America have encouraged this trend.

In Europe, where the slowd.own in activity in1958 was less marked than for newsprint, the pro-duction of paper other than newsprint and paperboard regained the momentum which liad beentemporarily checked by the lull in over-all indus-trial expansion, though the increase in productionwas also less marked than for newsprint. Stocksare at relatively low levels and merchants relyheavily upon prompt mili deliveries to meet pend-ing market needs. In the other regions of the worldalso, some advances in production were achievedin 1959.

The renewed expansion of the economy ingeneral and the rise in consumption led naturallyto an increase in trade, but smaller Western Eu-ropean purchases were being made from NorthAmerica, and Western European deliveries alsodeclined except those to the Western Hemisphere(mainly Latin America).

Consumption and demand are likely to continueto grow during 1960, and in North America it isexpected that mills will operate at about 95 per-cent of capacity, as against 90 percent in 1959. Inthe longer run, the growing product diversification is expected to bring greater operating economiesand production stability in times when the demandfor specific prod.ucts may fluctuate. With the de-velopment of new products, the inroads made bycompeting materials in recent years should becomeless pronounced.

Chapter III - PROGRA.:- NG FOR AGRICULTURAL DEVELOPMENT

This chapter reviews procedures and methodsof agricultural programing, in the context of generaleconomic development, mainly as they affecteconomically less developed countries. in thesecountries the growth of population is often rapid.Agriculture is usually the mainstay of the economyand also the sector where povertyis most acute.Levels of food consumption are relatively low;there is great need for nutritional improvement,while a small increase in per caput incomes gives riseto a much sharper increase in the demand for foodthan in wealthier countries. Finally, many lessdeveloped countries have a special need to expandagricultural exports or to reduce agricultural im-ports to increase the foreign exchange availablefor the import of capital goods. For all these reasonsthe desirable rate of expansion of the agriculturaloutput, though less than that of the nonfarmsector, is appreciably greater in the less developedthan in most of the more industrialized countries.On the other hand, many of the resources neededfor agricultural expansion are much less abundant.Agricultural programing, to make full use of theresources available, has thus a particularly importantrole to play in countries at an early stage of economicdevelopnient.

The chapter is intended to put into broadperspective the main problems of establishingagricultural development policies and programs.Throughout, it draws extensively on the experiencegained by FAO in providing teclinical assistanceto member governments in many parts of the worldin formulating and implementing agricultural de-velopment plans. It draws also on the extensiveexchange of information and experience in manyconferences and meetings on the economic andtechnrcal problems of agricultural planning anddevelopment. It is hoped that the review will beof help to member governments, particularlythose in the early stages of agricultural d.evelopment.

With this in mnd., the chapter has been draftedfrom the severey practical point of view that eco-nomic and agricultural planning is a barren exercisewiless the plans can be translated froin the blue-

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print imito reality. Much of the chapter is thereforeconcerned vvith the choice of methods of imple-menting agricultural development policies andprograms which have good prospects of beingput imito effect. It takes into accourit not onlyfinancial and economic feasibility. The practica-bility of an agricultural development project orpolicy depends no less on the capacities of thecrovernment and other administrative resourcesdealing with agriculture, especially the field organ-ization at the local level. Most important of all,it d.epends on the possibility of enlisting the co-operation of the multitude of farmers, whose actionsfilially determine the success or failure of any planof agricultural development. For it is to be stressedthat, like other entrepreneurs, the owners andtenant farmers and cultivators who account forthe bulk of the agricultural production in mostcountries, economically developed or otherwise,are unlikely to make the additional efforts or takethe risks involved in expanding their output onthe lines laid out in a national development programunless they themselves expect to benefit by doing so.

A review of postwar experience in less developedcountries suggests, indeed, that the chief hindrancesto agricultural development may not al.ways havebeen the over-all shortage of government financialresources, or the inadequacy of the share of theseresources devoted to agriculture. In many casesagricultural programs in less developed countrieshave not led to the results hoped for because :

governments did not llave the administrativeand field organization needed to make theirpolicies and programs effective at the farm.level;

a great many of the farmers liad no particularincentives to increase their production becauseof the local economic and institutional conditionswith which they were faced.

Much stress has therefore been laid on theimportance of having enough objective informationon the actual situation of farmers and their day-to-day problems as a basis for judging their probable

reactions to the policies and projects und.er con-sideration for implementing agricultural develop-ment programs. For in many less developed coun-tries the degree of success achieved often largelydepends on finding ways of reducing, or of circum-venting, the institutional and other obstacles whichprevent farmers from expanding their output moreor less in line with the growth of market demand.

Consideration is given equally to the morepositive aspect of making widely available to farmerstechnical services, production requisites and, to theextent possible, economic and other incentives toincreased production which will be effective withinthe agricultural framework of the country. In thisrespect, however, the possibilities in less developedcountries are necessarily limited. Agriculture isusually the largest sector of the economy and mustoften provide much of the investment and otherresources for industrialization. In these circum-stances there can be no question of giving the eX-tensive financial and other assistance to agriculturefrom other sectors of the economy which hasbecome fairly common in industrialized countries.

The general outline of the chapter may bebriefly indicated. After a review of the scope andmain objective of agricultural plans and policiesin countries at different stages of economic develop-ment, consideration is given in the next section tosome of th.e special problems of agricultural pro-graming which differentiate it from planning forother sectors of the economy. These problemsstem mainly from the biological nature of agricul-tural production, from the characteristically small-scale and dispersed nature of the productive units,and from the special importance of traditionalinstitutions and customs; they affect considerablythe applicability to agriculture of the usual tech-niques of development planning. This sectionconcludes with a brief review of the types of plan-ning organization which have emerged in differentcountries.

The third section is concerned with problemsof target setting and discusses methods of estimatingthe growth of demand for agricultural products

Scope, objectives and special problems

During the past two decades, national planningfor general economic development, and for agri-cultural development as one sector of the over-allplan, has become widespread. Many countries,

for domestic consumption and on world markets,means of establishing tentative prod.uction targets,and finally of making first estimates of the re-sources required to implement them.

It is stressed, however, that an estimate of thephysical inputs required is not enough since inacrriculture, more than in most sectors, there areusually many alternative combinations of measuresfor securing the output desired. Moreover, thechoice of measures must depend largely on naturalfactors of climate and soil and on the economic andinstitutional circumstances of the country. In turn,the choice of measures of implementation pro-foundly affect the nature and magnitude of theresources required. The fourth section of the chapteris therefore devoted mainly to a discussion of insti-tutional and economic factors and their bearing onthe most appropriate methods of implementation.Finally, a fifth section discusses the problems ofallocating resources for agricultural developmentin the light of the foregoing discussion.

To conclude this general introduction, a wordmay be added on the relation of agricultural devel-opment in less developed countries to over-alleconomic development. In nearly all countries,economic development is characterized by a grad-ual decline in the percentage of the populationproviding food and raw materials, and a gradualincrease in the percentage producing manufacturedgoods and also services, for both of which there isa rapid increase in demand as levels of living rise.It is in the nature of economic development thatthe rate of growth of the nonagricultural sector,and consequently of the economy as a whole, isnormally greater than that of the agricultural sector.Indeed, the faster growth of the nonagriculturalsector, and thus of the urban market, is usuallythe main stimulus to higher agricultural productiv-ity and incomes. But, as emphasized in The stateof _Pod and agriculture 1959, any failure of agri-cultural output to expand rapidly enough to meetgrowing needs will set up serious stresses in theeconomy and thus retard the pace of economicdevelopment as a whole.

of planning for agricultural development

both economically developed and less developed,established some form of operational planning tomobilize their resources and to minimize civilianhardships during the Second World. War. Sub-

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sequently this machinery was adapted to the pur-poses of casing postwar readjustments. Once theinitial phase of readjustment was over, however,most countries found it possible to make greateruse of market forces and to adopt more flexiblemethods of planning.

In many of the more developed countries, acurrent objective of planning is to replace the alter-nation of depression and prosperity, which hadbeen characteristic of the interwar period, withsteadier economic growth more oriented towardthe general welfare. Many of these countries nowhave some form of national resource budgeting, ofperspective planning, or of some type of planningfor key sectors or particular regions, the latter oftenconcerned with the welfare of the poorer arcas inthese countries.

In the last decade or so, the promotion ofeconomic development has become a main policyobjective in most of the less developed countries,and they have resorted increasingly to some formof planning to this end. Many Asian countrieshave formulated in recent years economic develop-ment plans, some of which are of a more or lesscomprehensive nature. In Africa, developmentplanning has also been widely adopted, though asa rule it is still in the nature of collections of develop-ment projects with perhaps some indications ofpriorities. Government encouragement of econom-ic development in Latin America has tended tobe more piecemeal; however, long-term perspectiveplans have been established for a number of coun-tries, some of which were formulated in co-opera-tion with, e.g., the United Nations EconomicCommission for Latin America or the InternationalBank for Reconstruction and Development, oftenwith assistance from FAO for the agriculturalsector.

The widespread adoption of development plan-ning suggests that it is expected to bring real bene-fits in terms of inaximizing production and generalwelfare. Wisely publicized, a plan may indeed behelpful in getting public support for the austeritiesand delayed general benefits that are usually en-tailed by economic development programs. Therellave been cases where the formulation of an eco-nomic plan has been primarily a pledge to theelectorate of better days to come, with little realprospect of implementation in the forsecable fu-ture. In a few others, plans appear to have beendevised largely in support of requests for externalassistance. Even so, where the plan has been co-

herent, whether adopted officially or publishedunofficially on the responsibility of, or in agree-ment with, an agency of the government, it hasoften been of value in providing guide posts topolicies.

The scope and nature of planning naturallyvaries a good deal from country to country inaccordance with the political philosophy of thegovernment and the administrative, physical, fi-nancial and other resources available to it. Eachcountry appears to be in a continuous process oflearning, usually by trial and error, the type andextent of planning suited to its own circumstancesand stage of development. Just wh.at constitutes adevelopment plan, and where the border lies be-tween financial budgeting and economic pl.anning,is not cicar-cut and may be endlessly debated.

Some plans consist simply of a bundle of phys-ical projects to be undertaken during a plan period.Others include all projected expenditures by govern-ments on various aspects of development. Stillothers consist of forecasts of a number of economicaggregates, such as the national product in majorsectors, the balance of foreign payments and thedistribution of resources between consumption andsavings. They usually attempt to give a coherentpicture of the economy at the beginning and endof the plan, or in a series of years, and are intendedprimarily as an indication of intentions or ofbroad lines of policy. Other plans consist of a moreor less detailed series of projected investment in-puts and commodity and other outputs. Othersagain combine aggregate national projections withdetailed budgets of public investment. These andother alternatives, singly or in combination, are tobe found in different countries.

One recent definition' suggests that the `` essen-tial components of a development program are:

a stateinent of the general aims and objectivesof the govermnent,

a statement of more precise and quantitativetargets,

a statement of the structure of the economy,recent trends, and broad lines of development,

balance sheets and tests of feasibility,

Problems concerning techniques ami development programming

in African countries: United Nations Economic Commissionfor Africa, December 1959; definition based on earlier sugges-tions by H. B. Chenery and J. Tinbergen.

a public expenditure program,

details of major projects,

explanation of the policies and measures bywhich the government proposes to achieve itsaims.

Probably few national plans would fulfill allthese criteria. For example, many governmentplans, especially in the economically more advancedcountries, do not specify over-all or sectoral targets.Even if established, such targets are often intendedonly as indications of general aims. In countries atan early stage of economic development, with fewexperienced adininistrators, it may be possible toimplement little more than a co-ordinated programof public expenditure devised in line with a broadstatement of objectives. Many countries have notyet been able to work out physical balance sheetsand tests of feasibility, or for that matter statementsof the policies and measures proposed to achievetheir objectives. The present chapter, however,deals both with relatively detailed developmentplans and also with less precisely formulated plans,for which a better term might be operational policiesfor development.

Some further characteristics of national develop-ment plans may be briefly noted. The duration ofdevelopment plans shows less variations than theirscope. As a rule, operational plans extend overthree to six years, occasionally up to ten years,but these are often combined with annual revisions,and sometimes with long-term " perspectiveplans extending over twenty or more years. Prob-lems of timing and of periodic plan revision arediscussed later in connexion with plan organization.

In large countries, especially those with a federalstructure, it is often considered desirable to developseparate plans for individual states or provinces.Regional plans within the national plan may alsobe of value for areas with special characteristics,e.g., mountainous areas as in Peru; arid arcas asin Tunisia and northern Brazil; natural geographicareas, such as river basins as in the UnitedStates; or areas where economic development haslagged behind the rest of the country, as the southof Italy. Where resources are very limited it maybe expedient to concentrate a large share on areaswhere returns are likely to be greatest. Plans forgeneral or for particular forms of development inselected arcas of a country, large enough to formami economic unit, may be useful to allow experi-mentation.

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It is sometimes suggested that planning is littlemore than a meaningless rite in countries lacking basiceconomic and statistical data on such things as thesize, growth and occupational distribution of popu-lation, or of the national product and the productof the agricultural and other key sectors. Certainly,such information provides time sinews of planning.But even in countries where such data are in-complete, the co-ordination of publ.ic investmentprojects and the preparation of limited plans ofpublic investment in terms of monetary expenditure,foreign exchange requirements, skilled manpower,raw materials, etc., may prevent some disturbingimbalances and help to obtain greater results fromthe resources used. Then, as experience and in-formation accumulate, it may be found useful toenlarge the area of planning. Later in this chaptersome suggestions are made of economic indicatorswhich can be helpful in countries where moredetailed data are lacking. But even in the mostdeveloped countries many assumptions and in-formed guesses must be made in the process ofplanning. These are useful and justified as long asthey are recognized as such, while steps may betaken subsequently to check and revise them onthe basis of more complete information. Butplans are by their nature tentative, at least to someextent, and almost always are found to need re-vision in the light of changing circumstances beyondthe powers of government to bresee or control.While lack of reasonably complete basic data cer-tainly hampers and restricts the arca of planning,this lack alone does not appear to justify an attitudethat no planning can be done.

Another objection sometimes raised is thatafter the technical aspects of planning have beencompleted, final decisions still depend mainly onjudgment and may often be warped by politicalor other pressures. Even so, comparable dataassembled for planning makes possible more in-formed and objective judgments based more se-curely on a knowledge of the problems involved,especially if data for al.temative projects and meas-ures can be exainined side by side. Such informa-tion can also be useful in helping the governmentto resist undue pressure from groups representingspecial areas or industries. Furthermore, if forsocial or other reasons one project is selected inpreference to another which appears more econom-ic, at least it is done with a fuller knowledge ofthe economic sacrifice that may be involved.

However simple or elaborate the form of plan-

ning, it can contribute to faster and more orderlyprogress toward a country's econonaic and socialobjectives to the extent that it:

provides a clearer picture of the operation of acountry's economy;

results in greater mutual consistency of develop-ment policies and programs;

results in greater continuity of effort towardachieving the objectives;

gives advance warning of approaching short-ages of scarce resources, e.g., foreign exchange,skilled manpower, etc. (or, alternatively, ofpossible surpluses), in time to permit appropriateadjustnaents of programs and policies; and

results in more efficient use of available re-sources, including those which would other-wise lie idle.

BROAD OBJECTIVES OF AGRICULTURAL PLANS ANDPOLICIES

The basic purpose of development planning,sometimes implicit rather than stated, is to promotehuman welfare and growth. Increase of nationalincome or of the rate of economic growth is themeans to this end. Within this broad aim thereare always more specific objectives, e.g., to max-imize employment, to diversify the economy, orto deal with problems of foreign payments. Tothese may be added many other objectives whichare partly economic, partly social. Thus, theIndian five-year plans have given attention to thesocial and economic improvement of the " back-ward classes, the development plan of Ghanareferred specifically to provision of free primaryeducation throughout the country, while theItalian Vanoni plan stipulated a reduction in in-come disparities between the North and the Southas one of its basic objectives. At times there isinevitably some conflict between objectives, al-though this is more characteristic of the short thanthe long term. For example, the desire for quickreturns may run counter to a policy of conserva-tion of natural resources; a desire to increase invest-ment to permit higher consumption levels inthe future limits increases in present consumption.

The shorter the planning period, the more dif-fuse the objectives are likely to be, and the greaterthe importance attached to subsidiary conditions

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which would lead to the attainment of longer-term objectives. For example, the increased uti-lization of an existing irrigation network and theaccelerated training of teachers figured importantlyin the two-year interim plan of Morocco, whilethe main objectives of the first development plansin most African countries were concerned withimproving the infrastructure, notably ports androads. As soon as a longer-term view is taken,however, the isolation of different objectives fromeach other and any conflicts between them recedein importance, and economic and social policyis determined more by their interdependence.

Agriculture usually bulks large in the nationaleconom.y of less developed countries. It is notsurprising therefore that the objectives of agricul-tural plans as a rule reflect rather closely the over-alleconomic and social objectives of national plans.Increased agricultural production, in particular ofcertain key commodities, often has a prominentplace. As a minimum, the aim is to meet the basicneeds of a growing population and to avoid in-flationary pressures from unsatisfied demand, with-out an increased dependence on food imports orwith.out having to scale down agricultural exports.But usually the objectives go beyond such a hold-ing operation, and agricultural plans are designedto improve the nutritional status of the population;to produce fibers, forest products and other rawmaterials for an expanding domestic industry; toattain a greater degree of agricultural self-suffi-ciency; or to increase and diversify agriculturalexports, especially when the country is dangerouslydependant on exports of one or two agriculturalproducts.

In more developed countries with relativelyhigh levels of national income, where agricultureis a much smaller sector of the economy, theresometimes appears to be a greater divergence be-tween the objectives of agricultural plans or pol-icies and those for the economy as a whole, usuallyfor social or political motives, including somenarrowing of the gap between income levels inagriculture and urban occupations. Since postwarrecovery was completed, agricultural expansion hasseldom been a primary aim. Indeed, in a numberof countries, of which the United States is onlythe most striking example, much attention has beengiven to preventing the further expansion or evento reducing the output of certain commodities,b,e. a wheat in the United States, milk in the United

Kingdom, wine in France.

Leaving aside for the moment the problem ofincreasing prod.uction or adjusting its pattern,some of the specific objectives of agricultural de-velopment plans and policies are discussed below.

Balance of foreign payments

Although the situation has generally eased inrecent years in the more developed countries,balance-of-payments considerations remain im-portant in the over-all economic policies andplans of most countries of the world. They areoften reflected in a country's agricultural plans andpolicies, particularly those of less developed coun-tries and of countries at higher levels of nationalincome which depend heavily on exports ofagricultural products to cam 'foreign exchange.In more developed countries which import a sub-stantial share of their supplies of foodstuffs, trendstoward greater self-sufficiency largely reflect socialpolicies of maintaining d.omestic farm prices andincomes, but tend to be tempered by the needto expand markets for their manufactured productsin primary producing countries.

In the last decade, foreign exchange savingsand earnings have played an increasingly domin.antrole in shaping the agricultural plans and policiesof many less developed. countries. This reflectsboth their desire to conserve their foreign exchangereceipts for the import of goods required for eco-nomic development which they cannot producethemselves, as well as their need for larger andmore stable earnings of foreign exch.ange to fosterdevelopment.

For example, a primary objective of Pakistan'ssecond five-year plan is self-sufficiency in foodgrains, and India's th.ird five-year plan will em-phasize the same goal. Brazil, Ceylon and theEgyptian Region of the United Arab Republicare still other examples of the large number ofcountries attaching m.uch importance to reducingtheir dependence on imported food grains, in someways the most characteristic case of improvingthe balance-of-payments situation by substitutionof domestic production for imports. Many coun-tries also aim at producing other agricultural prod-ucts at present largely imported, with the dualobjective of import substitution and diversi-fication of their agriculture. These products ofteninclude the fibers, forest products and other rawmaterials needed by an expanding domestic in-dustry. Thus India and Taiwan have made them-

104

selves virtually self-sufficient in jute, while Chile,Ethiopia, Iran, Sudan, Thailand and many othercountries are promoting the domestic productionof sugar.

When the objective is to expand foreign ex-change earnings, emphasis may be placed not onlyon a cowitry's traditional agricultural exports, butalso on diversification of the commodities exported.The latter is often given special weight in countriesheavily dependent on earnings from only one ortwo agricultural products, since prices on worldmarkets of these are notoriously unstable and largefluctuations in foreign exchange availabilities makeeconomic development difficult. Examples ofexpansion of traditional exports include the earlierpostwar development plans of Burma, whichconcentrated largely on rebuilding its rice exporttrade, while the Federation of Malaya until recentlyhas given attention mainly to improving the efficien-cy and increasing the scale of its rubber exportindustry. Argentina is seeking to rebuild exportsof a range of conunodities from the low level ofthe late 1940's and early 1950's. Examples of thealternative approach of diversifying agriculturalproduction for export include, e.g., cocoa fronithe Federation of Malaya, groundnuts and livestockfrom the Sudan, maize from Thailand.

It is sometimes suggested that the policies ofmany less developed countries of reducing theiragricultural imports and expanding their agricul-tural exports are mutually incompatible and selfdefeating. This may be true where th.e main tradeis in a lim.ited range of agricultural conunoditiesbetween economically less developed countries,e.g., intra-Asian shipments of rice. The agriculturalexports of most less developed countries, ho-wever,are directed mainly toward industrialized countries,while since the war the imports of less developedcountries have come increasingl-y from more in-dustrialized countries. There appears, therefore, tobe no inherent contradiction when less developedcountries seek to expand agricultural exports toindustrial countries and to reserve what foreignexchange they llave to import manufactured andcapital goods from these countries rather than thefoodstuffs which they could produce at home.

Increasing productivity in agríen llore

In industrialized countries much emphasis hasbeen placed in agricultural development policieson increased productivity per man, both to reduce

costs and increase competitive power, and also as ameans of raising the level of farm incomes withoutplacing too great a burden on the rest of the com-munity. Increased productivity per man, however,is also important in less developed countries ifagriculture is to make its full contribution toeconomic development. This is not only necessaryto maintain or improve the competitive positionin regard to other exporters, but even more tomeet the rising domestic demand for agriculturalproducts stenuning from higher incomes and anincreasing population in the face of the steadyfall in the percentage of the population engaged inagriculture which is characteristic of economicarowth.

In less developed countries with a rapidly risingdemand for agricultural products and with littleunused land to bring under cultivation, increasedprod.uctivity per hectare or per livestock unit may bean even more important immediate objective thanincreased output per man, even when the ruralpopulation tends to be underemployed at leastpart of the year. This appears to explain the em-phasis on the increased use of irrigation, of ferti-lizers, of improved seeds, etc., in the agriculturalplans of such countries as Ceylon, India and theUnited Arab Republic. In actual practice measuresto raise output per hectare and per man are oftenthe same, especially in the longer-term.

Some conflict may arise in the case of mechani-zation, which is naturally more readily justified incountries -where labor is expensive relative to thecost of machinery than in those where it is abundantand less expensive. Even in the latter case, however,simple small-scale mechanization of the type beingdeveloped in Japan may prove cheaper than themaintenance of draught animals for occasional use,while mechanization may contribute to higheryields by permitting more timely operations whenthe soil is in the best condition for cultivation or theweather favorable for harvesting. Furthermore,mechanization may result in freeing for other cropsland formerly needed to provide livestock feed.For some operations, e.g., land reclamation, thegreater efficiency of mechanization may be suchas to outweigh other considerations.

increased eniployment

Increasing total employment often finds a placein the economic policies and plans of both moreand less developed countries, but is a major objective

105

more characteristic of industrial than of agricul-tural development. However, in less developedcountries there is commonly, in rural areas, a

large supply of labor which is unemployed orunderemployed during at least part of the yearand cannot yet be absorbed in industry. A majorobjective of development plans may then be touse this labor more productively. Measures may betaken to encourage improvements on cultivators'holdings for which the inain component is labor,e.g., building, the production of compost, orsimple types of farm building, for which there ap-pears to be considerable scope. Alternatively, fullerrural employment can be obtained by fosteringforms of agriculture requiring larger labor inputs,such as double cropping, livestock raising, or hor-ticultural and other intensive crops. The combina-tion of such activities in mixed fanning enterprisescan also do much to even out labor requirementsover the year. Unused rural labor resources mayalso be mobilized by community developmentschemes for agricultural and other projects withinthe village, for local irrigation or soil conservationschemes, tree planting, construction of accessroads, storage facilities, schools, etc. Outside agri-culture, village and home industries on a part- orwhole time basis may be fostered, an objectivewhich has received much attention in, e.g., Indiaand Japan. Finally, projects requiring large amountsof labor may be undertaken outside the localarca for large-scale irrigation projects, road con-struction, etc., which can draw on any reservoir ofunused rural manpower.

Reducing rural and urban income disparities

In. most industrialized countries an increasinglyimportant objective of agricultural plans and pol-icies in the last decade has been the social aim ofpreventing levels of living in agriculture fallingtoo far behind those in other sectors of the economy.This is the case mainly in North American andWestern European countries. It applies much lessin Australia and New Zealand, which as agricul-tural exporting countries must maintain a com-petitive price level. Indeed, national income statisticssuggest that a rough parity of incomes alreadyexists in these two countries. Outside these regions,Japan appears to be the only country with anexplicit policy of raising farmers' incomes nearerto parity with incomes in other occupations. Apartfrom some exceptional cases, such an aim would

indeed. be out of the question in less developedcountries -where a large proportion of nationaloutput comes from agriculture, and where in-dustrial development at least in the early stagesmust perforce be largely financed from the agri-cultural sector. This does not iinply a lack of interestin less developed countries in the level of farmincomes, which are expected to rise as the averagenational income per caput increases. Larger farmincomes are also recognized as important to gen-erate larger markets for developing domesticindustries.

Nutrition

Improved nutrition has tended to become aless prominent objective in the more developedcountries during the past decade, if only because inthese countries malnutrition is now confined to agradu.ally shrinking section in the lowest incomegroups. At the other extreme, countries at anearly stage of economic development can affordto devote very little expenditure to theimprovement of nutritional levels, even thoughthe needs are greatest in these countries. Suppliesof surplus grain, dried niilk and other foods onconcessional terms or as gifts from wealthiercountries have made possible some limited feedingprograms. Such programs, however, provide onlytemporary relief until the deficiencies can be morepermanently overcome by general economic de-velopment. In rural areas a promising approach toraising nutritional levels despite low income levelslies in the dissemination through extension servicesof popularized information on home economicsand nutrition to encourage kitchen-gardening,poultry keeping, etc., for home consumption.Such activities can improve diets with little cashoutlay.

On the whole, it is in countries at the midwaystage of economic development that nutritionalobjectives receive the greatest weight, especiallyin those where governments have a welfare out-look. In such countries there is usually still greatneed for nutritional improvement in the lowerincome groups, and at the same time some publicfunds can be made available for food schemes forvulnerable groups, school feeding, or even con-sumer subsidies. Equally significant, a large partof the population is at an income level where theconsumption of such protective foods as livestockproducts, fruit and vegetables rises sharply with

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a small rise in incomes or reductions in price. Toencourage the production and improve the distri-bution of these foods thus becomes an importantobjective.

Long-term objectives

The objectives so far discussed have been of ashort-term or relatively short-term nature. Butin agriculture, more than in most sectors, long-term projects are of basic importance. Large-scaleprojects of irrigation or land reclamation, givinglittle return for five to ten years, are often essentialto realize a country's agricultural potential. Treecrops such as coffee, coconut, rubber or citrusfruit have a long period of gestation before comingimito full bearing and plans of planting or reha-bilitation must be laid many years ahead. Themain return from afforestation projects may notcome for decades, though the aiting period isbeing reduced by the development of fast growingvarieties. Above all, a fundamental objective of allagricultural development planning should be toavoid all measures tending to `` soil mining," andto conserve the soil and gradually build up itsfertility. Such measures as the afforestation ofhillsides, the encouragement of contour plowing,methods of cultivation which conserve humus, andthe proper allocation of land between arable land,pasture, tree crops and forests, though giving littleimmediate return, may be essential from thisstandpoint.

In short a balanced agricultural plan cannot belimited in its objectives to requirements which canbe foreseen within the next few years. It mustconsider also the longer-term needs of a country,sometimes at the cost of immediate benefits. Forthe soil of a country is its most lasting resource, andif destroyed or depleted over large areas can berestored only at the expense of much money,effort and time.

SPECIAL PROBLEMS OF AGRICULTURAL PLANNING

The difficulties and uncertainties which besetthe initial stages of economic development in allunderdeveloped countries (the low level of educa-tion, the chronic scarcities of skilled labor, mana-gerial ability and capital, administrative weaknesses,institutional obstacles to change, to mention onlya few) may be more effectively dealt with, but

are obviously not removed, by the adoption ofplanning. The wide fluctuations in foreign ex-change receipts, characteristic of countries whoseearnings come mainly from exports of primaryprod.ucts, have a particularly marked effect on thepace of investment, and they may even be aggra-vated when investment programs are heavilydependent on foreign aid, usually granted on anannual basis and subject to political changes abroad.The general practice of annual budgets, howevernecessary for democratic control of the executive,increases further the uncertainties of developmentprograming. Indeed, when planning is first adopt-ed in less developed countries it often takes someyears before affininistrators and the public get usedto the idea of long-term action. The practicesometimes adopted of separating development fromcurrent budgets can seldom do much to reduceinvestment uncertainties, since both budgets areultimately subject to the same economic presiiresfmancial stringencies and administrative control

Such factors are likely to impede the imple-mentation of development programs at least as

much, perhaps more, in agriculture as in othersectors of the economy. Agriculture, for example,is an easy target for budget cuts because some agri-cultural production can always be secured -withoutmajor investment or other action, because anyunfavorable repercussions are likely to be delayed,and because in less developed countries the agri-cultural sector is difficult to organize to resista reduction in agricultural development expenditures.

In addition, however, there are a number ofproblems of programing and its implementationpeculiar to agriculture -which make development inthis sector particularly difficult. Most of thesespring froni three root causes: the biological natureof agricultural production; relatively static insti-tutions and traditions prevalent in agriculture asman's oldest settled occupation but poorly suitedto efficiency in an exchange economy; and thecharacteristically small scale of agricultural pro-duction compared with industrial production..These special difficulties of agriculture are summa-rized below. Their implications for economicplanning and for the implementation of agri-cultural development plans are discussed in latersections, though necessarily in general terms. Todisentangle their relative importance in any con-crete case a full country analysis is indispen -

sable.

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The biological nature of agricultural production

Because of this there can be little control overor even reliable forward estimates of the level ofproduction, which fluctuates widely from year toyear with weather, the incidence of diseases andpests, etc., and is usually highly seasonal. It isdifficult to adjust supply quickly to changes indemand, especially for tree crops and other prod-ucts with a long gestation period. Downwardadjustments of production for most products areparticularly difficult; few farmers can afford toleave their land idle for long, and shifts to othercrops are often difficult. Fluctuations of supply,seasonally and from year to year, also create seriousproblems of storage, finance and marketing.Coupled with the rather low price elasticities ofdemand for most agricultural products, they largelyaccount for the characteristically wide swings ofagricultural prices on both world and domesticmarkets, which add yet another impediment toorderly agricultural development.

Planning is complicated also because the in-trinsic value of land for producing various cropsand livestock products may be variable in evensmall areas owing to differences in soil texture andcomposition, the availability of water, the " lieof the land," etc. When larger areas are considered,differences in climate still further complicate thepicture.

Traditional institutions and customs

These include forms of land tenure which do notafford the cultivator sufficient security of tenure toencourage him to improve his holding and which_often leave him too small a share in any increasedproduction to give him much incentive to make anyadditional effort. They include also marketingsystems long outgrown by rapid urbanization,which may insulate farmers from the stimulus of arapidly expanding market and return to them onlya small part of the price paid by the consumer.These often so attenuate efforts of governments tostabilize farm prices that they lose their intendedeffect of encouraging greater output. The largelysubsistence nature of agriculture in less developedcountries, although an insurance at times of eco-nomic difficulty, still further insulates farmers frommarket forces and makes them less responsive toeconomic incentives. A large element of subsis-

tence farming may also intensify the fluctuations inmarket supplies and prices, since the quantitiesoffered for sale may vary even more widely thanthe total output.

Capital is always scarce in less developed coun-tries, but especially so in agriculture, where returnstend to be slow and uncertain and which, as thelargest economic sector, must often help to financeinvestment in others.

