THE STATE OF FOOD AND AGRICULTURE 1962

'TIE A E t OC

AND 4 GRICUL 4 TIRE

CL 39/2

FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS

ROME 1962

The statistical material in this publication has

been prepared from the infirmation available

to FAO up to 30 June 1962

The designations employed and the presenta-tion of the material in this publication do not

imply the expression of any opinion whatsoever

on the part of the Secretariat of the Food andAgriculture Organization of the United Nationsconcerning the legal status of any country orterritory or qf its authorities, or concerning the

delimitation of its frontiers.

© FAO 1962

Printed in Italy

CONTENTS

Foreword

Summary

II. World review and outlook 13

AGRICULTURAL PRODUCTION 13

Longer-term trends in agricultural production in relation to population 15Regional agricultural production 17Main agricultural commodities 23Fishery production 24Forestry production 25

CHANGES IN STOCKS 27

ECONOMIC ACTIVITY AND THE DEMAND FOR AGRICULTURAL PRODUCTS 30

FOOD SUPPLIES AND CONSUMPTION 32

INTERNATIONAL TRADE IN AGRICULTURAL PRODUCTS 34Volume of imports into non-Communist areas 36Imports into Mainland China, the U.S.S.R., and eastern Europe 40Prices in world markets 41Agricultural export earnings 45Exports under special terms 47International trade policies 49

FARM PRICES AND INCOMES 50

CONSUMER PRICES 54

AGRICULTURAL POLICIES AND DEVELOPMENT PLANS 56

North America 58

Western Europe 60Eastern Europe and the U.S.S.R. 65

Australia and New Zealand 68

Latin America 69

Far East 72Near East 75

Africa 77

vi

Fishery policies 81

Forest policies 82

SHORT-TERM OUTLOOK 84

Agricultural production outlook for 1962/63 85

Commodity prospects 85

III. The role of forest industries in the attack on economic underdevelopment 88

SOME ASPECTS OF DEVELOPMENT POLICY 88

Development aims - a political choice 89

Financial appraisal and social evaluation 89

The data needed for investment decisions 90

THE PRODUCTS OF FOREST INDUSTRIES IN THE ECONOMY PRESENT AND FUTURE 91

Structural characteristics of demand 91

Consumption, production and trade 93

Dynamic characteristics of demand 94Future requirements and alternative supply possibilities 95

Summary 97

CHARACTERISTICS OF FOREST INDUSTRIES 98

The global pattern 98

The sawm Wing industry 98

The pulp and paper industry 101

Plywood, fibreboard and particle board 103

Miscellaneous and secondary forest industries 105

CHARACTERISTICS OF THE FOREST BASE 106

Some characteristics of forestry 106

The logging phase 108

Some advantages in hei ent in forestry 108

FEATURES OF FOREST INDUSTRIES RELEVANT TO DEVELOPMENT 109

Demand expansion and import-saving effect 109

Characteristics of the raw material and locational factors 110Technological advantages of forest industries 110

Dmand for forest products : indirect advantages and external economies 111

Summary 112

RESOURCES, TECHNOLOGY AND RESEARCH 113

Variety of forest reserves 113

Recent technological trends 114Where research is lagging 115

Making capital go further 116

DETERMINING THE ROLE OF FORESTRY 118Esthnating the demand for wood 119

Estimating the demand for the noncrop utilities of forests 119

Estimating the size and the nature of the forest resource 120

Appraising the availability of production factors 121Determining the plan and the measures to be adopted 122

PLANNING FOR FOREST INDUSTRIAL DEVELOPMENT 123Time horizons for planning 124Getting and using resource data 124Planning demand 125The importance of infrastructure 126Planning for specific areas within a country 126Autarchy or economic integration 126An organizational need 127The choice 128

IV. The livestock industry in less developed countries 129

INTRODUCTION 129The anatomy of hunger 129Poverty inhibits production 129Population and economic development 130Livestock production potential 131

Livestock in relation to general agricultural develop:u.ent 131

Animal population pressure 132

Disparities in animal productivity 132

INCREASING THE WORLD'S SUPPLY OF ANIMAL PROTEIN 133

Animal nutrition 134

Livestock/plant interrelationship 135

Fodder conservation and gr azing management 136

Importation of exotic breeds of livestock 136

Use of indigenous breeds of I ivestock 137

Crossbreeding 137

Disease survey, control and eradication 138

Education 140

Marketing 142

LIVESTOCK AND LIVESTOCK PRODUCTS 143

Cattle 143

Sheep 145

Goats 145

Poultry 145

Pigs 146

Buffaloes 146

Other types of 1 ivestock 147

Hides and skins 148

REGIONAL TRENDS IN ANIMAL PRODUCTION AND HEALTH 148

Africa 148

Near East 149

Nomadism 150

Far East 151

OU

Latin America 153

North America 154

Oceania 155

Western Europe 155

THE NEXT DECADE 156

Dynamics of development 156

Outlets 158

Improved animal health 158

Improved nutrition and breeding 159

Use of food surpluses 159

Demand 160

RITTRENCES 160

Annex tables

Indices of total food production, by countries and regions 163

Indices of per caput food production, by countries and regions 165World production of major commodities 167World exports of major commodities 168Western Europe: Production of major commodities 169

Western Europe: Exports and imports of major commodities 170Eastern Europe and U.S.S.R.: Production of major commodities 171

Eastern Europe and U.S.S.R.: Exports and imports of major commodities 172U.S.S.R.: Production and exports of forest products 173

North America: Production of major commodities 174

North America: Exports and imports of major commodities 175Oceania: Production of major commodities 176Oceania: Exports and imports of major commodities 176Latin America: Production of major commodities 177Latin America: Exports and imports of major commodities 178Far East (excluding Mainland China): Production of major commodities 179

Far East (excluding Mainland China): Exports and imports of major commodities 180Near East: Production of major commodities 181

Near East: Exports and imports of major commodities 181

Africa: Production of major commodities 182Africa: Exports and imports of major commodities 183Total catch (live weight) of fish, crustaceans and mollusks in selected countries 184United States Commodity Credit Corporation: Quantity and value of investment 186Food supplies available for human consumption in selected countries 137Calorie and protein content of national average food supplies in selected countries 190

I4A. Regional and world indices of volume and value of agricultural irnports, bycommodity groups 193

14B. Regional and world indices of volume and value of agricultural exports, bycommodity groups 195

15. World average export unit values of agricultural products 197

List of figures

II- Trends in regional food production in relation to population growth, prewar to1961/62 15

II- 2. Changes in total and per caput food production, 1959/60-1961/62 average in rela-tion to prewar period 16

II- 3. World production of major agricultural commodities, prewar to 1961/62 23

II- 4. Indices of the main stocks of agricultural commodities in the world and in NorthAmerica 30

II- 5. Estimated per caput food production, net trade and supplies, by regions 33

II- 6. Estirnated per caput calorie supplies, by regions, 1956-58 average 34

II- 7. Distribution of world agricultural exports and imports, by volume, 1959-61 average 36

II- 8. Indices of volume of agricultural imports, by regions and comrnodity groups 37

II- 9. Average export unit values (average prices) of selected agricultural products in worldtrade 44

11-10. Actual and hypothetical increase in the volume of agricultural exports from indus-trial and primary producing regions, 1952-53 average to 1960-61 average 47

II-11. Changes in indices of prices paid and received by farmers and in relationshipbetween the two indices, 1961 in relation to 1952-53 average 51

III-1. Forest products flow chart 99

ix

FOREWORD

Broadly it may be said that the key problems of food and agriculture in the lessdeveloped regions of the world are, first, underproduction, hunger and tnalnutrition, andsecondly, the continuing decline of agricultural prices on world markets, which erodes theearning capacity of these regions for foreign exchange and their potentialities for economicgrowth. In contrast, the problems of the economically more developed countries are moreoften excess production in relation to commercial outlets, leading to the accumulationof surplus stocks and, closely related, the social discontents resulting from the disparitiesof income betiveen farm people and those in other occupations though rural poverty,it goes without saying, is still more acute, if less articulate, in countries at a less ad-vanced stage of economic development.

111 regard to these problems, the year 1961162 could be considered as one of promiserather than achievement. There were encouraging signs of an increased world recogni-tion of the importance of agricultural development, both in itself and as a key componentof general economic growth. There were signs, too, of a greater determination to tacklethe problems of agriculture before they became still more acute. On the other hand, theyear's developments in production and in international trade contributed little to theirlong-term solution.

On the most basic problem of all, that of hunger, two developments may be men-tioned. In the less developed countries themselves there was a considerable e.xtension ofplanning for agricultural development, and particularly of plans closely integrated intothose for general economic development. While it would be too optimistic to suppose thatall these plans will be fully realized, they at least indicate a greater awareness of theissues and give promise of more rapid development during the forthcoming United Nationsdevelopment decade than in the past. Similarly in the more developed countries, underthe impact of the world-wide Freedom from Hunger Campaign and related programs, therewere increased efforts among governments and the general public to step up the flow ofmaterial aid to less developed countries, especially in the food and agricultural sector, in-cluding aid from surplus foodstuffs. Here a notable new development is the experimentalWorld Food Program, jointly sponsored by the United Nations and FAO, and expected tocome into operation late in 1962. The program is designed to explore methods of usingthe surplus food production of the more developed countries to aid economic developmentin less developed countries, and to combat hunger and mahzutrition. Though small inrelation to some bilateral programs, it is potentially of great significance.

There were indications, too, in 1961162, of wider and more comprehensive attemptsto mitigate the effects of the continuing down-drift of commodity prices. While morethan one government is trying to curtail surplus production where it threatens the stabilityof commodity markets, among the possibilities widely discussed in international forutnswere schemes of compensatory finance and of more comprehensive forms of world conz-modity agreements, though FAO itself had in the past advocated the commodity by com-modity approach as the more practical method. Some of the commodity agreements underdiscussion included proposals for increased shipments of surplus foodstuffs to needy coun-tries, for aid to less developed countries in disposing of their excess stocks, and for moreeffective means of limiting excess production of both temperate and tropical products inexcess supply. Such arrangements do not as a rule come quickly to fruition, and it would

be surprising if the current proposals were adopted without prolonged discussions and ex-tensive modifications. But the fact that such questions are now being widely discussedinternationally is in itself a hopefid sign. Still more encouraging developments are therenewal of the International Wheat Agreement in 1961162, and the prospects of a com-modity agreement for cocoa and of a broader-based agreement for coffee.

In discussing international exchanges in agricultural products, mention should be madeof the uncertainties and anxieties resulting frotn the various regional agreements or theirextensions now under discussion. A study of their possible repercussions on agriculture,especially those of the European Economic Community which inevitably will be mostwidespread in its effect, was prepared by FAO at the end of 1961,1 while later policydevelopments are discussed in some detail itz the present report. To these analyseslittle can be added until present negotiations are more advanced.