The small scale of production

Even in the economically advanced countriesof North America, Western Europe and Oceaniathe typical farm is a family enterprise or oneemploying only a few hired workers. The smallscale of most farms applies still more in economicallyless developed countries. Even though in suchcountries there is often a concentration of landownership in a relatively few hands, this land isusually subdivided into small holdings farmed bytenants who make most of the decisions and ex-penditures affecting production, with little parti-cipation or assistance from the landlord. Apartfrom the collective and state farms of socializedcountries, large-scale centrally managed enter-prises in agriculture, employing a substantial laborforce, llave emerged chiefly for export products,e.g., the estancias of Argentina, the rubber planta-tions of the Federation of Malaya or the tea planta-tions of India.

The difficulties of agricultural programing anddevelopment arising from the dispersion of pro-duction over a multitude of small enterprises areeasily formulated, though by no means easilyovercome. Fa: example, the statistical and otherinformation useful for planning is obviously muchharder to obtain for i million farms than for toomines or a few large steel mills; it takes longer toassemble, is usually less accurate, and can be checkedonly by its internal consistency or by expensivefield observations. Even more important, it isdifficult to influence the production of large num-bers of independent farmers in the directions en-visaged in a plan than that of a much smaller num-ber of mines or factories, or to judge in advance thelikely effect of any measures proposed for doing so.Again, the dispersed nature of production meansthat many measures can be carried through suc-cessfully only with the aid of an extensive localorganization; where this does not yet exist resort

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must be had to indirect methods of more doubtfuleffectiveness.

Some other difficulties arising from the dispersedand small-scale nature of production may he noted.It makes the assembly of agricultural products forthe domestic or export market difficult and ex-pensive. Ordinary financial institutions are re-luctant to give credit to small farmers. Thesefactors may be partly offset by the greater interestof small entrepreneurs, as compared with wageearners, in maximizing their incomes throughhigher productivity.

An effective agricultural plan in most lessdeveloped countries must either be designed tooperate within the limits imposed by these disa-bilities, or (more hopefully) include measures toovercome them by co-operative or other or-ganization.

Most of the special problems of agriculturalprograming and its implementation mentionedabove occur in nearly all less developed countries.Many apply in economically more advanced coun-tries as well. But they are most acute and theirsolution is most difficult where the density of thefarm population is high in relation to the landavailable, as for example in many countries ofSoutheast Asia, in the Egyptian Recrion of theUnited Arab Republic and in many Caribbeanislands. These are not ordy the regions where farmsare smallest and often highly fragmented, butusually also the areas where the weight of tradi-tional institutions and customs lies heaviest. It isin these circumstances that the worst rural povertyis usually found, especially among tenant farmers,and still more among the landless laborers whoearn a precarious livelihood by working for apittance on neighbors' farms, mainly at times ofpeak farm activity.

ORGANIZATION FOR PLANNING

The type of organization for economic (in-cluding agricultural) planning naturally dependson the traditions, the governmental setup, andother special circumstances of the country con-cerned. But provision normally has to be made,however simple or elaborate the form of planning,for action at three levels:

T. Determination of broad policies, such as themain objectives of development and of the

plan, the over-all level of investment, thebalance between different sectors of the econ-omy, etc.

2. The more technical aspects of planning, includ-ing the analysis, comparison and co-ordinationof proposed development projects and programs,reviews of trends and prospects on worldmarkets for those commodities of hriportanceto the country, formulation of targets of pro-duction, etc.

3 . After the plan has been finalized, implementa-tion of the individual projects and programswhich make up the plan.

The rnain point: for emphasis here is the greatimportance of close consultation and co-ordinationat all stages and levels if economic planning anddevelopment is to be coherent and effective. Aplan for one sector, such as agriculture, indeedbecomes fully meaningful only within the frame-work of an over-all plan. Most countries nowentrust policy direction to a ministerial council,often under the chairmanship of the prime minister(sometimes of the finance minister or a specialminister for economic development), in order tosecure co-ordination and to resolve departmentaldifferences. Members of the legislature (as in thePhilippines) and the chief ministers of provinces(as in India and Pakistan) may also be representedon national planning councils. In countries with afederal structure, similar policy co-ordinating bodiesat the state or provincial level llave also been founduseful.

The policy council is usually serviced by acentral planning secretariat or commission, whichhas the responsibility for elaborating a draft na-tional plan for consideration by the policy council,and for liaison with the agricultural and otherfunctional departments, provincial or local govern-ment units, private organizations of farmers andbusinessmen, the central bank, etc. The draftplan may be drawn up by the central secretariatfrom plans for the various sectors prepared by thesedepartments and other organizations, usually on the

'2' The central planning conunission is usually located inthe prime minister's office, or in the department of anotherminister who may be chairman of the policy council. In somecountries, central banks or other institutions outside the regu-lar machinery of govcriuncnt also play an important part inplanning.

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basis of broad policy directives. .Alternatively, afirst outline of tlac plan may be worked out cen-trally anci sent to the functional agencies for cona-ment and amplification. Machinery for jointplanning, or at least close consultation with stateand provincial governments, is often considereddesirable in countries with a federal form of Cr.,0V-

eminent. Day-to-day liaison may be providedthrough the central planning secretariat, or some-times (as in India) through both the central plan-ning body and the functional departments. Al-though they add to the complexity of the planningorganization, such arrangements tend to make forinore effective planning.

Yet another approach, aimed at making na-tional plans more responsive to the needs, aspirationsand abilities of local communities, is for the plan-ning process to be initiated by the preparation ofprovisional plans at the local level. The first ten-tative national plan could then be formulated byaggregating the local plans, with such adjustmentsas are needed to match domestic supplies to demand,to protect the balance of foreign payments, to takeinto account trends in world markets, etc.

Ultimately it is perhaps less important whetherplanning starts centrally, functionally or regionally,as long as each of these aspects is taken into account,and adequate co-ordination between them secured.For whatever the administrative setup, experiencesuggests that a consistent and well-based develop-ment plan can best be established as a combinedeffort of all the agencies and interests involved.Conversely, lack of full consultation appears to beone of the most common causes of ineffectiveplanning. But equally, unless the policy counciland the central planning secretariat are in a positionto prevent the formulation of the plan from beingbogged down in inclusive interdepartmental discus-sions, there is a danger of delay and a waste of thetime of administrative talent, usually a very scarceresource in less developed countries.

To recapitulate, provision for regular consulta-tions seems highly desirable during the process offormulating a development plan:

between the policy council and the centralplanning secretariat, to ensure that time is notlost in elaboratin.g proposals which the govern-ment considers politically impracticable;

between the central and any regional and localplanning bodies so that local conditions andsentiments are taken into account;

(c) between the central planning secretariat andthe agencies responsible for developing andimplementing plan.s in agriculture, to ensure sofar as possible that proposals are feasible fromthe financial, technical and organizational pointsof view.

Some planning organization -within the depart-ments dealing with agriculture is also usually desir-able for internal co-ordination (e.g., between cropproduction, livestock production, irrigation, ex-tension services and other divisions) and for a pe-riodic review of progress in implementing the plan.This organization may be no more than an ad hoc

or standing committee," though as planning be-comes more complex a small planning staff withinthe department is often found useful. A depart-mental planning committee can arrange for regularconsultations with the technical staff of the depart-ment and outside experts, e.g., through a systemof subcommittees, so that technical possibilities aretaken fully into account. These may well includenutritionists and specialists in marketing and pro-cessing, no less than specialists in the various aspectsof production. Similar consultations with repre-sentatives of the processing and distributive trades,of consumers, and of agricultural co-operative or-ganizations where they exist can also be of con-siderable value.

In most of the more developed countries muchimportance is attach.ed to consultations with pro-ducers' organizations during the establishment andimplementation of plans. The usual lack of or-ganization of agricultural producers in less developedcountries often makes this difficult or impracticable.As an alternative, representative farmers might beconsulted on the provisional development plans andthe ways in which. it is proposed to implement them.Implementation of an agricultural development plandepends ultimately on the efforts made and riskstaken by large numbers of farmers, and unlesstheir co-operation is secured no great degree ofsuccess can be expected. (Experience in the lastfew decades suggests that this is true even in coun-tries with a high degree of detailed planning by thecentral government for local districts and units.)Methods of obtaining more complete factual in-formation on the situation and day-to-dav prob-

3 For a better understanding of conunon problems it is

often found helpful for the central planning secretariat lo berepresented on such a committee.

terns of farmers and cultivators for use in agricul-tural planning are discussed more fully in a latersection of the chapter.

One further type of organization may be men-tioned. Because existing ministries liad been de-sig-ned for other purposes and were often hamperedby administrative traditions, many less developedcountries have established more or less autonomousdevelopment commissions during the postwar dec-ade (Iran, Iraq, United Arab Republic, and severalLatin American countries). Some were given wideterms of reference to plan and implement develop-ment projects over a fairly -wide field, while otherswere established for small subsectors to promote theproduction and marketing of single commodities.For example, several public and semipublic organi-zations have been established in African countriesto control the marketing of specific crops, prima-rily of export crops.

While many of these commissions have beeneffective, in other cases the difficulties of workingwith parallel and long-established ministries haveproved a handicap. In many instances, too, diver-gencies have arisen between the policies of thedevelopment agency and of time government. Wherean autonomous development agency is used., ade-quate consultations are especially important inorder to co-ordinate the agencies' policies and meas-ures of implementation with over-all policies, andto maintain harmonious working relations withother organizations working in closely relatedfields. There appears to have been some tendencyin the last few years, however, to return to estab-lished ministries for planning and development,especially in Near Eastern countries.

Time elements

In recent years there has been an increasing ten-dency to plan simultaneously for agricultural de-velopment over three different time periods. Somecountries have felt the need for a long look aheadto lay out the broad lines of agricultural develop-ment for the next two or three decades so thatlong-term objectives are not lost sight of in for-mulating shorter-term development plans. Sucha period is of course too long for planning actionprograms, and most countries have chosen a shorterperiod, usually of from three to six years, for theiroperational plans. Even during this operationalperiod, however, there are very often imforeseenchanges in external or doniestic circumstances which

may call for adjustments in the plan, especiallyin less developed. countries. Some countries tryto secure flexibility by a series of rolling plans;i.e., a plan is newly established each year or two forthe succeeding four- or five-year period. Planningprocedures of this type have been used in, e.g.,South Korea, the Philippines, Burma, Nyasa-land, and Rhodesia. The more common method,however, is to undertake an annual review in orderto check the progress achieved in reaching targetsand the resources still expected to be available, andto make necessary adjustments for the remainderof the plan period.

In long-term projections or " perspective plans,"targets may be only vaguely operational. Thoughthe relevant orders of magnitude are usually given,such projections are meant more as indications ofwhat future trends of output would be called for,given an assumed increase in population and a desir-able rise in income per caput. Nevertheless, ifthey are to have any significance, the various mag-nitudes must be consistent among themselves and

Economic objectives under a plan, as distinctfrom projections of what may be expected under thenormal growth of the economy, can be reached onlyby devising particular policies and measures whichwill make their achievement possible. The selec-tion of these policies and measures, as an essentialpart of the planning process, is discussed below inthe sections entitled " The Choice of Means toImplement Prod.uction Targets and " The Areaof Choice." In many cases, however, a valuableintermediate stage is to establish a consistentseries of targets or goals to bring out theinterrelationships between the different parts ofthe plan, as a quantitative expression of the ob-jectives and of what is needed to achieve them, oras yard.sticks to estimate the success of particularpolici.es or measures.

Many kinds of targets are used in agriculturalplanning. At the early stage of planning, targetsmay be confin.ed to such things as the number ofsmall irrigation wells to be dug, the quantities ofimproved seeds or fertilizers to be distributed, orthe area of land to be reclaimed within the periodof the plan, together with estimates of the materials

The establishment of agricultural targets

1 I L

fall within the realm of what seems possible interms of finance, organization and manpower.While perspective plans need not be very detailed,they should still be detailed enough to permitbroad conclusions to be drawn on the relativebalance between different sectors of the economy,and to point up the danger of some imbalances andthe inevitability, and perhaps the creative impact,of others. They may also show up deficiencieswhich, though not felt at present, could have aserious impact in years to come, for instance ineducation. In that case, steps may have to be takenat once to develop the training institutions whichwill ensure an adequate supply of technicians, ad-ministrators and instructors io or 20 years hence.To that extent a perspective plan may becomeoperational. The chief value of a perspective planis in fact that it gives scope for foreseeing and plan-ning for such long-term inputs, or for measures ofsoil conservation or afforestation which demand acontinuing and consistent policy, though yieldsmay come only after a period of years.

and other inputs required and the estimated ex-penditure.

Such targets are also established in the more elab-orate forms of planning. But they are then morelikely to figure as subsidiary targets within a largerplan -which might cover targets (or projections)of the expected level of demand for agriculturalproducts, the agricultural output, and the maininputs needed to achieve the output. These targetsmay be Worked out for the main commodities, orfor the agricultural sector as a whole (in terms ofvalues and expenditures) or for both. Targets arealso often established for some aspects of agricul-ture of special interest to the country concerned, suchas the net farm income, the contribution of agri-culture to the balance of payments, the growthof productivity, the establishment of co-operativesocieties, or the construction of warehouses andother aids to improved marketing. Input targetsare sometimes established for things which cannotbe easily related to production during the periodof the plan, e.g., the provision of farm buildingsor farm amenities such as water and electricity; forprojects -which will be reflected in production at

a later date; a given arca of land to be reclaimed,irrigated or afforested, or for the provision ofincreased facilities for agricultural education, re-search and extension.

* * *

Economic targets partake more of the nature ofobjectives if the starting point is an estimate ofurc,,ent national needs, whether for economicgrowth, economic or military security, level ofliving, social advance, etc. They may be regardedprimarily as yardsticks if the rate of developmentis less critical and more flexibility is permissible.Their value as yardsticks should be qualified, how-ever, for success in reaching a target may meanthat the target was too low in relation to whatmight have been achieved with a more dynamicpolicy, or alternatively that some physical targetsllave been achieved at the cost of shortfalls in othereconomic sectors, or at an undue sacrifice of pro-gress in education, health or other things lesseasily measurable.

Input targets are often a useful yardstick ofprogress in economic development, though theyneed to be used with a good deal of caution, es-pecially when expressed in terms of expenditures.For in addition to the above qualifications, themeasurement of progress by input targets may bemisleading if they are used on a gross rather thana net basis (e.g., counting the new irrigation chan-nels dug and ignoring those falling into decay), ifthe input/output relationships originally assumedwere faulty, or if the original estimates of expen-ditu-e were inaccurate or llave been made obsoleteby subsequent price changes. Nonetheless, a short-fall, e.g., on expenditure on irrigation, may be avaluable pointer to administrative or organizationalweaknesses. Inputs, in any case, are essentiallyno more than a means to an end, and ultimatelyoutput provides the only reliable yardstick ofeconomic development.

In many countries, year-to-year variations inthe aggregate agricultural output, and still more inthe output of single commodities, may be as largeas the whole increase which can be expected in aperiod of, say, five years. In such cases th.e produc-tion trend is clearly more significant than the outputin the final year of the plan or any other singleyear. This variability, incidentally, widerlines thevalue of reserves of essential foods and of flexibil-ity of foreign trade policies.

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Both aggregate and individual commodity targetshave their value and their limitations in agriculturaland in general economic planning, and ideally acombination of the two is desirable. Aggregates ex-pressed in values at constant prices or in index num-bers are of value to central planning- authorities in themore elaborate types of planning as a yardstickof over-all progress, to put the different sectors ofthe economy into perspective, and to ensure theinternal consistency of the plan. They are partic-ularly useful for long-term perspective planning.When over-all plans llave to be translated intoconcrete projects and policies, however, a moredetailed breakdown of targets of demand, pro-duction and especially of inputs is usually necessary.Again, aggregate targets give little guidance toproducers. For example, soon after the SecondWorld War, when the agricultural productiontarget of the United Kingdom was stated as anincrease of 6o percent over the prewar output,farm organizations .frequently pressed for clearerguidance on what emphasis should be given todifferent products.

There are also limitations to the use of commod-ity targets and projections. Thus, projections of theaggregate demand for foodstuffs are less liable toerror than those for single commodities because ofthe considerable degree of substitution betweenfoods which occur in response to changes in thelevel of supplies and. prices. The possibility ofsuch substitutions in turn gives a degree of latitudeto production targets. Thus, in the first Indianfive-year plan the over-all output target for grainwas reached because a shortfall in rice prod.uctionwas compensated by an over-fulfilment of thetargets for wheat and millets.

In the discussion below on the methods ofestablishing agricultural targets, consideration is

given first to projections of demand. Althoughsuch projections, except in a very simple form,can be made only in countries where there is afairly extensive background of statistical data, theycan be of considerable value in themselves, as wellas a valuable approach to establishing outputtargets. This is followed by a brief summary ofvarious approaches to establishing output targets,some of -which may be applied in countries whererelatively little statistical information is available,and by a revie-,v of some of the problems whicharise in estimating the resources needed for a givenexpansion of output. Further consideration ofinput programing, however, is reserved for a final

section after discussing the choice of methods ofimplementing agricultural development programs.This arrangement is followed as the nature andmagnitude of the inputs required and the methodsof implementation adopted are closely interde-pendent, and as the physical inputs are only someof the means which contribute to reaching theoutput targets.

The sequence followed below is, of course, onlyone possible method of presentation. It is also truethat the resources available and the input factorspotentially available largely determine the courseof production and the feasibility of productiongoals, so that these could be made the starting point.In actual planning, all aspects are usually consideredside by side, and successive adjustments made tothe various parts of the over-all plan until reason-able balance and consistency is reached.

PROJECTIONS OF DEMAND AND THEIR LIMITATIONS

More is known quantitatively of the factorsinfluencing the demand for agricultural productsthan of any other aspect of agricultural target set-ting. Even so a regular scrutiny of any demandprojection is advisable, in the light of experience,or of any necessary modifications of the under-lying assumptions or improvements in methods.In discussing the steps to be followed in makingprojections of demand it is convenient to separaterequirements for domestic use from those for ex-port, and to distinguish further between foodstuffsand rai,v materials for industrial use. A furtherdistinction may be convenient between basic cal-orie foods (mainly food grains and in some coun-tries starchy roots) and oth.er foods.

Food ,for domestic consumption

The main factors influencing the domestic de-mand for food are:

The growth of population. For most economicallyless developed countries this is likely to be muchthe most important factor in view of their frequentlyrapid grovv dl of population, often of the order of2 percent annually and occasionally approaching3 percent. Even in countries like India, with anadvanced statistical apparatus, the underregistra-don of deaths, and especially of births, makes esti-mates of growth in intercensus periods somewhathazardous, and longer-term projections still more

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so. For projections of, say, five years, however,the liability to error is likely to be within the per-missible range for practical working.

Less is known of the relative growth of theagricultural and nonagricultural populations, whichgreatly influence both the market demand and thequantities of foodstuffs marketed. Although thepercentage of the population engaged in agricul-ture falls in the course of economic development,the absolute number of persons dependent on agri-cul.ture usually continues to rise until a fairly ad-vanced stage of economic development is reached.4Unless agricultural production rises appreciablyfaster than the growth of the farm population thequantities of food reaching urban markets may failto expand.

The growth of the nonagricultural, and espe-cially of the urban, population is commonly inuchfaster than that of the total population. Some meas-ure of its rate of increase is valuable in planning,as it mainly determines the commercial or marketdemand for food. Rough estimates can some-times be built up from, e.g., police records of mi-gration or from school and hospital registrations,but in most less developed countries informationis scanty.

Time growth of per caput incomes. As incomes risethe expenditure on food increases. The effect ismost niarked in economically less developed coun-tries where a rise of I percent in per caput dispos-able income may lead to an increase of around 0.8percent in food expenditure, against about 0.4 per-cent in more developed countries where per caputincomes are higher.5 It applies particularly to thenonbasic foods. For example, in Japan the `` incomeelasticity " for all foods is about o.6, for cerealsabout 0.2, and for such foods as meat nearly 1.0.6In North American and Western European coun-

F. Dovring, The share of agriculture in a growing pop-ulation, FAO Alonthly Bulletin cf Agricultural Economics andStatistics, Vol. VIII, Nos. 8/9, August/September 1959.

These figures are usually termed elasticities of expenditurewith respect to income changes. Recent estimates for repre-sentative countries arc as follows: Ghana 0.8 - i.o; U.A.R.(Egyptian Region) o.9; Ceylon, Puerto Rico o.8; India 0.75- o.85; Greece, Guatemala o.7; France o.6; Switzerland,Netherlands, Norway, 0.45 - 0.5; United States, ID:mu:ark 0.4;Canada 0.35 - 0.4. L. M. Goreux, Income elasticity of thedemand for food. Household survey analysis. United NationsEconomlic CH. ommission for Europe and FAO. (Provisionaledition ininicog,raplicd, 1960.)

FAO, The state of .food and agriculture 1957, p. 94.

tries income elasticities for meat may be about o.6(less in the highest income group) and negativefor cereals: that is to say less cereals are consumedat higher income levels because of the substitutionof preferred but more expensive food..

A further point is that while in high incomecountries a large part of any increased expenditureis absorbed by more elaborate methods of process-ing or distribution, in less developed countriesmost of the increased expenditure is for thefood itself. It follows that in naaking estimates ofthe prospective demand for foodstuffs, especially inrapidly developing economies, some assumptionsmust be made of the probable growth of disposableincomes. This will usually have been postulatedas one of the objectives of the over-all developmentplan, or some assumption made for use in othersectors as well as agriculture.

Information on income elasticities for foodstuffsare sometimes based on time series of the totalconsumption of foodstuffs in a country, but areusually derived from household surveys of con-sumer consumption and expenditure. Such surveyscan be of considerable value to less developedcountries in enabling, a rather comprehensive pictureto be established relatively quicldy of consumptionpatterns in different income and social groups.Intercountry comparisons suggest a surprisingly uni-form relationship between income and food expen-diture, and in countries where no household sur-veys llave been made, income elasticities based onsurveys in neighboring countries would seldom beseriously misleading.

The more complete the information availableon the above factors, and on past trends of foodsupplies, the more effectively projections of futuredemand trends for foodstuffs may be established.The simplest method is by the extrapolation oftime series of consumption estimates based on" food balance sheets,"8 taking into account theexpected growth of population and income. Suchprojections can apply only to the economy as awhole. More elaborate demand projections may

FAO, The state of food and agriculture 1957, Chapter III.A food balance sheet starts with the production of a com-

modity, adjusts for exports and im.ports, and as far as possiblefor changes in stocks and for quantities used .for seed, animalfeeding, industrial purposes, wastage, etc.; the residual thenrepresents the quantities available for human consumption.These may be expressed on a per caput basis. The additionof such balances for all main foodstuffs g,ives a measure of

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also start from food balance sheets, but utilize aswell more detailed information of the trends offood expenditure and consumption in differentsocial and income classes, and of the price andincome elasticities of different foodstuffs. Accountmay th.en be taken of expected developments in,

e.g., rural and urban populations, and of thegrowth and distribution of per caput income, aswell as of past trends of production, consumptionand foreign trad.e.

In tlacse ways, first estimates may be obtained ofthe " normal " demand for current consumption,but to complete the picture allowance may have tobe made for some additional requirements. It iswell known that the diets of most economicallyless developed countries, especially the diets ofthe poorer classes, are usually deficient, sometimesin quantity and nearly always in quality. Deficien-cies of protein and of certain vitamins and mineralsare often especially important. Measures to remedyserious nutritional deficiencies will therefore in-fluence estimates of future food requirements. Yet,in some respects nutritional needs call for somewhatdifferent treatment than the other factors mentioned.If most consumers cannot afford the ad.ditionalfood, or the different pattern of diet, which from anutritional point of view they need, it is not likelyto be produced.. Even if produced it might be unsale-able and result in heavy financial losses to farmers.

Vulnerable groups such as mothers and childrenma-y be protected by special feeding schemes, butfew less developed countries are in a position togive such protection to a large part of the popula-tion, e.g., by consumer subsidies. Again, foodhabits are not quickly changed, and even apartfrom rising incomes, improvements in the dietmay have to wait on the gradual spread of nutri-tional knowledge. Nutritional considerations aretherefore likely to bulk more largely in longer-term perspective plans than in short-term opera-tional plans.

Provision for building up reserve stocks may alsobe important in estimating future food require-ments. Although the clanger of actual famine has

total food consumption; it may theta be expressed in termsof individual nutrients and calories. Time series may beconstructed if food balance sheets are available for a numberof years for the total food supply or for the supply of individualfoodstuffs. For information on the construction aun use offood balance sheets see: FAO, Handbook pr the preparation offood balance sheets, April 1949.

receded while surplus stocks of grains are availablein exporting countries, national reserves, especiallyof grains, can be of great value for use as a bufferstock in stabilizing food prices, both to producersand consumers. The establishment of such a re-serve is expensive and organizationally difficult;some of the problems are discussed in a later sec-tion. In marginally self-sufficient or deficit coun-tries it can usually be accumulated only graduallyin years of heavy crops, unless it can be built upfrom overseas surpluses available on special terms.as may often be possible at the present time. Theinitial stages may be the inost difficult, however.The magnitude of the stock needed (for example,in terms of weeks' supply) can be estimated onlyin relation to the concrete situation of the country,including, the number of grain crops harvestedin a year, the size of year-to-year fluctuationsin output, the development of communications,and the deg,ree of price stability contemplated.

An important point in food planning and policyis that rather little latitude can be allowed betweendemand and supply for cereals and other basic foods,particularly in less developed countries where thesefoods usually provide well over half-the total calorieintake. Apart from any danger of hunger, even arather small shortfall in supplies of the basic foodscan lead to a steep rise in prices, with serious in-flationary effects, since these foods are much thelargest single item of personal expenditure. Unlessrising grain prices can be prevented by releasesfroin stocks, grain imports must be increased orgrain exports reduced, often at a cost in foreignexchange which less developed countries can illafford. Conversely, a relatively small oversupplyof cereals in relation to effective demand can leadto a disproportionate fall in prices, likely to dis-courage farmers from expanding production forthe market. These considerations underline thevalue both of a buffer stock and of rather carefulprojections of the demand for basic foods as a

g,uide to production policies.For other foodstuffs there is more latitude, and

some divergence between the growth of demandand of supplies is likely to be less serious. Nutri-tionally, the less basic foods form a smaller partof the diet, even though they contain essentialelements for a balanced (het. Moreover, their priceelasticity is much greater. A small oversupply can beabsorbed with a moderate fall in price. A smallshortfall does not lead to an excessive rise in prices.In less developed countries they form., at least in-

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dividually, a relatively small part of the familybudget so that the effect of price fluctuations onthe general price level is usually rather limited.On the other hand, it may be noted that an im-portant factor in the steady creeping price inflation,which some European countries, e.g., France, ex-perienced in the early 1950's, was the steady risein the relative price of meat. This has also been animportant factor in the inflationary trends in severalLatin American countries, where as a result of thedeveloped livestock industry meat is a more im-portant constituent of the diet than is usual incountries at a relatively early stage of economicdevelopment.

A special difficulty of projecting prospectivedemand in less developed countries arises from thelarge subsistence element in agriculture. Thescanty data available, mainly from India, suggestthat if the value of the home produced food con-sumed on farms is taken into account as part offamily income, the effect of income changes onfood consumption levels in the subsistence sectoris much the same as in towns. If farm family in-comes rise, farmers tend to eat more and betterfood and sell less. If prices and farm incomes fall,they must often tighten their belts an.d sell moreto cover essential expenses, however limited thesemay be. These reactions, for which there is a gooddeal of scattered evidence, though m.ore completeinformation is badly needed, must often have anappreciable destabilizing effect on market suppliesand prices, including those for cereals and otherbasic foods. For farm incomes are usually a gooddeal lower than average incomes in other occupa-tions, and the farm consumption of basic food-stuffs is therefore likely to show a greater responseto a small change in income than would resultfrom a corresponding change in nonfarm incomes.

It is in this context that the problem of the" marketable surplus must be seen. For the so-called " backward sloping supply curve " is inmost cases nothing but a reflection of the fact thatas farmers' real incomes rise, they become largerconsumers of their own products, dependingon the extent to which their income elasticityof demand for their own products is higherthan their income elasticity for productsthat they would otherwise purchase. Thus, ifrising prices give farmers a sufficient cash incomefor their needs, gains in production may be entirelyconsmned on the farm with no increase in the mar-ketable supplies to meet the growing urban demand.

This appears to represent a phase, but a necessaryand indeed desirable one, in the progress of agricul-ture. But once a certain level of rural consumptionis attained, the farmer, like his counterpart thetownsman, will be able to afford greater varietyin his expenditure. In other words his income elas-ticity of demand for food will decline, a rise inincome will have correspondingly less influence onhis retentions for family consumption, and he willbe more eaaer to increase his sales so that he canbuy more of other products which at present arelargely outside his reach.

The effect in less developed countries of meas-ures to increase farm production on the share ofthe increased output consumed on the farm andthe share marketed thus seems likely to depend agood deal on the way in which the increased out-put is obtained. If efforts tend to be concentratedon relatively few large farms, for instance by chan-neling credit in their direction, the share of theincreased output reaching the market is likely tobe rather high. If it results from small improvementsspread over a multitude of small farms, the shareof the increased output marketed will probablybe appreciably lower. Nonetheless, it would seema short-sighted policy, especially where land is

scarce and small farms predominate, to concentrateefforts too narrowly on the larger farms, as thiswould mean that the time when the smaller pro-ducers come effectively into the market economywould be indefinitely delayed.

Ratv materials for domestic comumption

Little need be said under this heading, sincefuture requirements for, e.g., fiber must be keyedto plans for industrial development. In most lessdeveloped countries the crop area devoted to agri-cultural raw materials for domestic use, or evenfor export, is relatively small and does not greatlyencroach on the area available for food crops.There are some cases of conflict, though mainlywhen raw materials are grown for exports. Forinstance in Egypt the authorities impose a

limit on the expansion of cotton to safeguard theproduction of food grains. In Bengal, in formertimes of food crises, priority was given to rice overthe production of jute. In normal times, however,such conflicts are comparatively rare.

A more serious competition for land resourcesmay arise between cropland, grassland and forestarea. As population grows, crop cultivation and

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livestock raising encroach more and more onforest areas. Encroachment on the forests by cropsis especially damaging in some tropical countrieswhere forests are burned and crops are grown forshort periods under a system of shifting cultivation.As population grows and the need for land becomesgreater, the fallow period between crops becomesprogressively shorter with disastrous consequencesin erosion and loss of soil fertility. In mountainousareas in both tropical and subtropical countriesany serious encroachment on the forest results inerosion and serious repercussions on the fertilityof the plains. This usually occurs when there is arising demand for forest products, including woodfor construction, etc., fuelwood, and pulp andpaper products for v hich income elasticities arehigh. All these considerations also point up theneed for a careful policy of land utilization andforest conservation.

Export prospects for agricultural products

There is no need to stress the dependence ofeconomically less developed countries on exportsof primary products, especially agricultural prod-ucts, and most of these countries include increasedagricultural exports among their developmentgoals. World trade in agricultural products as awhole, however, has made little progress forsome decades. Thus, the volume of worldagricultural exports (excluding trade between theU.S.S.R.., Eastern Europe and Mailand China)in 1958 was only some 20 percent higher thanin either 1934-38 or 1948-52.° The volume ofagricultural exports in 1958 from economicallyless developed countries as a whole, though nearly20 percent higher than in 1948-52 (when recoveryfrom the war years was incomplete), was scarcelyhigher than in 1934-38. The comparison with thelate 1920's is even less favorable; from 1928 to1958 the total volume of world trade increased bymore than 8o percent, but that of exports of agri-cultural products by about is percent. And whilereal prices of agricultural exports, as measured bytheir capacity to purchase manufactured goods, arestill some so percent higher than in the years ofdepression before the war, they llave declinedsteadily during the past decade. As a result the

There was, however, a sharp increase of about 6 percentin. 1959 in the volume, though not in the real value, of worldagricultural trade; se'.;! Chapter II.

increase of zo percent in the volume of agriculturalexports from less developed countries from 1948-52to 1958 brought virtually no increase in the realvalue of their export earnings. Evidently the prob-lem of increasing earnings from agricultural ex-ports is no simple one.'°

The situation is not of course the same for allcommodities and therefore for all countries. Themain factors tending to restrict international tradein agricultural products have been (a) increaseddomestic production in the industrialized countrieswhich provid.e the main import markets (thisaffects mainly the products of temperate agriculture)and (b) the increasing development of syntheticsubstitutes for fibers, rubber and other agriculturalproducts, e.g., detergents for soaps based on vegetableoils, together with greater economy in the use of rawmaterials. On the other side, the main factors tendingto expand agricultural trade have been rising incomesand populations, though as stressed earlier incomeelasticities of most agricultural products declineconsiderably at the levels of income now rulingin the main importing countries. For commod-ities with relatively high income elasticities, whichare neither produced domestically in the mainimporting countries nor extensively replaceable bysynthetic substitutes, the growth of world tradehas been rapid. (in terms of real export earnings) andcommensurate with growth of world trade inmanufactured. goods. Such products as coffee, cocoaand some tropical and semitropical fruit fall intothis category. The same is true of some raw ma-terials such as wood and wood pulp, and of afew others such as rubber and wool for which de-mand has grown even more rapidly than the useof substitute materials. For most other major ex-port products the growth of export earnings inthe postwar period has been more modest and some-times even negative.