Turning to actual developments in 1961162, preliminary estimates suggest that, becauseof unfavorable weather, world agricultural production showed little increase during theyear, though it already seems probable that the rising trend will be resumed in 1962163.The most disquieting trend is that per caput food production in Latin America, Africaand the Near East, which increased appreciably during the 1950s, has tended to fall inthe last few years as production has lagged behind the growth of population. In the FarEast, however, the region where food problems are most acute of all, recent developmentshave been somewhat more favorable.

The volume of international trade in agricultural products rose by about 4 percentin the calendar year 1961, but this resulted mainly from shiptnetzts of cereals to meetthe situation arising out of crop failures in China, and to some extent fronz larger ship-ments of Cuban sugar and a few other products to the Sino-Soviet group of countries.Agricultural imports into the rest of the world increased hardly at all. Moreover therise in the volume of agricultural exports was ahnost precisely offset by a 4 percent fallin average prices, so that their value showed very little increase. Indeed the share of theless developed countries in export earnings declined, since the heavy shipments of cerealsto China came mainly from Australia and Canada. Coupled with an exceptionally poorcrop in Catlada and with an etnergency program to limit feed grain production in the UnitedStates, they led to atz appreciable decline in world grain stocks for the first time in

several years.Although the basic problems of agriculture are likely to remain substantially the

same for some years or even decades, it is encouraging to note that the world food andagricultural situation is no longer essentially static. Both the level and pattern of thedemand for agricultural products are in constant flux as a result of changes in population,consumer incomes and prices, and these changes in demand in turn impose changes onagricultural production. At the same time, it must be noted that not all the changes oractivities are in the right direction and of the right emphasis. An analysis of probabletrends to 1970 of demand, production and trade in agricultural products has recently beenpublished by FA0.2 It is in no sonse a forecast, but rather an analysis of the likelyoutcome if present policies remain unchanged. The study is disquieting in that it bringsout the danger that, unless drastic action is taken to increase production in the less devel-oped countries, the food supply may fall increasingly behind domestic demand. At the sametime, surplus production of export commodities may become even more widespread, whilethe demand for farm products in world trade may grow only slowly or in some caseseven decline. Nevertheless, with rising populations and incomes a rapid increase maybe expected in the demand for some commodities, notably forest products and (especiallyin less developed countries) livestock products.

' FAO, Agricultural commodities and the European Common Market. Rome, 1962.' FAO, Agricultural commodities: Projections for 1970. Rome, 1962.

2

These groups of products are the subject of the two special chapters in this year'sissue of The state of food and agriculture. Chapter III analyzes the growth of demandin developed and less developed countries alike for forest products, including wood, manu-factured boards, and paper and pulp, and also the important con tribution which forest in-dustries can make to economic development. This is a sector which in the past con trib-uted largely to the economic development of some European countries, and which todaymight provide a valuable industrial base to not a few of the less developed countries.

Livestock products, which are discussed in Chapter IV, are especially badly neededin the less developed countries for a more balanced and healthy diet. The demand forthem increases dramatically as incomes begin to rise and people have the possibility ofsome

firrther purchases after satisfying their basic hunger with cereals and other low cost foods.In most of the less developed countries, however, production is handicapped and made muchmore expensive by a variety of factors: animal diseases, underfeeding, the failure to cullunthrifty animals, social customs, and poor marketing facilities, to mention only someof the more important. The chapter analyzes the problems of expanding livestock produc-tion in the less developed countries and gives some indications of developments whichmay be foreseen in the next decade. While they deal with specific branches of agriculture,both special chapters have also a wider significance in that they provide excellentexamples of the major contributions which the agricultural sector can make to economicdevelopment as a whole.

B. R. SENDirector-General

AGRICULTURAL PRODUCTION

From the preliminary FAO estimates so far avail-able it seems that there was little increase inworld agricultural production in 1961/62. Popula-tion is now estimated to be rising by about 1.8 per-cent a year, so that there was some reduction in percaput production, in comparison with the previousyear, though the longer-term trend of agriculturalproduction is still ahead of population growth.

The pause in the expansion of production wascaused mainly by widespread bad weather. Agri-cultural production appears to have increased sub-stantially in 1961/62 only in Latin America, and

'there were smaller increases in eastern Europe an.dthe U.S.S.R., Oceania, and the Far East (exclud-in.g Mainland China) There were quite sharp re-ductions in Africa and the Near East as a resultof droughts in a number of countries, and pro-duction was also a little lower than in 1960/61 inwestern Europe and in North America. For Main.-land China, again this year no official figures ofagricultural production have been published, butall the evidence points to a third successive seasonof poor crops.

World per caput food production is estimatedto have averaged about 13 percent more in 1959/60-1961/62 than before the war. Almost all of thisrise, however, has been in the more developed re-gions, rather than the less developed parts of theworld where such improvements are urgently neededto raise levels of living. This is largely becauseof the much more rapid growth of population inthe less developed regions. Although since the warproduction has been increasing faster than popu-lation., in some regions the margin over populationgrowth has not been sufficient to make up, at leaston a permanen.t basis, for the deficit that developedduring the war years, so that per caput productionin these regions remains less than before the war.Thus, while the prewar level of per caput food pro-

Chapter I. SUM

Chapter II. World review and outlook

5

duction has been regained in each of the less de-veloped regions at some time during the postwarperiod, in all except the Near East this has so farbeen only temporary and per caput productionhas subsequently slipped back.

On a commodity basis, the products mainly re-sponsible for the pause in the expansion of worldproduction in 1961/62 were grains and sugar, theoutput of which dropped sharply in comparisonwith the year before. World grain production wasaffected particularly by droughts in North America,n.orthwest Africa and much of the Near East, andby reductions in maize and sorghum plantings inthe United States under the Emergen.cy Feed GrainProgram. The fall in sugar production in 1961/62was due mainly to smaller beet harvests in westernEurope and to a sharp reduction in the cane cropin Cuba. The expan.sion of world cocoa productionwas arrested in 1961/62. For most other agricul-tural commodities production continued to rise in1961/62, though large increases were rather few.

The production of fish again increased substantial-ly in 1961. Preliminary estimates indicate that theworld catch rose by about 7 percen.t to more than40 million tons. Large gains were registered byeach of the main producers, including Japan, Peru,an.d the U.S.S.R.

World roundwood removals are estimated to haverisen only slightly in 1961. The production of fuel-wood continued to decline slowly, but total indus-trial wood removals are estimated to have increasedby about 3 percent over the 1960 level.

CHANGES IN STOCKS

Mainly as a result of the check in the expansionof production., the over-all level of stocks of agri-cultural commodities was reduced in 1961/62, forthe first time since 1957/58. Wheat stocks arelikely to show a decline of about 15 percent by the

end of the season., because of the lower productionin the United States an.d especially Canada, togetherwith large Canadian sales to Mainland China. Thelower output of maize and sorghum under the Emer-gen.cy Feed Grain Program in the United States,combined with the Canadian drought and sales toMainland China, are expected to bring a fall of about12 percent irr stocks of coarse grains, the first formore than a decade.

The chief exception.s to the downward movemen.tof stocks in 1961/62 were coffee, soybearts, butter,and cheese. The increase in stocks of the latterthree products was mainly in. the United States,where it is estimated that nearly 70 percent of thetotal world stocks of agricultural products are stillheld. Apart from coarse grains, world stocks ofcoffee are the largest in relation to internationaltrade, and they are also the main surplus stocksoutside North America, being held mainly in Brazil.

ECONOMIC ACTIVITY AND THE DEMAND FOR

AGRICULTURAL PRODUCTS

In. 1961 there was a revival in economic activityin North America after the mild recession. of 1960,contin.ued growth in western Europe and boom condi-tions in Japan. During the first half of 1962, how-ever, the North American recovery has failed totake economic activity to the high level expectedearlier, and in western Europe and Japan the ex-pansion has slowed down.

The comparatively favorable economic situation inthe main importing areas in 1961 strengthened thedemand for agricultural raw materials, though im-ports were not always affected correspondingly.Toward the end of the year the deman.d for forestproducts reflected the slackertin.g in ecortomic activity.Demand for foodstuffs appears to have been littleaffected by recent changes in economic activity, butin 1961 an.d 1962 a main in.fluence was the largeimport demand for grains by Mainland China, tomake good the losses in domestic production.

FOOD SUPPLIES AND CONSUMPTION

Because of the accumulation of stocks, theimprovemen.t in actual food con.sumption levelssince before the war has been slightly lessthan the rise in world per caput production.For the world as a whole the index of per

6

caput food production nevertheless gives a fairlygood indication of the course of average food con-sumption per person. However, for individual re-gions and countries, food supplies and consumptionare affected not only by per caput production butalso by changes in imports and exports of foodstuffs,which in some cases have been quite substantial.

Trade has the biggest effect on the food suppliesof the more developed region.s, and in the less de-veloped regions net imports or exports amount toonly a small fraction of domestic production. Never-theless in the latter group of regions, as a resultof larger imports and often smaller exports, thetrend of food supplies appears to have been slightlymore favorable than that of per caput production.Food supplies per head thus appear to have beenmaintained at more than the prewar level in eachof the less developed regions, in spite of the factthat, except in the Near East, the regairting of theprewar level of per caput production has so farproved only temporary. A slow improvement in percaput food supplies appears to have continuedthroughout the postwar period in Latin America,the Far East (excluding Mainland China) and theNear East, but in Africa changes in trade do notseem to have been sufficient to compensate forrecent declines in per caput production, and in thisregion per caput supplies may have dropped backslightly in the last few years.

INTERNATIONAL TRADE IN AGRICULTURAL PRODUCTS

The year 1961 saw no fundamental chan.ge in thetenden.cies that have characterized international tradein agricultural products over the past several years.Ample exportable supplies continued to compete foroutlets that are expanding at only moderate rates,and the general level of agricultural export pricesagain fell. As a result, in spite of a rise of about 4percent in the volume of shipmen.ts, there was noincrease in the total value of agricultural exports, andthe agricultural export eamin.gs of the less developedcountries in fact fell substan.tially. In real terms theloss in their export earnings was accentuated by afurther increase in the average export prices of man-ufactured goods. This increase, combined with thefall in the prices of agricultural exports, resulted ina further decline of 6 percent in the " terms oftrade " of agricultural exports, which in 1961 were24 percent lower than in 1952-53.

The volume of agricultural imports into countries

other than the U.S.S.R., eastern Europe and Main-land China, which had started to level off in 1960,showed no increase in 1961. To a large extent thisreflects the large harvests in many food importingcountries in 1960/61, which halted the increase inFood imports into western Europe and most of theless developed regions. In addition imports of rawmaterials into western Europe, which for some yearsnow have been rather stagnant, declined in 1961,and those of North America remained at the lowlevel of recent years. There was an increase in theimports of beverages and tobacco into nearly allregions, and larger imports of agricultural raw ma-terials in.to the Far East and other less developedregion.s, but these increases were barely sufficient tocompensate for the reduced volume in the other sec-tors of imports.

In con.trast to the rest of the world, there was asharp increase in the imports of agricultural productsinto the U.S.S.R. and Main.land China in 1961,which was largely responsible for the rise of 4 per-cent in the total volume of world agricultural trade.As a result of the series of poor harvests, MainlandChina imported a total of well over 5 million ton.sof grain.s from outside the Sino-Soviet area in 1961,while both the U.S.S.R. an.d Mainland China fur-ther expanded their sugar imports from Cuba. Thepoor harvests in China also affected world marketsfor rice and vegetable oils, because of reduced Chi-nese exports of these commodities.

These developments contributed to the strength-ening of the prices of a number of products,but for most commodities prices were lower in1961, and the FAO index of unit values of allagricultural exports fell by over 4 percent. Thismore than can.celed the modest price recoveryregistered in 1960, and the longer-term declineof agricultural export prices thus continued. Thefall in prices in 1961 also almost exactly offsetthe increase in the volume of exports, so that thetotal value of world agricultural exports remainedmore or less un.changed.

While the value of exports from the more developedregions rose substantially in 1961, however, the agri-cultural export earnings of the less developed regionssuffered declines rartging from 4 to 10 percent. Thiscontinued a trend that has gorte on for some years,the share of the less developed regions in the totalvalue of world agricultural exports having declinedfrom 56 percen.t in 1952-53 to 52 percent in 1960and 49 percent in 1961. This trend reflects a n.umberof factors, including the different commodity compo-

7

sition of the exports of the two groups of regions,and the curtailment of food exports from many lessdeveloped countries because of the rapidly risin.gdomestic consumption.

In addition, export subsidies, donations and saleson concessional terms have stimulated the volumeof exports from some of the more developed coun-tries, though not necessarily at the expense of othercountries. Exports under special terms have beenof particular importance in the United States, wherethey have in recent years accounted for nearly onethird of total agricultural exports, an.d more thantwo thirds in the case of wheat. If the value ofsuch shipments, which do not bring earnings offoreign exchange, is deducted from the total valueof the agricultural exports of North America, thetrend of exports from this region is found to bemuch more closely in line with that of the less de-veloped regions.

The concern of primary exporting countries at thecontinuing unfavorable trend in their agriculturalexport earnings has been heightened by uncertaintyas to the effects of the agricultural and trade policiesof the European Economic Community and of theterms under which the United Kingdom may join.During the past year there has been much moreactive con.sideration, often on a wider basis thanbefore, of the possibilities of stabilizin.g commodityprices and export earnings.

FARM PRICES AND INCOMES

Average farm prices in most of the economicallymore advanced countries for which information isavailable were somewhat higher in 1961 than the yearbefore, largely because of higher price supports.Prices paid by farmers also increased, however, andin most cases there was little chan.ge in farm pricerelationships. In the longer run, the ratio betweenthe prices received and prices paid has tended tomove again.st farmers. Of 12 countries for whichcontinuous series of data are available, in only twodid the price ratio move in favor of farmers between1952-53 and 1961. In all other countries the in-crease in prices received by farmers was exceeded,sometimes substan.tially, by increases in the pricespaid for production requisites, and in livingexpenses where these were in.cluded in the indices.

Comparable data for less developed countries arevery scanty, and in the main observations must bebased on data for individual commodities. Here

a number of significan.t increases were registered inthe official prices, in particular for the basic productssuch as cereals; on the other hand, prices for mostexport products tended to decline.

In the relatively few countries which publish in-formation on farm incomes the general trend ofnet earnings in 1961 was upward, even though produc-tion costs were generally higher. The volume ofsales, however, expanded in most countries, andprices for many products were above those of 1960,often because support prices were raised to offsetrising production costs. Of the 17 countries forwhich data were available for 1961 or 1960/61, thenet incomes of farmers fell in only four, and in oneof these, Canada, the fall in earnings from currentoutput was to a large extent offset by sales fromcarry-overs from earlier crops.

CONSUMER PRICES

The upward trend of retail prices of food, whichhas persisted ahnost without a break sin,ce the se-cortd world war, continued in 1961. In most casesthe increases were small. But in nine of the 80countries for which data are available they exceeded10 percent, including a few very steep rises in Latin.America. Over the longer term, the retail prices offood and the general cost-of-living indices have,in the economically more advanced countries, movedclosely together. In the less developed countries,there have been greater divergencies, even thoughfood constitutes a larger part of total consumer ex-penditures than in countries with higher irtcomes.A comparison of the movements of the two indicesbetween 1953 and 1961 brings out that, in countrieswhere the general cost-of-living index has sisenrapidly, the retail prices of food have usually riseneven faster, while in countries where the generalprice level has remained more stable, food pricesand the general cost of living have moved closelytogether. This suggests that food prices are of keyimportance as a determinant of the general level ofprices, and emphasizes the importance of adequatesupplies of food as an anti-inflationary force indeveloping economies.

AGRICULTURAL POLICIES AND DEVELOPMENT PLANS

There were numerous important agricultural policydevelopinents in 1961/62. In western Europe the

Ministerial Council of the European Economic Com-munity (EEC) approved in January 1962 the firstcommodity regulations for the common agriculturalpolicy of the six countries. The objective of thecommon agricultural policy is to establish, over atran.sitional period, a single Community-wide marketfor agricultural products, protected from outside bya system of import levies. Tlse gradual implementa-tion of this policy is likely to bring about signifi-can.t shifts in European production and trade pat-terns, and un.avoidably to give rise to problems formany countries which are traditional suppliers ofthe European. market. Prices of farm products aregradually to be broug,ht in line, but the crucial ques-tion of the ultimate level of these prices has notyet been decided. Similarly, at the time of writin.g,the outcome is not yet known of the negotiationsconcerning the possible membership of the UnitedKingdom and other countries, which may bring somemodifications in the policies of the Community.The negotiations with the United Kingdom havevery largely con.cerned agricultural problems, in theUnited Kingdom itself and in the Commonwealthagricultural exporting countries in both tropical andtemperate zones.

In both Australia and New Zealan.d concern at thepossible con.sequences of the United Kin.gdorn'sjoining EEC has been the main agricultural policyissue during the year under review. Both countrieshave pressed strongly for special treatment in theUiaited Kingdom market and have at the same timeattempted to expand sales in other markets.

The United States Government is making evenmore determined efforts to reduce the costly burdenof agricultural surpluses, though progress to date hasbeen limited. The Emergency Feed Grain Program,which was so successful in reducing the productionof maize and sorghum in 1961/62, was extended in1962/63 to barley. A new program of acreagerestriction and diversion was also introduced for the1962/63 wheat crop. More comprehensive measureswere submitted to Congress in early 1962 but werenanowly defeated, though it is reported that theAdministration intends to resume at a later date itsefforts for a more basic solution of the problem ofgrain. surpluses. The United States Sugar Act wasextended, the Cuban quota being reallocated todomestic and foreign. producers. In Can.ada therewas no major chan.ge in agricultural policy in1961/62.

In the U.S.S.R. a perspective plan has been for-mulated up to 1970 and 1980. Agricultural produc-

don. is scheduled to increase by 150 percent between1960 and 1970, and by a further 40 percent by 1980.New directives envisage a shift from fallows andotational grasses to more intensive cropping with

the help of fertilizers. Some important organiza-tional changes have reversed the former trend togive more autonomy to the collective farms. In boththe U.S.S.R. and the eastern European countriesthe prices of livestock products have been sharplyincreased, partly as a production incentive andpartly to restrict demand. The collectivization drivehas con.tinued in eastern Europe. In Mainland China,however, the commune system has been furtherdecentralized, giving more authority to local produc-tion brigades and teams, and new econ.omic incentivesof a limited character have also been introduced.

There has been a continued exten.sion of planningfor agricultural development in the less developedcountries, often closely integrated into plans forover-all economic development. In the Far Eastmost countries have been formulating, reviewin.g andimplementing such plarts, with varying degrees ofsuccess, over man.y years. In the other regions,however, a number of countries have recently pre-pared or launched their first development plan.s.The Alliance for Progress has provided a new stimulusfor planning in Latin America. In the Near Eastthere is a noteworthy trend toward more compre-hensive forms of planning. In Africa, also, the com-prehensive approach to development planning is

gaining more attention, although most plans in thisregion are still concerned only with the public sec-tor of the economy.

Agrarian reform is being given special attentionun.der the Alliance for Progress, and during the pastyear at least six Latin-American countries have ap-proved or prepared legislation to reform the agrarianstructure. Important new legislation on land tenurehas also been introduced in a n.umber of countriesof the Near East. In Africa, also, much interesthas been focused on changes in land ten.ure systems.

Efforts to increase agricultural production forexport by means of price incen.tives have been madein a number of Latin-American countries. In theFar East several countries made substantial changesin agricultural price policies, usually in order tobring production more in line with planned objectivesand to give added production incentives to farmers.Amon.g the far-reaching economic measures designedto further socialization that have been hatroducedin the United Arab Republic, the Egyptian CottonCommission has been set up to purchase cotton

9

from growers at prices fixed by the Government, andthe Egyptian. Cotton Organization to sell cottonfor export or to local textile manufacturers. Be-cause of the continuin.g fall in world prices of coffeeand cocoa, producer prices of these commoditieswere reduced in a n.umber of African countries in1961/62. Ghana is n.ow selling cocoa only in Accra,and Nigeria in Lagos as well as in London.

Further headway has been made with the variousschemes for regional economic co-operation in theless developed parts of the world. Additional coun-tries have now joined the Latin American FreeTrade Area while, under the Central AmericanIn.tegration Scheme, the Central American Bank forEcon.omic Integration made its first loan to a mem-ber country in December 1961. Twenty Africancountries have agreed in principle on the establish-ment of a new Inter-African and Malagasy StatesOrganization. In the Near East a draft agreementon Arab econ.omic unity was signed at the June1962 meeting of the Economic Council of the ArabLeague, and a fund for Arab econ.omic develop-ment has been established by the Government ofKuwait.

Fishery policies in many of the more developedcountries have been designed primarily to make theindustry more competitive through the moderniza-tion of facilities. Until technological improvementsresult in. increased profitability of operations, how-ever, the govern.ments of some countries have hadto continue or increase direct financial support,because of special hardships experienced by somesectors of the industry. In some fisheries exclusionfrom customary fishing grounds following the ex-tension of fishing limits has contributed to a worsen-ing of economic condition.s. In the less developedcountries development efforts have required moreradical forms of assistance, and financial con.ces-sions and protective measures have played a morepromin.ern part in the fishery policies of thesecountries.