Even for more favorably placed commodities,however, any rapid increase in world exports wouldoften bring down p1-ices so far that there would belittle if any increase in total earnings. Nevertheless,the longer-term prospects for these products arefor continued growth, except in so far as

some of the traditional markets are approachingsaturation. This may be the case for tea (and insome countries for coffee), and here renewed growthmay largely depend on building new markets.

" A more &tailed analysis is given in The state of food andagriculture 1956, Chapter III.

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This is the over-all view and it is importantby way of background. It does not, however, takeinto account changes in the share of the marketsecured by different exporters which may greatlyinfluence the outlook for any individual country.Some postwar changes in this respect have been tothe disadvantage of less developed countries, chieflywhere a more rapid growth of domestic demandthan of production has reduced the supply avail-able for export. The decline in Argentine exportsof cereals and meat during the late 1940's andearly 1950's is a well-known instance. Since thewar, too, the Far East region as a whole has chang-ed from a net exporter to a net importer of cereals.In both cases, larger exports from higher incomecountries in North America and Oceania llavetended to fill any gap in the world market.

The view of an individual exporter is mostlikely to differ from the over-all world view' if itsshare of world exports is small. In that case todouble its volume of exports might have littleeffect on world supplies and prices and mightroughly d.ouble its export earnings. The problemis then mainly one of domestic resources and costs.

For a major exporter of a commodity, however,the situation is more complex. The effect on worldprices and on the country's total earnings of in-creasing its volume of exports must be carefullyconsidered, bearing in mind, however, that anover-high price level will encourage both the searchfor substitutes and the encroachment of newer andcompetitive exporters imito world. markets. For thelarge exporters there appears to be no alternativeto ami informed judgment, based on a continuousstudy of long-term trends and short-term fluctua-tions in world consumption, prices, stocks and ofproduction and exports from competing countries.This is particularly difficult for tree crops wheremany years may elapse between planting and bearing.

TARGETS FOR AGRICULTURAL PRODUCTION

Projections of demand, as discussed above, giveone starting point, though not the only one, forframing agricultural production targets. Thus, theprojections of the demand for domestic food sup-plies (including any allowances for special nutritionalprograms or reserve stocks), together with estimatedrequirements of raw materials for domestic in-dustry and of expected exports of agriculturalproducts, give ami estimate of the total supply of

agricultural products required. Part of this supplywill usually be imported, if only the productswhich cannot be grown domestically for climaticreasons. The import program, however, willdepend not only on largely agricultural consider-ations such as relative production costs. In somecountries nonagricultural factors will be important;for example, domestic and external political con-siderations, balance-of-payments problems, theavailability and form of economic aid, and recip-rocal trade patterns with trading partners coveringother sectors as well as agriculture. It may be usefulto prepare a tentative import program for agricul-tural products based on such considerations. Theestimated total requirement of agricultural products,including exports, adjusted by any tentative importprogram would then give a first indication of themagnitude of the desirable agricultural output.Such estimates may be useful on both an aggre-gate and a commodity basis.

This is clearly only a first approach and onewhich can be ad.opted only in countries with enoughstatistical background to establish demand pro-jections. Moreover, any first estimates of the outputneeded derived from such projections would haveto be carefully tested for technical and economicfeasibility, as a result of which it might be necessaryto adjust the estimates of import requirements oreven of consumption.

À second approach, which may be follo-wed inany country with basic statistics of agriculturalproduction, would be a simple projection of recenttrends of output. Every economy, however unde-veloped, has a certain momentum. Even wherelittle effort has yet been made toward economicdevelopment there will be some growth of pro-duction, though it may not keep pace with popu-lation, and slow shifts in the pattern of cropping.A simple projection of the recent trend of pro-duction, perhaps graphically, would give a firstindication of the possible line of development forthe main crops and, to the extent that data areavailable, for minor crops and livestock productsas well. Similar trends and projections for cropareas and yields would also be valuable in provid-ing a more complete picture of current trends."

11. It would be important for such projections to be basedon data for a sufficient inunbcr of years, especially incountries where year-to-year fluctuations in yield and outputare large.

1113

Comparisons between the tentative estimatesd.erived from production trends and from projec-tions of demand would be useful in giving a firstimpression of the possibility of meeting the estimatedconsumption requirements. Such comparisonsmight also give indications of the commoditiesfor which an intensification of the recent rate ofexpansion seemed necessary to keep pace witla theestimated demand, of other commodities wherespecial efforts might not seem necessary, andperhaps a third group where the growth of pro-duction seemed to be in danger of outriuming thegrowth of demand. In less developed countries thelast possibility might be most likely for some exportproducts.

Where more elaborate forms of planning arefollowed, similar comparisons on an aggregate basisof recent production trends with demand projectionswould give a first indication of the adequacy of therecent rate of growth of the agricultural sector as awhole.

For individual commodities these indicationscould be clarified by recent trends of imports orexports and of prices. A rising trend of importsover a period of years -would obviously confirmthat domestic production was lagging behind de-mand. So, too, might a falling trend of exports,though in this case alternative explanations might bea shrinking world demand or successful competi-tion by other exporting countries. Similarly arising trend of " real " prices for a commoditywould suggest that supplies were falling behindeffective demand, and vice versa. Even withoutdemand projections such data, fairly readily avail-able in most countries, would provide reasonablygood indicators of commodity supplyideman.dtrends, and provide a third and relatively simpleapproach to establishing production targets.

Further approaches might be made from a moretechnical angle. For example, as a fourth possibleapproach, a mixed group of economic and agricul-tural specialists might be established to work out insorn.e detail desirable and feasible lines of agriculturaldevelopment, taking into account likely consump-tion needs, the agricultural resources of the country,and the financial and other means likely to beavailable. Their conclusions might indicate alsowhat physical inputs and what government actionmight be needed to secure the results proposed..For more detailed working on these lines, sub-groups of the same character could be set up forseparate aspects of agriculture, e.g., crop production,

livestock production, irrigation, forestry and fisher-ies, as in the preparation of the Indian third five-yearplan. Similar groups might at the same time lookinto the nutritional, social and institutional aspectsof agricultural production. The more completethe information available to such groups, the moreconcrete could be their proposals. Thus, data onthe agricultural resources or on farm managementand cost fiictors for different parts of the countrywould enable suggestions to be made on the mostappropriate localities for different types of develop-ment. The conclusions of the subgroups establishedunder such an approach would ultimately be con-solidated into ami over-all report.

As a fifth approach the above procedure mightbe reversed; that is to say, the various inputs likelyto be available could be taken as a starting point andan estimate made of the additional production to beexpected from their ern.ployment. Such " inputprograming " would cover, for example, the ex-pected return from large-scale projects of irrigationor land settlement due for completion during theperiod of the plan. It would take into accountalso proposed resources for the provision of addi-tional fertilizers, small-scale irrigation, and improvedpractices, and estimate the likely output which mightresult on the basis of conversion factors derivedfrom experimental work or past experience.

Such an approach is widely used as it is attractivefrom two points of view. In the first place, it can befollowed in countries where as yet there is little inthe way of basic statistical or economic data onagriculture. Secondly, it gives the possibility ofcomparing the likely return from expenditures ondifferent forms of agricultural development, bymeans of cost/benefit estimates, and thus givessome basis for choosing the most economic meansor combination of means.

Input programing equally has some limitations.Conversion factors (or yardsticks), based on experi-mental data or past experience, to evaluate the likelyad.ditional output from any project are seldom verytrustworthy in farm practice. This applies especiallywhen they are used in combination: for example,factors for nitrogen, potash and phosphate fertilizersindividually may be less reliable when used formixed applications, or when fertilizers are usedin conjunction with other practices, such as irri-gation and the use of improved seeds. If outputtargets are being established on a commodity basis,there is no certainty that fertilizers, which it is

assumed will be used for one purpose, would not be

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transferred to another, e.g., grains to cash crops.These and other problems which arise in inputprograming are discussed further below. Nonethe-less, this can be a useful approach to agriculturalprograming if employed with an appreciationof its potentialities and. limitations.

A sixth approach to production targets from alocality angle can be of value in some circumstances.For example, groups of local officials and others(including representatives of farmers) might beestablished to consider and recommend, if possiblein quantitative terms, the type of agricultural devel-opment which would SCCM most appropriate intheir own areas, and wh.at investment and physicalinputs or other requirements would be needed tobring it about. These estimates could be aggregatedto build up yet another view for the whole country.

It goes without saying that inore than one ofthese various approaches could be followed at thesame time. The findings which emerge from them,however, will almost always show many incon-sistencies, and considerable adjustments are likelyto be necessary before a consistent set of outputtargets can be developed. Adjustments to thedemand projections may also have to be made tobring them imito line with production and otherpossibilities. Even then, however, the productiontargets can be no more than tentative, until moredetailed consideration has been given to the fea-sibility or otherwise of the projects and measuresby which they could be implemented. These arediscussed in the next section. Still further adjust-ments to the production goals may thus prove nec-essary during this final stage.

Before turning to methods of implementingtargets it may be useful to discuss briefly in whatdetail national agricultural production targets canusefully be broken down imito targets for smallerareas. Where, as for example in India, the imple-mentation of a federal plan is the responsibility ofstate or provincial governments, at least this degreeof breakdown is of course necessary. A subdivisionof output targets may also be desirable when thereare wide differences of climate and topographybetween different parts of the country, or when it isdesired to even up regional disparities, or alter-natively to concentrate resources in key areas.

A much more detailed form of planning wasdiscussed in the Indian second five-year plan:

Each district and, in particular, each national extensionand community development project area should have acarefully worked out agricultural plan. This should indicate

for villages the targets to be aimed at, the broad distributionof land between different uses and the program of development.Within the framework of au overall policy... sucia local planswill be valuable steps leading to more careful planning forstates and regions and for the country as a whole. The croppattern envisaged by these local plans has in the main to beinfluenced through such incentives as the provision of irrigation,credit and marketing facilities, provision of fertilizers, and in-timate contact with the cultivator on the part of extensionworkers and especially the village level workers.

If local communities can be encouraged todevelop their own production goals within thebroad framework of the national plan, it may wellbe a valuable additional incentive to local effort.If, however, it were intended that all these localplans were to be carefully phased, co-ordinated andaggregated to form a state and national plan, thedetailed paper work seems excessive and urmec-essary, especially in view of the flexibility alwaysneeded in agricultural plans. In the U.S.S.R.,before the recent decentralization, central agricul-tural planning appears often to have covered localplans in great detail, in some cases extending downto the production plans of individual state or col-lective farms and including targets for crop areasand livestock numbers. The whole planning ma-chinery is said to have become so enmeshed indetail that important decisions were delayed andproduction development badly hampered.

Since the reorganization the individual plansare worked out tentatively on state and col-lective farms and combined into plans for thedistrict, the republic and ultimately the U.S.S.R.as a whole. This type of plarining is regarded asmore realistic than plans prepared centrally. Onlythe quantities of the main products to be sold tothe State under the official collection by districtsand farms, however, are now established centrally,or, for less essential products, at the regional level.These indications ensure that the trend of produc-tion is in line with expected urban demand.The official del.iveries are of course by no meansthe same as the total output or even the totalsupply marketed. Operational matters and decisionsare left more and more to local initiative.

How much detailed planning from the groundup is feasible in countries where the main outputcomes from multitudes of small farms is debatable.There can be no doubt, however, that if even onlya small proportion of villages or other rural com-munities prepared local plans these could givevaluable pointers to the aspirations and real needsof the cultivators, the more so to the extent that

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these plans originated spontaneously in the villagesthemselves rather than in response to suggestionsfrom outside.

PROBLEMS OF ESTIMATING RESOURCES FOR

AGRICULTURAL DEVELOPMENT

In over-all economic development plannin.g it isusual to start with certain assumptions, based large-ly on experience, on the share of the nationalincome which will be set aside for investment, andon the capital/output ratios applicable to the wholeeconomy and to its main sectors. For example, if15 percent of the national income were investedeach year and the average capital/output ratio is 3 :

the national product would be likely to increase byabout 5 percent annually. If at the same time ten-tative estimates are made of what ad.ditional invest-ment resources might be obtained from abroad,and of the distribution of the total resources avail-able between the main sectors of the economy inaccord with demand forecasts, it is possible to buildup a first outline of a desirable and feasiblerate and pattern of economic growth. Tentativeconclusions may be drawn on the main fields forpublic investment and on what should be leftto the private sector. In the course of workingout a more detailed plan all these estimates areliable to adjustment until a mutually consistentset of targets is arrived at, in line with over-allpolicy and with the financial and other resourceslikely to be available.

If this approach to planning is to be effective, aconsiderable background of statistical and economicinformation is needed. This approach also hasweaknesses which, if not allowed for, may leadto serious errors. To mention only a few, thecapital/output ratio for past periods may differappreciably from the marginal productivity ofnew investments. The latter is subject to constantchange, especially in sectors of the economy whereproductivity is rising, e.g., as a result of teclmicalprogress. The return from investment in any sectoris likely to be greatly influenced by para'lel invest-in.ent in the infrastructure. Industrial development,for exaitnple, may be greatly influenced by invest-ment in electric power. Agricultural deve'opment,because of its dispersed nature and the need tomarket bulky produce, may be greatly affected byinvestment in road construction. Nonetheless, thisapproach to planning economic development is

useful, especially in. long-term perspective planning,in establishing the first broad framework of a na-tional plan. In economically developed countries,estimates of investment and of capital/output ratiosmay be of operational use and validity.' In lessdeveloped countries, where the basic data are muchless complete, such estimates are bound to be morespeculative and must be used more cautiously.

This approach to planning, however, is moreuncertain and liable to error in agriculture than inother sectors. Reasonably reliable basic data arehard to obtain, even in relatively developed econ-omies, and the concept of investment in agricul-ture is less clear-cut than in other major sectors.For these and other reasons, discussed more fullybelow, it is particularly difficult to arrive at re-liable estimates of the resources needed for a givenincrease in the agricultural output. Unless some ofthe special features of the agricultural sector arekept in mind, a misleading impression of the re-sources and programs needed for agricultural de-velopment may be obtained from estimates basedprimarily on capital/output ratios.

It is partly for this reason, and partly becausemany less developed countries do not yet have thebasic data or experience to embark on an aggregateapproach to planning, that various methods ofarriving at provisional output targets have beendiscussed before considering what resources andpolicies would be needed to achieve these levelsof production. Some of the methods described forestablishing provisional targets do not bring in theconcept of investment, though investment problemsof course arise later in considering the feasibilityof the targets and the ways of achieving them.Some methods of establishing output targetsindeed require no more than basic statistics ofinternational trade, price movements and agricul-tural production, which are available to a greateror lesser extent in nearly all countries.

In agriculture it seems more logical in mostcircumstances to start with a first approximationof what additional output is needed and feasible,and with first estimates of the resources needed toobtain this output by some promising combinationsof projects and policies, rather than to begin withsome rather shaky assumptions on the rate ofsavings, the share available to agriculture, and theapplicable capital/output ratio. If a generalizedestimate of a capital/output ratio for agricultureis required it can usually be worked out morerealistically as a second stage after some broad

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decisions have been taken as to the means to beadopted for implementing the production targets.Even so, its significance is likely to be limited.

One reason for the difficulty of estimating theresources needed for agricultural development isin fact the unusually wide choice of methods.For example, if steel production is to be increasedit is clearly necessary to build a new steel mill orto enlarge existing plants. More than one type ofmill may have to be considered, but the choice isfairly restricted. On the other hand, if grain pro-duction is to be expanded it may be done byreclaiming land, by plowing pastures, by increasedirrigation (either large-scale or minor irrigationprojects), by a greater use of fertilizers, by improvedseeds, by better control of weeds, pests and dis-eases, by improved crop rotations, or the govern-ment may prefer a more generalized approach byincreased extension services or by price or oth.erincentives to farmers, leaving it to the producersthemselves to decide the most suitable means(and inputs) for expanding their output. In anycircumstances, an almost endless series of combi-nations in varying proportions of the above factorscould be considered. The inputs required for anyproject would be estimated by the yardstick ap-proach discussed earlier in connection with theestablishment of a first approximation to outputtargets, and would be subject to the qualificationsthere noted. Although there is bound to be a largemargin of error in any estimate on a national scaleof what combination of methods would be themost effective and economic, this seems the mostreasonable approach, as the choice of methods maygreatly influence the ma.gnitude and nature of theresources required.

Another, and perhaps more fundamental, dif-ficulty lies in the limitations of the concept of in-vestment as applied to agriculture, and of itscorollary, the capital/output ratio, particularly asinvestment is usually measured in market prices interms of the national currency. Some of these limi-tations may be briefly summarized.

Nonmonetary investment

Any measurement of agricultural investment inmonetary terms is likely to be very incomplete,especially in less developed countries. A largepart usually consists of a multitude of small im-provements to the land, brought about by theunpaid labor of the farmer and his family, e.g., in

draining, leveling, building rice paddies, buildingbarns, fences, etc. As it does not create inflationarypressures, and does not as a rule divert labor orother resources from other forms of production,this nonmonetary investment is particularly val-uable in less developed countries, and if it can beencouraged, reduces the need for monetary in-vestment. Conversely, if nonmonetary investmentis inhibited by institutional or other difficulties theneed for monetary investment is increased.

Scarce factorS

Even where monetary payments are involved, acomparison of the investment needed in the agri-cultural and in other sectors of the economy may bemisleading. Industrial development, for example,usUally makes much heavier demands than doesagricultural development on the factors which areusually scarce in less developed countries, such asforeign exchange and skilled labor." This im-portant difference may be concealed as for variousreasons market prices often fail to reflect adequatelythe relative sc:arcities of investment factors. Agri-cultural investment, which can often draw ondomestic resources amply available, may thusappear less profitable, in terms of its cost to theeconomy, than it would if a more rational formof measurement could be applied."

Working capital

A large share of the capital needed to increaseproduction in agriculture is short-term workingcapital. Working capital does not usually appear inthe capital/output ratio, and unless its use in agri-culture is taken into account the total capital require-ment for agricultural development may be heavilyunderestimated.

" " Skilled labor " is used in the conventional sense. Agri-cultural labor may often be highly skilled in. the sense that itrequires long experience. But it is a skill which is usually moreabundant in less developed countries than other skills, e.g.,using or servicing complicated machinery.

" A device sometimes used to avoid tisis and other difficul-ties of pricing is co replace marlcet prices by " shadow prices,chosen to reflect more closely the relative scarcities of the in-puts and outputs. Thus, in countries where .foreign exchangeis scarce the shadow price of imported goods would be raisedby using an exchange rate less favorable than the oficial rate.The device can be useful for comparing alternative projects,though inevitably it brings in many arbitrary assumptions.

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Indirect benefits

The distinction between working capital andfixed capital is indeed less clear-cut in agriculturethan in most industries, and so also to some extentis the distinction between gross and net investment.Expenditures on fertilizers, for example, are usuallyconsidered as coming from working capital, butin some cases have considerable residual valueswhich benefit subsequent crops. The contribu-tion of organic manures may be underestimatedif only their immediate effect is counted andnot their cumulative effect on the soil structureand fertility. In some cases the output itselfserves also as ami input, as in the production oflegumes which add nitrogen to the soil, or whenrice is cultivated as an interim crop to conditionalkaline land. In brief, some cultural practices cu-mulatively raise the productive capacity of the landwhile others cumulatively reduce it. In choosingmethods of agricultural development it is importantto bear in mind the longer-term " appreciationor " depreciation " of productive capacity, as wellas the short-term effects indicated by estimates ofinput/output relationships.

Time _factms and the interdependence of short- andlong-terno projects

Estimates of the return to be expected from agri-cultural investment as a whole or from specifictypes of agricultural investment are complicatedbecause some projects take years to build up tothe point at which they start to yield. An extremecase is afforestation, which may sometimes give nomeasurable return for decades. Land settlement orlarge-scale irrigation projects usually take ro to 20years to approach their full potential productivity.The planting of tree crops or the raising of beefcattle are well-known examples of agricu.lturalprojects with a long gestation period.

The problem is not simply one of timing, sincea project yielding a return only after many yearsmay llave ami indirect effect on current output.Thus, the afforestation of hill land, while in itselfgiving no direct return for a long period, mayfairly soon operate as an iinportant measure ofsoil conservation to maintain or increase productiv-ity on adjacent valley land and to check deterio-ration from flooding. Rational agricultural develop-ment often implies a combination of long- andshort-term rn.easures, and this complicates the esti-

mation of resource requirements or the use ocapital/output ratios.

Some other difficulties, which also affect anycost/benefit appraisal of agricultural projects, may benoted. One difficulty is that of pricing. The longperiod for maturation of many projects means thata series of future payments for amortization ofcapital expenditures and for annual operating costmust be compared with the returns anticipated fromincreased production over a future period. Thisinvolves making assumptions concerning agricul-tural price levels, in both monetary and real terms,over several decades in the future, and this is nec-essarily rather specul.ative. Another uncertaintycomes from the wide range of possible outputs.The return from an irrigation scheme, for example,will clearly be very different if the irrigated landis used to grow grain or to produce high valuecash crops or export crops. But the use to whichthe land is finall.y put will depend to a large extentnot only on technical factors, but also on futuremarket conditions when the scheme reaches theprod.uction stage, as well as on the social and eco-nomic status of the farmers at the time. Again, incosting a project various arbitrary assumptions mustbe made, e.g., on the value imputed to farm familylabor and on " true " interest rates, since (likemarket prices) current interest rates may not ac-curately reflect the relative scarcity of capital tothe economy.

The validity of such estimates to assess the ab-solute profitability of a project is obviously limited.If used to compare the relative profitability of twoor more alternative schemes the margin of erroris smaller, since the same general output patternand the same assumptions can be used for eachscheme, though the error may still be consider-able.

Interdependability of projects : Ancillary projects

Although it appears that the resources needed foragricultural development can be estimated onlyon the basis of individual projects, and even thensomewhat .uncertainly, this project-by-project anal-ysis should not obscure their close interdependence.For example, the encouragement of livestock pro-duction may make possible mixed farming and agenerally higher level of productivity. A cropmay be barely profitable when considered by itself,but play an important part in a rotation. Relatively

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small ancillary projects may be the key to consider-ably wider development in agriculture as in othersectors. A sugar-cane factory or an oil-pressingmill, for example, may be onl.y marginally prof-itable and offer lirnited opportunities for employ-ment, but may make possible a considerable in-crease in farm employment and output. Market,warehousing or transport facilities may be anessential step in bringing a subsistence area intoproduction for the market.

Social, institutional and organizational factors

Finally, the return from a development projectwill depend to a considerable extent on social,institutional and organizational factors which maydetermine its feasibility or its profitability to thefarmers or cultivators. These factors, discussedmore fully below, may, for exam.ple, determinewheth.er irrigation water is fully utilized; whetherfarmers can afford to buy or can use profitably thesupplies of fertilizers or improved seeds made avail-able; whether they will in fact take up the improvedpractices recommended by the extension services.

* * *

The above points have not been raised to questionthe value of the contribution that economic anal-yses can make to the formulation of agriculturaldevelopment projects. There is no other way toassess the resources needed for a given expansion ofoutput, to compare alternative agricultural projects,or to reach some reasonable judgment of the valueof agricultural projects in comparison with alter-native projects in other sectors. All these thingsare clearly essential for economic developmentplanning. The intention is rather to bring out themany factors to be taken into consideration inagriculture, and also to emphasize that an analysisin monetary terms alone is seldom by itself anadequate basis to assess the feasability of a develop-ment project, even if technically sound.

It is equally important, for example, to takeimito accowit the actual situation of the farmers inorder to judge their probable reaction to any pro-posed measure, to know whether a project can bebacked by the necessary organization, especiallyat the local level, or whether farmers will have

access to the improved planting material, fertilizers,teclmical advice or other things which may beneeded and assumed in plans. The bearing on thechoice of measures to implement agricultural de-velopment of the institutional, social and economic

The choice of means to implement production target

There are many ways in which governments caninfluence the resources devoted to agriculture andthe rate and pattern of agricultural development;for example:

by direct public investment in. agriculture, asfor large-scale projects of irrigation and landsettlement, or in the essential infrastructure,e.g., access roads;by measures and policies to increase farmers'incentives (or to remove or reduce disincentives)to expand agricultural investment and pro-duction; these include measures to improvemarketing and stabilize farm prices, to makefarm credit more readily available, to itnprovethe agrarian structure, to give relief from someforms of taxation, etc.;by the provision of improved services to agri-culture, e.g., extension and information servicesfor cultivators, as well as services which operaten the longer term, such as agricultural researchand professional training in agriculture.

This is not the only possible classification; nor doall measures fall neatly in one or other of the threecategories. Nonetheless, in general, agriculturaldevelopment programs and policies are implement-ed by a combination in varying proportions of thesethree types of measures.

The choice and combination of the measureswhich will lead most effectively and economicallyto the achievement of the plan is the most important,and usually the most difficult, aspect of agriculturalplanning. The means chosen must of course be inharmony with the policies of the country, with theobjectives of the over-all development plan forthe whole economy, and with the financial andother resources available. They must take intoaccount also the skills and limitations of the culti-vators on whom the success of the plan ultimatelydepends, and of the economic, social and institu-tion.al environment in which they llave to work.Finally, it is necessary to balance the interests of agri-

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circumstances of the farmers, together with someorganizational questions, are therefore briefly dis-cussed in the next section, before considering furtherthe resources needed for agricultural develop-ment.

cultural producers and of consumers, especially ineconomically less developed countries, where foodis the largest single item of expenditure, and toselect methods of development which will nothamper the growth of other sectors of the economy.

GENERAL APPROACH TO IMPLEMENTATION POLICIES

In any concrete situation the choice of policies,projects and other measures will already have beendecided to a considerable extent by what has hap-pened earlier. A number of development schemesare likely to be under way which it would notbe feasible to discontinue, except in the unlikelyevent that some proved to be basically unsound.Similarly, there are always existing services to bemaintained or enlarged, and policy commitmentswhich it would be difficult to change unless therewere strong reasons for doing so. Nonetheless, aconsiderable area of choice is likely to remain wherepolicies and measures llave not yet been decided,or where those already operating are patentlyinadequate.

It is not easy to find objective criteria for suchdecisions on the general strategy of agriculturaldevelopment and to choose the most promisingcombination of the three main types of measureslisted above, amid the arguments and counter-arguments of specialists in particular fields, believersin particular policies or spokesmen of specialinterests. Economic measurements such as cost/benefit ratios can be of value in judgingbetween alternative projects for irrigation orland settlement, or even to compare them withmeasures to stimulate the use of fertilizers, thoughwith some limitations already discussed. But theycan do little to help in deciding what weight to giveto such projects of physical investment on theone hand, and on the other to policies of greaterproduction incentives, or to increased extension andother services to farmers.

In many cases the most realistic approach willbe to look at the agriculture of a country as a goingconcern, and to consider what extensions and ad-justments can most simply and economically givedesired results. There are several reasons for suchan approach. In the first place it corresponds to theactual situation. During the normal planning periodof around five years the additional production willseldom exceed 10-20 percent of the output at thebeginning of the plan and will often be less. Inother words, much the largest part of the outputat the end of the plan, even if all objectives arereached, will come from resources already operatingwhen the plan started.

If agricultural development is thought of pri-marily in terms of savings and investment there maybe some tendency to overemphasize new projects,especially those which can be expressed and assessedin monetary terms, to the neglect perhaps of lesseasily measured and more intangible things suchas education and extension, economic incentives orthe removal or alleviation of institutional hindrancesto development. There may be also some tendencyto concentrate expenditure on new projects and toleave barely enough for th.e maintenance and fullexploitation of existing assets, especially if theprogress of the plan is assessed in terms of develop-ment expenditure. New wells may be dug whileexisting facilities are not fully used, new landreclaimed while the existing agricultural area is

yielding only a fraction of its capacity, even withthe techniques already known in the country."

As part of this approach it would be of valueto make a rather careful quantitative inventory ofthe existing resources which are not yet fully ex-ploited: irrigation water not used for lack ofdistribution channels, or (if distribution channelsare completed) not fully utilized for double crop-ping; readily cultivable land not fully used for lackof access to markets; unused small warehouses orother buildings suitable for storage; sugar factoriesor oil-pressing plants not working to capacity.

The approach could go further, however. It isknown, for example, that in all countries, but es-pecially less developed countries, the yields ob-tained by the better farmers greatly exceed, some-times by several times, those of the less successful

" Bringing new land into cultivation may, However, benecessary in such circumstances largely for social reasons, e.g.,to provide subsistence and employment for landless laborers.

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farmers. But there has been little analysis of whythis should be. Much is no doubt due to ratherimmutable personal factors, but much also is likelyto reflect economic and physical handicaps, e.g.,lack of credit, of incentives, of draught power.Ami analysis of the causes, based on ami objectivesurvey of selected farms, might be of considerablevalue in agricultural planning by pinpointing themain reasons for low productivity in the circum-stances of any particular country or district.

Some of the factors which arise in this approachto planning agricultural development are discussedbelow: means of obtaining more precise informa-tion on the situation of farmers on which to basepolicy; the influence of conditions of land tenure onimplementing development plans; factors influenc-ing the fuller employment of rural labor; andfinally organizational problems, particularly as theyaffect the measures of price stabilization, farm creditand other incentive policies or the provision ofimproved extension and other services to farmers.

IMPORTANCE FOR AGRICULTURAL PLANNING OF DE-

TAILED INFORMATION ON THE DAYTODAY PROBLEMS

OF FARMERS

It seems important to stress the need foraccurate information on the actual situation andproblems of farmers if the choice of methods toimplement production programs is to be soundlybased, and also to judge the feasibility of thetargets themselves. In the last analysis it is thefarmers and cultivators who make the final de-cisions on cropping, expenditure, and methodsof farming which determine the future courseof production. In most less developed coun-tries, however, a majority of farmers operate underdisabilities likely to inhibit them from follow-ing the courses needed for a progressive develop-ment of agriculture. The success or failure of aplan may largely hinge on understanding theirdifficulties and finding ways of overcoming them.

Many of the disabilities of farmers in less de-veloped countries have already been referred to inthis chapter. They were briefly summarized in theDirector-General's foreword to The state of foodand agriculture 1959

The more closely the situation is examined, the more oneis impressed by the odds against the cultivator in manyless developed countries, Handicapped by ignorance, poverty

and debt, he must .face great fluctuations of price, and becauseof his lack of resources must usually sell inunediately afterthe harvest when prices are lowest. If he improves his methodsof farming, much of the benefit of his increased output maygo to the merchant or landlord to whom he is indebted. Oftenhe has so little security of tenure that he has no real inducementto improve his holding. When all is considered, the wonderis that agricultural production has increased as much as it has.Until these disabilities are reduced it seems inevitable that muchof the teachings of the farm advisory services will fall uponstony ground.

The extent to -which any or all of these problemsarise naturally varies from country to country.They were examined in some detail in the samepublication in a chapter entitled `` Some GeneralProblems of Agricultural Development in ',CS's

Developed Countries." As a result of this reviewit was suggested that a primary aim of governmentsshould be to create a favorable economic and socialclimate for agricultural expansion as an essentialcomplement, or even prerequisite, to efforts toim.prove technical methods of farmers. Threefactors were suggested for special attention:

reasonably stable prices for agricultural productsat a remunerative level, though one within thereach of the mass of consumers,

adequate marketing facilities, and

(e) a satisfactory system of land tenure.