Countries contin.ue to elaborate or revise theirforest policies or to establish long-term forestryplans, which are tending to be more closely integratedthan before with general plan.s for economic andsocial developmen.t. Insufficient atten.tion., however,seems to be paid to the implementation of theseplan.s, either because governments give them lesspriority than plans in other sectors, or because basicdata, technician.s an.d finan.ce are lacking, and eco-rtomic and institutional conditions remain unfavor-able for forestry development.

SHORT-TERM OUTLOOK

The economic outlook for the remainder of 1962and for 1963 in the leading industrialized countries,which account for the bulk of the world importdemand for agricultural products, is somewhat un-clear at the time of writing. In general, however,the rate of growth of economic activity in thesecountries seems likely to be slower than had beenexpected earlier. Supplies of most agricultural prod-ucts are expected to remain ample, and there seems

Chapter III. The role of forest industries in the attack on economic underdevelopment

Governments of developing countries, in decidingon the allocation of scarce investment funds amongdifferent sectors of the economy, need to examineeach sector from the standpoint of the contributionwhich its development can make toward promotingthe growth of the economy as a whole. The moreimportant categories of data for an evaluation ofthe economic impact of investment in a particularsector include technological data, investment andcost data, demand data, and facts concerning thesecondary and indirect effects of in.vestment in thesector.

DEMAND FOR FOREST PRODUCTS

The structural characteristics of the demand forforest products show that investment in forest in-dustries ranks high as a growth promoter. This isbecause of the high degree of lin.kage with othersectors of the economy. The forest industries drawa high proportion, of their inputs from other sectors,and a very high proportion of their products go tofeed other sectors. An.other favorable indication isthat income elasticities of demand for forest productsare high, especially in low income countries.

At the present time, however, the production, offorest products in the world is even more highlycon.centrated than is consumption. The consequenceis that the developing regions, even those favorablyendowed with forest resources, are substantial netimporters (in value terms) of forest products. Ingeneral, they export unprocessed wood and importhigh value processed wood products.

lo

no reason to expect any great increase in demand thatwould halt the decline in prices on world markets.

The limited data available so far suggest that in1962/63 the rising trend of world agricultural produc-tion will probably be resumed with a further sizableincrease. Climatic conditions seem generally to havebeen more favorable than in 1961/62, when badweather was so widespread.

The chapter is concluded with brief notes on theprospects for the main agicultural commodities andfor fishery and forestry products.

CHARACTERISTICS OF FOREST INDUSTRIES

The forest industries sector, which includes saw-milling, pulp and paper manufacture, plywood andveneers, fibreboard, particle board and a wide varietyof miscellaneous and secondary industries, showsvery great diversity in its raw material needs, itsrequirements of capital, skilled and unskilled labor,in the technologies it can use, and in economies ofscale. In other words, the production function forthis group of industries has a wide range and con-siderable flexibility. These are characteristics whichrender it specially suitable for investment in develop-ing countries.

Other important advantages derive from the char-acteristics of forestry, considered in this context inits capacity as " woodshed " for forest industries.Forestry work, too, is highly flexible, and can thusutilize unemployed labor, thereby diversifying an.denriching the rural economy.

Certain indirect effects of investment in the forestindustries sector are also important. Because of themutual relations between industries in the sector,initial investments in one branch pave the way forcomplementary developments, making the sector asa whole to some extent self-propelling. Many forestindustries are best located n.ear the forests, whichare often some distan.ce from population concentra-tions. Thus investment in this sector favors decen-tralization and the establishment of new develop-ment zones. Finally, forest industries are closelylinked with infrastructural developments such aspower and communications, and hence can frequent-ly help to valorize needed infrastructural investment.

OBSTACLES TO BE OVERCOME

In the developing countries, many forests becauseof their heterogeneity lend themselves less readilyto industrial development than those in the moreadvartced countries. However, the prospect of theeconomic utilization of these forests improves as theraw material basis of the forest industries steadilybroadens with techrtological progress. The processcould be considerably accelerated if greater researcheffort were devoted to the specific problems of de-veloping countries.

Another difficulty lies in the small size of manynational markets at the present time, since in certainbranches of forest industry the economies of scaleare very marked. While time, with expanding mar-kets, will eventually solve this problem, economicintegration hastens progress, enlarging investment op-portunities. Moreover, economic integration canensure optimum use of the forest raw materials in agiven region.

Disparities between the diets of the less developedcountries and the more adequate diets of the moredeveloped region.s of the world are more markedfor livestock products than for any other majorfood group. Recent estimates suggest that, while thecalorie value of the average diet in less developedcountries is about 70 percen.t of that of more devel-oped countries, the correspon.ding figures for meatare about 20 percent, for milk about 14 percent andror eggs about 12 percent. While such broad aver-ages can be no more than indicative, they bring outthe essential point that consumption levels in lessdeveloped countries are not only low quantitatively,but are also strikingly lacking in many essentialnutrients.

Poverty is the inain explanation of the low con-sumption of livestock products in these countries,and the demand for livestock products increasesdramatically once incomes begin to rise. The effortsn.ow being made to speed economic development,coupled with the accelerating growth of population,are thus likely to bring about a steep increase in thedemand for livestock products in less developedcountries. Unless this rising demand is matched byincreased production, the result will be higher prices,

I I

Scarcity of investment capital is often an impedi-ment; this underlines the need for a more systematicand imaginative approach to capital saving.

PROBLEMS OF PLANNING

Planning for the forestry and forest industriessectors the two cannot be divorced presentsmany special problems. These relate essentially tothe time horizons appropriate for each, given thelong production cycle in forestry; to the need forinsuring that the important n.oncrop functions ofthe forest receive adequate attention; and to thepossible areas of conflict between public and privateinterests. Forests, rightly used, can make an im-mense contribution to the development process, butif this con.tribution is to be realized there must bean effective link at all levels between the authoritiesresponsible for the forests and those respon.sible forplanning and encouraging industrial developmen.t.

Chapter IV. The livestock industry in underdeveloped countries

making them still more inaccessible to the poorestsections of the population who lack them most.This trend is already evident in a number of coun-tries. Estimates based on the expected growth ofpopulation and incomes suggest that the deman.dfor livestock products may well grow by some 5 per-cen.t annually in the less developed countries.This is estimated to be about twice the recen.t rateof growth of production.

In general tile number of livestock in relation tothe human population is not significantly lower inless developed than in more developed regions, andthe small production of livestock products stemsfrom their very low productivity. For example, theoutput of meat and milk per head of the cattle pop-ulation in Europe is estimated to be about ten timesgreater than in the Far East, seven times greaterthan in Africa, and four times greater than in theNear East and Latin America. In.creased suppliesof livestock products in these regions depertd notso much on increasin.g the number of animals, whichare often already too large in relation to availablefeedstuffs, as on raising the output per animal.

The second section of the chapter discusses thetechnical problems of increasing the productivity of

livestock. For this three main methods are avail-able: the control of disease, better feeding and betterbreeding. These three facets of improved manage-ment are indivisible. Better feedin.g will do little ifthe stock is unthrifty through disease or parasites;gen.etic improvement will do little unless the improvedtypes of animals are properly fed. Better technicalmethods, however, will not be adopted unless farm-ers are made aware of their potentialities throughimproved education and exten.sion services, an.d un-less economic conditions are favorable. The latterinclude adequate credit facilities, in many countriesimproved con.ditions of land tenure, and also efficientmarketing and distribution services to link thefarmer with the gowing urban. demand.

The chapter discusses some of the main problemsof animal nutrition, especially in tropical climates,and the con.ditions necessary for the integration oflivestock husbandry with crop production to thegain of both. It emphasizes the importance of fod-der conservation and range management, especiallyin arid areas.

In regard to breeding, the chapter discusses condi-tions under which the importation of exotic breedsof livestock can contribute to increased production,but also brings out the limitation.s of the methodand stresses the importance of effective controlsagainst the simultaneous importation of new diseases.Emphasis is laid on the importance of breeding andselecting indigenous breeds, already adapted to thelocal environment and resistant to local diseases.It also discusses the possibilities of crossbreeding.

2

Indication.s are given of the immense and largelypreventable losses resulting from animal disease, andexamples are quoted of successful control or eradica-tion. Disease in livestock is not necessarily a spec-tacular matter with thousands of animals exhibitingobvious symptoms or with a high death rate. Manyforms causing heavy losses, includin.g intern.al para-sitism, infectious infertility, or mineral deficien.cies,may be so widespread and insidious as to be acceptedas normal.

Much emphasis is laid on the importance of educa-tion in animal husbandry an.d veterinary science,and on the contTibutions which the more developedcountries can make in the earlier stages of livestockdevelopment in those which are less developed. Thissection of the chapter ends with a brief discussionof the many problems of livestock marketing, includ-ing transportation.

A third section of the chapter con.siders separatelythe problems of cattle, sheep, pigs, poultry, andother main types of livestock, in.cluding the condi-tion.s under which each are likely to prove of value.A fourth section discusses the main problems of eachof the main regions of the world and gives briefindications of recen.t successful examples of in.creasinglivestock production. A final section briefly re-views possible future developments, including thepotentialities of some of the newer techrtiques nowcoming into use. It also discusses the possibilityof usin.g surplus stocks of feed grain.s for buildingup efficient livestock industries in those countrieswhich are economically less developed.

Preliminary estimates suggest that there was littleincrease in world agricultural production in 1961/62.With population now estimated to be rising by about1.8 percent per year, this would imply some reductionon a per caput basis (Table II-1). The longer termtrend of agricultural production, however, duringthe past decade and also in comparison with theprewar period, is still ahead of population growth.The pause in the expansion of production, whichif confirmed by later figures would be the first since1957/58, was caused mainly by widespread badweather, and there is every indication that the risewill be resumed in 1962/63.

Among the main regions of the world, agriculturalproduction appears to have increased substantiallyin 1961/62 only in La.tin America where productionhad fallen in 1960/61 (Table II-2). It is estimatedthat there was an increase of about 4 percent in totalagricultural production in Latin America in 1961/62,though food production rose by only about 2 percent.In. eastern Europe and the U.S.S.R. production isestimated to have risen by about 2 percent in 1961/62,after failing to increase in the previous season. Smaller

Chapter II. LD REVIEW AND OUTLOOK

Agricultural production

13

increases of approximately 1 percent are estimated forOceania and for the Far East (excluding MainlandChina).

In each of the other regions for which data are avail-able there was a decline in agricultural productionin 1961/62, according to preliminary estimates.There was a decrease of about 1 percent in westernEurope from the very high level of 1960/61, whenaccording to revised figures production had iacreasedby no less than 6 percent. 1 Agricultural production

The preliminary estimates published in last year's issue ofthis raport indicated a rise of only 3 percent in western Europein 1960/61. 'There were larger increases than expected in theproduction of milk and vegetables, both of which are producedcontinuously throughout the crop year, so that the preliminaryestimates for them are particularly subject to error. Similarlyrevised data for Africa indicate an increase of 4 percent in 1960/61instead of the I percent reported last year. This change appearsto be due mainly to sharp revisions in the estimates of grain pro-duction, but it should be noted that for this region the data areespecially unreliable for all commodities except those which arealmost entirely exported. There llave also been smaller changesin the data for most other regions, and for the world (excludingMainland China) it is now estimated that there was an increaseof about 2 percent in 1960/61 instead of the 1 percent originallyreported. While revisions in the production data are unavoidable.especially in view of the early date at which this report has to beprepared, it is unusual for the figures to be so substantially affected.

NOTE: The world and regional indices of agricultural production shown in this report have been calculated by applying regional weights.based on 1952/53-1956/57 farm price relationships, to the production figures which are adjusted to allow for quantities used for feed andseed. The indices for food products exclude coffee, tea, tobacco, inedible oilseeds, animal and vegetable fibers, and rubber. While thecoverage of most of the regional groupings used is self-explanatory, it should be noted that western Europe is defined as including Yu-goslavia, and the Near East as extending from Cyprus and Turkey in the northwest to Afghanistan in the east and including from theAfrican continent Libya, Sudan, and the United Arab Republic. For Mainland China no estimates are included until more completedata are available.

' Excluding Mainland China.

Prewar averageAverage

1948/49-1952/53Average

1953/54-1957/581958/59 1959/60 1960/61

1961/62(Preliminary)

Indices, average 1952/53-1956/57 = 100

TOTAL PRODUCTION

All agricultural products 77 88 102 113 116 119 119

Food products only 76 88 103 114 116 119 119

POPULATION 81 94 102 107 109 112 114

PER CAPUT PRODUCTION

All agricultural products 95 95 101 106 106 106 105

Food products only 94 94 101 106 106 107 105

TABLE 11-1. - INDICES OF WORLD AGRICULTURAL PRODUCTION IN RELATION TO POPULATION

TABLE - INDICES OF WORLD 1 AND REGIONAL AGRICULTURAL PRODUCTION IN RELATION TO POPULATION

Prewaraverage

NOTE: See explanatory note to Table II-I.' Excluding Mainland China.

Average1948/49-1952/53

1953/54 1954/55 1955/56 1965/57 1957/58 1958/59 1959/60 1960/61

1961/62

(Prelim-inary)

14

Indices, average 1952153-1956157 100

Total production

ALL AGRICULTURAL PRODUCTS

Western Europe 82 86 101 100 102 103 107 109 113 120 118

Eastern Europa and U.S.S.R. 82 86 94 96 '105 116 118 129 132 132 135

North America 68 93 99 97 101 103 98 105 107 109 108

Oceania 78 90 97 98 103 105 102 117 118 122 123

Latin America 73 89 96 100 102 107 112 118 122 120 124

Far East 84 87 98 100 103 107 106 111 115 119 120

Near East 71 83 100 97 101 108 113 117 120 121 118Africa 69 88 98 101 101 106 104 109 110 114 111

ALL ABOVE REGIONS 77 88 98 98 102 107 107 113 116 119 119

FOOD PRODUCTS ONLY

Western Europe 82 86 101 100 102 103 107 110 113 120 119

Eastern Europe and U.S.S.R. 83 86 95 96 104 116 119 130 133 134 137North America 66 92 98 97 101 104 101 109 109 111 110Oceania 81 93 99 98 103 100 98 116 114 119 119Latin America 70 ea 96 101 101 108 111 117 117 118 120Far East' 82 87 99 100 103 107 106 111 116 120 120Near East 71 83 101 97 101 108 113 117 119 119 117Africa 72 89 98 101 100 106 103 107 107 111 108

ALL ABOVE REGIONS 76 88 98 99 102 107 108 114 116 119 119

Per caput production

ALL AGRICULTURAL PRODUCTS

Western Europe 93 89 102 101 102 102 105 106 108 114 112Eastern Europe and U.S.S.R. 84 91 96 96 103 113 113 122 123 121 122North America 88 100 101 97 99 100 93 98 98 98 95Oceania 103 99 99 97 101 100 95 107 106 106 104Latin America 108 97 98 100 100 102 105 107 108 103 105Far East' 109 93 100 100 101 103 100 102 104 105 104Near East 93 91 102 98 99 103 105 107 107 105 100Africa 94 96 100 101 99 102 98 100 99 101 96

ALL Al3OVE REGIONS 95 95 100 99 101 103 101 106 106 106 105

FOOD PRODtJCTS ONLY

Western Europe 93 89 102 101 101 101 105 106 109 115 112Eastern Europe and U.S.S.R. 85 92 96 96 103 112 114 123 124 123 124North America 85 99 100 97 99 101 96 101 100 99 97Oceania 108 102 102 98 101 96 92 106 101 104 102Latín America 103 97 98 101 99 103 104 106 104 102 101Far East ' 106 93 101 100 101 103 100 102 105 106 104Near East 93 91 104 98 99 103 106 107 106 103 99Africa 97 98 100 101 98 101 ! 97 98 96 98 93

ALL ABOVE REGIONS 94 94 100 99 101 103 102 106 106 107 105

also fell by some 1 percent in 1961/62 in NorthAmerica, mainly because of drought in the prairieprovinces of Canada. In the Near East productionis estimated to have dropped by between 2 and 3percent, as a result of continued droughts in a numberof countries and heavy pest damage to the UnitedArab Republic cotton crop. Estimates for Africa,where there was a large increase the year before,indicate a decline of as much as 3 percent in 1961/62,resulting mainly from drought in Algeria, Moroccoand Tunisia.

Again this year no oficial figures of agriculturalproduction have been published for Mainland China,which is therefore not included in the FAO indexof world production. Floods, droughts and pests arereported to have curtailed production for the thirdconsecutive year, and there have been further largeimports of grains.

LONGER-TERM TRENDS IN AGRICULTURAL PRODUCTION

IN RELATION TO POPULATION

The recent course of per caput production hasbeen somewhat uneven. In 1958/59 there was asharp increase in world per caput agricultural produc-tion (excluding Mainland China). This increasedlevel was approximately maintained in the two fol-lowing years, but in 1961/62, as noted above, therewas probably a slight decline.

Over the past decade, however, production hasincreased at an average annual rate of about 2.9 per-cent, while the average rate of population increaseover this period has been about 1.8 percent per year.This margin of production over population growthhas taken per caput agricultural production to alevel about 10 percent higher than before the war,but because of the more rapid population growthin the less developed regions almost all of the im-provement over the prewar level has been in themore developed regions of the world.

It is perhaps remarkable that it is still necessary,after more than 20 years, to compare per caputagricultural production with its prewar level. The

low levels of per caput production at that time in

the less developed regions, only about 40 percentof the average for the more developed regions,are certainly no desirable standard at which to aim.However, it was during the war years that the increase

2 This comparison is based on the price-weighted aggregatesof the FAO production indices.

15

in agricultural production temporarily fell behindpopulation growth in each region of the world exceptNorth America, where production was enormouslystepped up to make good the deficits elsewhere.There are still some regions where production hasbeen unable to catcla up with population after thiswartime setback, at least on a permanent basis, andwhere per caput production therefore remains lowerthan before the war.

Figure II-1 is almost identical with one publishedin last year's issue of this report, but it is repeatedhere (with the addition of data for 1961/62) sinceit shows particularly clearly how, as a result of thewartime setback, per caput production is less thanbefore the war in some regions even though produc-

FIGURE 11-1. TRENDS IN REGIONAL FOOD PRODUCTION IN RELA-TION TO POPULATION GROWTH, PREWAR TO 1961/62

- Food production---- Population

' Excluding Mainland China

Indices, prewaroverogeS=100

Indicesoverages

prewar0100

40

130

120

90

60

150

140

-130

-120

-110

- WO

90

'-'1°-160

-150

-(00

-170

,70-i60-

150-

140-

t30-

120-

i00

WORLD I/ WESTERN EUROPE

90

170

160-

150

(40

130

120

.0100-

90

110

160-

mo

(40

150

120

110

100-

90

'70-160-

150-

140

t30

120-

110

t00

90

NORTH AMERICA OCEANIA

....

'20

160

i50

140

130

120

110

100

90

LATIN AMERICA

,

-

FAR EAST)/

ITO

160

150

-140

130

120

110

100

90

AFRICA NEAR EAST

i

1934-39overoge

1948-32 5overoec ' ;2;

' :k P,

57 1934-30 1940-52ti órñ *

average overoge .1,

tion has been increasing faster than population. Themargin of production over population has not beensufficient in these regions to make up for the deficitthat developed during the war years. The comparisonis shown in terms of food production rather than totalagricultural production, for it is in its role of feedingthe rapidly growing population that the performanceof world agriculture is most anxiously watched.

While the prewar level of per caput food productionhas been regained in each of the less developedregions at sorne time during the postwar period,in all except the Near East this has so far been onlytemporary and per caput production has subsequentlyslipped back. As is discussed in a later section ofthis chapter, however, actual supplies of food per cap-ut in these regions appear to have been maintainedat higher levels than before the war as a result oflarger imports and often smaller exports of food.

Even in the Near East, while per caput food pro-duction in the peak year of 1958/59 was about 15percent more than before the war, this gain has sincebeen approximately halved, chiefly because of thesuccession of droughts in a large part of the region.In Africa food production per caput is estimated tohave reached about 5 percent above the prewarlevel in 1956/57, but in the last few years it appearsonce more to have dropped slightly below this level.Per caput food production in Latin America wasbriefly a little more than before the war from 1956/57to 1959/60. In the Far East (excluding MainlandChina), the most populous region, where productionper caput is the lowest in the world, the prewarlevel was fin.ally regained. in 1960/61 following threesuccessive good harvests, but from preliminaryestimates it is doubtful if it has been naaintained in1961/62.

Reference to Table II-2 indicates that, while thesituation is not very different if the comparison ismade in terms of all agricultural products insteadof just food, there are some small divergencies incertain regions. In Latin America, for food andnonfood products together the prewar level of percaput production was regained for only a single year;linseed production in this region remains much lessthan 'before the war, while coffee production also wasbelow the prewar level until the very rapid increasethat began in the late 1950s. In Africa, on theother hand, largely because of the continued rapidexpansion of coffee production, total agriculturalproduction is estimated, in contrast to food produc-tion, to be still a little more than before the waron a per caput basis. In the Far East (excluding

16

TABLE 11-3. - CHANGES IN FOOD PRODUCTION AND POPULATION,1959/60-1961/62 AVERAGE IN RELATION TO PREWAR PERIOD

WORLD I/

EASTERN EUROPEond U.S.S.R.

WESTERN EUROPE

NORTH AMERICA

NEAR EAST

LATIR AMERICA

AFRICA

FAR EAST 1/

OCEANIA

Per capas foodproduction

' Prewar average to 1959/60-1961/62 average. Minus sign indicatesdecrease. - 2 Excluding Mainland China.