It was stressed that if in these or other wayswhich may be of importance in particular countries,favorable conditions for agricultural developmentwere established, investment in agriculture would bemore likely to match the needs of a country foradditional production. Moreover, `` the initiativeof farmers would be likely to lead to an increasednonfinancial investment to improve their holdings.Farmers would be more receptive to the teachingof extension services and the adoption of newmethods and more eager to utilize credit for pro-ductive purposes. Direct measures by governmentsto expand production, such as the provision ofimproved planting material or fertilizers at reason-able prices, as well as schemes of irrigation, landreclamation or settlement, would be likely tolead to better results.""

A common wealuiess of agricultural planning, inmany less developed countries appears to be thescarcity of precise knowledge of the real situation

Tire state or food find agricHlture 1959.

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If'

and problems of farmers, not in a general way,but as the-y affect farmers in a particular countryor district. There is often a wide gap betweenthose responsible for preparing and carrying throughdevelopnaent plans and the cultivators themselves.This gap is usual.ly much wider than in more de-veloped countries, for reasons which can be easilyunderstood.

It is, for example, very hard to get much def-inite information in many countries about the pricesactually received by cultivators, even more so forgrain than for purely cash crops. Prices at wholesalemarkets are usually available, but as is well knownthe cultivators are often separated fi-orn these mark.etsby one or more intermediaries who clearly takesome payment for the services they perform. Farmprices cannot be reliably estimated by adjusting- th.ewholesale price by some constant margin, for thewide seasonal variations in agricultural prices en-courage speculation, while the position is furthercomplicated by the frequent indebtedness of cul-tivators and the common practice of repaymentin kind, reckoned at sonic notional price, or priceruling in the village when the debt is paid, usuallyjust after the harvest when prices are low.

Again, where tenancy is on a sisare basis it is

very hard to find how many cultivators llave anysurplus of grain left to sell after paying their rentand debts, and allowing for their own consumption,though it is known that they often have to buygrain from earnings outside the farm to carry theirfamilies to the next harvest. Thus, it is difficult tojudge how many producers are in fact sellers ofgrain; what their share is of the total quantitymarketed; and what slaare .is marketed by landlordsand others to whom cultivators are indebted, butwho take little interest in increasing production.

Yet, all these matters are cl.early highly relevantif consideration is 'being given to stabilizing orraising grain prices as an incentive to increased. pro-duction. They would also be very relevant injudging whether proposed measures to encouragethe use of more ferti.lizers, better seeds and otherimproved practices for cereals were likely to beattractive enough to induce farmers to undertakethe additional effort, expense and risk, or whetherfertilizers, for exainple, would be more likely tobe resold for use on more profitable crops.

Many other examples could be suggested wheremore definite information "night be of great valuein choosing measures to implement a plan or inmaking other administrative decisions. For exam.-

pie, it is a commonplace that much rural manpowerin less developed countries is unemployed or under-employed, at least seasonally, and much has beenwritten about how it could be more fully utilized.There is seldom any quantitative information,however, on how much is available at differenttimes of th.e year, on the conditions in which itcould be employed, or other information which isessential if it is intended to find ways of betterutilizing th.is potential resource.

A recent survey in India suggesteci that aboutthree quarters of those farming on their own ac-count were fully employed, but that less than halfthe wage labor was fully employed, and that over20 percent worked for less than one quarter of theyear." The same inquiry indicated a comparabledegree of unemployment in textiles and some otherurban industries. Few countries, however, haveinformation of this ki.nd.

Similarly, it would often be of great value inagricultural planning to have full information, fromthe point of view of the cultivator, on such thingsas the security and precise conditions of tenancies,on the extent of rural indebtedness, including themagnitude of old accumulated debts beyond therepayment capacity of the borrowers, and th.e needif any for administrative or legal action to adjustsuch debts. Jt would also be important to knowfor what purposes loans were needed, the methodsof financing purchases of production requisites, thereasons for the lack of progress of co-operativemethods in most less developed countries, or onthe good and bad features of existing marketingfacilities. Otherwise, judgments on the probableresponse of cultivators to particular measures mustbe made in the dark, or at best in half light, andbased largely on h.unch.

Some information of this kind may be obtainedfrom advisory groups of farmers or, where theyexist, from. farm organizations. Even in advancedcountries, however, such groups and organizationstend to be dominated by the larger farmers, andtheir views, though valuable, may therefore notbe fully representative. In less developed countriesthis danger would be likely to be still greater.

Farm management studies, where undertaken(an.c1 in less developed countries there are rather few),

le' India,, Finance, 29 August 1959. Information on theplight of agricultural laborers and their Emillies is also contain-ed in the Report qf the Agricultural Labour Enquiry of the Govern-ment of India, Ministry of Labour. New Delhi, May 1954.

1 27

can often furnish valuabl.e objective informationon the actual situation of farmers, though onlyafter a considerable delay while farm accounts areassembled and. analyzed. However, because of thelarge amount of detailed work involved theyusually cover relativel.y few farms.

In many cases, a simpler way of collectingessential information for planning may, therefore,be through sample surveys among cultivators inrepresentative villages or other areas. For example,a large-scale sample survey conducted by the In-dian Reserve Bank threw a flood of light on theindebtedness of Indian farmers asid showed theirextreme dependence on loans from relatives orfrom merchants, moneylenders and landlords,usually at a crippling rate of interest. The con-tinuous survey of farm expenditures asid house-hold consumption carried out regularly by theJapanese Department of Agriculture provides mostuseful information on a variety of topics on whichinformed judgments may be based. Thus, in addi-tion to giving valuable information on nutritionalproblems and on problems of farm management,such surveys would be likely to throw much lighton the probable effect of changes iii farm pricesand incomes on deliveries of produce to themarket.

Smaller-scale ancl less elaborate surveys thanthose mentioned, if carefully devised and directedtoward specific problems arising in the courseof agricultural planning, could often yield infor-mation which would be of great value in selectingappropriate measures to implement agriculturaldevelopment policies by throwing more light onthe basic problems of the cul.tivators asid suggestingmeans of overcoming them. But to be reliablethey would have to be very carefully planned, andbe carried through by experienced workers ofgreat integrity, who liad the confidence of thecultivators. This suggests the use of officials residentin the arca, though naturally not those responsiblefor the collection of revenue. Or such surveysmight be organized perhaps on a more regularbasis through., e.g., universities, asid carried out ona selected panel of villages which the field workerscould visit regularly so that they become knownand trusted by the cultivators. Measures to imple-ment agricultural development plans based on suchinformation would be far more likely to give resultsthan schemes hastily improvised or adapted fromthose of more advanced countries with very dif-ferent agricultural and social conditions.

LAND TENURE AND THE CHOICE OF METHODS FOR

AGRICULTURAL DEVELOPMENT

The choice of feasible methods to encourageagricultural development, particularly the provi-sion of incentives to increase production, may begreatly influenced by systems of land tenure, in-cluding the size of farms. Agricultural develop-ment, particularly increased production for themarket, is bound to be difficult when the mainproduction is on large numbers of small farms,sometimes fragmented into scattered plots, andoperated on little more than a subsistence basis.Although very high yields per hectare llave beenreached in some countries, notably Japan and theEgyptian Region of the United Arab Republic,in spite of very small farms and a considerable degreeof fragmentation, these conditions are always aserious handicap and very intensive labor and otherinputs are necessary for high yields. In differentcircumstances and at a higher level of nationalincome, countries like Denmark and the Nether-lands have achieved a very high productivityper hectare within a typically small farm structure.17

A high level of productivity per man is naturallystill more difficult to reach when farms are small,though even in this respect there are possibilities,e.g., in doubl.c cropping, or in specialization onintensive livestock and horticultural production.Here again, Denmark and. the Netherlands standhigh. The latter measures are feasible, however,only when adequate markets for such specializedproducts are readily accessible, which is seldom thecase in less developed countries except in the im-mediate neighborhood of large towns. Further-more, specialization on high quality products ofteninvolves the import of a substantial part of the grainused for food and livestock feed.

The consolidation of fragmented farms is morelikely to merit priority in the agricultural plans ofthe economically more advanced countries whereraising farm incomes by higher productivity perman is a primary policy objective. Consolidationdoes not greatly change the average size of holding,

" It is unnecessary for the present discussion to re-examinethe familiar problem of what is meant by a small farm. Theconcept does not, of course, depend only on area, but willvary greatly with the soil, climate, intensity of cultivation andthe stage of social and economic development of the locality;it is thus more meaningful and readily defined in a concretesituation than in general terms.

12E

and is of course feasible even when there is a highpressure of rural population. It may sometimeslead to substantial increases in output, e.g., whereland consolidation would make possible smallirrigation projects, though its main value lies inmaking possible higher productivity per man.Land consolidation, however, can be a heavy drainon the administrative and financial resources ofcrovernment, typically scarce in less developedcountries. In the early stages of economic develop-ment ami increased output per hectare is often evenmore important than increased productivity perman, and the priority given to land consolidationwill largely depend on whether these resources areconsidered likely to give a larger increase in outputif used for this or for some other purpose. At alater stage of economic development increasingagricultural productivity per man becomes relativelymore important, and land consolidation wouldrate a higher priority.

The creation of larger and economically moreviable holdings may also be important and feasiblein some circumstances. However, in less developedcountries which are densely populated, notably inAsia, scarcity of land and the continuing rise inthe absolute numbers of the farm population oftenrule out the possibility of increasing the size ofholding. Its may indeed be difficult to preventa further decline. The situation in this respect isless difficult in large areas of Africa and Latin Amer-ica, where land is less scarce in relation to pop-ulation.

Co-operative farming is soinetimes suggestedas a means of giving small farmers some of thebenefits of large-scale production. Interestingschemes of this kind have been operated in Nige-ria and the Sudan, wherc mechanized cultivation,etc., are carried out from a central machine sta-tion, though each farmer retains and does thegreater part of the work on his own plot. In thisrespect they differ from the well-known examplesof co-operative farming in Israel, where manyco-operative farms operate as single units.

In many less developed countries systems oftenancy are an important impediment to agri-cultural development, and even if agrarian reformis not immediately practicable, some modificationof the tenancy system may merit high priority inagricultural development plans. Por example, ifthere is no security of tenure, or if the tenant hasno right to compensation on eviction for anypermanent improvements which he has made on

the holding, he has clearly little incentive to niakesuch improvements or to raise the fertility of thesoil., since the longer-term benefits of his effortsmay accrue to others.

Furthermore, incentives for the adoption ofimproved methods of farming and increased pro-duction are likely to be greatly diluted when muchof the land is held on share tenancies. When thetenant's share of the crop is small (it is often onlyone half and sometimes less), any inducementto raise his output is correspondingly reduced. Insuch circumstances, increased production for themarket may come largely from a minority offarms owned by their cultivators or held on fixedrent tenancies; these farms are usually above theaverage size.

Serious secondary effects follow from the pov-erty of most sharecroppers because they cannotafford to adopt improved methods, while theirinsecurity of tenure often makes it hard for themto obtain credit from sources oth.er than the land-lord or the local moneylender. Much naturallydepends on the way in which the sharecroppingsystem is operated in any particular instance. In asubstantial number of less developed countries,landowners do not as a rule contribute to the costof cultivation, including such aids to higher yieldsas fertilizers or improved seeds. The cultivator'seconomic return from expenditure on these itemsis thus reduced in proportion to the share he pays.If h.alf the increased output from fertilizers goes inrent, he gets only half the return from his invest-ment that an owner farmer or a farmer with afixed rent would obtain. This difficulty might bepartly overcome by legal measures requiring thecost of requisites for higher yiel.ds to be shared.pro rata to the rent. The proportionate benefitof both landlord and tenant would then be thesame as that of an owner farmer. As such aregulation would be in the interest of both parties,the possibilities of its enforcement would beenhanced.

The incentive effect of price stabilization meas-ures is also likely to be sharply diminished whentenancy is on a crop sharing basis. As alread-y noted,tenants often have little or nothing to sell over andabove the needs of their families after paying theirrent, and so would receive little benefit from stableprices. The main sales for the market are likelyto be made by the landowners, or by the money-lenders or merchants to whom cultivators haverepaid debts in kind. While these more commer-

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cially minded groups might benefit from morestable prices, they usually have little interest in im-proving the production methods of the cultivators.In such situations, price support measures -would belikely to have only minor effects in encouraginglarger output. In principle th.is difficulty could begot around by imposing some form of fixed ceilingon rents (e.g., half the crop or so many quintalsper hectare, whichever was smaller).

Again, crop sharing not infrequently applies onlyto the main crop, usually cereals, and not to any

catch-crop /7 grown after the main crop is

harvested.. If double cropping could be morewidely adopted in these circumstances by the useof quick gro-wing crops on irrigated land, it couldprovide an additional source of income to tenantfarmers. Most less developed countries are inregions where a second crop of cereals, or stillbetter of legumes or oilseeds, can be produced underirrigation. Even a second crop of vegetables, large-ly for home consumption, and of green fodder forthe tenant's livestock, could be of considerablevalue in raising the tenant farrner's level of living.This might be an effective line of approach for theextension services.

Sharecropping is still prevalent over wide areasof Asia, North. Africa and Latin America, eventhough its importance on a world scale has beendiminished by the postwar land reforms in, e.g.,India, Japan, and the United Arab Republic. Evenwhen officially abolished, however, sharecroppingmay still persist quite extensively under privatearrangements. Small farmers often let all or partof their farms on this basis to neighboring farmers orlandless laborers (despite legal provisions to thecontrary) because of their own inability to culti-vate their land, or to be able to devote them-selves to other occupations. Such small landlordsare often even more demanding than larger land-owners, especially if they have little else to live on.

In many countries, including the Philippines andIraq, legal ceilings have been placed on the share ofthe produce which may be charged as rent, butsuch laws are almost impossible to enforce incountries where land is scarce and farm labor plen-tiful. Measures to give greater security of tenuremay even in certain in.stances react back on thecultivator, for landowners may feel it desirable(if a certain minimum length of occupancy is setd.own before greater tenure rights are granted)to change their tenants every two or three yearsto avoid losing a measure of control over their land.

The main issue under consideration here is howincentives to increased production may be madeeffective where small farms, tenancy and partic-ularly sharecropping are prevalent forms of land.tenure. The wider issues of land tenure and agrarianreform fall largely outside the purview of thischapter, although there can be no doubt that tenuresystems which cause political and social unrest maysometimes badly hamper agricultural development,even if the technical methods of agriculture in useare efficient, as in some plantation system.s. Wheredissatisfaction with the system of tenure is combinedwith a failure to develop the efficient use of muchof the best land, as in the latifindia of some LatinAmerican countries, the impediment to agriculturaldevelopment is obviously much greater.

In many cases agrarian reform is approached pri-marily as a social or political problem and lessattention is given to its effects on, and the needs of,agricultural production and development. Indeed,mere redistribution of land is often carried throughwithout the necessary follow-up measures, such asthe provision of credit, marketing facilities andextension services. An emergency or revolutionarysituation may preclude a careful examination inadvance of the economic implications of proposednew ownership patterns. However, in some coun-tries possibilities appear to exist for an agrarianreform which could give consideration to economicas well as social objectives. For example, in someLatin American countries measures are under con-sideration for the redistribution of large estates.Again, in some countries of Africa and a few areasin the Near East there is a move toward confirmingrights of individual ownership in arcas wherevarious systems of tribal or communal tenure haveoutlived their usefulness and are breaking downbecause of the increasing pressure of population, orbecause of the widespread planting of permanenttree crops which cannot be reconciled with a tribalsystem of land tenure.

There are many areas, however, where tribalsystems of land tenure are still functioning andshow considerable capacity for adjustment to eco-nomic development. Where tribal institutions arestill respected, the development of co-operativeorganizations adjusted to tribal traditions wouldbe a natural means of promoting agriculturaldevelopment.

The general question may indeed be raisedwhether transfer to small-scale private ownership(i.e., land-to-the-tiller programs) is always the

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best solution even though it may reflect the aspi-rations of the more progressive farmers. Thisapplies especially where agricultural methods arestill rather primitive. Small family farms widerowner occupancy have shown their capacity forrapid increases in productivity in many countries.Historically, however, rapid agricultural improve-ment has often come from large estates, as inEngland in the late eighteenth and early nineteenthcenturies, where enlightened landlords insisted onsuitable rotations and methods of farming as a

condition of tenancy and contributed their personaltechnical knowledge and capital to carry them out.

In most countries such paternalism is no longerfeasible. Nevertheless, rather than leaving smallfarmers to sink or swim as -best they can, it maybe preferable to adopt some form of lease from thestate or community which gives security of tenure,provided that a specified system of farming isfollowed with reasonable efficiency, and the cul-tivator aided with, e.g., technical advice, some formsof cultivation and of pest control which can bestbe carried out on a large scale, short-term credit,and marketing facilities.

An interesting example is provided by the" partnership schemes sponsored by the Produc-tion Development Board of the Western Regionof Nigeria which supplies finance, technical adviceand equipment in partnership with either a co-operative or a local community, the members ofwhich make over their land for 50 years. The largerplantation schemes of this Board and similar organ-izations in other African territories are of interestfrom the point of view of land tenure, in that theyrepresent attempts to secure the economic advan-tages of plantation-scale production without thealienation of land to private concerns.

The Gezira cotton growing scheme in the Sudanis another successful example of such an approach,wider a triple partnership involving the govern-ment, the Gezira Board and the tenants. Thegovernment, which took the land on a long leaseand carried out the capital works, is responsiblefor the main irrigation canals. The Gezira Boardis responsible for management, including sub-sidiary canals, land preparation, seeds, fertilizers,pest control, farm supervision and. accounting,credit, and the transport, ginning and marketingof the crop. The tenants do the work under super-vision and must allow a fixed rotation of long-staple cotton, durra and lubia (a legume) withabout half the land in fa llow. They may market

durra and lubia for themselves, but cotton can besold only through the Board. The proceeds fronicotton are divided, 44 percent each going to thegovernment and the tenants, io percent to tlae

Board, and 2 percent to a Social Development Fundfor the benefit of the tenants.

There are now about 31,000 tenants in 950 vil-lages. Each tenancy consists of about 40 acres heldon an annual basis, though evictions are rare andonly permissible for inefficient farming. The schemehas been criticized for failing to evoke a personalinterest in the improvement of the land. In addi-tion, supervision is limited in practice to the cottoncrop, and little assistance is given with livestock,though a village farming experiment for mixedfarming, covering 6o to 70 families, was started atWad Nairn in 1953. Neverth.eless, tenants under thescheme enjoy incomes which are well above theaverage in countries at this stage of development,while the contribution of the cotton export to thecountry's economy is crucial. It is doubful whetherthese results would have been possible under aless organized approach.

THE FULLER UTILIZATION OF FARM LABOR

As this chapter is concerned with agriculturaldevelopment planning, the main emphasis has beenplaced on ways of utilizing more fully farm laboron individual holdings especially by incentive meas-ures, or for communal projects using voluntaryor paid labor to raise the agricultural potential by,for example, digging feeder channels for the localdistribution of irrigation water or the constructionof access roads. Large-scale schemes of irrigationor land reclamation would also draw heavily onany underutilized rural labor, though normallyon a wage basis and often in an area remote fromthe laborers' homes so that the provision of transportand shelter for the labor force would arise. Somefurther points may be added on the fuller use oflabor, first in agriculture itself in relation to theproblems of agricultural diversification and mecha-nization and, secondly, to improve rural amenitiesand levels of living.

The underemployment of rural labor in mostless developed countries is due not only to the factthat there are too many workers for too 1.ittleland; some is the result of technical factors. Thus,in countries where there is a long dry season eachyear when nothing will grow and the land is too

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hard to plow, there is little cultivation or harvest-ing work to be done for weeks at a time. Asidefrom part-time work outside agriculture, the mainway of creating additional employment appearsto lie in irrigation to make possible double cropping.

Another reason for seasonal variations in farmwork is the wide prevalence of monoculture inmany less developed countries. If most of the landis under grain there is relatively little to be doneexcept in the sowing and harvesting periods. Amore diversified form of production would enablefari labor to be spread more evenly over the yearand thus be more fully used. This is an importantreason for the high labor productivity in some areasof mixed farming. More diversified production,however, is not only a technical matter. Apartfrom production for family consumption, it can befollowed only where there is a market for a fairlywide range of products. As livestock productsand most alternative crops are more expensivethan grain, widespread diversification is only fea-sible in countries where income levels are highenough to provide markets for these products.Even at a fairly early stage of economic develop-ment, however, it is of value to encourage thistrend, notably by providing marketing facilities toreduce the cost to consumers and improve thequality and condition of for example, milk, fruitand vegetables. For greater diversification of pro-duction has at least a threefold value: it can raisethe nutritional level; it can help to increase the fer-tility of the soil; and, as already stressed, it canraise agricultural productivity and incomes.

The abundance of rural manpower in most lessdeveloped countries has an obvious bearing on thedegree to which mechanization is justifiable inagriculture, on the land itself and in projects ofirrigation, land reclamation, etc. This is a problemof some importance in both agricultural and generaleconomic plaiming.

The extent to which mechanization is justifiedin a given agricultural project depends in the firstinstance on technical factors. There are S0111C opera-tions in agriculture, for example, some forms ofdeep plowing for land reclamation, which cannot beeffectively carried out without the aid of machinery.

Technical considerations apart, however, a sim-ple comparison of the costs of labor and machineryshows the very different situation in developedand less developed. countries. Economically, thedegree of mechanization justified in a countrydepends on the relative scarcity of labor and capital.

These are roughly reflected, though very imper-fectly, in wage rates and interest rates. Thus, inindustrialized countries, where wages are rela-tively high and interest rates usually low, a muchhigher degree of mechanization is profitable than ineconomically less developed countries wherewages are usually low and interest rates high.'8While this is broadly in accordance with experience,the situation may be obscured in particular cases,

when official interest rates for credit, fixedon the basis of over-all political decisions, are farbelow market rates of interest. On the other hand,market rates of interest, especially in agriculture,may be inflated by the risk of default and by thestrong bargaining position of the moneylendingclass in relation to most farmers and cultivators.Technicians, especially those trained in industrial-ized countries, do not always fully allow for thesedifferences in economic conditions and sometimestend to recommend a greater degree of inechani-zation than is appropriate in a less developedCountry.

There may be some instances, however, whena higher'dcgree of mechanization may be morejustifiable than would be suggested by cost relation-ships; for example, if the demand for farm laboris highly seasonal and there is a shortage at harvestor other times of peak activity, or if it is importantto speed up th.e flow of labor from agriculture intoindustry.

In recent years much attention has been givento ways of employing underutilized farm laborwhich cannot yet be absorbed in other sectors toimprove social and welfare amenities in rural arcas.Equally, there has been criticism of the too simpleassumption that such labor could be used with.outsignificant cost to the community, on the groundsthat it must in any case be fed, clothed and sheltered.If the rural unemployed are put to work, whetherpaid or unpaid, they will need a larger food con-sumption than if they did nothing. If paid they willseek other consumption goods as well. Even if theadditional work is carried out without wages bycultivators to improve their own holdings, it willbe done with the expectation of some additionalbenefit later, though in this case only after theadditional work has led to additional production.

" In less developed countries, where most machinery hasto be imported, capital may in effect be much the same asforeign exchange. If a project (or ways of carrying through aproject) is capital-saving it is also likely to be import-saving,

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Increased activity in the rural sector, if notimmediately productive, may thus have repercus-sions which can aggravate a potentially inflationarysituation. One way of obtaining additional ruraloutput with a minimum inflationary effect wouldbe to use underutilized rural labor to satisfy itsown basic needs in ways which throw little or noadditional dem.and on urban industries. Communitydevelopment schemes, using voluntary labor toconstruct rural roads, improve water supplies, oreven to provide school buildings, is one attemptedsolution which has many successes to its credit.However, enlightened leadership and a ratherfarsighted outlook on the part of the rural com-munity are need.ed if this type of activity i.s

to be maintained for long. In earlier centuriesprecisely similar tasks were often carried out inWestern Europe by organized unpaid labor, butobligatory work is less and less easy to reconcilewith present-day thinking, even though thosewlao do the work also benefit by it.

Another interesting approach, which needs to befurther explored, is the setting up of village ex-change schemes to enable underemployed ruralworkers to undertake additional production which,though surplus to market requirements, could stillsatisfy their own basic needs. Thus, a laborerwho cannot find employment for cash wages canbe called in to thatch a farmer's hut and mend hisfence, and can be paid in garden or dairy producewhich -would not fetch a remunerative price in themarket. A vil.lage weaver can contract to producemore cloth than he can sell in the outside marketin order to supply the local cabinet-maker andobtain payment in articles of furniture which aremade in addition to what the cash market couldabsorb. Each producer's extra output can thuscreate a private market for the extra output of oneor more of the others.

The extent to which such transactions can bedeveloped depends, first, on organizing a specialexchange for credit trading of the surplus outputamong the producers themselves and, secondly, onsubstituting this output for similar supplies nowbouo-ht for cash. While industrialization is ulti-mately a major benefit for the rural people in lessdeveloped countries, in the short run and duringthe period of transition, when there is a large dis-parity in productivity between urban and rural areas,the village economy is often in the same relation tothe town economy as an underdeveloped to anindustrialized country. The wise course may thus

be for the village to reserve its supply of " urbanexchange (from sales to urban markets) for capitalimports from towns, such as improved tools andequipment, and to use its own idle capacity to takecare of those needs for which urban imports are notindispensable. This could be effected simply byusing credit instead of cash within a small villagetrading group. An experiment along these lineswas started in the community development areasof West Bengal" in India, but though highlypromising was shortlived, perhaps through lackof leadership and follow-up action. These devicesmay appear to be of somewhat marginal conse-quence to the problems of planning agricultural de-velopment in the narrower sense; but they have animportant bearing on the wider problems of ruralproductivity and in giving confidence to ruralproducers in the efficacy of their own efforts toimprove their inunediate condition.

ORGANIZATION FOR IMPLEMENTATION

Many of the most serious problems of govern-ments in promoting agricultural development inless developed countries fall into the two categories,financial and organizational. The financial problenishave been much publicized, but in many cases theorganizational problems appear to be still moreintractable. Clearly much depends on the methodsof development selected.

Because of the dispersed nature of agriculturalproduction, nearly all measures and projects foragricultural development in less developed countriesrequire for their implementation an extensive localorganization in day-to-day contact with farmersand cultivators. This organization is seldom entirelygovernmental and usually includes large elementsbased on semiofficial or co-operative agencies andon private enterprise. To a large extent, the suc-cess of any agricultural development program_ hingeson the adequacy of the local organization and theway in which it is used.

The need for a local organization applies mostobviously to the provision of extension and otherservices to farmers, or to the establishment ofimproved systems of farm credit or marketing.

19 See The village exchange program 1-or industrial extension

in West 13engal. Development Department of the Governmentof West :Bengal, Calcutta; and Sushil Dey, Industrial development- A ¡ten' 01.,prOadl, Calcutta, 1955.

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It is usually no less essential, however, if schemes ofprice stabilization or agrarian reform are to becarried through effectively. Even large schemes ofpublic investment often require an extensive localorganization; for example, to arrange for theconstruction of feeder channels to carry irrigationwater to individual holdings. In less developedcountries, with low levels of education and income,to build up a country-wide organization with thenecessary efficiency and integrity is particularlydifficult, and it is on this rock that many agricul-tural development plans and projects have foun-dered.

In many cases a major weakness is that the lim-ited number of local officials responsible for agri-cultural and rural development appear to llave farmore tasks assigned to them than they can conceiv-ably carry out effectively. They are seldom consult-ed on their ability to undertake new duties, andwhen they are it is often difficult for them to refuse;they may not in any case appreciate in advance howmuch additional work is involved. Moreover, alarge part of their time tends to be occupied inpaper work or routine duties, at the expense of timefor practical extension or organization work amongfarmers and cultivators. The problem was putforcefully in a recent report on Indian food prob-lems sponsored by the Ford Foundation." Thefollowing quotation relates to village level work-ers in the Indian community development scheme,but similar comments could be made on extensionanci other agricultural officials in the farmino-areas of many countries.

The broad objectives of the Conununity Developmentprogram and of improving agricultural technology, as theycome down from the many departments and organizationsat the Centre, State, district and block levels, filially come tocentral focus on the village level worker to unify, co-ordinateand integrate everything into a program for the villager. Evenif he had the capacity to do the job, time would not permithim to do all the things expected. As a result, he has to chooseamong many possibilities.... It is no wonder that there is awide gap between what he is expected to do and what, infact, he actually gets done.... By the nature of his intimatecontact and acquaintance with village people, lie has the op-portunity of effecting change toward both immediate and longrange goals. It is urgent that all superior officers recognizethis as the village level worker's basic task, and that his

role be construed as one of service to the village rather thanerrand boy for those above him.... Among the more onerous

port on lurlia's food crisis ,npl steps to meet it. Govern-Kilo, April 1959.

distractions from the primary educational job of the village levelworker and other extension officers are the service tasks suchas the procurement of seed and 'fertilizer, collection of fees,management loans, etc. It is a temptation to say that theextension worker should slough off these chores, but oftenalternative ways of handling them arc not available.... Oftenthe services are of such a crucial character that withdrawal maycause a fai.lurc of the program. We can only conclude underthe circumstances that such vital servi.ce activities be continuedonly for as short a time period as necessary, and that immediatesteps be taken to develop other provisions for rendering thesenecessary service functions.

What is said here of community developmentand extension work applies no less to other vitalservices in agricultural development. Inaciequacyof the local organization may be an importantfactor in delaying the implementation of schemes ofagrarian reform, thus prolonging the unsettlingperiod of uncertainty to the detriment of produc-tion. Similarly, the utilization of new irrigationfacilities, or the operation of improved services ofcredit and marketing, to quote ordy a few examples,may be badly delayed or ineffectively carried outbecause of the weakness or overloading of thesometimes none too experienced local staff re-sponsible for these activities. In many cases a con-siderable strengthening of such staff is no doubtnecessary. The final solution, however, often liesnot so much in building up a greatly increased staffof national or local government officials, as indevolving as many of these functions as possibleon other bodies, for example farmers' co-operativeand other producers' organizations, local com-mittees, voluntary workers, or tO the private sector.

Price stabilization

Many problems of local organization are wellillustrated by reviewing some of the difficultieswhich governments in less developed countrieshave encountered in trying to stabilize the farmprices of cereals. It is -widely recog,nized that inmany of these countries more stable farrn priceswould be a powerful incentive to increased grainproduction, even if held at a level which wouldentail no increase in the average price paid through-out the year by consumers. As already emphasized,most farmers must sell at low prices soon after theharvest, or even pledge their crops to merchantsbefore the harvest, for lack of resources to keeptheir surplus until later in the season when pricesare usually much higher. A more stable price wouldthus enhance their returns.

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It is also widely held that grain prices can bestbe stabilized in less developed countries by a s-ystemof buffer stocks.2" To stabilize prices to consumersthe reserve or buffer stock should be large enoughnot to be easily exhausted when releases are madeat times of rising prices. At least part of the reserveshould be located near large consuming centers.

Large grain silos near consuming centers, how-ever, do little to stabilize prices to producers incountries where the marketing system is imperfectand most farmers are virtually without liquid re-sources. For this to be effective all farmers musthave easy access to official buying depots where theycan at any time count on getting at least an offi-cial minimum price for their produce. Thus, anetwork of buying points, with storage facilitiesand a widespread local staff, is necessary if pricestabilization policies are to serve as ami incentiveto production as well as a protection to consumers.The local buying points may be operated by theofficial agency concerned, or by co-operative agents(as in Japan) or private firms (as in Nigeria andsometimes in India) acting as agents for the govern-ment. The important thing is to see that theproducers can count on receiving the minimumprice.

21 That is to say that the government or an official agencyis prepared to buy grain if prices fall below a certain minimumlevel, either throughout the country or jis limited arcas, andto release supplies to the market when priccs rise above a cer-tain maximum. The aim is then not so much a fixed price level,as to reduce price fluctuations sufficiently to avoid serioushardship to either producers or consumers. An alternative,widely used during the period of shortages and rationing, sudstill maintained in some countries, is to fix grain prices at allstages of distribution.

For a fuller discussion of these problems sec Report of theFAOIECAFE centre on policies to support and stabilize agriculturalprices and incomes in Asia and the Par East (held in New Delhiin March-April 1958) and Report of the centre on _rood and agrienl-tural price stabilization and support policies in Latin America (heldin Santiago de Chile, February 1959). The report of theFar East center in particular contains a full discussion on factorsto be taken into account in establishing the level at which tostabilize prices, though ultimately this must be found by ex-perience. Too high a price level is likely to lead to productionin excess of demand, atad in turn to continuously rising, stocksand a heavy drain on government revenues. If the supportprice level is too low, or if there is no effective price supportto farmers, production is likely to fall short of demand, leadingto inflationary pressures and in turn to the need for larger im-ports (or reduced exports) to counteract them; in these cir-cumstances it will seldosu be possible to build up a reserve stock,except perhaps from imported supplies.

Ceylon is one country where price stabilization,in this case at a relatively high leve1,2 has beentried as an incentive to grain production; purchasesare made through some 9oo co-operative agricul-tural production and sales societies, acting as theagents of the government. The results obtained,however, have been less than had been hoped,largely because of the difficulty of ensuring thatcultivators did in fact receive the guaranteed min-imum price. In his report for 1956 the MarketingCommissioner stated that " the complexity offactors relating to the structure of agrarian economy,rural indebtedness and transport difficulties stand inthe way of the cultivator deriving the full benefitof the scheme."'" The difficulties were analyzedfurther by the Technical Working Group on theDevelopment of Paddy Production:24

... allegations arc often made that the fall purchase priceis not obtained by the producer; middlemen arc said to buythe output from the cultivators at reduced prices and scll it tothe Purchasing Centre at the guaranteed price... If at the timewhen [the cultivator] wishes to sell his output he is unable toobtain the guaranteed price duc to organization difficulties andis therefore compelled to scll to a middleman at a lower price,the incentive to maximising production is seriously weakened.Most middlemen arc able to carry on their activities duc to thePurchasing Centre being distant, transport difficulties, and theCentre not being in a position to take delivery and pay in cashwhen the cultivator brings his output for sale. The cultivatorsconsequently find it less troublesome to sell to a middleman.In addition, many cultivators are indebted to middlemen, traders,etc., because of the inability to obtain all their credit requirementsfrom thc Cooperative Institution and arc therefore compelledto return their loans in the form of produce.

Similar reports are to be heard, officially orunofficially, from many other countries. In some,it is alleged that there is often collusion betweenthe officials of the buying agencies and privatetraders. The West African Statutory MarketingBoards, which employ private firms as buyingagents, endeavor to protect the prod.ucer by ap-pointing two or three buying agents in each localityso that the farmer has an opportunity of comparisonand choice.

" Largely with the help of export earnings from otheragricultural products.

" Administrative report of the Commissioner for the develop-

ment of nuuketing, Colom.bo, 1956.

24 National Plant.ing Council; First interim report. Colom-

bu, 1957.

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Credit and marketing

Experiences such as those described for Ceylonunderline the importance of building up an ade-quate local organization if price supports to stim-ulate production are being considered as onemeans of implementing a development plan.25 Butthis applies equally to the provision of better facil-ities for farm credit, especially if these are toreach the smaller farmers; large farmers can usuallyobtain credit more readily. It applies also wherefertilizers and other requisites arc distributed throughofficial channels. In view of the scarcity of suitablestaff, it is often suggested that all these functionsshould be undertaken through one organization.This was the conclusion of the All-India RuralCredit Survey of the Reserve Bank of India in1955, which recommended an integrated scheme ofrural credit and marketing. The proposals includ-ed limited liability credit societies, large enough toemploy a full-time manager and to become eco-nomically viable, but covering a small enougharea to be reasonably accessible to all cultivators; ashift of emphasis from land to crops as a securityfor loans, borrowers signing agreements to markettheir produce through the credit co-operative orits affiliated marketing and supply society; as far aspossible the provision of credit in kind to ensureits use for productive purposes. In line with theseproposals some 6,00a " large size "25 societies werereported to have been organized by 1959.

These features, and some others of generalinterest, are also to be found in the Japanese multi-

" Proposals for making the local organization more effec-tive in Ceylon include checks to ensure that purchases are madeonly from bona fide cultivators, prompt payment for paddydelivered, the issue of purchase receipts to cultivators, asid theestablishment of more co-operative buying points in areas notadequately served. (Report of the Commissioner for Marketing,

1956.)" Large " to distinguish theni from the existing " small

primary co-operatives usually serving a single village. Thesewere not only too small to be viable, but wcrc often dominatedby one or two individuals. To quote the report of the IndianReserve Bank "V/licii local co-operation gets into the chargeof the village moneylender, asid more especially the landlord-cum-moneylender, he becomes the socicty, the depositor andthe borrower, all of them together or each in turn, with thecase with which the one Godhead becomes Brahma, Vishnuasid Shiva - Creator, Preserver asid Destroyer in the morepicturesque expressions of Hinclu philosophy, or with theexclusiveness with which matter asid energy exchange rolesin the more recent refinements of nuclear physics. "

purpose agricultural co-operative associations. Theseare among the most successful agricultural co-opera-tives outside the economically advanced Westerncountries. They currently handle about 55 percentof all faum products marketed and provide between40 and so percent of all credit to farmers, mainlyon short-term loans. The co-operatives own about31,000 warehouses for their marketing operationsand derive an appreciable income from ware-house business. In addition they are responsiblefor the distribution of about 70 percent of the largequantities of fertilizers used in Japan and of some 8opercent of the pesticides, as well as such other req-uisites as machinery and feedingstuffs. Altogether,Japanese farmers buy over 40 percent of their farmrequisites and about II percent of their living ne-cessities through their co-operatives.

Loans for the purchase of fertilizers andother requisites can be obtained on the guaranteeof five members, at about 9 percent interest,on condition that grain sold through the co-operative shall be the source of repayment. Condi-tions for loans vary somewhat according to thepurpose for which they are required. Orders forfertilizers are placed in advance by farmers, cen-tralized through the prefectural and national as-sociations, and delivered to local co-operatives forcollection by the farmers at the time they arerequired. Payment for the grain, etc., bought bythe co-operatives as ag-ents for the government ischanneled down through the central bank. Tomeet the large payments required for these pur-chases the government usually issues short-termbonds, most of which are taken up by the Bankof Japan.

Proditcers' associations

Effectively functioning producers' organizations,whether co-operative organizations or statutoryboards, can be of great value in implementing agri-cultural development programs and it seems worthconsidering some of the conditions which makefor their success.

A first point which seems significant is that agreat deal depends on the use made of these organ-izations by the government itself. Where produc-ers' co-operatives and other farmers' organizationshave been established in less developed countriesthe initial impetus has almost always come fromgovernments, and governments usually providesome degree of supervision over their activities.

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The use of farmers' associations as official buyingagencies for cereals, as in Japan, or for the distribu-tion of fertilizers and the collection of land purchaseannuities under the agrarian reform schemes, asin Taiwan, clearly goes far beyond. this.

The value of such close working arrangements isthat they give the farmers' associations a status,a continuing function, and above all a regularsource of income which they -would not otherwiseenjoy. These advantages may be of decisive im-portance in less developed countries, where smalland struggling farmers' associations find it hardto compete with private traders who have muchgreater resources, especially when they form someloose combination to combat the spread of co-operatives. On the other hand, there is the dangerthat the producers' associations may become vir-tually government agencies, and this can be avoidedonly if they are left with a large degree of autonomyin their own affairs.

Such working arrangements, for which thereare interesting parallels with the operations ofstatutory marketing boards in West Africa, or theuse of producers' marketing boards in the UnitedKingdom for the distribution of deficiency pay-ments arising under this system of price guarantees,seem to deserve serious consideration in less de-veloped countries. They can at the same time relievethe administrative burden of government depart-ments and give an impetus to the development offarm organizations.

A second way in which governments can nfluence the growth of producers' organizations is inthe provision of credit. If this were needed forimproved marketing services it would not ingeneral imply the provision of additional credit,since credit for marketing is already obtained bymerchants from commercial sources to finance theiroperations. The problem would rather be itsdiversion, at least in part, from private merchantsto producers' organizations. One means which hasbeen used by the government of India to restrainspeculation in cereals at times of rising prices hasbeen to limit commercial bank credit for the pur-chase and stocking of grain. If more orderly market-ing through producers' organizations and morestable farm prices were considered a useful means ofencouraging agricultural development, it would bewithin the power of most governments to see thata larger share of the credit for agricultural market-ing was channeled, through a central co-opera-tive bank, to individual producers' co-opera-

tives. Reference was made earlier to the similarmethod followed in Japan to finance co-operativepurchase of farm products at the time of harvest.

The problem evidently does not end there. Ifimproved marketing resulted in some increase infarm incomes, it would entail additional farm ex-penditure for consumption and for productionrequisites. In the circum.stances of most less devel-oped countries this rnight be largely a transfer oFpurchasing power from merchants, landownersand moneylenders to farmers, but it would stillimply a change in the pattern of expenditure. Theissue of additional farm credit for production pur-poses puts the problem more directly since it wouldlead to increased farm expenditures for productionrequisites, and often for fixed capital investment.This aspect is considered in a later section.

The form and scale of organization seems anotherpoint of importance. The conclusion reached in theAll-India Rural Credit Survey that such organiza-tions should be large enough to employ a full-timemanager, yet sufficiently numerous to be readilyaccessible to all farmers, seems amply borne outby experience in other countries. This points to anorganization serving small groups of adjacentvillacres with elected directors from each vil-lage. It also underlines the value of multipurposeorganizations, for in this way the volume of busi-ness is enlarged, while .farmers can deal withmarketing, credit and the supply of requisites inone place.

Many reports have stressed the importance ofsimplicity of procedures and speed of operation ifproducers' co-operatives are to be successful,especially in providing credit. Complaints of redtape and d.elays in granting loans are common inmany countries, and to some extent account forthe continued resort to private moneylenders,despite very high interest rates, as they can act atonce on their own responsibility. Their prompt-ness can be matched by farmers' associations onlyif they are left a fair degree of freedom of action,which in turn is possible only when the directorsand the managers are sufficiently dependable. Avital point here, and indeed for any linking ofcredit and marketing, is the acceptance of crops assecurity for loans rath.er than insistence on land.In many countries this requirement automaticallydebars a large proportion of farmers from institu-tional credit.

No less essential if producers' organizations areto be effective in marketing is the prompt payment

137

of members for all produce delivered, a point stress-ed in the report already quoted of the Commis-sioner for the Development of Marketing of Ceylon.One element in the success of the Kaira DistrictCo-operative Milk Producers Union in India,which provides milk for the well-known BombayMilk Scheme, is that payment is made on the spotfor milk deliveries from members. Where this isnot possible partial payments or negotiable ware-house receipts give farmers some immediate re-turn. Thus, the Kilimanj aro Native Co-operativeUnion in Tanganyika, which markets the greatbulk of the coffee produced in that area, makesinitial payments on produce delivered and finalpayments at the end of the season when marketinghas been completed. This co-operative also pur-chases production requisites for its members, re-ceives deposits and encourages mutual help.

If farm credit is issued in cash there is an evidentdanger that much of it will be used for nonpro-ductive purposes. In some countries, mainly in LatinAmerica, this difficulty is avoided by the issuc ofsupervised credit for specific purposes, though thissystem entails much trained personnel for adminis-tration. Probably a simpler method is that recom-mended in the report of the All-India Rural CreditSurvey of issuing farm credit largely in kind. InTaiwan, for example, some of the credit is issuedin the form of fertilizers and there repayment, too,is in kind on the basis of a fixed ratio of rice tofertilizers, profitable to both the farmers and thegovernment. Under the three-year agriculturalprogram launched in 1960 by the government ofIndonesia, credits are to be granted through some500 " paddy centers," partly in the form of high-yielding seedlings and fertilizers for repayment inrice after the harvest.

A last point: institutional credit, whether or notrepaid in kind, can be an important factor in im-plementing measures of price stabilization since acondition of loans against the security of cropswould be that the producer marketed his surplusthrough the farmers' organization. Ideally, pay-ments might be made optionally in cash or kind.For example, any grain, cotton or other suitableproduce delivered by growers for marketing orin repayment of loans would be credited to themat the minimum guaranteed price. But if actualsales were at a higher price they would later receivean additional payment. Similarly, if producers'associations were made responsible for the collectionof, e.g., land taxes, irrigation dues or annuities foz-

land purchase, farmers might be entitled to payeither in cash or in produce at the minimum guar-anteed price, whichever he found preferable.This procedure would put a floor under the marketfor a considerable part of the output, and if effec-tively operated would often be an important in-centive to increased production.

These matters go beyond the Scope of generaldevelopment planning, though scarcely of agricul-tural planning, since they lie at the root of manyorganizational problems crucial to agriculturaldevelopment. The main point for emphasis is thatif strong producers' organizations can be built upin less developed countries it should be possible totransfer to them much of the detailed administrationof agricultural development measures. In this wayit may be possible to undertake measures and ser-vices which would not otherwise be organizationallyfeasible and to free government staff; includingskilled extension workers, for other duties.

In an earlier section (page 124) projects andmeasures for agricultural development were clas-sified into three broad groups:

direct investments by governments;incentive measures (including the removal orreduction of disincentives) to encourage farmersto raise production;the provision of advisory and other servicesto increase agricultural efficiency.

Other classifications could be made, and forsome purposes might be more significant; this one,however, largely reflects the alternatives as theywould present themselves to an agriculture depart-ment, a planning commission, or perhaps still moreto a finance department. Some consideration maynow be given, in the light of the preceding discus-sion, to the conditions tending to favor one orother of these broad groups of projects and totheir interrelationships.

Direct investment by governments

In many less developed countries, especiallythose at an early stage of economic development, alarge share of government development expen-ditures is devoted to schemes of direct investment;

The area of choice

138

It should be stressed, however, that to establishsuch organizations hastily and to entrust importantfunctions to them without proper organization andtraining is to court failure. The Japanese co-operative movement, for example, has a longhistory. Nevertheless, it still finds it necessary tohold training courses for co-operative officials, andthis practice is also followed in, e.g., India andthe British territories in Africa. In some casestraining is provided not only for officials but alsofor the directors of co-operative societies. Notonly training, but also experience is necessary, andthis, too, debars over-hasty development. Never-theless, where conditions are favorable, and howfavorable they are depends largely on govenunentplanning and action, there is a sufficient record ofsuccess from widely different arcas of the world tomake it clear that co-operative and other producers'organizations can make a major contribution toagricultural development.

in agriculture, typically to large-scale schemes ofland settlement or of irrigation, sometimes combinedwith hydroelectric development. As many lessdeveloped countries have extensive areas of unculti-vated land, or land which is without water for longperiods of the year, these are often the most ob-'vious ways of promoting increases in the agricul-tural output, though as a rule they give substantialreturns ordy after a period of some years. Large-scale projects of this kind also have a greater " publicrelations value than less spectacular methods ofdevelopment, and are useful in bringing home tothe public that economic development is underway.

As such projects are usually too costly for any-thing but government financing, the emphasis inthe development program on government invest-ment inay thus reflect the physical needs of thecountries. But even when such large-scale projectsare not included in a development program, a largeproportion of direct government investment may beneeded in the circumstances characteristic of mostcountries at ami early stage of economic develop-ment; for example, when the domestic accumulationof private capital is too limited or dispersed foreffective development; when much private invest-ment is for unproductive or inessential purposes;

when the forms of investment most needed, e.g.,roads, are unsuitable for private investment; whenthe investment in.clucles a large foreign exchangecomponent which would not be readily obtainedby private investors; or when there is a shortageof skilled administrative and technical personnel."In these circumstances direct government invest-ment may be the only means of financing evenmedium-sized undertakings which in more de-veloped countries would often be left to privateenterprise, e.g., the manufacture of fertilizers orfarm machinery. Obviously, too, the degree ofdirect government investment partly reflects tlae

political philosophy of the government.

Incentive measures

Schemes of direct government investment,however, may fail to approach their full productionpotential unless they are combined with measuresto give farmers greater incentives to increase theiroutput, or to remove institutional and other ob-stacles to agricultural development. Withoutsuch measures, indeed, any substantial increase inproduction for the market may be difficult toachieve. The need for incentive measures ariseswhen the economic and social conditions in a coun-try prevent a flow of resources and effort into agri-culture on a scale commensurate with its need forincreased food production. As already indicated,these difficulties most often stem from inadequaciesin the systems of marketing, land tenure and credit,aggravated by the small scale of operations andweak bargaining position of most farmers.

To a large extent, incentive naeasures in lessdeveloped countries thus represent governmentefforts to break through the barriers which areimposed by the social and economic structure to amore rational use of resources. They are often anessential first step to lift cultivators from the stateof apathy and hopelessness engendered by gen-erations of exploitation. Price supports or agrarianreforms may be needed to give them an assurance,which they have never before had, that they will

" The last point may appear paradoxical. Projects of directgovernment investment, however, often require a less compre-hensive local organization than many schemes of the " incen-tive " type. Moreover, large-scale development projects areoften carried out under contract by foreign firms wlichfurnish the technical management.

139

reap a commensurate reward from any additionalefforts and expenditures which they undertake.

Improved services

Similarly, the provision of improved extensionand other services to teach farmers new and Un-proved methods is often essential if Lither govern-ment investment or incentive naeasures are to giveanything approaching their potential benefit. Gov-ernment services to agriculture in economicallyless developed countries need n ,t be only advisoryin character; there are many successful examples ofthe provision to small farmers of such things asmechanical cultivation, improved breeding stock,or pest and disease control. Pests and diseasesof crops and livestock are indeed often amenableonly to control measures on a national or eveninternational scale, as in the case of foot-and.-mouthdisease of cattle or of locusts.

Operation of incentive policies and improved services

As a general rule the share of government ex-penditure on agriculture which is devoted to incen-tive measures and to the provision of services tendsto become larger as countries become more de-veloped economically. This partly reflects the grad-ual transition from a subsistence to a marketacrriculture, for incentives have their main effecton production for the market. These measures,however, can raise the level of agricultural produc-tion only to the extent that they lead to more pro-ductive methods of farming and induce farmers todevote more resources to production. Much ofany increased investment, especially in less devel-oped countries, is likely to be in the form of labor,largely unpaid labor, by the farmer and his family.As there is an abundance of farm labor in mostless developed countries it is usually desirableto maximize this component. Nonetheless, someof the additional farm investment is normallymonetary, involving increased expenditures byfarmers, partly within the farm sector, as for addi-tional animal draught power or improved plantingmaterial, and partly from other sectors, e.g., forfarm implements, building materials, fertilizers,28pesticides.

" Reasons were given earlier for regarding, expenditureon fertilizers as akin to investment.

Thus, when a government places emphasis onincentive policies or on improved services to agri-culture, it d.oes not thereby avoid the task of ensuringthat farmers can obtain readily an adequate supplyof production requisites. In this respect it is in. thesame position as a government which confines itsactivities to making supplies of production requisitesavailable to farmers without any special measures toencourage their use. The main advantages from the" incentive " approach are: (a) incentive measuresmake it more certain that the additional requisiteswill be used, or that they will be taken up in greatervolume and used for the purposes most needed,and. (b) incentive measures encourage nonmonetaryinvestments to a much greater extent than does thesimple supply of production requisites. They thusput an additional drive behind technical measuresfor agricultural development. In many less de-veloped countries this extra impetus may benecessary to get agricultural development underway, or to work up a sufficient momentum foragriculture to meet the growing market demandfor its products. How far incentive measuresshould be considered thus depends largely onan assessment of how far current social, economicand institutional deficiencies are acting as a brakeon needed agricultural production.

There are a good many practical problems ineffectively carrying through incentive measures.Emphasis was laid in an earlier section on the com-plex organizational problems, and these are prob-ably the most difficult. Again, incentive measuresusually lead to some increase in farm incomes. Inless developed countries this inay mean some reduc-tion in the net outflow of funds from agricultureto other sectors. There may be some transfer ofincome to farmers from landowners, moneylendersand merchants.

In the nature of things, part of any increase infarm incomes will be spent by farmers on their per-sonal consumption, which is indeed a goal ofeconomic development. Otherwise the incentiveeffect will be small. At very low income levels in-creased food conswnption rnay even be a pre-requisite for increased. work. In the main, however,if incentives are to make their maximum . contri-bution to agricultural development it is importantto fmd measures, or ways of implementing them,which tend to raise the share of any increase infarm incom.es which is devoted to productive in-vestment.

In economically more developed countries this

140

may often be largely a matter of fiscal policy, e.g.,of adjusting income tax differentials and deprecia-tion allowances. In economically less developedcountries the fiscal approach is usually less generallyapplicable and oth.er methods must be sought.Thus, in some countries supervised farm credit isused as one means of ensuring that funds providedfor productive investment are not spent on consum-er goods, though administratively this system iscostly. As an alternative, credit may be issued mairdyin the form of farm requisites. Other examples, notnecessarily in connection with credit, will suggestthemselves in the circumstances of any particularcountry.

To the extent that investment is nonmonetaryand in the form of farm labor, there can be noquestion of any diversion of funds to consumptionspending, at least until the " investment has bornefruit. This is a major virtue of some " incentivetype measures, notably agrarian reform, whichprovide a strong inducement to increased productivework on farmers' own holdings. In a good manycountries loans or grants are given to farmers toencourage some form of direct investment by them.in, for example, farm buildings or in small irrigationschemes, in the expectation that a small governmentcontribution may bring about a still larger invest-ment, monetary and nonmonetary, by the farmers.

The importance of ensuring that adequate sup-plies of production requisites are readily availableif incentive policies are to be successful has alreadybeen stressed. Otherwise farmers' efforts to expandoutput may be largely frustrated. In some LatinAmerican countries, for example, there were atone time many complaints that agricultural de-velopment was badly hampered by inadequategovernment allocations of foreign exchange forthe import of farm machinery and especially ofspare parts. It is usually only in the more indus-trialized countries that this task can be left to privateenterprise with satisfactory results. In less developedcountries, at least some degree of government in-tervention is almost always necessary.

Decisions will be needed on such matters as therelative advantages of importing or producingdomestically fertilizers and other prod.uction requi-sites," and what part of their domestic production

Apart from the size of the farm demand, the decidingfactors in such cases are mainly nonagricultural, e.g., consider-ations of foreign exchange, relative manufacturing costs,availability of skilled labor, etc.

can safely be left to the private sector and wheredirect government investment is preferable. Tech-nical as well as financial considerations arise. Forexample, the multiplication of high quality seeds andother improved planting material, or the productionof veterinary vaccines, may require more skilledsupervision than could be expected under privateenterprise in many economically less developed.countries. Or such products may have to be sup-plied to farmers at prices which would leave littleor no profit for private entrepreneurs. In such casesit will be necessary to establish government seedfarms or production laboratories.

It may also be important to budget at anearly stage for improved education, research andextension services for agriculture. These are thingswhich cannot be hastily improvised, and timelyprovision will have to be made for the necessarytraining of staff at home or abroad if an effectiveservice is to be built up.

INVESTMENT AND EXPENDITURE

Throughout this chapter stress has been laidon the complementary nature of different measuresfor agricultural development, and of the closeinterrelation between agricultural and general eco-nomic development, without which progress inagriculture is retarded. But while basically com-plementary, all projects, agricultural or non-agricultural, are in another sense competitive. Theyall compete for the limited funds available for in-vestment and current budgetary expenditures, aswell as for the administrative and organizational re-sources which in many countries may be as much alimiting factor as finance.

The proportion of the resources required toimplement different schemes and projects may varyrather widely from one type of development proj-ect or measure to another. This means primarilythat countries normally give preference to develop-ment projects and measures, and on ways of carryingthem through, which draw mainly on the resourceswith which they are best endowed. It may alsomean that in some cases combinations of develop-ment projects can be selected which are comple-mentary not only in their effect on production, butalso (or at least minimally competitive) in theresources needed to implement them.

An attempt has been made in the followingtable to summarize the main investment, budgetaryand organizational resources called for by a few

141

representative development projects and policies.It rnay serve to bring out some of the main issuesand interrelationships, though to avoid making thetable too complicated most of the secondary effectshave been omitted, e.g., the potential inflationaryeffects of large-scale government investment proj-ects. Where incentive policies increase the demandfor, e.g., fertilizers, the considerations vvhich arenoted in the table regarding their increased supplywill arise indirectly and as a secondary effect.

The table may also be useful in bringing imitoclearer focus the monetary expenditures and otherefforts required from governments, private or semi-private organizations and farmers if the programor policies mentioned are to result in increasedproduction. For example, a price stabilizationscheme will not have its full incentive effect unlessthere are adequately staffed and financed localpurchasing stations within easy reach of mostfarmers. Similarly, larger supplies of fertilizerswill not have their full effect unless ami adequatedistribution system is available, and unless creditfacilities enable farmers to buy them and pricerelationships make their use profitable.

Expenditure for investment and production byindividual farmers, together with any nonmonetaryinvestment engendered by incentive measures,have been shown separately from investment out-side the farm sector proper. The latter, and alsocurrent governmental expenditure, have been bro-ken clown to show separately the foreign exchangecomponent. Requirem.ents for local organizationsin contact with farmers have been shown in acolumn by themselves, partly to stress their im-portance, partly because by no means all therequirements and costs under this heading need begovernmental; much may fall to producers' credit,marketing or co-operative organizations or toprivate initiative.

Some of the points brought out in the table maybe briefly noted. Rather few projects in the agri-cultural sector involve a large direct expenditure offoreign exchange. On the contrary, agriculturaldevelopment is often important to increase exchangeearnings or for import saving. Irrigation and fer-tilizers are the only projects included in the tablewhich would usually imply substantial foreignexchange expenditure by less developed cowitries,though farm machinery, pesticides, etc., usuallywould as well.

Incentive measures or the provision of servicesdo not as a rule call for a large direct monetary

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l).

investment. A price stabilization system wouldrequire the setting up of a network of buyingpoints and warehouses, which may involve a sub-stantial investment.30 Some investment would beneeded for agricultural research stations and schools.In general, however, the main expenditures in-volved would be current expenditure for salaries.In spite of the importance of adequate organ-ization, especially at the local level, and theprovision of technical services, their direct costis usually small compared with expenditure ondevelopment projects including the provision ofinputs. The main economic cost, indeed, usuallylies not in the incentive schemes themselves, but inmeeting increased demand by farmers for pro-duction requisites, and also for personal consump-tion, to which they may give rise. Increased farmexpenditure, however, would usually be for quickyielding projects such as small irrigation units,fertilizers or improved seeds, while much of theinvestment would be nonmonetary. Additionalfarm expenditure on personal consumption couldthus seldom arise until after an increased outputhad been harvested and sold. It should thus causelittle inflationary pressure.

There may be other substantial payments undersome measures of the incentive type, though theyare more significant from what may be called the" Treasury point of view than in their over-allimpact on the economy. Thus, compensationmay be paid to landowners under schemes ofagrarian reform. Apart from the initial provisionof funds for farm credits, there may be lossesfrom bad debts. There may also be trading lossesin domestic price stabilization operations,n especial-

" Price stabilization measures may also involve the costof carrying a stock of, e.g., grain.

In some countries price supports are used to raise farmincomes for social reasons and substantial funds may be trans-ferred to the farm sector, either by direct govenunent paymentsor more often indirectly by artificially maintaining the level offarm prices. Thc poverty of most consumers rules out suchpolicies in most economically less developed countries, wherethere is more often a net outflow of funds from the agriculturalto other scctors. Nevertheless, price stabilization measures canoften raise farm returns without higher prices to consumersby savings on distribution costs, including the speculative gainsoften made by distributors when agricultural prices show mark-ed seasonal fluctuations. It is not unusual, however, in lessdeveloped countries, to aid one sector of agriculture at the ex-pense of another, e.g., by export taxes on certain agriculturalproducts to finance an incentive price to farmers (or a consum.ersubsidy) on food grains for domestic consumption.

144

ly in the early stages when the staff is inexperienced.All these are basically transfer payments, whichredistribute the national income but do not greatlyinfluence its level, though they may change thepattern of expenditure. Nevertheless, many ofthese payments must be made from current revenuesor met by the issue of bonds. Either course maycause difficulties for the finance departments ofless developed countries.

THE CONCENTRATION CF RESOURCES

A country following a vigorous program ofeconomic development and investnient whichstrains its economic resources is always likely to beon the verge of inflation. A time must come whenthe inclusion in the program of additional projects,however desirable, is no longer compatible withreasonable stability of the currency. This appliesespecially to slow yielding projects involving heavyinvestment expenditure. When this point is reachedany enlargement of the investment program dependson getting further economic aid from abroad.

This aid is naturally most useful in the form ofconvertible foreign exchange, but other forms,including the supply of physical goods andtechnical aid, can be used to extend thedevelopment program if they coincide withlimiting factors in the recipient country. Muchthought has been given recently to the possible useof surplus agricultural products to aid economicdevelopment. Shipments of such surpluses onspecial terms can, in fact, enlarge the recipientcountry's resources for development if the addi-tional consumer demand resulting from investmentexpenditure were giving rise to food scarcities andinflationary pressures which would otherwise haveto be countered by spending foreign exchange onfood imports. Any " counterpart funds " arisingfrom the sale of these surpluses do not, however,represent additional resources for investment asthe government could always have obtained fundsin its own currency by loans or other means. Awarning note should perhaps be added. If, forexample, measures of agrarian reform, improvedmarketing, or domestic price stabilization wereneeded for a healthy development of the recipientcountry's own agriculture, it would seem impor-tant that the respite from food scarcities andinflationary pressures given by the import ofagricultural surpluses should be used to carry

through these adjustments rather than as an op-portunity to postpone necessary reforms.

In earlier discussions an attempt has been madeto outline the main factors to be taken into accountwhen a final choice of projects and measures fordevelopment has to be made in the agriculturalsector. But it has also been stressed that the variousprojects and measures are complementary andreinforce each other. A choice which impliessacrificing some types of project is liable to cancelthis mutually reinforcing effect. Yet, to attempt todo everything at once may mean that resourcesare spread so thinly as to be largely ineffective.This is a constant dilemma in programing andplarming.

These difficulties apply both within the agri-cultural sector and in its relations to the rest of theeconomy. An irrigation project is most likelyto succeed when at the same time adequate exten-sion services can advise farmers on methods ofirrigated farming, when credit facilities make itpossible for farmers to take up these methods, whensupplies of production requisites are at hand, whenthe system of land tenure gives farmers the con-fidence to invest money and labor in improvingtheir holdings, and when effective marketingfacilities and reasonably stable prices assure farmersof a fair return for their produce. If one or moreof these factors is lacking, the value of the others isimpaired and development will be slower.

Similarly, agricultural development will bemost rapid when parallel development in urbanindustries provides farmers on the one hand withan expanding market for their produce and, onthe other, supplies them with an increasing flow ofproduction requisites and consumer goods atprices which they can afford. Agricultural andindustrial development thus go hand in hand. It isno accident that the agricultures of the moreindustrialized countries are often the most pro-ductive, or that, subject to limitations of climate andsoil, the most efficient agriculture -within the in-dustrialized countries is often to be found in theneighborhood of large towns where the urbaninfluence is strongest.

One way of combining the value of this crossfertilization with an adequate build-up of resourcesis to concentrate a large share of the total develop-ment effort of a country into limited areas or sectors.A comprehensive approach within a restrictedarca perrnits a build-up of resources, which wouldbe impossible if the resources were spread thinly

145

over the whole economy. In over-all planning,limited areas may be chosen for more intensivedevelopment. In a newly developing country,for example, it would be reasonable to concentrateon a favorable area where investment would yieldthe largest and quickest returns. in a country at amore advanced stage of economic development, alocalized scheme of development might be usedto help a backward area to catch up with the restof the country: the Cassa per il Mezzogiornoscheme for the south of Italy is an example.

If the same approach is applied more narrowlywithin the agricultural sector two alternatives arepossible. A comprehensive plan may be developedto increase the production or productivity of aparticular crop of special importance to the country.Alternatively, a limited area may be chosen forcomprehensive agricultural development.

There are a good many examples of specialattention being devoted to a particular crop. Thus,jute production was built up quickly in India afterpartition, and latterly sugar-cane production in thesame country has responded remarkably to pro-visions of guaranteed minimum prices to growersas well as distribution of improved seed and otherprograms. Rubber, cocoa and other export cropsprovide further examples of such a specializedapproach, aimed sometimes at building up produc-tion, though latterly more often to increase pro-ductivity, and therefore the competitive power ofa country's exports on world markets. Examplesinclude the largely self-financed schemes in Ceylonand the Federation of Malaya for replanting rubberplantations with high-yielding varieties.

As such crops are often largely concentrated infavorable areas, in practice these schemes are gen-erally automatically localized. However, whenthe main need is to step up the production of abasic crop such as grain, which is produced through-out the country, a limited geographical area mustbe selected if the aim is to build up an effec-tive concentration of resources.