Mainland China), where there has been a slightshift from nonfood crops compared with before thewar, it was only for food products that the prewarlevel of per caput production was briefly regainedin 1960/61.

It is evident from Table II-3 and Figure II-2 thatahnost all of the rise in world per caput productionhas been contributed not by the less developedregions, where such improvements are urgently need-ed to raise levels of living, but by the more developedparts of the world. Increases in per caput productionhave been far greater in the more developed regions

FIGURE II-2. CHANGES IN TOTAL AND PER CAPUT FOOD PRO-DUCTION, 1959/60-1961/62 AVERAGE IN RELATIONLTO PREWAR

PERIOD

-6 Ci 30 40 40 60Percent

C:=1 Total food production10aM Per caput food production

' Excluding Mainland China

Pe/centage increase

Western Europe .... 19 43 20

Eastern Europe andU.S.S.R 12 62 46

North America 43 65 16

Oceania 52 44 5Four above regions 21 56 29

Latin America 71 69 1Far East' 46 45 1Near East 50 66 11

Africa 53 52 1Four above regions 51 54

ALL ABOVE REGIONS 38 56 13

Total foodPopulation production

than in the Near East, the less developed region whereprogress in this respect has been the most rapidand in fact the only one where per caput food pro-duction was above the prewar level in 1961/62.This is in spite of the fact that recently in NorthAmerica the expansion of production has been tosome extent stemmed by measures designed to preventthe further accumulation of surplus stocks. InOceania increases in per caput production have beenprevented by a particularly high rate of populationgrowth, resulting partly from substantial immigration.

Generally, however, the growth of population hasbeen a great deal more rapid in the less developedthan in the more developed regions, and it is this,rather than any marked failure on the part of theiragricultural production, that over the longer termhas caused the poor showing of production on aper caput basis. Table II-3 indicates that, for theless developed regions as a whole, food productionhas grown about as much as in the more developedregions. In Latin America, in fact, total foodproduction in 1959/60-1961/62 averaged nearly 70percent more than before the war, which is a greaterincrease than in any other region. Populationgrowth, however, was also more rapid than in anyother region, with the consequences already notedfor per caput production. The rate of populationgrowth has of course diverged even more sharplyfor individual countries, as is apparent from a com-parison of the data of total and per caput foodproduction in Annex Table 1.

Finally it must be noted that the growth of popu-lation is tending to accelerate in the less developedregions as the spread of hygiene and medical carebrings down death rates. Recent censuses in manycountries have revealed rates of increase much higherthan those estimated earlier, and it has been necessaryto revise the estimate of the annual rate of increaseof world population (excluding Mainland China)from 1.6 to 1.8 percent. The accelerating growthof population partly accounts for the slower increaseof per caput production in some of the less developedregions in recent years, though the main influencein this case has come from the production side ofthe equation.

REGIONAL AGRICULTURAL PRODUCTION

Some of the main features of the recent agriculturalproduction situation in the principal regions of theworld are discussed in more detail below. As far

17

as possible information is included on individualcountries, but this analysis is inevitably limited asthe FAO country production indices are not yetavailable for 1961/62. Statistics of the regionalproduction of the major commodities are to befound in Annex Tables 3-10.

Western Europe

Following large increases in each of the two preced-ing years, preliminary estimates indicate a slight fallin agricultural production in western Europe in1961/62. In 1960/61, when according to reviseddata the rise had been as much as 6 percent, therewere substantial increases in production in all thecountries of northwestern Europe, but except forsmall increases in Portugal and Spain productiondropped sharply in the southern part of the region(Table II-4). In 1961/62 declines in productionappear to have been quite widespread, and Greecewas probably the only country of the region to reg-ister a large increase.

The region's grain production is estirnated to havefallen by about 6 percent in 1961/62 from the highlevel of the year before. The wet autumn of 1960resulted in lower acreages of winter grains in manycountries, while the replacement of winter wheatby lower-yielding spring wheat as well as loweryields of other grains also contributed to the declinein production. There were substantial reductions inthe production of wheat a.nd rye in northwesternEurope and of maize in southern Europe. Theproduction of sugar beet and of potatoes also fellfar short of the bumper root harvest of 1960/61.Excess supplies of sugar and potatoes in 1960/61led to the planting of smaller areas in most countriesin 1961/62, and yields were also affected by dryweather. Among the main crops, only citrus fruitand cotton rose substantially in 1961/62.

While crop production was lower in 1961/62,livestock production continued its rapid increasewith a further rise of from 3 to 4 percent. Beefand veal and pig-meat were plentiful in 1961/62, anddairy products were in oversupply. Milk yieldscontinued to increase, and in the winter of 1961/62the number of inilk cows was about 2 percent morethan the previous winter, so that the production ofmilk products, especially butter, rose sharply. Pignumbers rose by about 6 percent in 1961 and havecontinued to increase during 1962, and the productionof pigmeat has risen substantially.

Eastern Europe and U.S.S.R.

In Eastern Europe and the U.S.S.R., where therewas no increase in agricultural production in 1960/61,a rise of about 2 percent is estimated for 1961/62.U.S.S.R. production, which liad declined in 1960/61,is reported to have increased in 1961/62 but to havefailed to reach planned targets; the recent slowgrowth of agricultural production, in strong contrastto the rapid progress of earlier years, is causingconcern. Among the countries of eastern Europe,only Poland appears to have had a good season in1961/62. The southern countries of the regionsuffered from drought, and in Eastern Germanylabor shortage and other problems, resulting fromthe rapid collectivization of the previous year, causedconsiderable losses.

As a result of an increase in area, especially ofmaize, the U.S.S.R. grain harvest rose slightly in1961/62, but at 137.3 million tons was considerablybelow the target of 154 million tons. The season wasparticularly favorable in the Ukraine, but there wasbad weather in many other major producing regions.

TABLE 11-4. 11,0)I(7ES AGRICHLTURAI PRODUCTION IN '1/4..V ROIL

NOTE: Country indices are calculated by FAO on a uniform basis. They may differ from national indices produced by the countriesthemselves because of differences in concepts of production, coverage, weights, and methods of calculation. They are not yet availablefor 1961/62.

The production of pulses rose from 2 6 million tonsin 1960/61 to 4 million tons in 1961/62. Potatoproduction failed to increase, and the output ofother vegetables fell by 6 percent. Sugar beet pro-duction also was lower, but cotton and oilseeds,especially stmflowerseed, expanded. The increase inthe production of meat and milk in the U.S.S.R.was negligible in 1961. Meat production was 8.8million tons, as against the 11.8 million tons planned,and state procurements were reduced. Milk pro-duction reached only 62.5 million tons, comparedwith the target of 78.4 million tons. Livestocknumbers, however, increased substantially.

In the eastern European countries there was no in-crease in grain production in 1961/62. Sugar productionwas 8 percent less than in 1960/61, in spite of a recordcrop of sugar beet in Poland. The Polish potatocrop was also a record one but production was lowerin the rest of the region except for Czechoslovakia.Sunflowerseed production in Hungary was 60 percentabove the low 1960/61 level, but it declined sharplyin Bulgaria and Romania. Fruit production washigh in the southern part of the region, but crops

NORTHWESTERN EUROPE

1952/53 1953/54 1954/55 1955/56

Indices, average

1956/57 1957/58

= 100

1958/59 1959/601960/61

(Preliminary)

1952153-1956157

Austria 91 103 96 102 107 112 116 110 122

Belgium-Luxembourg 93 96 104 107 100 106 110 103 116

Denmark 100 101 101 97 101 111 110 107 117

Finland 98 105 100 97 100 109 110 112 124

France 91 99 104 104 102 105 104 111 125

Germany, Federal Republic 95 101 101 100 102 105 111 107 123

Ireland 95 97 105 99 105 115 105 98 111

Netherlands 100 99 100 104 98 105 115 116 128

Norway 97 99 99 97 108 101 101 103 108

Sweden 104 103 101 91 101 99 95 97 100

Switzerland 101 100 103 99 98 99 108 106 112

United Kingdom 96 98 99 99 107 106 102 111 117

Subtotal 95 100 102 101 103 105 107 109 121

SOUTHERN EUROPE

Greece 79 102 100 109 111 128 121 126 115

Italy 92 104 96 105 103 101 116 116 110

Portugal 87 106 104 102 102 105 99 101 103

Spain 100 95 102 99 104 108 110 117 118

Yugollavia 70 114 92 120 104 147 119 163 148

Subtotal 90 103 98 105 104 112 114 122 117

REGIONAL TOTAL 93 101 100 102 103 107 109 113 120

TABLE 11-5. - INDICES OF

1952/53 1953/54

NOTE: See explanatory note to Table II-4.

were poor in Czechoslovakia and Eastern Germany.Pigmeat production rose by 14 percent in Poland,and pig numbers expanded in all countries exceptBulgaria and Czechoslovakia. Cattle numbers in-creased, except in Eastern Germany, where there wereheavy slaughterings in order to maintain meat supplies.

North America

Agricultural production in North America fell byabout 1 percent in 1961/62 from the level of the yearbefore, when United States output had set a newrecord. In 1961/62 United States production is

estimated to have been maintained at close to thisrecord level, but in Canada production was reducedby about one fourth as a result of severe droughtin the prairie provinces, which at the regional levelbrought declines especially in the production of grainsand linseed.

It is clear from Table II-5 that Canadian agricul-tural production is subject to considerable year-to-year fluctuations, but the decline in 1961/62 is thebiggest for eight years. The wheat crop was thesmallest since 1937/38, and the barley crop the smallestsince 1949/50. Oilseed production also fell sharply,that of linseed by as much as 35 percent. Forageproduction was reduced by the drought, and increasednumbers of cattle were therefore marketed, many

NOTE: See explanatory note to Table 11-4.

AGRICULTURAL PRODUCTION IN NORTH A MERICA

1 9

1960/61

(Preliminary)

of them going for feeding and slaughtering to theUnited States, where feed supplies were adequate.The production of beef, veal, mutton, and poultrymeat continued to increase in 1961, though therewas some decline in the production of pork and eggs.

In the United States, livestock production increasedfurther in 1961, but crop production was slightlylower than the previous season. In spite of recordyields, maize and sorghum output fell as a result oflower acreages under the Emergency Feed GrainProgram. Wheat production was about 10 percentless than in 1960/61, largely because of droughtdamage to the spring crop. There were large in-creases, however, in the production of soybeans,because of the 25 percent increase in the supportprice, and of sugar, as a result of the curtaihnentof imports from Cuba. A small increase was reg-istered for tobacco, while cotton production fell

slightly. Beef production rose by 3 percent to a recordlevel in 1961, and broiler production by about 12percent. Pork production declined slightly, but theexpansion of milk production continued in spite ofa decrease in the number of dairy cows.