Following a suggestion in a specialist reportsponsored by the Ford Foundation," it is thereforeproposed under the Indian third five-year planto select one district in each state for comprehensivetreatment. The scheme envisages the simultaneous

Report on Indias food crisis and stops to meet it. Governmentof India, April 1959. It is understood that the Ford Founda-tion will contribute to the cost of this scheme.

provision in each of the selected districts of themain elements needed for increased production:irrigation, fertilizers, pesticides, improved seeds,strengthened extension services and improvedcredit and marketing facilities. The districts havebeen selected on the basis of existing irrigationfacilities or relative immunity from climatic hazards,and of the large contribution which they alreadymake to the supply of food grains entering com-mercial channels.

Such an approach can be useful from more thanone point of view. It can contribute substantiallyto production. It can also provide a pilot or ex-perimental area to try out new approaches, which ifsuccessful can be more widely applied, and serveas a training ground for administrators and fortechnical and local staff. Pilot areas have also beenused on a smaller scale to test out more limitedprojects, as for crop insurance in Ceylon. Such pilotschemes can also be of value in establishing suitableadministrative methods and pinpointing difficulties,though they naturally lack the element of inter-action between different types of projects whichis one of the most valuable features of the morecomprehensive approach.

More experience is needed oflocalized. schemes ofintensive agricultural development. They are likelyto be inost effective, however, when they form partof wider local schemes of intensive over-all develop-ment. On general grounds it would seem importantthat the selected areas, though small enough topermit an adequate concentration of resources,

Selected bibliography on

A substantial number of publications have ap-peared on general economic planning ; fewer areavailable on the agricultural sector.

The first section of this bibliography givesa small selection of the material available ongeneral economic development, most of whichcontain some mention of agriculture. Morecomplete bibliographies in the general field may befound in:

UNITED NATIONS, Bibliography on industrializationin under-de'veloped countries (New York, 1956,Sales No. 1956. II. B.2.); ORGANIZATION FOREUROPEAN ECONOMIC COOPERATION, Countries inprocess of development (Paris, 1960, Special bibli-

146

should also be large enough to constitute a repre-sentative area rather than a demonstration village.A period of years would usually be needed for suchan experiment to be properly tried out. On theother hand, difficulties could easily arise if it werecontinued so long that the gap between the develop-ment areas and the rest of the country became verypronounced. To avoid local rivalries the trial na-ture of such schemes, and the expectation that ifsuccessful they would be extended to other partsof thc country, should be made abundantly clearfrom the outset.

This approach is clearly no more than an ex-pedient when available resources are patently in-adequate for nation-wide development. It may makepossible a breakthrough in a limited area whichcan afterward be extended to the rest of the country.For political and social reasons the approach couldhardly be carried to an extreme, and only part ofa country's resources could be used for such acrash program. In a sense, however, this approachto development does in a co-ordinated way verymuch the same thing that took place earlier in mostof the more developed countries because of theimeven distribution of markets and natural resources.In these countries, too, there were areas of rapideconomic development and areas which remainedrelatively unchanged. It is as a rule only in thelast few decades that conscious efforts have beenmade in economically developed countries tonarrow the gap between their less and moreeconomically developed areas.

agricultural programing

ography No. 34); HAZLEWOOD, Arthur, The econom-ics of underdeveloped areas (London, Oxford univer-sity press, 1959).

The second section of this bibliography listspublications which deal not only with agriculturalprograming as a whole, but also with specificimportant aspects.

I. GE s ERAL ECONOMIC DEVELOPMENT AND PLANNING

AGARWALA, A. N. & SINGH, S. P., eds. The econom-ics of under-development. London, Oxford univer-sity press, 1958.

Jord.e. Teoría y programación del des-arrollo económico. University of Buenos Aires &Economic Commission for Latin America, 1958.

BUCIIANAN, N. S. & ELLis, H. S. Approaches to eco-nomic development. New York, Twentieth centuryfund, 1955.CLARK, C01111. The conditions of eC0110111k progress.Lond.on, Macmillan, 1957.FInzscHmAN, A. O. The strategy of economic develop-ment. New Haven, Conn., Yale university press,1958.KINDLEBERGER, C. P. Economic development. NewYork, McGraw-Hill, 1958.KUZNETS, SDI1011, MOORE, W. E. & SPENGLER, J. J.,eds. Economic growth : Brazil, India, Japan. Durham,N. C., Duke university press, 1955.LEIBENSTEIN, H. Economic backwardness and economicgrowth. Studies in the theory of economic development.New York, Wiley, 1957.LEwis,W. A. The theory of econo nc growth. London,Allen & Unwin, 1957.MYRDAL, G. Economic theory and underdeveloped re-gions. London, Duckworth, 1957.NURKSE, R. Problems of capital formation in under-developed countries. Oxford, Blackwell, 1953.R_OSTOW, W. W. The process of economic growth.New York, Norton, 1952.TINBERGEN, J. The design of development. Baltimore,Johns Hopkins press, 1958.UNITED NATIONS. ECONOMIC COMNIISSION FOR

AFRICA. Problems concerning techniques of develop-ment programming in African countries. Addis Ababa,1959.

. ECONOMIC COMMISSION FOR ASIA AND

THE FAR EAST. Economic development and plan-11 ing in Asia and the Far East. Problems and tech-niques. Economic bulletin fiv Asia and the Far East6 : 3 : 1-70, 1955.

. Economic development andplanning in Asia and. the Far East. Policies andmeans of implementation. Economic bulletin fivAsia and the Far East 7 : 3 : I-69, 1956.

. ECONOMIC COMMISSION FOR LATIN

AMERICA. Advice and assistance to governments inprogramming economic development. New York,1959.

Analysis and projections ofeconomic development. I. An introduction to the

technique of programming. New York, 1955.. Manual on economic develop-

ment projects. New York, 1958.

147

II. AGRICULTURAL DEVELOPMENT AND PLANNING

Aziz, U. A. The interdependent development ofapiculture and other industries. Malayan economicreview 4 : I : 21-33, 1959.CALCATERRA, E. ragricoltura nello sviluppo delleeconomic. arretrate. Milan, Giuffre, .1954.

FOOD & AGRICULTURE ORGANIZATION OF THEUNITED NATIONS. Documentation prepared forthe Center on land problems in Asia and the FarEast, held in Bangkok, Thailand, 22 NovemberII December 1954, under the FAO ExpandedTechnical Assistance Program. ROIDC, 1955.

. An enquiry into the problems of agriculturalprice stabilization and support policies. Rome, 1960.

. Marketing problems and improvementprogranis. Rome, 1958. (Marketing guide no. I.)

. Mediterranean development project. The

integrated development of Mediterranean agricultureand forestry in relation to economic growth. Rome,1959. (One over-all report and tcn country studies.)

. Near East planning survey. Generalreport on agricultural development, planning methodsand organization in time Near East. Rome, 1960.

Problems of food and agricultural expan-sion in the Far East. Rome, 1955.

. Problems of food and agricultural expan-sion in the Near East. Rome, 1955.

Report of the FAOIECAFE Centre onpolicies to support and stabilize agricultural prices andincomes in Asia and the Far East. Rome, 1959.

. Report of the Latin American Centre onfood and agricultural price stabilization and supportpolicies. Rome, 1959.

. Report of the Technical meeting on market-ing, Asia and the Far East. Rome, 1959.

. The state of food and agriculture.1956. Chapter III. Some factors influencing thc

growth of international trade in agricul-tural products.

1957. Chapter III. Factors influencing the trendof food consumption.

1959. Chapter III. Agricultural incomes andlevels of living in countries at differentstages of economic development.Chapter IV. Some general problems ofagricultural development in less-developedcountries in thc light of postwar experience.

OHKAWA, K. Economic growth and agriculture,with special reference to the productivity-employ-ment problem. Annals of the Hito tsubashi Academy,Tokyo 7 : I : 46-60, 1956.

SEN, S. R. The strategy for agricultural develop-ment. Agricultural situation in India 14:1068-1078,1960.UNITED NATIONS. ECONOMIC COMMISSION FORASIA AND THE FAR EAST. Credit problems of smallfarmers in Asia and the Far East. Study prepared bythe ECAFEIFAO agriculture division. Bangkok, 1957.

Economic development andplanning in Asia and the Far East. The agriculturalsector. Economic bulletin for Asia and the Far East8 : 3 : 1-77, 1957. (Report issued under the jointauthorship of ECAFE and FA.0.)

Some aspects of agricultural

148

development planning in Asia and the Far East.Study prepared by the ECAFE/FAO agriculturedivision. Economic bulletin for Asia and the Far East

1960.. ECONOMIC COMMISSION FOR LATIN

AMERICA. The selective expansion of agriculturalproduction in Latin America. Joint report of the Eco-nomic commission for Latin America and the Food andagriculture organization of the United Nations. NewYork, 1957.WARRINER D. Land reform and development in theMiddle East. A study of Egypt, Syria and Iraq. London,Oxford university press, 1957.

ANNEX ABLES

ANNEX TABLE IA. INDICES OF '11-IE VOLUME OF AGRICULTURAL PRODUCTION, BY COUNTRIES AND REGIONS

1952/53 1953/54 1954/55 1955/56 1956/57 1957/581958/59

(Preliminary)

NOTE: These indices may differ from national indices produced by the countries themselves because of differcnces in coverage, weights and methods of calculation.

151

Averag, 1952153-1056157 too

WESTERN EUROPE 93 100 101 103 103 107 109Austria 91 102 97 103 107 110 120Belgium-Luxembourg 93 96 104 107 100 105 110Denmark 99 101 101 97 102 110 110Finland 98 10S 100 97 100 106 109France 91 99 104 104 101 103 105

Germany, Western 95 101 101 100 102 105 106Greece . 79 102 100 108 111 127 120lrelan d 95 98 106 99 103 115 102Italy 92 104 96 105 104 101 113Netherlands 99 99 100 104 98 104 109

Norway 97 99 100 97 108 101 103Portugal 87 106 104 102 101 105 99Spain 101 95 103 98 103 108 110Sweden 104 104 101 91 101 100 94Switzerland 100 101 102 99 98 101 113United Kingdom 96 98 99 99 108 108 105Yugoslavia 70 108 94 125 103 137 116

NORTII AMERICA 99 99 97 101 103 98 106

Canada 110 103 78 99 109 92 98United States 98 98 99 101 103 99 107

LATIN AMERICA 95 96 100 102 106 112 115

Argentina 99 97 99 97 107 109 108

Brazil. 93 95 99 106 106 115 122

Chile 100 95 102 101 102 110 110

Colombia 98 100 98 102 102 110 113

Cuba 99 97 94 99 111 114 115

Mexico 85 88 103 111 113 121 126

Peru 98 100 102 103 97 98 98

Uruguay 97 108 102 99 95 101 93

FAR EAST (excl. Mainland China) 93 98 100 104 107 105 109

Burma 102 98 97 96 107 92 107

Ceylon 94 95 101 108 102 105 108

China: Taiwan 96 97 100 101 108 114 117

Federation of Malaya 95 93 99 105 108 108 110

India 91 101 101 103 105 104 106

Indonesia 93 98 106 102 102 103 105

Japan 96 85 94 114 110 115 118

Korea, South 86 105 105 106 93 107 109

Pakistan 99 97 102 98 105 103 100

Philippines 93 98 99 101 109 111 111

Thailand 89 106 85 105 115 93 106

AFRICA 94 98 100 102 106 103 107

Algeria 91 101 106 95 108 98 95

Morocco: former French Zone 92 102 106 100 100 85 98

Tunisia 94 109 103 81 113 98 136

Union of South Africa 91 96 101 104 108 107 109

NEAR EAST 94 100 97 100 109 112 116

Iran 90 98 98 104 109 114 115

Israel 81 92 100 103 123 128 132

Turkey 99 107 87 101 106 109 121

U. A. R.: Egyptian Region ...... 96 92 102 103 107 114 115

OCEANIA 96 98 98 104 105 102 116

Australia 97 97 97 104 105 99 119

New Zealand 97 96 100 103 104 106 109

ANNEX TABLE i13. INDICES OF PER CAPUT FOOD PRODUCTION, BY COUNTRIES AND REGIONS

NOTE: These indices may differ from national indices produced by the countries themselves because of differences in coverage, weights and suethuds of calculation.

152

1952/53 1953/54 1954/55 1955/56 1956/57 1957/581958/59

(Preliminary)

Average 1952153-1956157 = ¡no

WESTERN EUROPE 95 101 101 102 102 105 106

Austria 91 102 96 103 108 110 121

Belgium-Luxembourg 94 96 104 107 100 106 112

Denmark 99 101 101 97 102 110 110

Finland 98 105 100 97 100 106 109

France 91 100 104 104 101 103 105

Germany, Western . 95 101 101 100 102 105 109

Greece 81 105 100 103 110 123 120

Ireland 95 98 106 99 103 115 102

Italy 91 103 96 105 104 102 114

Netherlands 99 99 101 103 98 105 110

Norway 97 99 100 97 108 101 103

Portugal 87 106 104 102 101 105 99

Spain 101 95 103 98 102 109 110

Sweden 104 104 101 91 101 100 94

Switzerland . 100 101 102 99 93 101 113

United Kingdom 96 98 99 99 108 108 105

Yugoslavia 70 109 93 125 103 137 117

NORTH AmERICA 103 100 97 99 101 96 102

Canada 111 104 78 99 107 91 96

United States 98 97 100 101 104 103 112

LATIN AMERICA 99 99 101 99 103 103 103

Argentina 98 96 100 98 108 108 108

Brazil. 89 95 101 103 111 115 119

Chile 100 95 102 101 102 110 110

Colombia 97 97 97 106 102 105 108

Cuba 100 97 94 98 111 113 116

Mexico 87 91 103 106 113 120 123Peru 100 102 101 102 95 97 95

Uruguay 95 109 101 99 95 100 94

FAR EAST (excl. Mainland China) 95 100 100 102 104 100 103

Burma 102 98 96 96 107 92 108

Ceylon 97 90 101 113 99 99 101

China: Taiwan 96 97 100 100 107 113 117

Federation of Malaya. 90 89 102 104 115 113 109

India 90 102 101 103 104 103 105

Indonesia 90 98 106 102 104 104 107

Japan 97 85 94 114 110 115 119

Korea, South. 86 107 104 106 93 103 110

Pakistan 96 100 103 96 105 102 100Philippines 94 99 100 101 107 110 111

Thailand 90 108 83 104 114 89 104

AFRICA 99 101 100 99 101 96 96Algeria 91 99 106 95 110 93 95Morocco: former French Zone 91 102 106 100 101 85 99

Tunisia 95 110 103 80 113 99 137

Union of South Africa 91 96 100 104 108 107 108

NEAR EAST 97 103 97 98 105 105 105Iran 92 98 98 103 109 114 114Israel 82 92 101 103 122 126 130Turkey 99 108 86 100 106 111 123U. A. R.: Egyptian Region 86 93 103 105 113 115 111

OCEANIA 103 103 99 101 95 92 105Australia 98 101 99 104 98 95 120New Zealand 98 96 100 103 102 104 105

lndex of all farm products .

ANNEX TABLE 2A, - WORLD ' PRODUCTION OF MA,1012 COMMODITIES

Average1934-38

Average1948-52

1954/55

Indices: avera 1952/53-1956/57 100

77 89 99 102 105 104 109 112

1953 1954 1955

153

1955/56

1956

1956/57

Million cubic meters

Million metric ton

1957

1957/58

1958

' Excluding U.S.S.R., Eastern Europe, and Mainland China, except for forest products. - Beef and veal, mutton and lamb, pork.

1958/591959/60

(Preliminary)

1959

(Preliminary)

Million metric torts

Wheat 95.0 113.6 119.2 124.2 123.1 126.2 139.0 135.5Barley 28.5 36.1 44.8 46.3 52.4 49.9 51.6 51.5Oats 37.5 42.5 42.3 45.7 43.9 40.8 41.2 37.5Maize 94.1 119.6 123.5 130.2 137.0 139.4 150.0 166.6Rice (milled equivalent) 70.2 75.0 82.5 88.6 93.0 86.7 95.1 99.0

Sugar (centrifugal) 20.0 26.6 31.7 32.3 33.8 35.5 39.1 38.8

Citrus fruit 11.1 15.1 17.8 18.2 18.0 18.1 19.7 20.0Apples 11.0 12.7 13.8 12.8 14.7 9.0 19.0 12.2Bananas 8.1 11.4 12.7 12.9 13.4 14.2 14.3 14.2

Vegetable oils and oilseeds (oilequivalent) 9.2 11.7 13.3 13.4 14.9 14.8 15.3 15.2

Animal fats 3.01 4.14 4.72 5.02 5.33 5.29 5.12 5.29

Coffee 2.41 2.25 2.43 2.84 2.51 3.17 3.48 4.53Cocoa 0.74 0.75 0.82 0.83 0.90 0.77 0.92 0.98Tea 0.47 0.56 0.67 0.70 0.70 0.72 0.76 0.76Wine 18.0 17.6 21.2 21.4 20.8 16.8 21.7 21.9Tobacco 1.96 2.46 2.78 2.88 2.91 2.78 2.71 2.77

Cotton (lint) 5.29 5.78 6.48 6.82 6.51 6.18 6.36 6.98Jute 1.95 2.04 1.67 2.32 2.31 2.23 2.41 2.11VVool (greasy) 1.51 1.57 1.75 1.81 1.91 1.87 1.96 2.04Rubber (natural) 1.00 1.74 1.85 1.95 1.92 1.93 1.95 2.09

Milk (total) 193.6 205.2 227.4 229.3 233.6 238.4 240.1 242.6Meat' 26.9 30.5 35.4 37.2 38.9 39.3 39.1 39.8Eggs 5.82 7.48 8.70 8.85 9.06 9.33 9.50 9.66

FOREST PRODUCTS

RoundwoodSawnwoodPlywood

1 470267.0

8.3

1 552274.5

9.0

1 601

296.310.8

1 658294.211.3

1 663289.611.8

1 664295.013.0

1 670303.0

14.1

Wood pulp 39.1 42.4 46.6 49.8 50.3 50.2 51.7Newsprint 9.8 10.4 11.2 12.0 12.3 12.1 12.6Other paper and board 38.6 41.0 45.7 48.0 49.3 50.5 52.0

154

' Including exports from the rest of the world to the U.S.S.R., Eastern Europe, and Mainland China, but excluding exports from t 'ese countries, except for forestproducts. - 3 Excluding United States trade with its territories. - 3 Oranges and lemons only. - Excluding copra imported into Malaya and Singapore for re-export, but including copra smuggled from Indonesia and North Borneo into Malaya and Singapore. - Excluding imports into Malaya and Singapore for re-export, but including rubber smuggled from Indonesia into Malaya and Singapore. - Beef and veal, mutton and Iamb, pork. - Logs, pulpwood, pitprops, fuel-wood, poles, pilings and posts. - ° 1953.

ANNEX TABLE 213. - WORLD EXPORTS ' OF MAJOR COMNIODITIES

Average1934,-38

Average1948-52

1954 1955 1956 1957 19581959

(Preliminary)

Million metric tons

Wheat and wheat flour (wheatequivalent) 15.36 25.03 22.64 24.72 31.64 29.47 27.55 28.74

Barley 1.74 3.23 5.47 5.16 7.04 6.35 6.51 6.16Oats 0.72 1.23 1.48 0.91 1.33 1.44 1.47 1.39Maize 9.33 4.34 5.42 4.68 5.88 7.12 8.80 9.63Rice (milled equivalent) 9.67 4.40 4.29 4.85 5.46 5.61 5.03 4.83

Sugar (raw equivalent) 9.64 10.74 11.90 13.31 13.52 14.67 14.33 13.24

Citrus fruit' 2.07 1.89 2.60 2.84 2.39 2.69 2.76 3.08Apples 0.69 0.57 0.70 0.98 0.87 1.14 0.86 1.22Bananas 2.48 2.35 2.93 3.05 2.96 3.25 3.49 3.55

Vegetable oik and oilseeds (oilequivalent)4 4.19 3.63 4.51 4.61 4.98 5.15 4.82 5.04

Coffee 1.66 1.94 1.80 2.08 2.34 2.24 2.23 2.59Cocoa beans 0.69 0.70 0.72 0.72 0.76 0.80 0.66 0.75Te 0.40 0.42 0.51 0.44 0.52 0.50 0.54 0.52VVine 1.94 1.64 2.39 2.69 2.49 2.79 2.74 2.47Tobacco 0.49 0.54 0.59 0.64 0.64 0.68 0.66 0.64

Cotton (lint) 3.01 2.36 2.64 2.39 2.85 3.09 2.63 2.77Jute 0.82 0.86 0.90 1.00 0.89 0.82 0.93 0.87Wool (actual weight) 1.08 1.10 1.04 1.17 1.21 1.23 1.17 1.39Rubber (natural)° 1.04 1.82 1.87 2.07 2.07 2.05 2.14 2.33

Fleet (fresh, chflled, and frozen) 1.15 0.96 1.11 1.18 1.35 1.43 1.49 1.59Eggs (in che shell) 0.25 0.24 0.34 0.35 0.35 0.38 0.39 0.43

Million c ltic metersFOREST PRODTJCTS

Round wood ° 18.4 21.3 27.0 26.6 27.3 25.5 26.0Sawnwood ° 28.7 32.1 35.7 31.8 33.9 33.1 34.4Plywood ° 0.5 0.8 1.0 0.9 1.1 1.1 1.2

Million metric tons

VVood pulp 6.0 6.9 7.6 7.8 7.8 7.7 7.9Newsprint ' 6.0 6.2 6.6 7.0 6.9 6.8 6.9Other paper and board ° 2.3 2.8 3.2 3.2 3.6 3.5 3.7

ANNEX TA13LE 3A. - WESTERN EUROPE: PRODUCTION OF m \ma COMMODITI.s

155

' Beef and veal, mutton and las M, pork. - ' I icluding Eastern Europe. - ' Only partial coverage of production of exploded and defibrated pulp.

Average1934-38

Average1948-52

1954/55 1955/56 1956/57 1957/58 1958/591959/60

(Preliminary)

Million t ten* tons

VVheat. 31 07 30 32 35 70 37 81 32 00 40 57 39 09 42.57Rye 7.49 6 65 7 64 6 69 7.14 7 21 6.98 7.15Barley 9 08 10 93 13 72 14 74 19.04 17.50 17.69 20.38Oats 16 44 14 84 14 58 14 78 15.98 13 23 12 87 12 64Maize 9.73 7.15 8.55 9.72 10.11 12.19 11.04 14 16


Potatoes 69.87 76.26 80.93 73.04 84.07 78.58 72.42 81.39Citrus fruit 1.99 2.10 263 2.54 1.84 2.76 2.89 3.11Apples 7.42 8.74 9.49 8.69 10.29 4.22 13.73 7.19

Olive oil 0.81 0.86 0 85 0.72 0.90 1.08 0.86 1.07Animal fats 1.04 0.89 1.18 1.25 1.31 1.37 1.42 1.44

VVine 14.13 13.10 15.33 16 08 15.58 11,52 16.01 16.31

Tobacco 0.19 0.25 0.29 0.34 0.30 0.37 0.31 0.31

Milk (total) 77.02 77.17 90.92 89.74 91.27 95.18 95.69 97.40

Meat 8.56 7.53 10 23 10.51 10.68 11.07 11.25 11.54

Eggs 1.95 2.10 2.66 2.71 2,84 2.99 3.06 3.12

Indices: average 1952/53-1956/57 = too

Index of all farm products 82 87 101 103 103 107 109 113

1938Average1948-52

1954 1955 1956 1957 19581959

(Preliminary)

Million standardsFOREST PRODUCTS

Sawn softwood 10.24 9.87 10.72 11.13 10.84 10.62 10.61 10.42

Million lac meters

Sawn hardwood 9.07 9.08 9.92 10.69 10.70 10.80 10.95 10.97

Plywood 1.09 1.24 1.86 1.95 1.91 2.10 2,13 2.30

Iliillioit ten* tons

Fibreboard (hard and insuladng) 0.17 0.67 1.05 1.19 1.27 1.38 1.45 1.51

VVood pulp (chemical) 6.67 5.96 7.66 8.37 8.69 9.24 9.12 9.48

VVood pulp (mechanica03 3.95 3.46 4.40 4.66 4.96 5.08 5.07 5.22

Nevvsprint 2.80 2.33 2.86 3.12 3.43 3.53 3.51 3.64

Other paper and board 8.29 8.85 12.11 13.18 13.67 14.76 15.02 15.65

ANNEX TABLE 3B. - WESTERN EUROPE: EXPORTS AND IMPORTS OF MAJOR COMMODMES

156

' Oranges and lemons only. - Including Eastern Europe. Prewar figures refer to 5938. - ' Beef and veal, mutton and lamb, pork.

Average1934-38

Average

1948-521954 1955 1956 1957 1958

1959

(Preliminary)

Million t tetrie tonsGROSS EXPORTS


Sugar (raw equivalent) 0.86 1.37 1.68 1.83 1.56 1.84 1.36 1.29Citrus fruit' 1.18 0.91 1.26 1.40 0.86 0.97 1.20 1.35Apples. 0.19 0.31 0.41 0.66 0.53 0.74 0.40 0.80Wine 0.50 0.48 0.77 0.76 0.93 0.86 1.11 0.75

Bacon, ham, and salted pork 0.26 0.14 0.27 0.29 0.28 0.30 0.30 0.28Eggs (in the shell) 0.20 0.17 0.26 0.27 0.28 0.31 0.31 0.35Wool (actual weight) 0.23 0.11 0.09 0.10 0.11 0.11 0.10 0.13

Million CI bit meters

Coniferous logs' 2.39 1.71 0.88 0.92 0.63 0.67 0.94 0.93Broadleaved logs' 0.50 0.45 0.67 0.94 0.66 0.66 0.58 0.77Pulpwood' 3.03 3.53 4.11 5.74 5.22 5.18 3,94 4.45Pitprops 3.16 3.00 2.44 3.00 3.03 3.13 2.56 1.93Sawn softwood 2 13.86 12.66 14.88 15.39 14.05 14.26 13.05 15.18Plywood' 0.36 0.30 0.45 0.50 0.40 0.44 0.41 0.51

Million nulric tons

Wood pulp 2 4.55 3.51 4.39 4.70 4.97 4.90 4.82 5.08Newsprint 2 0.92 0.87 1.02 1.12 1.30 1.29 1.33 1.36Other paper and board 1.20 1.51 2.24 2.46 2.48 2.72 2.68 2.96

GROSS IMPORTS

VVheat and wheat flour (wheatequivaMn0 11.95 14.42 12.88 13.19 15.78 14.04 12.22 12.78

Barley 2.41 2.53 3.95 3.58 5.06 4.62 4.69 4.75Maize. 8.46 4.03 4.27 4.51 5.02 4.78 6.32 7.65Rice (milMd equivalent) 1.31 0.35 0.42 0.59 0.59 0.51 0.52 0.61

Sugar (raw equivalent) 3.47 4.25 3.79 4.07 4.41 5.38 4.87 4.63Vegetable oils and oilseeds (oil

equivalent) 3.00 2.52 3.02 3.09 3.43 3.57 3.30 3.33Oranges 1.28 1.33 1.92 2.06 1.73 1.95 2.10 2.24

Coffee 0.69 0.48 0.61 0.68 0.75 0.76 0.80 0.88Cocoa beans 0.36 0.33 0.40 0.40 0.39 0.45 0.39 0.43Tea 0.26 0.23 0.28 0.26 0.27 0.31 0.30 0.27VVine 1.68 1.39 2.00 2.40 2.13 2.53 2.64 2.18Tobacco 0.37 0.34 0.39 0.41 0.40 0.41 0.41 0.40

Cotton (lint) 1.76 1.40 1.58 1.42 1.51 1.72 1.43 1.43Rubber (natural) 0.36 0.59 0.71 0.80 0.76 0.79 0.77 0.69

Meat (fresh, chilled, frozen) 1.12 0.81 0.77 0.93 1.14 1.18 1.12 1.09Canned meat 0.08 0.18 0.20 0.20 0.19 0.23 0.24 0.24Bacon, ham, and saked pork 0.39 0.21 0.31 0.31 0.32 0.34 0.35 0.36Butter 0.57 0.39 0.32 0.40 0.44 0.45 0.46 0.47Cheese 0.23 0.27 0.28 0.28 0.30 0.31 0.33 0.34Eggs (in the shell) 0.31 0.21 0.29 0.31 0.32 0.34 0.36 0.41

ANNEX TABLE 4A. - EASTERN EUROPE AND U.S.S.R.: PRODUCTION OF MAJOR. COMMODITIES

157

SOURCES: Based generally on the official statistics of the countries concerned.' Albania (except for milk and eggs), Bulgaria, Czechoslovakia, Eastern Germany, Hungary, Poland and Romania. 1959 production of some products has

been estimated for Albania, Bulgaria, Romania and Eastern Germany. - Wheat, rye, barley, oats, maize. - Thousand million. - Including pulses.

Average1949-53

1954 1955 1956 1957 19581959

(Preliminary)

Million metric tort.

EASTERN EUROPE

Total cereals 38.3 37.5 44.5 38.8 47.0 41.2 45.6Wheat 11.9 9.7 12.0 10.8 13.3 11.9 12.8Rye 10.9 9.8 11.1 10.7 11.4 11.2 11.3Barley 4.4 4.3 5.2 4.7 5.3 4.8 5.0Oats 5.2 4.7 5.3 5.0 5.3 5.3 5.3Maize 5.9 9.0 10.9 7.6 11.7 8.0 11.2

Potatoes 56.0 64.2 51.6 66.2 64.5 58.5Sugar beet 20.9 23.5 24.1 19.8 26.3 27.1 25.5Grapes 1.7 1.6 2.2 1.4 2.1 3.0 2.3Sunflowerseed 0.59 0.70 0.72 0.56 0.55 0.61 0.93Milk 20.3 22.3 23.4 23.7 25.3 26.9Eggs' 9.6 10,6 11.6 12.7 13.6 14.3Tobacco 0.12 0.10 0.18 0.21 0.22 0.21Flax (fiber) 0.23 0.10 0.10 0.11 0.09 0.09Cotton (raw) 0.11 0.17 0.09 0.07 0.08 0.98 0.08

U.S.S.R.

Total cereals' 80.9 85.6 106.8 127.6 105.0 141.2 124.8Wheat 34.5 42.4 47.3 67.4 58.1 76.6 68.6Rye ... ... 14.1 14.5 15.8Barley 12.9 8.5 13.0Oats ... ... 13.2 12.7 13.4Maize ... 3.7 14.7 12.5 7.0 16.7

Potatoes 75.7 75.0 71.8 96.0 87.8 86.5 86.4Vegetables 10.0 11.9 14.1 14.3 14.8 14.9 14.3Fruit 2.2 ... 3.4 3.8Grapes 0.8 ... ... ... ... 1.7 1.7Sugar beet 21.1 19.8 31.0 32.5 39.7 54.4 43.9Sunflowerseed 2.0 1.9 3.8 3.9 2.8 4.6 2.9Milk 35.7 38.2 43.0 49.1 54.7 58.7 62.0Butter 0.50 ... ... ... 0.75 0.78 0.84Meat (slaughter weight) 4.9 6.3 6.3 6.6 7.4 7.7 8.9

Pigmeat 1.7 2.7 2.0 2.7 3.3 3.3 3.6Eggs' 12.9 17.2 18.5 19.5 22.3 23.0 25.0Cotton (raw) 3.5 4.2 3,9 4.3 4.2 4.4 4.7Flax (fiber) 0.23 0.22 0.38 0.52 0.44 0.44 0.39Wool 0.20 0.23 0.26 0.26 0.29 0.32 0.35

ANNEX TABLE 4B. - EASTERN EUROPE' AND U.S.S.R.: EXPORTS AND IMPORTS OF MAJOR commoDmEs

' Albania, Bulgaria, Czechoslovakia, Eastern Germany, Hungary, Poland,

ANNEX TABLE 4C. - U.S.S.R.: PRODUCTION ANO EXPORTS OF FOREST PRODUCTS

PRODUCTION

Sawn softwood

Sawn hardwoodPlywood

FibreboardWood pulp (chencapVVood pulp OnechanicapNevvsprintOther paper and board

EXPORTS

PulpwoodPitpropsSawn softwoodPlywood

Average1948-52

8.80

7.300.66

0.021.080.430.240.92

0.050,290 820.05

1953

12 08

9.960.95

0 041.560 610.291.76

--0 441.300.05

1954

12.55

10.351.02

0 051 680 660 321.95

--0.781.74006

158

1955

Million standards

13.75

Million cithic met

11.34

Million netric roas

0 051.740.720.362.04

0.550.842 320 09

1956

13 93

11.491.12

0 071.850.770.362.22

illillion cubic meters

0.530 642.210 05

1957

14.92

12 30

0.091.960.790 382.41

0.590 823 460.10

1958

17.10

14.101.23

0.112.090.810 392.57

0.820.993.630.11

1959(Prelhninary)

18.01

14.851.30

0.132.220.840.412.79

0.991.134.400.13

Exports Imports

1955 1956 1957 1958 1955 I 1956 1957 1958

"Flunaand merit. tons

I

Wheat 2 373.2 l 1 608.6 5 468 2 3 943 2 2 739.6 2 208.2 4 389.3 3 403.1

Rye 728 6 622.1 442 4 461 0 601.8 791.1 342.0 416.9

Barley 565 0 785.4 1 214 0 278.3 776 0 769.0 1 066.7 600.5

Maize 487.5 492 8 184 6 300 0 680 8 535.1 142.3 667.1

Oats 75 6 164 3 223 5 261 1 40 0 87 0 150.0 133.0Rice (milled equivalent) 21.4 37.9 55 3 500 652 5 805 3 571.9 677.6

Other feed -- -- -- -- 233 0 129 0 423.0 69.0Sugar (raw equivalent) 1 127 2 525.6 605 2 1 072 9 1 094 5 405.2 706.7 446.2Citrus fruit 0 4 0 4 0 3 0 2 152 1 155.9 205.7 274.2Oilseeds 99.0 88.1 60 2 63.7 1 149 3 1 164.9 1 151.4 952.5Vegetable oils 524 71.3 666 726 256 6 181.5 117.1 158.1

Meat 153 0 169.5 203.9 178 2 409 5 357.9 291.7 314.7Butter 12.9 31.4 54.2 55 6 38 6 41.8 55.9 55.2Cheese 3.1 3.5 11.2 4.5 11 0 9 8 16.3 11.5Eggs 43.9 44 5 40.1 51 0 27 2 26 3 30.7 29.4Tea 5.7 6 4 5.7 4.3 14 2 20 1 27.7 31,9Tobacco 31.7 50 0 48.3 45 2 106 9 127.4 149.1 140 9

Wool (clean basis) 15.0 13.4 14 5 17.3 91.7 94.9 113.3 114.3Cotton (lint) 336.9 309.5 318.7 310.9 334 3 358.6 463.3 495.2Flax 4.5 27.5 35.7 29.7 2.0 2.3 2.1 2.3Natural rubber -- -- -- -- 103 8 226 6 255.9 377.2Coffee -- 15.3 21.4 25.4 28.0Cocoa -- -- 35.1 38.5 68.1 39.5

ANNEX TABLE A. - NORTH AN1ERICA: PRODUCTION OF MAJOR COMMODITIES

' Beef and veal, mutton and lamb. pork. - Includes exploded and defibrated pulp.

159

Average1934-38

Average1948-52

1954/55 1955/56 1956/57 1957/58 1958/591959/60

(Prelhninary)

'Million metric tons

Wheat 26.65 44.54 35.81 39.57 42.93 36.37 49.90 41.96Oats 18.99 25.30 25.19 28.11 24.97 24.75 26.73 22.03Maize 53.20 82.36 78.24 82.84 88.48 87.68 97.31 111.57Rice (milled equivalent) 0.62 1.25 1.89 1.65 1.46 1.27 1.31 1.57

Potatoes 11.94 12 83 11.41 12.14 12.98 12.91 13.93 12.63Citrus fruit 3.62 6.41 7.32 7.47 7.57 6.44 7.42 7.33

Vegetable oils and oHseeds (oilequivalent) 1.19 2.66 2.86 3.20 3.66 3.38 4.01 3.78

Animal fats 1.30 2 40 2.58 2 78 3.01 2 85 2 66 2.85

Tobacco 0.62 1.02 1.10 1.06 1.06 0.83 0.88 0.89Cotton (lint) 2.76 3.11 2.98 3.21 2.90 2.39 2.51 3.17

Milk (total) 54.44 59.55 63.03 63.63 64.67 65.24 64.91 64.75

Meat' 8.09 10.83 12.37 13.15 13.76 13.28 12.77 13.66

Eggs 2.42 3.77 3.95 3.94 4.01 3.98 3.97 4.01

Indices: average 1952153-1956157 100


Average1934-38

Average1948-52

1954 1955 1956 1957 19581959

(Preliminary)

Million standardsFOREST PRODUCTS

Sawn softwood 11.86 18.14 18.43 19.99 19.04 17.36 17.38 18.20

Minion cubic meters

Sawn hardwood 12.08 18.10 17.80 18.68 18 77 14.89 16.01 17,10

Plywood 0.82 3 49 4.99 652 671 6.75 7.69 8.15

AIHIMn nerric rons

Fibreboard (hard and insulating).. 0.64 1.21 1.50 1.67 1.72 1.63 1.71 1.80

VVood pulp (chemical) 5.20 13.70 17.02 19.16 20.50 20.14 20.19 21.80

VVood pulp Onechanica02 3.44 7.23 8.32 8.87 9.32 9.10 8.88 9.24

NewsprMt 3 38 5.74 6.51 6.92 7.32 7.40 7.10 7.45

Other paper and board 10.05 20.50 23.31 26.04 27.19 26.34 26.58 27.90

' Excluding United States trade with its territories. - a Oranges and lemons only.

160

ANNEX TABLE B. - NORTH AMERICA: EXPORTS AND IMPORTS OF MAJOR COMMODITIES

Average Average 19591934-38 1948-52

1954 1955 1956 1957 1958(Preliminary)

Million metric tonsGROSS EXPORTS

VVheat and wheat Hour (wheatequivalent)

6.07 18.54 13.25 13.64 21.98 20.27 19.15 19.61

Barley 0.50 1.44 2.15 2.96 3.56 2.55 4.25 3.83Maize 0.80 2.31 1.96 2.78 3.02 4.52 4.56 5.57Rice (miHed equivalent) 0.07 0.54 0.56 0.52 0.82 0.74 0.57 0.69

Oranges 0.15 0.23 0.33 0.30 0.41 0.33 0.16 0.26Vegetable oHs and oHseeds (oil

equivalent) 0.02 0.41 0.85 0.84 1.17 1.31 1.09 1.28

Tobacco 0.20 0.22 0.22 0.27 0.25 0.24 0.23 0.23Cotton (lint) 1.29 1.03 0.94 0.56 1.03 1.57 1.00 0.80

Million bic meters

Coniferous logs 0.33 0.60 0.71 0.72 0.54 0.60 0.63Broadleaved logs 0.23 0.25 0.22 0.26 0.24 0.27 0.29Pulpwood 5.68 4.64 4.87 5.21 4.81 3.51 4.00Sawn softwood 8.41 11.14 12.59 10.79 10.22 10.76 12.20

Million metric tons

VVood pulp 0.80 1.83 2.38 2.72 2.63 2.64 2.48 2.60Newsprint 2.80 4.50 5.14 5.42 5.55 5.51 5.27 5.53

GROSS IMPORTS

Sugar (raw equivalent)' 3.21 3.88 4.05 4.22 4.45 4.43 5.00 4.85Citrus fruit2 0.11 0.19 0.22 0.21 0.21 0.21 0.20 0.24Bananas 1.35 1.49 1.61 1.58 1.67 1.70 1.76 1.82Vegetable oils and oilseeds (oil

equivalent) 0.90 0.55 0.52 0.56 0.54 0.52 0.54 0.56

Coffee 0.81 1.27 1.07 1.23 1.33 1.30 1.26 1.45Cocoa 0.26 0.29 0.25 0.24 0.27 0.25 0.21 0.23Tea 0.06 0.06 0.07 0.07 0.07 0.07 0.07 0.07

Jute 0.07 0.08 0.06 0.05 0.08 0.06 0.04 0.07Sisal 0.15 0.18 0.17 0.18 0.16 0.16 0.15 0.21Wool (actual weight) 0.10 0.29 0.15 0.17 0.17 0.13 0.12 0.18Rubber (natural) 0.52 0.81 0.65 0.70 0.64 0.61 0.52 0.63

'Beef and veal, mutton and lamb, pork.

ANNEX TABLE 6B. - OCEANIA: EXPORTS AND impowrs OF MAJOR COMMODMES

161

Average1934-38

Average1948-52

1954 1955 1956 1957 19581959

(Preliminary)



Barley 0.07 0.26 0.63 0.36 0.63 0.64 0.32 0.89Oats 0.01 0.19 0.03 0.11 0.20 0.09 0.07 0.40


Copra and coconut oil (oil equiv-alent) 0.13 0.13 0.16 0.17 0.17 0.16 0.17 0.16

Beef 0.15 0.13 0.17 0.25 0.24 0.28 0.28 0.32Mutton and lamb 0.27 0.30 0.34 0.33 0.31 0.30 0.34 0.39Butter 0.24 0.21 0.18 0.24 0.25 0.21 0.24 0.28Cheese 0.10 0.12 0.11 0.11 0.11 0.10 0.10 0.10Wool (actual weight) 0.49 0.66 0.62 0.71 0.72 0.80 0.73 0.87

GROSS /MPORTS



Rubber (natural) 0.01 0.04 0.05 0.06 0.05 0.04 0.05 0.05

ANNEX TAIHE 6A. - OCEANIA: PRODUCTION OF MAJOR COMMODIIIES

Average1934-38

Average1948-52

1954/55 1955/56 1956/57 1957/58 1958/591959/60

(Preliminary)

Million metric tons

Wheat 4.38 5.30 4.70 5.39 3.74 2.76 6.04 4.91Sugar (centrifugal) 0.94 1.04 1.48 1.36 1.36 1.51 1.64 1.59Wool (greasy) 0.59 0.69 0.79 0.85 0.93 0.88 0.97 1.03Milk (total) 10.18 10.43 10.52 11.28 11.76 11.46 11.34 11.80Meat' 1.42 1.58 1.79 1.88 1.86 1.97 2.10 2.21

Indices : average 1952153-1956157 - too


Average1948-52

1954 1955 1956 1957 19581959

(Preliminary)

Million ct bic metersFOREST PRODUCT'S

Sawnwood 4.19 4.73 4.85 4.59 4.50 4.72 4.80

'Beef and vcal, mutton and lamb, pork.

ANNEX TABLE 7A. - LATIN AMERICA: PRODUCTION OF MAJOR COMMODITIES

162

Average1934-38

Average1948-52

1954/55 1955/56 1956/57 1957/58 1958/591959/60

(Preliminary)

Million metric tons

VVheat 8.62 7.97 11.70 9.47 11.09 10.33 10.72 9.72

Maize 18.00 15.04 17.36 19.05 18.39 20.16 21.39 21.06

Rice (mdlled equivalent) 1.33 3.08 3.80 3.63 4.13 4.00 3.95 4.23


Citrus fruit 3.28 3.73 4.03 4.20 4.40 4.53 4.75 4.71

Bananas 4.20 7.80 9.26 9.38 9.80 10.60 10.50 10.50

Coffee 2.11 1.88 1.94 2.23 1.88 2.48 2.74 3.72

Cocoa 0.24 0.25 0.32 0.29 0.30 0.29 0.34 0.33

Tobacco 0.21 0.31 0.35 0.38 0.40 0.39 0.40 0.40

Cotton (lint) 0.59 0.86 1.12 1.28 1.16 1.27 1.26 1.20

Milk (total) 12.22 14.59 17.42 18.27 18.92 19.79 20.06 20.20

Meat' 5.03 6.10 6.14 6.45 7.10 7.27 7.30 6.75

Eggs 0.48 0.58 0.75 0.78 0.79 0.89 0.93 0.95

Indices: average 952153-1956157 = 100


Average1954 1955 1956 1957 1958

1959

1948-52 1 (Preliminary)

lillian cubic metersFOREST PRODUCTS

Sawnwood 8.10 9.12 9.24 8.27 8.74 9.06 9.20

Million metric tons

VVood pulp 0.22 0.30 0.32 0.37 0.37 0.40 0.42

All paper and board 0.69 0.88 1.15 1.24 1.36 1.47 1.52

ANNEX TABLE 713. - LATIN AMERICA: EXPORTS AND IMPORTS OF MAJOR COMMODITIES

' Excluding trade between the United States and its territories. .- atad veal, mutton atad lamb, pork.

163

Average1934-38

Average1948-52

1954 1955 1956 1957 19581959

(Preliminary)


VVheat and wheat flour (wheatequivalent) 3.45 2.00 3.38 4.23 3.03 2.83 2.45 2.50

Maize 6.61 1.20 2.27 0.53 1.11 0.84 1.73 2.74Rice (milled equivalent) 0.10 0.25 0.16 0.13 0.25 0.13 0.17 0.17

Sugar (raw equkalent)' 4.05 7.06 6.56 7.70 7.90 8.64 8.84 8.14Bananas 2.04 1.92 2.34 2.38 2.32 2.55 2.81 2.89Linseed nnd linseed oil (oil

equivalent) 0.55 0.19 0.29 0.18 0.08 0.17 0.18 0.23

Coffee 1.40 1.61 1.35 1.57 1.70 1.57 1.56 1.88Cocoa beans 0.21 0.18 0.22 0.22 0.21 0.20 0.19 0.17

Cotton (lint) 0.34 0.39 0.73 0.69 0.76 0.52 0.59 0.72Wool (actual weight) 0.19 0.19 0.16 0.17 0.19 0.13 0.18 0.19

Meat (fresh, chiHed and frozen)' 0.59 0.34 0.25 0.28 0.49 0.50 0 52 0.48Canned meat 0.12 0.12 0.10 0.10 0.10 0.14 0.13 0.10

Ill011 CI bit meters

Broadleaved logs 0.40 0.34 0.40 0.43 0.37 0.34 0.35Sawn softwood 1.25 1.19 1.12 1.10 1.76 1.54 1.56

Million tnetric tonsGROSS IMPORTS

VVheat and wheat flour (wheatequivalent) 1,69 2.84 3.39 3.79 3.47 3.55 3.40 3.91

Rice (milled equivalent) 0.39 0.37 0.30 0.22 0.22 0.32 0.40 0.33

Sugar (rawequivalenPotatoes

0.250.18

0,360.24

0.430.21

0.470.19

0.280.20

0.480.21

0.350.16

0.320.15

ANNEX TABLE 8A. - FAR EAST (EXCLUDING MAINLAND CHINA) : PRODUCTION OF MAJOR COMMODITIES

'Beef and veal, nautton and lamb, pork.

164

Average1934-38

Average1948-52

1954/55 1955/56 1956/57 1957/581959/60

1958/59(Preliminary)

Million I ietric tons

VVheat 12.13 11.35 13.45 13.96 13.78 14.72 12.96 15.49

Millet and sorghum 14.94 13.28 18.11 15.42 15.46 16.60 17.82 16.80



Sugar (noncentrgugap 3.67 4.04 4.46 4.88 5.34 5.12 5.85 5.93

Starchy roots 21.62 26.06 31.76 33.62 33.79 34.94 36.71 37.52

Pulses 6.78 7.12 8.23 9.34 9.16 9.92 8.85 10.77

Vegetable oils and oilseeds (oilequivalent) 3.96 4.02 5.05 4.86 5.19 5.08 5.12 5.08

Tea 0.46 0.54 0.63 0.66 0.66 0.67 0.70 0.70Tobacco 0.79 0.61 0.74 0.78 0.84 0.85 0.77 0.82

Cotton (lint) 1.22 0.90 1.30 1.20 1.26 1.31 1.23 1.17

Jute 1.94 1.99 1.64 2.28 2.26 2.18 2.36 2.06Rubber (natural) 0.97 1.65 1.74 1.82 1.77 1.78 1.80 1.93

Meat' 1.65 1.77 2.00 2.22 2.30 2.38 2.41 2.44Nfilk (total) 23.23 25.25 26.74 26.48 26.45 26.24 26.60 26.90

Indices: average 1952/53-1956/57 = 100


Average 19591954

1948-521955 1956 1957 1958

(Preliminary)

Million cubic metersFOREST PRODUCTS

Sawnwood 16.86 21.03 24.52 30.02 31.91 30.71 34.00Plywood 0.25 0.67 0.83 1.03 1.20 1.31 1.49

Willion metric tons

VVood pulp 0.78 1.65 1.93 2.21 2.47 2.35 2.55Newsprint 0.16 0.45 0.48 0.55 0.59 0.61 0.68Other paper and board 0.90 1.77 2.09 2.42 2.84 2.91 3.24

ANNEX TAU LE 813. - FAR EAST (EXCLUDING MAINI, ND CHINA): EXPORTS AND IMPORTS OS MAJOR COMMODITIES

165

' Excluding copra imported into Malaya atad Singapore for re-export, but including copra smuggled from Indonesia and North Borneo into Malaya andSingapore. - Excluding imports into Malaya and Singapore for re-export, but including rubber smuggled froto Indonesia into Malaya and Singapore.

Average1934-38

Average1948-52

1954 1955 1956 1957 19581959

(Preliminary)

GROSS EXPORTS Million metric tons

Rice (milled equivalent) 8.96 3.05 3,08 3.55 3.51 4.06 3.40 3.52Sugar (raw equivalent) 3.31 1.01 1.83 1.86 2.00 1.97 1.96 1.80Vegetable oils and oilseeds (oil

equivalent)' 1.71 1.32 1.24 1.51 1.52 1.42 1.41 1.12Tea 0.36 0.39 0.47 0.40 0.47 0.44 0.49 0.45

Cotton (lint) 0.68 0.27 0.19 0.28 0.24 0.18 0.18 0.12Jute 0.79 0.84 0.89 0.99 0.87 0.81 0.91 0.85Rubber (natural)' 0.96 1.69 1.75 1,92 1.81 1.83 1.83 2.12

Million c bic meters

Broadleaved logs 0.76 2.20 2.50 2.98 3.27 3.40 3.45Sayvn hardvvood 0.56 0.89 1.08 1.09 1.06 1.08 1.10Plywood 0.02 0.17 0.24 0.30 0.35 0.40 0.45

Million metric tonsGROSS IMPORTS


Rice (milled equivalent) 6.13 3.12 3.40 3.11 4.03 4.04 4.08 3.39Barley 0.05 0.69 0.82 0.61 1.20 1.12 1.07 0.55Maize 0.21 0.20 0,24 0.44 0.49 0.68 0.83 1.16

Sugar (raw equivalent) 1.68 1.16 2.56 2.30 2.07 1.89 2.07 1.94Vegetable oils and oilseeds (oil

equivalent) 0.37 0.25 0.38 0.49 0.48 0.54 0.51 0.56

Cotton (lint) 0.90 0.52 0.74 0.66 0.86 0.89 0.76 0,90Jute 0.05 0.27 0.25 0.29 0.23 0.18 0.13 0.10

WheatBarleyRice (milled equivalent)

Total grains'

Sugar (centrifugal)Pulses

Citrus fruitDatesBananas

Vegetable oils and oilseeds (oil

equivalent)TobaccoCotton (lint)

Milk (total)Meae

Index of all farm products

ANNEX TABLE 9A. - NEAR EAST: PRODUCTION 09 MAJOR COMMODITIES

Average1931-38

Average

1948-521954/55

166

1955/56

Million t leak tons

9.50 10.95 13.56 14.08 15.21 17.80 16.54 16.29

4.24 4.67 5.87 5.40 6.10 7.45 6.39 5.96

1.09 1.34 1.50 1.35 1.65 1.81 1.41 1.67

19.07 22.05 26.59 27.54 29.32 33.39 31.01 30.15

0.22 0.42 0.59 0.69 0.72 0.79 0.86 1.00

0.70 0.78 0.84 0.85 0.84 0.90 0.80 0.84

0.79 0.85 1.12 1.25 1.19 1.31 1.50 1.49

0.87 0.85 1.06 1.01 1.11 1.10 1.09 1.10

0.05 0.07 0.08 0.10 0.11 0.11 0.12 0,11

0.32 0.41 0.52 0.50 0.62 0.51 0.63 0.62

0.09 0.12 0.14 0.15 0.15 0.16 0.15 0.15

0.56 0.66 0.74 0.76 0.81 0.80 0.95 0 99

9.70 10.36 10.17 11.16 11.70 11.52 12.42 12.50

0.65 0.85 1.01 1.06 1.20 1.22 1.16 1.13

Indices : average 1952153-5956157 = too

72 84 97 100 109 112 116 116

heat, barley, oats, maize, /Mat, sorg,hum, rice, rye, mixed grains. Beef atad veal, mutton and lamb, pork.

ANNEX TABLE 913. - NEAR EAST: EXPORTS AND IMPORTS OF MAJOR COMMODTI S

' Wheat and wheat flour, barley, maize, oats, sorghums, millet, rye, rice. -a Oranges and lemons.

1956/57 1957/58 1958/591959/60

(Preliminary)

Average1934.38

Average1948-52

1954 1955 1956 1957 19581959

(Preliminary)



Barley 0.36 0.46 1.03 0.46 0.78 0.53 0.58 0.26


Total grains' 0.94 1.11 2.65 1.11 1.54 1.41 1.36 0.90

Citrus fruit2 0.30 0.20 0.36 0.30 0.35 0.37 0.39 0.45

Tobacco 0.04 0.07 0.07 0.06 0.07 0.09 0.06 0.07

Cotton (lint) 0.47 0.47 0.52 0.57 0.51 0.55 0.54 0.77

GROSS IMPORTS

Wheat and wheat flour (wheatequivalent)

0.29 1.43 0.86 1.32 2.20 2.51 2.30 3.64

Total grains' 0.52 1.79 1.13 1.85 2.71 3.06 2.89 3.70


Million ci bic meters

Sawn softwood 0.38 0.71 0.62 0.47 0.51 0.50 0.53

ANNEX TABLE ioA. - AFRICA : PRODUCTION OF MAJOR COMMODITIES

' Beef and veal, mutton and lamb, pork.

167

Average1934-38

Average1948.52

1954/55 1955/56 1956/57 1957/58 1958/591959/60

(Prelhninary)

Million lietric tons

WheatBarleyMaize

Millet and sorghumRice (milled equivalent)

2.662.604.629.31

1.11

3.163.187.01

10.671.72

4.303.778.63

11.381.89

3.91

2.81

8.7411.141.96

4.333.699.25

11.171.92

3.712.188.66

10.99

2,09

3.933.249.23

11.032,06

3.722.508.85

11.062.00


Starchy roots 35.40 45.43 51.41 52.31 48.75 50.25 50,44 49.38Pulses 1.02 1.42 1.61 1.51 1.51 1.34 1.39 1.35

Citrus fruit 0.38 0.77 1.00 1.09 1.16 1.26 1.16 1.29Bananas 0.30 0.31 0.43 0.50 0.50 0.55 0.55 0.55

Groundnuts (oil equivalent) 0.56 0.71 0.82 0.94 0.98 1.18 1.05 1.00

Vegetable oils and oflseeds (oilequivalent) 1.73 2.20 2.51 2.52 2.78 2.84 2.89 2.74

Coffee 0.14 0.29 0.38 0,49 0.51 0.54 0.59 0.65Cocoa 0.49 0.50 0.49 0.53 0.513 0.46 0.57 0.63Wine 2.14 1.72 2.51 2.07 2.19 2.16 2.05 1.98

Cotton (lint) 0.14 0.22 0.26 0.26 0.28 0.31 0.30 0.31Sisal 0.16 0.23 0.29 0.30 0.31 0.33 0.35 0.36

Milk (total) 6.82 7.87 8,65 8.72 8.84 8.94 9.07 9.10Meat' 1.52 1.84 1.89 1.99 2.05 2.07 2.10 2.10

indices: average 1952153-1956157 100


Average1954

1948.521955 1956 1957 1958

1959

(Preliminary)

Million cubic meterFOREST PRODUCTS

Sawnwood 1.30 1.79 1.80 1.91 1.96 1.88 1.97

168

ANNEX TABLE 10B. - AFRICA : EXPORTS AND IMPORTS OF MAJOR COMMODITIES

Average 1

1934-38Average1948-52

1954 1955 1956 1957 19581959

(Prelinffnary)

Million t ietric tonsGROSS EXPORTS

VVheat and wheat flour (wheatequivalent) 0.52 0.33 0.53 0.63 0.35 0.30 0.36 0.22

Barley 0.21 0.55 0.64 0.46 0.48 0.10 0.25 0.25

Maize 0.67 0.36 0.79 1.02 1.31 1.39 1.56 0.82


Oranges 0.15 0.40 0.53 0.66 0.56 0.76 0.69 0.74

Bananas 0.14 0.22 0.34 0.36 0.35 0.39 0.38 0.34

Groundnuts:and groundnut oil

(oil equivalent) 0.33 0.32 0.51 0.46 0.59 0.55 0.67 0.64

Palm kerneis and oil (oil equivalent) 0.30 0.33 0.37 0.36 0.37 0.36 0.39 0.38

Palm oil 0.24 0.33 0.39 0.37 0.38 0.35 0.37 0.40

Coffee 0.13 0.28 0.35 0.43 0.50 0.51 0.54 0.57Cocoa beans 0.46 0.48 0.47 0.48 0.52 0.57 0.44 0.55

VVine 1.41 1.12 1.59 1.90 1.53 1.90 1.53 1.63

Tobacco 0.03 0.07 0.09 0.08 0.09 0.08 0.08 0.10

Cotton (lint) 0.13 0.19 0.24 0.24 0.26 0.24 0.27 0.29Sisal 0.16 0.22 0.27 0.29 0.30 0.32 0.34 0.36

Alillion cubic meters

Broadleaved logs 1.19 1.88 2.36 2.32 2.64 2.86 3.30

Million 'leak tonsGROSS IMPORTS


Rice (milled equivalent) 0.39 0.18 0.23 0.35 0.34 0.46 0.38 0,53Sugar (raw equivalent) 0.41 0.55 0.87 0.94 0.95 1.00 1.00 1.05

ANNEX TABLE II. - TOTAL CATCH (LIVE WEIGHT) OF FISH, CRUSTACEANS, MOLLUSKS, IN SELECTED COUNTRIES

169

1938Average1953-57

1953 1954 1955 1956 1957 19581959

(Preliminary)

Thousand metric tons

WORLD TOTAL 20 500.0 28210,0 25 240.0 27 010.0 28 350.0 29 850.0 30830.0 32 100.0 35 600.0

A. 1953-57 average catch: 1 000 000

tons and more

Japan 3 562.0 4828.1 4521.6 4 544.6 4912.8 4762.6 5 399.0 5 505.0 5 875.0United States (incl. Alaska) 2 253.1 2 791.5 2 666.2 2 771.3 2 783.4 2 981.9 2 754.9 2 703.6 2 889.7China: Mainland ... 2494.4 1900.0 2294.0 2518.0 2640.0 3120.0 4060.0 5020.0U.S.S.R 1 523.0 2 376.6 1 983.0 2 258.0 2 495.0 2 616.0 2 531.0 2 621.0 2756.0Norway 1 152.5 1 879.0 1 557.1 2068.2 1 813.4 2201.3 1 754.8 1 438.8 1 607.2United Kingdom 1 198.1 1 071.5 1 122.0 1 070.2 1 100.4 1 050.4 1 014.7 999.0 988.9Canada (incl. Newfoundland) 836.8 1004.0 924.2 1027.4 965.0 1 105.4 997.1 1 000.7 1 050.6

B. 1953-57 average catch: 500 000tons and more but less than

1 000 000 tons

India ... 946.3 819.0 828.5 839.0 1 012.3 1233.0 1064.4 ...Germany,Western 776.5 775.2 764.9 703.9 814.8 800.6 791.7 743.1 765.0

Spain (incl. Ceuta and Melilla) 423.5 712.4 635.1 665.5 770.3 761.6 777.7 844.9 ...Indonesia 472.0 671.3 616.9 628.5 669.8 713.9 727.4 685.0 723.3

Union of South Africa (incl. SouthWest Africa) 66.7 597.3 638.8 623.1 607.1 536.9 580.6 649.9 ...

France (incl. Algeria) 530.3 519.1 520.3 500.2 522.7 537.9 514.5 519.7 511.0

C. 1953-57 average catch: 100 000

tans and more but less than

500 000 tons

Iceland 327.2 476.1 424.7 455.4 480.3 517.3 502.7 580.4 639.9

Portugal 247.2 446.2 425.2 438.7 424.7 472.2 470.3 455.5 427.4

Denmark 97.1 424.8 342.8 359.4 425.3 463.0 533.3 598.1 673.7

Philippines 80.9 377.0 311.9 364.6 385.2 416.0 407.5 447.3 517.5

Netherlands 256.2 320.2 343.3 339.2 319.5 298.1 300.8 313.8 319.6

Angola 26.2 317.6 220.4 261.2 290.4 420.5 395.5 278.2 ...Korea, South 838.3 306.4 260.9 255.0 262.2 346.0 408.1 395.1 382.1

Korea, North 925.2 290.4 122.0 235.0 312.0 ... ... ...Pakistan ... 267.9 249.0 259.7 270.9 277.0 282.8 283.7 290.1

Thailand 161.0 220.0 205.0 229.8 213.0 217.9 234.5 196.3 204.7

Italy 181.2 215.7 208.4 217.6 218.0 219.6 210.3 209.3 213.4

Peru ... 212.9 147.8 176.1 213.3 297.3 483.1 930.2 2 000.0

Sweden 129.2 205.9 199.7 201.1 219.5 197.4 222.1 238.0

Brazil 103.3 189.4 160.7 172.0 190.3 208.0 216.2 215.0

Chile 32.2 173.2 107.2 143.5 214.3 188.3 213.1 225.8 272.8

China: Taiwan 89.5 172.8 130.4 152.2 180.3 193.2 208.0 229.7 246.3

Cambodia ... 150.0 ... 150.0 150.0 150.0 ... ...Federation of Malaya 139.6 147.0 137.3 136.8 138.5 138.3 139.5 145.9

Viet-Nam 180.0 128.3 ... ... 120.0 130.0 135.0 143.0 153.5

Poland 12.5 126.1 107.4 117.9 126.9 139.3 138.8 145.1 159.7

Morocco 43.7 118.0 138.8 103.5 94.3 108.2 145.1 161.7 144.4

Turkey 76.0 117.9 102.5 119.4 111.5 139.5 116.7 101.3 96.7

Mexico 17.1 102.2 90.9 105.8 134.8 117.5 164.0 190.6

Faeroe Islands 63.0 101.1 88.8 89.4 105.6 116.3 105.6 106.7 ...Burma 100.0 ... . 100.0 100.0 ...Muscat and Oman 100.0 100.0

ANNEX TABLE II. - TOTAL CATCH (LIVE WFICIEF) OF FISH, CRUSTACEANS, MOLLUSKS IN SELECT.ED COUNTRIES (concluded)

' Only 23 of the 543 countries included in group E publish regs lady annual statistics on fish catch.