Oceania

Preliminary estimates indicate a further increase ofabout 1 percent in agricultural production in Oceania

TABLE I - INDICES OF AGRICULTLMA L PRODUC NON IN OCEANIA

1960/611952/53 1953/54 1954/55 1955/56 1956/57 1957/58 1958/59 1959/60

(Preliminary)

4--- _----- ------

Indices, average 1952153-1956157 100

Australia 97 97 97 104 105 99 119 118 121

New Zealand 97 95 100 103 105 109 115 119 121

REGIONAL TOTAL 97 97 98 103 105 102 117 118 122

Indices, avert's, 1952153-1956157 100

Cariada 111 103 78 99 109 92 97 101 107

United States 98 98 99 101 103 99 106 108 109

REGIONAL TOTAL 99 99 97 101 103 98 105 107 109

1954/55 1955/56 1956/57 1957/58 1958/59 1959/60

in 1961/62. In the previous year there had been anexpansion of about 3 percent in both Australia andNew Zealand (Table II-6). The region's grain produc-tion declined by 15 percen.t in 1961/62, though it re-mained high in relation to earlier years. There werefurther sharp increases in the 1961 output of livestockproducts, in particular a large rise in beef productionwhich checked the decline that had begun in 1959.

While Australian wheat production was at a highlevel in 1961/62 it was a good deal lower than therecord crop of the previous season. Australian beefproduction increased by more than 20 percent, therewas a rise of 3 percent in mutton and lamb output,and the 1961 wool clip recovered from the heavylosses of the previous year, in spite of continuingdrought in some areas. In New Zealand there wassome increase in the production of milk, wool,beef, and mutton and lamb. Butter production wassomewhat lower, as more milk was used in the pro-duction of cheese, which rose by 7 percent.

Latin America

In Latin America, according to preliminary esti-mates, there was an increase in agricultural productionof about 4 percent in 1961/62, chiefly as a resultof sharp recoveries in the output of wheat, coffee,

TABLE - INDICES OF AGRICULTURAL PRODUCTION IN LATIN AMERICA

NOTE: See explanatory note to Table II-4.

linseed, and beef. The increase in food productionin 1961/62 was only about 2 percent. In 1960/61total production had fallen by between 1 and 2 per-cent, almost entirely because of drought in Argentinaand Brazil (Table II-7). Th.e data so far availablesuggest that 1961/62 was again a good season formost countries, though in Cuba, partly because ofdrought and floods, there was a big drop in produc-tion from the high level of the previous year.

Wheat production recovered by about 20 percentin 1961/62, most of the rise being accounted for byArgentina. The coffee crop was nearly 15 percentlarger than in 1960/61, when there had been a sharpfall; here too, one country, Brazil, was responsiblefor almost all of the increase. For linseed the recov-ery amounted to as much as 35 percent, and againArgentina was the principal country concerned.There were also significant but smaller increases inth.e production of cotton, cottonseed and soybeans.Sugar production fell sharply, however, as a resultof the smaller crop in Cuba.

The output of livestock products is estimated tohave risen by about 4 percent in 1961, which repre-sents a substantial recovery from the low levels ofthe two preceding years. The bulk of the increasewas in beef and veal production, especially in Argen-tina, but the region's total for this commodity re-mained below the 1958 record.

20

CENTRAL AMERCA

1952/53 1953/54 1954/55 1955/56 1956/57 1957/58 1958/59 1959/601960/61

(Preliminary)

Indices, average 1952153-1956157 100

Cuba 99 97 94 99 111 114 115 115 126Guatemala 93 96 99 102 110 115 120 130 127Honduras 99 103 95 97 106 110 109 114 114Mexico 84 89 104 110 113 129 138 136 137Panama 91 102 99 104 103 113 119 119 115

Subtotal 90 92 100 106 112 123 129 129 132

SOUTH AMERICA

Argentina 100 97 99 97 107 108 111 103 97Brazil 93 96 99 106 106 115 124 142 133Chile 101 95 102 103 99 108 104 105 108Colombia 98 101 98 101 102 109 112 118 118Peru 98 100 102 102 98 99 107 113 116Uruguay 97 108 100 97 98 93 84 83 87Venezuela 95 96 101 101 107 109 114 110 118

Subtotal 97 97 99 102 105 109 114 119 114

REGIONAL TOTAL 95 96 100 102 107 112 118 122 120

Far East

After increases of some 3 percent for three suc-cessive seasons, it appears from preliminary datathat the rise in agricultural production in the FarEast (excluding Mainland China) was limited toabout 1 percent in 1961/62. The 1960/61 seasonhad been particularly favorable for almost everycountry in the region (Table II-8), but in 1961/62adverse weather conditions affected production inseveral countries, including Burma, Indonesia, andSouth Viet-Nam.

There was a further large increase in wheat produc-tion in 1961/62, but the rice crop is estimated to llavebeen slightly below the high level of the previousyear, so that total grain production was virtuallyunchanged from 1960/61. Rice harvests were lowerin Burma, Cambodia, Indonesia, and South Viet-Nam, but production was high in most other coun-tries. Groundnut production increased sharply, witha big rise in India. Jute production was up byalmost 40 percent over the exceptionally low levelin 1960/61 and was a record in both India and Pak-istan. Rubber production also rose substantially,mainly because of sharply expanded smallholderoutput in Indonesia, though the coming into bearingof higher-yielding trees is also having an effect.For most other commodities, however, there waslittle increase in production; in particular, it is esti-mated that the output of livestock products showedonly a negligible rise in 1961 above the 1960 level,in spite of a continued rapid increase in Japan.There were decreases in the region's production of

TAI3LE 11-S. - INDICES OF AGRICULTURAL PRODUCTION IN THE FAR EAST

1952/53

NOTE: See explanatory note to Table 11-4.' Excluding Mainland China.

1953/54 1954/55

21

cotton and coffee, in both cases because of lowercrops in India.

For Mainland China, while no official productionfigures have been announced, all the evidence pointsto a third successive season of poor harvests in 1961.Food consumption levels and individual rationsllave apparently decreased further, and malnutritionis reported to continue to affect workers' output.As described later in this report, China has beenimporting very large quantities of grains in 1961and 1962 in an effort to mitigate the food shortages.

Near East

Following an increase of less than 1 percent in1960/61, preliminary estimates indicate that agri-cultural production in the Near East declined bybetween, 2 and 3 percent in 1961/62. The recent poorperformance of agricultural production in the re-gion has resulted in particular from a succession ofdroughts in Iraq, Jordan, and Syria (Table II-9).

In 1961/62 grain production fell by nearly 2 mil-lion tons from the already low level of the previousyear a,nd would have been even lower had therenot been some slight improvement in Iraq, Jordan,and Syria and a good sorghum harvest in Sudan.In Turkey the grain harvest was 14 percent lessthan in 1960/61. In the United Arab Republicwheat and maize production was lower, and owingto water shortage the rice area was reduced andproduction fell by more than 20 percent. The re-gion's production of pulses, sugar and citrus fruit

1955/56 1956/57 1957/58 1958/59 1959/601960/61

(Preliminary)

Indices, averag 1952153-1956157 = 10

Burma 102 98 96 96 107 93 107 110 110

Ceylon 94 95 101 108 102 106 110 111 114

China: Taiwan 95 96 99 101 109 115 120 115 122

Federation of Malaya 95 93 99 105 108 108 110 118 123

India 90 100 100 102 108 106 111 114 119

Indonesia 92 101 105 101 102 104 106 108 112

Japan 96 85 94 114 110 115 118 124 125

Korea, Republic of 86 105 104 106 99 108 111 116 117

Pakistan 99 98 102 98 104 102 102 108 112

Philippines 93 98 99 101 109 111 115 116 121

Thailand 88 106 86 105 115 95 107 113 120

REGIONAL TOTAL 92 98 100 103 107 106 111 115 119

1952/53

NOTE: See explanatory note to Table II-4.

also declined, and olive oil was the only principalcrop to show a sharp increase in production. Therewas a fall in tobacco production in Turkey. Becauseof leafworm attack and bad weather, the 1961/62cotton crop in the United Arab Republic was 30percent less than in 1960/61. For the region as awhole, however, the fall in cotton production wassmall, principally because of a very sharp increasein Sudan.

Africa

Revised estimates indicate that agricultural pro-duction in Africa increased by about 4 percent in

1952/53

1953/54

1953/54

1954/55

1954/55

22

1955/56 1956/57 1957/58 1958/59 1959/601960/61

(Preliminary)

1960/61, but according to the preliminary data sofar available for 1961/62 this was followed by afall of almost the same magnitude, so that produc-tion in 1961/62 was only slightly higher than in1959/60. In both of the last two seasons the regionalsituation seems to have been substantially influencedby events in the three countries of northwest Africa,which generally account for approximately one sixthof the region's total production.' In 1960/61 therewas some recovery in production in Algeria, Morocco,and especially Tunisia (Table II-10), but in 1961/62,for which complete country data are not yet avail-

3 Based on the price-weighted aggregates of the FAO produc-tion indices.

TABLE 11-10. - INDICES OF AGRICULTURAL PRODUCTION IN AFRICA

1955/56 1956/57 1957/58 1958/59 1959/601960/61

(Preliminary)

NOTE: See explanatory note to Table II-4.' Former French zone only. - Excluding Eritrea. - ' Derived by subtraction of subtotal for noillmest Africa from icioi.al total.

NORTHWEST AFRICA

'feces. average 1952153-1956157 100

Algeria 91 100 106 96 106 99 94 99 103Morocco ' 91 '101 '108 ' 97 103 ' 80 '106 100 102Tunisia 94 109 103 81 112 99 134 111 128

Subtotal 91 102 106 94 106 92 104 101 106

SOUTH OF SAHARA

Ethiopia' 99 100 100 101 100 100 100 104 103South Africa 90 97 101 102 110 106 111 112 120

Subtotal' 94 97 100 103 106 106 110 112 116

REGIONAL TOTAL 94 98 101 101 106 104 109 110 114

Indices, average 1952153-1956157 10

Iran 90 98 98 104 109 115 115 117 115Iraq 85 105 119 as 103 124 105 98 100Israel 81 92 100 104 124 129 150 167 163Syria ss 98 115 80 120 136 96 100 101

Turkey 100 108 86 99 107 105 121 123 124

United Arab Republic 96 92 102 103 107 116 116 120 123

REGIONAL TOTAL 94 100 97 101 108 113 117 120 121

TABLE 11-9. - INDICES OF AGRICULTURAL PRODUCTION IN THE NEA LAST

able, severe droughts in these countries appear tohave been the major contributor to the decline inthe region's total agricultural production.