170

1938Average1953-57

1953 1954 1955 1956 1957 19581959

(Preliminary)

D. 1953-57 average catch: 50 000tons and ¡flore but less tiran

1 000 000 tons

Belgian Congo 0.9 90.8 70.2 73.9 86.1 96.2 122.4 136.6 153.4Argentina 55.3 78.3 77.2 78.2 79,0 75.4 81.6 80.6 88.6Belgium 42 8 71.3 74.4 72.6 80.0 69.1 62,9 64.3 57.5Germany, Eastern ... 73 0 62.3 62.8 613 6 74.9 96.5 ... ...Venezuela 21.7 65.9 63.3 51.8 69.6 61.3 03.1 78.3 83.3

Finland -14.4 j 63.1 62.1 65.5 63.3 60.2 64.5 61.5 67.4U.A.R.: Egyptian Region 36.1 63.5 52.1 56,7 63.4 70.3 75,2 80.0 85.6Greece 25 0 59.7 46.0 52.5 60 0 65.0 75.0 80.0 02.0Australia 33.5 52.6 52_0 53.7 52 5 19.9 55.3 53.6 ...Tanganyika 16 0 52.5 50.0 50 0 52.4 55.0 55.0 55.0 60.0

E. 1953-57 averaKe catch: Less that50 000 tons'

Hong Kong ...J

55.7 44.8 51.9 57.5 57.2 67.2 69.5 67.0Aden ... 41.4 75.0 51.9 34.3 21.0 22.6 21.5 24.4New Zealand 27.0 38.5 36,6 36 9 39.2 ... ... ...Uganda ... 36.1 23.4 25.0 34.9 45.7 51.3 52 8 55.6Ceylon 33.1 25.5 29,7 31.3 10.3 38.5 40.7 47.6

Greenland 4.7 26.9 25.0 24.9 25.8 27.4 31.5 33.5 34.6Ireland 12.8 26.2 19.0 21.5 23.6 30,5 36.6 37.5 30 8Yugoslavia 16.8 26.1 25,7 23.0 22 6 28.4 30.7 31.4 29,4Ethiopia and Eritrea, Fed. of , .. 20.8 20.5 25.2 15.1 ... - .Colombia 10.0 20.3 16.0 16.0 18.0 21.2 30.1 25.0 21.1

Kenya "' 31.2 .., 36.9 30.'1 32.6 25.4 22 4 1 22.5Ryukyu Islands 12.0 13.3 8.8 15.1 13.6 13,7 15.8 16 5 21.0Cuba 10.0 11.4 10.2 11.5 12.0 15.6 22 0 21.9 28.2Sudan 8.8 12.4 12.1 12 9 13.6 13 5 19.9 19.2

- -

Tunisia 9.6 11.6 11.5 13.6 10.8 11.9 11.0 152' -

Israel 1,7 0.9 7,7 92 10.7 10.3 11.6 12.6 13.2Singapore '1.5 8.3 5.7 6.3 6 2 9.6 13.3 12,3 ...Flawaii 7.0 7.5 8.6 9.3 7.0 7.5 4.9 5.1 7.5St. Pierre and Miquelon 1.9 7.3 5.9 6.3 60 9.3 7.9 8.3 9.4Rwanda Urondi ... 6.1 4.2 5,6 5.6 5.4 9.7 11.5 11.0

Uruguay 3,6 4,9 3.4 4.0 4.9 5.4 6.9 6.4Mauritius 2.0 1.7 1.6 1.6 1.7 1.7 1.7 1.6 1.3Malta and Gozo 1.1 0.9 1.0 0.8 0.8 0.13 1.0 1.1 1,1

ANNEX TABLE 12. - VARIABILITY OE PRODUCTION AND YIELD OF SELECTED monucrs, BY REGIONS, 1948149-1959/60

' Excluding Mainland China. - 'Average annuli deviation from trend line (standard error of estimate) as percentag,e of average annual production or yield.

171

WesternEurope

NorthAmerica

Oceania Latin America Far East' linar East Africa

Percentage

PRODUCTION

Wheat 5.5 12.6 17.2 15.3 5.9 8.3 8.6Rice 12.2 13.7 3.7 4.3 17.4 2.7Maize 13.5 8.9 5.1 7.8 5.8 6.5Potatoes 6.5 10.0 10.3 6.1 5.1 5.4Sugar (centrifugal) 8.0 6.2 9.6 5.7 7.3 6.6 6.6Soy beans 11.6 12.4 5.1Groundnuts 17.3 8.8 7.3 7.8Tobacco 7.4 8.7 2.6 4.5 7.9 5.0COtt011 13.4 6.6 8.1 6.6 3.8Cocoa 8.6 8.2Coffee 9.0 7.2Tea 2.5 8.7

YIELD PER HECTARE

Wheat 3.5 7.8 16.1 8.8 4.2 7.5 7.9Rice 3.3 8.5 3.0 3.4 6.2 2.5Maize 13.1 7.5 3.7 5.1 4.2 4.4Potatoes 4.8 3.1 8.0 4.6 4.1 5.9Soybeans 7.0 9.9 2.4Groundnuts 11.3 5.7 7.7 2.7Tobacco 3.5 4.2 4.0 7.1 6.0 6.0Cotton 9.4 5.2 18.1 9.9 4.6

VV

heat

.

Ric

e

Bar

ley

Oat

sM

aize

.

Gra

in s

orgh

um

But

ter

Che

ese

Drie

d m

ilk.

Lins

eed

Lins

eed

oil

Cot

tons

eed

oil

Cot

ton

linte

rsC

otto

n, u

plan

dW

ool.

Tob

acco

Oth

er c

omm

oditi

es

AN

NE

X T

AB

LE 1

3.U

NIT

ED

ST

AT

ES

CO

MM

OD

ITY

CR

ED

IT C

OR

PO

RA

TIO

N :

QU

AN

TIT

Y A

ND

VA

LDE

OF

INV

ES

TM

EN

T

Qua

n(3

0 A

pril)

1954

1955

1956

1957

1958

1959

1960

Tho

nsan

d m

etric

tons

Tot

al

Cha

nge

from

pre

viou

s ye

ar

Mill

ion

dolla

rs

2 15

52

633

693

3410

7

3253

129

61

437

6016

7

6 18

9

175

237

7 26

1

Val

ue (

30 A

pril)

6032

192

62

289

128

105

4421

111

73

3024

5 9 2

31

2 26

8 82

535

287

8 63

3

SO

UR

CE

: Rep

ort

of f

inan

cial

con

ditio

ns a

ndop

erat

ions

, Uni

ted

Sta

tes

Dep

artm

ent o

f Agr

icul

ture

, Com

mod

ity C

redi

t Cor

pora

tion,

Apr

il19

55, 1

956,

195

7, 1

958,

195

9, 1

960.

' Sto

cks

pled

ged

for

outs

tand

ing

loan

s an

d st

ocks

in p

rice

supp

ort i

nven

tory

.

42

5

158

064

2

35 609

590

396

405

7 81

67

251

Pcrc

mita

ge 9 72

402

3 10

510

481

114

155

32

2 41

4

393 60 62 26 7

57

2 48

670

6 26 4 20 31

7

1 26

0

594

401

8 93

3

+ 2

3

1960

3 25

3 65

113

27

2 78

683

3 35 3 34 2. 4

947

441

290

8 83

2

24 2

08 58 622

28 1

5629

073

763

1 32

22

044

1 98

7

24 4

53 804

177

4

24 1

74 732

2 69

8

33 9

3735

512

535

f45

5

3 24

22

383

589

20 5

681

029

165

164

298

382

31 469

279

167

4

55

1 05

222

255

2 92

7

149

176

101

201 37

170

318

181

7 70

1 22

229

192

2 88

7 34 130

81 41 26 5

141

2 83

9 54

650

34 8

01

2 04

0 16 87 65

351 20

2 05

6 24

646

45 2

9114

964 27

4

108 18 14

117

497

31

628

732

37 2

11

8 29

5 45 74 70 59

137

6

39 2

0613

498 20 5 59

279 27

366

402

427

414

317

451

281

245

146

109

212

156 38

56 13 185

25 14 64

58

126

8

81

67

1 43

910

3

270

406

1959

1954

1955

1956

1957

1958

2 79

523

2 92

2 41

1

107 87

+ 9

7+

17+

19

ANNEX TABLE 14A. FOOD SUPPLIES AVAILABLE POR HUMAN CONSUIVIPTION IN SELECTED COUNTRIES

173

Country Period CerealsStarchyr00t5

Sugar PulsesVege-

tablesFruit Meat Eggs Fish Milk. Fats

Kilograms per rapur per yearWI,STERN EUROPE

Austria 19481-50/ 130 108 23 1 3 61 47 30 4 2 170 15

19511-53 / 116 101 26 3 61 50 41 6 2 201 161958/59 116 93 36 ! 4 64 85 50 10 3 217 18

i

Belgium-Luxembourg 1948/-5 0 / 106 148 28 4 60 60 47 12 7 141 21

1951 /-5 3 / 104 147 28 4 66 76 49 13 7 160 22

1958/59 93 147 32 4 67 55 56 15 6 187 22

Denmark 1 948 /-50 / 104 141 36 7 62 48 62 9 18 272 18

1 951 /-53/ 95 137 41 6 64 54 58 8 13 269 25

1958/59 78 128 48 5 67 57 71 8 16 233 26

Finland 1949/-50f 122 119 31 2 18 17 29 5 12 343 15

1951/-53! 120 115 34 2 29 21 29 7 10 356 17

1957/58 116 102 41 2 19 30 31 7 11 323 18

France 1948/-50/ 121 133 23 6 140 56 10 6 142 14

1951 /-53 / 116 122 26 6 139 16 61 11 6 143 16

1958/59 113 100 30 6 126 45 68 10 5 188 17

Germany, Western 1948/-50/ 114 209 24 4 51 38 29 5 8 166 16

1951 /-53 / 99 172 25 3 46 66 41 8 7 192 23

1958/59 90 149 29 4 47 74 52 12 7 200 25

Greece 19481-50/ 154 34 9 15 66 76 11 3 6 78 15

1951 /-53 1 149 41 10 16 68 85 14 3 6 88 15

1957/58 151 41 11 16 110 104 19 5 7 109 15

Ireland. 1948-50 133 190 35 2 53 26 53 12 3 250 18

1951-53 133 184 40 2 53 26 53 1.5 3 258 20

1958 117 136 43 3 63 26 60 15 4 231 20

Italy 1948/-501 149 38 12 13 81 53 15 6 4 93 10

1951/-53/ 146 40 14 15 93 66 18 7 4 100 12

1958/59 140 53 19 11 117 68 24 9 5 111 16

Netherlands 1948/-50/ 98 159 36 4 68 47 28 5 7 262 23

1951 ¡-53/ 95 116 361

4 64 53 33 6 6 255 26

1958159 87 139 40 4 66 53 43 9 5 250 25

Norway 1918/-50/ 116 128 24 3 28 28 33 7 25 287 23

1951/-53/ 103 107 32 3 30 39 34 7 20 275 26

1958/59 88 104 38 4 37 55 39 8 19 261 26

Portugal 1998-50 120 108 12 13 107 56 16 3 16 22 14

1951-53 125 117 14 11 111 54 15 3 17 23 15

1958 121 109 16 10 102 74 16 3 21 25 15

Sweden 1948/-50/ 88 120 94 4 25 51 49 10 16 20

1951 /-53/ 83 111 41 3 25 57 50 10 13 312 20

1958/59 74 100 40 4 26 55 52 10 17 251 20

Switzerland 1948/-50/ 117 89 38 8 73 96 44 9 2 319 15

1951/-53/ 109 80 38 9 73 96 48 9 2 304 15

1958/59 95 73 10 10 81 96 55 10 3 293 19

United Kingdom 1948/-50/ 106 115 39 5 61 40 50 13 11 204 21

1951 /-53 / 97 104 40 5 56 42 55 12 10 202 21

1958/59 84 93 50 6 59 46 63 14 11 206 22

NORTII AMERICA

Canada 1948/-50/ 75 75 46 7 70 50 70 15 6 254 20

1951 /-53/ 75 67 43 5 71 61 73 15 6 253 20

1958/59 70 66 44 5 72 65 75 17 257 19

United States 1948-50 77 52 41 8 105 89 32 22 5 253 20

1951-53 73 50 40 8 100 85 84 22 5 260 20

1958 67 47 41 7 96 77 90 20 5 270 21

ANNEX TABLE 14A. - FOOD SUPPLIES AVAILABLE FOR HUMAN CONSUMP HON IN snEcTEr) couNTiuns (coatinucd)

174

Country Period Ceres.IsStarchy

1-00I5Sugar Pulses

Vege-tables

Fruit Meat I."9cs Fish ' 11i1k ' Fats

Kilogram. per calm( ¡'ir year,

LATIN AMERICA

Argentina 1918 126 88 35 2 10 53 116 7 2 145 16

1951-53 105 79 32 4 45 59 103 9 2 111 10

1958 104 75 33 2 11 81 110 9 4 110 13

Brazil 1948 79 123 30 26 24 81 39 3 2 73 6

1951-52 91 118 33 25 25 90 28 3 2 ... 7

1958 90 73 33 26 ... 114 29 5 ... 58 65

Chile 1948 134 80 25 6 54 41 38 2 7 65 6

1951-52 129 61 27 9 56 41 30 5 9 83 8

1958 125 61 33 13 ... 31 ... 31 92 7

Colombia 1948 72 98 62 8 12 105 29 1 1 127 3

1957 75 63 51 5 18 55 35 2 2 73 5

Ecuador. 1951-56 78 61 25 12 23 275 11 3 2 76 4

Mexico 1954-56 111 10 25 21 10 39 12 4 2 70 101958 156 8 27 17 19 61 ... 7 ... 73 9

Paraguay 1958 81 260 16 14 ... 159 19 ... ... 73 13

Uruguay 1949 96 43 36 4 20 70 114 7 1 137 151952-53 96 59 32 2 27 59 123 7 1 167 161958 105 46 37 1 35 55 ... ... ... 182 18

Venezuela 1919 25 90 14 13 3 79 22 3 8 107 5

1953 82 94 45 15 10 39 22 4 9 67 6

1958 81 82 33 15 10 ... 25 6 15 120 10

FAR EnsT

Ceylon 1952-53 118 35 16 32 42 4 3 2 5 15 4

1958 117 23 14 39 12 a 3 1 7 13 4

China: Taiwan 1948-50 137 73 9 7 62 22 11 1 6 -- 21951-53 145 63 9 9 62 18 17 2 9 - 3

1958 153 72 9 12 60 20 19 2 11 4

India 1949-50 112 a 12 23 16 13 1 O,lj 1 47 531951-53 121 11 11 24 16 13 1 0.2 1 16 53

1957-58 121 11 14 26 - 12 2 0.2 1 45 ' 4

Japan [ 1948-50 157 62 4 18 61 14 2 1 13 4 1

i'

1951-53 147 57 10 28 69 13 3 J 2 19 3 2' 1958 151 65 13 31 73 21 5 4 22 18 3

I

Pakistan 1949-50 161 . 12 8 18 14 4 0.4 1 55 3 3

1951-53 153 ... 13 8 18 33 4 0.1 1 56 ' 41957-58 149 ... 17 12 21 14 4 0.4 2 56 3 3

,

Philippines 1952-53i 131 50 14 12 16 - 12 3 8 5 31957-58 128 51 12 7 8 26 10 3 9 17 9

,

NIIAII EAST ,

Israel 1950 /-51 / 133 45 19 8 103 104 15 19 16 153 151951 /-53 / 150 39 21 7 116 120 12 13 12 147 151957/58 124 45 27 9 123 113 26 19 8 152 16

Turkey 1913/-50/ 188 16 6 9 56 62 14 1 1 79 719511-53/ 197 28 8 11 67 66 j 14 1 1 84 71958/59 119 39 10 14 7/ 89 13 2 2 85 8

Untad Arab Rep.: 1948/-50/ 174 11 13 12 46 42 10 1 3 60 53Egyptian Region 1951 /-53/ 176 9 14 10 51 58 11 1 3 47 ' 4

1957/58 188 10 12 12 107 64 14 1 6 43 3 5

ANNEX I4A. - Fool) SUPPLIES AVAILABLE FOR ULLMAN CONSUMPTION IN SELECTED COUN'CRIES (Cm/Cli1d9d)

' Estimated edible weight. - 'Milk and milk products estimated in terms of liquid - ' Excluding buLter.

175

Country Period CerealStarchy

Sugarroots

PulsesVo7e-

meles

Kikvams

Fruit

per Capfil

Meat

.1.,Ce year

Egg, Fish. ' Mill( Fats

AFRICA

Libya: Cyrenaica..... 1957 115 6 33 21 41 0 2 1 108 61953 109 8 17 43 8 2 1 125 5

Mauritius 1955 128 13 39 13 29 2 5 6 45 8

1952 129 16 37 29 33 5 2 5 49 10

Morocco: former 1952/-55 147 9 34 62 39 20 5 163 4French Zone

Rhodesia and 1951-53 164. 12, '13 26 9 30 1 2 36 2Nyasaland, Fed. or: 1953 201 10 12 16 26 9 29 1 2 37 2

Southern Rhodesia.

Union of South Africa 1943-50 152 16 39 3 34 26 42 3 5 79 5

1351-53 161 13 36 3 35 23 90 3 8 79 6

1957 148 16 43 4 37 31 45 3 8 96 6

OCEANIA

Australia 1949/-50/ 97 50 53 5 55 79 113 12 4 135 15

1951/-53/ 94 51 51 60 70 103 10 3 180 16

1957/58 87 55 Sl 4 66 75 113 11 3 192 16

New Zealand 1949/53 93 52 50 4 79 53 103 13 7 253 16

1951-53 136 43 43 5 86 52 106 12 6 267 20

1958 86 59 42 4,

70 57 103 15 7 277 20

,

ANNEX TABLE I4B. CALORIE AND PROTEIN CONTENT OF NATIONAL AVERAGE FOOD SUPPLIES IN SEI,ECTED COUNTRIES

176

Country Period CaloriesTotal protein

(grams)

Animal protein(grams)

Per caput per dayWESTERN EUROPE

Austria . 1948/-501 2 670 77 30

1951/-53/ 2 700 80 38

1958/59 3 050 87 43

Belgium-Luxembourg 1948/-50/ 2 890 84 381951/-53/ 2 950 87 471958/59 2 930 86 45

Denmark 1948/-50/ 3 240 105 60

1951/-53/ 3 340 95 541958/59 3 350 92 57

Finland 1949/-50/ 2 980 96 521951/-53/ 3 070 96 531957/58 3 070 92 50

France 1948/-501 2 e00 92 4019511-531 2 840 93 431958/59 2 950 96 49

Germany, Western 1948/-501 2 730 79 321951/-53/ 2 870 77 39

1958/59 2 990 80 45

Greece 1948/-50/ 2 490 76 17

19511-53/ 2 500 78 191957 2 650 85 23

Ireland 1948-50 3 430 96 471951-53 3 520 96 491958 3 500 96 39

Italy. 1948/-50/ 2 350 70 191951/-53/ 2 480 72 21

1958/59 2 650 76 26

Netherlands 1948/-50/ 2 930 82 391951/-53 / 2 840 81 41

1958/59 2 940 78 43

Norway . 1948/-50/ 3 100 99 53

1951/-53/ 3 103 90 501958/59 3 080 86 50

Portugal 1948-50 2 320 67 21

1951-53 2 410 68 21

1958 2 430 71 26

Sweden. 19481-50/ 3 150 90 561951/-53/ 3 060 90 571958/59 2 890 81 52

Switzerland 1948/-50/ 3 170 96 51

1951/-531 3 120 94 511958/59 3 180 93 52

United Kingdom 1948/-50/ 3 130 90 451951/-53/ 3 100 84 441958/59 3 260 85 50

NORTH AMERICA

Canada 1948/-50/ 3 110 93 571951/-53/ 3 050 93 581958/59 3 110 95 62

United States 1948-50 3 180 91 61

1951-53 3 150 92 631958 3 100 93 65

ANNEX TABLE I413. CALORIE AND PROTEIN CONTENT OF NATIONAL AVERAGE FOOD SUPPLIES IN SELECTED COUNTRIES (COnlifilled)

LATIN AMERICA

Argentina

Brazil

Chile

Colombia

Ecuador

Mexico

Paraguay

Uruguay

Venezuela

EAR EAST

Ceylon

China: Taiwan

India

Japan

Pakistan

Ph lippines

NEAR EAST

Israel

Turkey

Country

United Arab Rep.: Egyptian Region

Period

19181951-531958

1948

1951-521958

19481951-521958

19181957

1954-56

1954-561958

1958

1919

1952-531958

1949

1951

1958

1952-531958

1948-501951-531958

1949-501951-531957-58

1948-501951-531958

1949-501951-531957-58

1952-531957-53

1950 /51

1951/-53/1957 /58

1948/-50/1951 ¡-53/1953 /59

1948/-50/1951 /-53 /1957 /58

177

Calories

Per aqua per day

3 2402 9803 020

2 3602 4002 500

2 3702 4302 450

2 2802 050

2 130

2 3802 560

2 570

2 9202 9503 110

2 1602 2702 120

1 9902 010

1 9802 1402 330

1 6401 7501 808

1 9001 9602 210

2 0402 0102 010

1 9601 980

2 6802 7802 750

2 5302 7002 850

2 3702 4102 640

Total protein(grains)

110

97

101

63

60

62

73

7478

5648

51

6471

66

93

99

100

57

59

61

42

48

43

50

57

43

4747

19

58

67

49

17

49

43

36

88

87

81

81

87

90

70

7078


66

6064

24

18

20

23

25

27

2622

13

13

17

27

596665

23

21

26

6

12

12

15

5

6

6

9

13

17

8

8

8

10

11

3427

33

15

17

15

12

11

13

ANNEX TABLE 413. CALORIE AND PROTEIN CONTENT OF NATIONAL AVERAGE POOL) SUPPLIES IN SELECTED COUNTRIES (CO/ICl/IAA

178

Country Period CaloriesTotal protein

(grams)


Per rama per dayAFRICA

Libya: Cyrenaica 1957 2 110 55 16

1958 2 091 55 18

Mauritius 1955 2 220 47 11

1958 2 230 45 10

Morocco: former French Zone 1952/-55/ 2 350 72 18

Rhodesia and Nyasaland, Fed. of:Southern Rhodesia 1951-53 2 450 75 16

1953 2 630 81 16

Union of South Africa 1948-50 2 640 73 27

1951-53 2 680 74 27

1957 2 660 74 31

OCEANIA

Australia 1943/-50/ 3 220 97 66

1951/-53/ 3 170 92 61

1957 /58 3 200 91 65

New Zealand . 1948-50 3 360 100 67

1951-53 3 350 103 701958 /59 3 430 106 72

Nor

th A

mer

ica

5E0

;70

0

Wes

tern

Eur

ope

'33

9;

535

i-i

Lat

in A

mer

ica

2 18

0;

194

0-.

.1si

-",

Eas

tern

Eur

ope

and

U.S

.S R

1225

Far

Eas

t .30

033

9

Chi

na, M

ainl

and

12

Oth

er r

egio

ns26

543

0

SOU

RC

E: U

nite

d N

atio

ns, Y

earb

ook

of I

nter

natio

nal T

rade

Sta

tistic

s,19

58, V

ol. I

I.'I

nclu

ding

Tur

key.

-N

ear

Eas

t, A

fric

a an

d O

cean

ia.

AN

NE

X T

AB

LE

15.

- R

EG

ION

AL

NE

TW

OR

K O

F T

RA

DE

IN

FO

OD

, BE

VE

RA

GE

S A

ND

TO

BA

CC

O, 1

953

AN

O 1

958.

Eas

tern

Eur

ope

oN

orte

Am

eric

a;

Wes

tern

Eur

ope'

Lat

in A

mer

ica

Far

Eas

tan

d U

.S.S

.R.

dolla

rs a

t cur

rent

prI

ces

61

205 49 45

620

153

105 4

415 52

259

715 96

101 7

344 59 189

151

0

Chi

na: M

ainl

and

;O

ther

reg

ions

Sum

of

regi

ons

7 3

13

213

13

339

431

529

i

101

124

I

143

357

270

l17

37

:...

63

;2

-;

12e

923

40;

From

1953

119

5919

5319

5819

53;

1955

1953

1958

;19

5319

5819

5319

5319

531

1953

j19

5319

59

1 37

21

565

2 56

13

343

1 23

61

233

256

363

407

595

2549

2 10

32

561

Sum

or

RE

GIO

NS

3 74

73

971

7 96

09

759

960

947

191

401

162

3

253

273

3 31

23

855

654

935

4 02

15

242

5667

3 95

13

723

3062

305

464

414

409

154

61

753

9217

117

028

054

956

63

241

3 79

8

2 06

22

453

15 5

4619

115

All agricultural products

Food and food

CerealsEdible oils and oilseedsMeatDairy products

Beverages and tobaccoAgricultural raw materials

WheatWheat flourBarley

Maize

Rice (milled)

Sugar (raw)

ApplesBananas

Oranges and tangerinesRaisins

CopraPalm kernelsSoybeans

Groundnuts (shelled)

Olive oilCoconut oil.Palm oilPalm-kernel oilSoybean oilGroundnut oil

CattleBeef and vealMutton and lambBacon

Canned meat

CheeseButterEggs in the shellMilk,condensed and eN¡aporated,Milk, powdered

Potatoes

Oilseed cake and meal

CoffeeCocoaTeaWineTobacco (unmanufactured)

Linseed

Linseed oil

CottonJuteSisal

Wool (greasy)Rubber (natural)

ANNEX TABLE 16. - AVERAGE WORLD EXPORT UNIT VALUES 01' AGRICULTURAL PRODUCTS

1958 19591947-49 950-51 1952-53 ¡ 1954-55 1956-57 I Il III IV I II Ill IV

Indices, awrage 1952-53 = 100

92 105 100 97 93 87 85 90 88 87 87 83 85 85 87

107 96 100 91 90 87 87 87 87 86 89 85 88 88 88

109 87 100 81 75 73 71 73 73 74 74 67 73 71 71

112 109 100 92 91 90 93 90 91 89 90 96 101 100 97

79 87 100 101 101 104 107 99 102 105 110 111 106 105 103

107 88 100 95 94 80 93 82 76 76 85 83 90 91 105

74 94 100 115 99 100 88 101 101 103 97 90 89 87 87

80 129 100 93 93 79 79 86 78 76 77 74 78 79 84

S. dollars per I tetric ton

94 73 79 67 63 63 60 63 63 63 62 52 62 63 62

129 100 113 98 87 81 79 80 85 80 80 77 82 79 77

84 64 69 53 51 49 50 45 47 49 53 54 50 48 49

79 69 78 61 58 51 50 52 51 51 49 51 51 50 49

153 131 175 132 116 120 110 118 118 125 123 114 116 103 105

102 111 105 98 108 101 96 102 99 97 104 101 96 96 91

108 94 95 101 124 148 105 180 211 83 115 101 92 118 109

100 102 99 99 101 93 94 93 93 92 92 93 94 94 95

117 104 99 103 123 120 102 114 122 162 124 95 92 122 123

263 251 215 224 277 327 309 322 314 317 345 347 338 327 274

200 207 168 161 142 167 207 155 166 167 174 212 222 198 204

130 146 155 130 123 130 168 129 128 129 136 161 170 170 169

124 111 111 104 93 87 85 89 91 90 84 85 87 87 83

194 176 221 199 200 171 164 179 175 161 164 158 164 169 167

875 677 603 563 722 607 473 627 622 601 577 432 457 546 496

360 364 233 263 237 279 349 269 270 274 304 340 366 343 346

239 253 216 192 219 200 205 21-1 207 196 188 192 200 226 202

340 330 274 253 239 253 317 243 243 254 267 293 321 333 312

464 390 309 319 339 302 257 317 323 286 277 267 265 252 244468 442 408 362 406 362 328 365 378 359 340 323 337 342 308

110 127 114 125 123 129 141 120 131 135 130 135 134 151 151

331 407 471 458 430 505 576 452 497 519 545 572 575 590 564

288 257 308 402 433 415 366 443 389 402 406 437 371 317 293

724 627 702 657 701 689 655 614 704 703 737 688 616 663 652596 803 921 890 848 848 899 825 829 847 898 899 899 897 900

722 604 670 660 734 633 752 602 585 605 730 741 705 736 8191 010 847 958 959 858 633 917 678 532 583 673 703 947 904 1 085

768 624 706 648 637 600 533 595 590 574 631 515 468 510 605

352 309 340 312 326 312 310 333 317 289 311 309 298 303 330553 389 487 39-1 404 373 359 403 349 375 371 337 351 370 373

57 50 59 49 56 60 58 52 70 57 56 59 56 SO 61

84 73 74 71 62 55 66 55 51 53 58 63 63 67 71

52E3 1 019 1 124 1 250 1 043 922 754 996 950 923 836 780 771 734 735

548 639 679 946 575 8-16 746 805 999 942 815 787 751 733 691

1 152 1 024 931 1 384 1 256 1 221 1 210 1 174 1 188 1 271 1 226 1 1513 1 179 1 218 1 251

245 173 168 145 165 217 174 183 207 259 247 181 171 168 1761 128 1 115 1 199 1 251 1 287 1 285 1 299 1 345 1 303 1 212 1 287 1 278 1 299 1 319 1 299

192 155 147 120 130 125 131 131 128 122 123 127 126 128 143563 385 314 186 281 251 213 247 275 229 242 213 182 217 250

769 1 005 887 816 742 691 601 728 683 669 684 620 643 574 581

312 284 212 183 198 196 178 207 175 193 193 191 173 165 181278 341 290 165 143 140 174 139 136 140 144 151 168 185 191975 2 065 1 507 1 459 1 -191 1 135 1 091 1 311 1 172 1 073 978 973 1 034 1 133 1 242386 881 592 579 626 525 665 539 489 505 561 572 638 691 746

1110

Average 1958 1959

ANNEX TAIlLIs 07. AVERAGE UNO VALUES OF AGR1;ULFUI1AL EXPORTS AND IMPORTS OP TIlE U.S.S.R.., COMPARED WITO THE WORLD AVERAGE

181

Average export unit values Average import

1955 1956

unit values

1955 1956 1957 1958 1957 1958

U. S. dollars per metric ton

WheatU. S. S. R. 83 76 80 74 91 62 58 63

World ' 66 63 63 63 78 78 76 71

BarleyU. S. S. R. 66 64 64 59 _

World ' 54 52 49 49

OatsU. S. S. R. 63 61 61 48

World ' 58 50 44 41

MaizeU. S. S. R. 70 71 67 68 73 70 70 70

World ' 62 60 55 51 74 75 69 59

Rice (milled)U. S. S. R. 130 130 120 ' 131

World ' 138 135 130 139

ButterU. S. 5. R. 1 192 1 164 1 150 854 994 993 912 635

World ' 950 920 797 633 979 925 791 640

Eggs

U. S. S. R. 562 587 553 147

World ' 660 648 607 590

LemonsU. S. S. R. 184 172 192 156

World ' 173 193 184 197

Sugar (raw)U. S. S. R. 69 68 134 78

VVorld ' 119 120 140 116

Sugar (refined)U. S. 5. R. 116 119 150 123 98 100 148 117

World ' 118 124 159 123 125 127 153 127

OilseedsU. S. S. R. 141 145 146 119 131 126 113 116

World ' 139 139 138 141 161 '162 163 160

Vegetable oilsU. S. S. R. 371 132 428 349 296 322 356 320

World ' 272 304 307 290 293 333 334 311

CocoaU. S. S. R.

999 668 518 896

World ' 906 633 620 912

ANNEX TABLE 17. - AVERAGE uNrr VALUES OF AGRICULTURAL EXPORTS AND IMPORTS OE THE U.S.S.R., COMPARED WITH THE WORLD AVERAGE

(corich de cl)

182

Non: it should be noted that the inport values for the U.S.S.R. are given in f.o.b. values tt frontier of tho exporting country or at the port of shipment, ,incontrast to the more usual c. f. basis which is used for the world average. The rubles are co werted at the official exchange rate of 4 rubles = U.S. $ E.' Excluding Eastern Europe, the U.S.S.R., and rvlainiand China.

Average export unit values Average import unit values

1955 1956 1957 1958 1955 1956 1957 1958

U.S. dollars per metric ton

CoffeeU. S. S. R 1 393 1 336 1 280 1 086

World 1 236 1 186 1 149 1 010

TeaU. S. S. R. 691 763 562 621 1 037 1 078 1 229 1 366World 1 131 1 263 1 245 1 221 1 554 1 351 1 360 1 233

Tobacco

U. S. S. R. 985 914 936 879World ' 1 318 1 321 1 394 1 375

Cotton (lint)U. S. S. R. 881 880 802 767 1 008 1 050 1 130 951

World ' 104 740 743 691 854 783 739 705

WoolU. S. S. R. 2 333 2 695 1 972 1 966 1 930 1 055 2 229 1 950World' 1 917 1 864 2 120 1 492 1 922 1 875 2 061 1 629

Rubber (natural)U. S. S. R. 760 7811 721 593World 763 739 679 565

In addition to the usual review of the recent world food and agriculturalsituation, each issue of this report from 1956 has included one or more spe-cial studies of problems of longer-term interest. Special studies in earlierissues have covered the following subjects:

Some factors influencing the growth of international trade in agriculturalproducts.

World fisheries: General trends and outlook with examples from selectedcountries.

Factors influencing the trend of food consumption.

Postwar changes in sonic institutional factors affecting agriculture.

Food and agricultural developments in Africa South of the Sahara.

The growth of forest industries and their impact on the world's forests.

Agricultural incomes and levels of living in countries at different stages ofeconomic development.

Some general problems of agricultural development in less-developedcountries in the light of postwar experience.

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