Total grain production is estimated as almost 10percent lower than in 1960/61, with declines of asmuch as 36 percent for wheat and 55 percent forbarley, which are produced principally in northwestAfrica. Maize production increased further, how-ever, with another large crop in South Africa and theFederation of Rhodesia and Nyasaland, though inparts of east Africa and also Dahomey there werefood shortages following poor maize crops as aresult of drought. In addition to their drought-affected grain production, the countries of north-west Africa had their lowest olive oil harvests formany years. Among the crops produced mainlysouth of the Sahara, the region's cotton productionis estimated to have fallen by almost 20 percentin 1961/62, mainly because of drought in Uganda.Cocoa and coffee production also fell slightly, and theonly crop to show a substantial increase in 1961/62was sugar, which rose by 24 percent with the recov-ery of production in Mauritius from the cyclonedamage of the previous year.

MAIN AGRICULTURAL COMMODITIES

On a commodity basis the chief contributors tothe pause in the expansion of world production in1961/62 were grains and sugar, the output of whichdropped considerably in comparison with the yearbefore (Figure II-3 and Annex Table 2A). For mostother agricultural products world production con-tinued to expand in 1961/62, though large increaseswere rather few. The following paragraphs brieflyreview recent trends in the world production (exclud-ing Mainland China) of the main commodities.'

The production of each of the main grains wassmaller than in 1960/61. Wheat production fell byabout 4 percent, mainly because of the droughtsin the prairie provinces of Canada, the spring wheatareas of the United States, northwest Africa andmuch of the Near Ea.st. The same factors werelargely responsible for a decline of about 7 percentin barley production in 1961/62. For three yearsnow world wheat production has been well belowthe peak level reached in 1958/59, but barley pro-duction appears to be fluctuating about a slowlyrising trend.

4 For a full review of the agricultural commodity situation, seeF40 commodity review 1962. Rome, 1962.

23

FIGURE 11-3. WORLD 1 PRODUCTION OF MAJOR AGRICULTURALCOMMODITIES, PREWAR TO 1961/62

(Semilogaritlimic scale)

' Excluding Mainland China.

The rapid upward trend of world maize produc-tion was halted in 1961/62, largely because of re-duced acreage in the United States under the Emer-gency Feed Grain Program, which also brought adecline in the world production of sorghum. Theproduction of oats fell sharply, reflecting the long-term trend toward lower acreages in western Eu-rope as well as the droughts in North America.Rice production is estimated to have declined slight-ly from the high level of 1960/61, the principalreductions being in Bunna, Cambodia, Indonesia,South Viet-Nam, and the United Arab Republic.

World sugar production fell back by about 7 per-cent from the record 1960/61 level, but was stillmuch larger than in earlier years and more than

Million

400

10o

50

to

tons

MILK (total)

..----4----, WHEAT...------' ___------------- MAIZE

z------------- RICE (milled).-

/-------

--- BARLEY...---------___,......... _ OATS/ ,...::7- MEAT-----7, - SUGAR (centrifugal ),..... ,....-----,

--...-

/..................... --- SOYBEANS

/"4-.._ _---- ---- GROUNDNUTS,- //:___-_,Zec---- --- EGGS/.---7

/...7="2'

//

/ COPRA

_-

Million tons30

20WINE,...------- --"*---. -". CITRUS FRUIT-

i

o- \

------/:_\--/-7 BANANASAPPLES7,--,--

// -- COTTON ( lint )____._._----,_-------

,./".""44.-----. TOBACCO

7 COFFEE

/ wooL (4reftsY)./ ---------_-_RjuUTBESER( natural)

/ ____----- OLIVE OIL/i____--- - ----TEA

..-.........-----...-----

0.4

Prewar 1948-52 1953-57average average average

twice the prewar level. Beet harvests in western Europedeclined and there was a sharp reduction in the canecrop in Cuba, which was the smallest for many years.

There was a small increase in citrus fruit produc-tion, resuming the upward trend which had beenhalted in 1960/61. The production of oranges inSpain, Italy, and Algeria rose especially sharply in1961/62. For apples, however, the bien:nial pro-duction cycle caused a sharp downturn in productionin most European countries except Italy, and worldoutput dropped steeply. Banana production, whichhad hitherto been rising rapidly, is estimated tohave been slightly reduced in 1961/62, accordingto the limited data available. There was a substan-tial increase in the production of dried fruit, witha recovery of about 24 percent in raisin output fromthe low level of 1960/61.

World output of vegetable oils and oilseeds is

estimated to llave increased by about 4 percent in1961/62. The *United States soybean crop wasexceptionally large, following a 25 percent increasein the support price. Olive oil output declined withthe " off-season " in western Europe and northwestAfrica. Groundnut harvests were large in westAfrica and India.

Wine production, which tends to fluctuate sharply,is estimated to have decreased by about 12 percentin 1961/62. World tobacco production was onlyslightly larger than in 1960/61: production gains inthe *United States, Brazil, and Cuba were offset bywidespread outbreaks of downy mildew, especiallyin Italy and other countries of southern Europe.

The expansion in cocoa production was arrestedin 1961/62. The 1961/62 crop in Ghana was about7 percent smaller and in Nigeria much the sameas the exceptionally high levels of the year before.Coffee production recovered partially from the set-back of 1960/61, when the rapid postwar expansionof this crop was interrupted for the first time. Worldtea production is estimated at about the same levelas in 1960/61.

Cotton production in 1961/62 was somewhatbelow the record level of the year before. UnitedStates production fell slightly, while in the UnitedArab Republic leaf worm damage reduced the cropby 30 percent. Jute production recovered sharply,with much larger acreages in both India and Palci-stan. Hard fiber production remained virtually un-changed for the third year running, some expansionin sisal and henequen offsetting a decline in abacaand the minor fibers. Wool output increased slight-ly to reach a new record level, with the recovery

24

of the Australian clip from the h.eavy losses of 1960/61.Natural rubber production rose by about 5 percent,chiefly because of a sharp recovery in Indonesiansmallholder production, coinbined with the effect ofthe coming into bearing of higher-yielding trees.

For livestock products, production statistics inmost of the less developed countries are considerablyless reliable than those for crops. The availabledata, however, indicate that, in contrast to the rath-er erratic movements in the production of the maincrops in 1961/62, there was a continued steady in-crease in the output of each of the principal livestockproducts in 1961. This tendency is particularlyencouraging in view of the likely development ofdemand over the coming years.

Milk production increased in 1961, especially inmost countries of western Europe, in Japan, and inCanada. Total meat production is estimated tohave increased by about 3 percent. Beef productioncontinued to rise in western Europe and NorthAmerica and recovered in Latin America and Oceania.There was some slackening in the expansion ofmutton and larnb production in Oceania. As in mostrecent years, the quickest increase was in poultry meat,for which the bulk of the increase in 1961 was inNorth America. The rise in world egg productioncontinued in 1961, notably in the U.S.S.R.

FISHERY PRODUCTION

The production of fish again increased substan-tially in 1961. Preliminary estimates indicate thatthe world catch rose by about 7 percent to morethan 40 million tons, or approximately twice thelevel of the immediate prewar and postwar years(Table II-11 and Annex Table 11). Large gainswere registered by most of the leading producers,including Japan, Peru, and the U.S.S.R.

Japan, with a production of well over 6 milliontons, continues to be the largest producer. In Main-land China, now the second fishing nation of theworld, production is believed to be over 5 milliontons and to have doubled during the last live years.Almost half of China's total comes from inlandwaters, with the output from ponds and paddy fieldsprobably more important than that from rivers andlakes; the development of marine fisheries is saidto be less spectacular than that of inland fisheries,partly because of a shortage of capital for largervessels equipped for high-seas fishing.

Peru's production again showed a remarkable

' Including estimates for Mainland China.

increase in 1961, and this country, which a fewyears ago was only a very minor producer, movedcloser to the leading fishing nations. Fish mealproduction in Peru rose to some 800,000 tons (equiv-alent to at least 4 5 million tons of raw fish) in 1961,as against about 570,000 tons the year before.

Catches by the U.S.S.R., including whales, totaledabout 3.6 million tons in 1961. Ahnost four fifthsof the total was taken in the open ocean, with im-portant increases in the tuna, sardine, ocean perch,and Atlantic herring fisheries. The fishing fleetscontinue to be expanded, and increased reliance isbeing placed on deep-sea factory ships, with up-to-date facilities for freezing, canning and processing.

The United States increased its landings onlyslightly in 1961. Gains were registered primarilyin the menhaden, tuna, jack mackerel, salmon, andking crab fisheries, but there were significant declinesin catches of herring, sardine, shrimp, and whit-ing. United States production of fish meal was ata high level. Canned tuna production was a record,and the production of several other camied products,such as salmon and mackerel, was also the largestfor some years. In Callada considerably improvedsalmon catches on the Pacific coast boosted totallandings, but Atlantic coast results, in particular inthe cod fishery, were below average.

Catch results in Europe varied in 1961. Icelandiccatches were about 20 percent more than in 1960,owing to an exceptional recovery in the herringfishery which was only partly offset by reduced land-ings of cod and redfish. Production was also largerin Denmark, mainly because of increased catches offlatfish and herring. Norwegian production wasapproximately 5 percent lower than in 1960. Thewinter herring fishery, which only a few years ago

25

yielded close to one million tons, was virtually acomplete failure, and the total catch of herring andsprats was the lowest since 1946 in spite of a largeroutput of other than winter herring. Norwegiancod fishing results were good, in contrast to thoseof the United Kingdom. The United Kingdom'stotal fish production was lower in 1961 than theyear before. Production in the Federal Republicof Gennany was also lower in 1961, because ofsmaller catches of herring following a decision toreduce the size of the fleet fishing for this species.

Fisheries development is progressing rapidly through-out Africa. South Africa (including South WestAfrica), which has more than doubled its outputof most processed items in four years, produced arecord of over 1 million tons in 1961. In Morocco,which has important pelagic fisheries, processingestablishments were also able to expand productionin 1961. In tropical Africa as a whole, catches havereached at least 1 million tons mutually. About aquarter of this total is supplied by Angola where,in spite of a decline in recent years, the catch is stillnearly ten times its prewar level. Much progresshas also been made in other countries, such as Chad,Ghana, and Senegal.

FORESTRY PRODUCTION

World roundwood removals are estimated to haverisen only slightly in 1961 and to have reachedabout 1,750 million cubic meters (Table II-12). Theproduction of fuelwood continued to decline slowly,but total industrial wood removals are estimated tohave increased by about 3 percent over the 1960 level.

World output of sawn softwood in 1961 was only

TABLE H-11. - ESTIMATED WORLD CATCH OF F1511, CRUSTACEANS, AND MOLLUSKS

1938Average1918.52

1953 1954 1955 1956 1957 1958 1959 1960

1961

(Prelimi-nary)

Western Europe 5.44 6.19 6.77 7.24

Million metric

7.35

tons,

7.77

live welsh

7.33 7.18 7.61 7.41 7.6Eastern Europe and U.S.S.R. 1.70 1.99 2.28 2.58 2.84 2.99 2.94 3.05 3.21 3.53 3.8North America 3.15 3.60 3.62 3.83 3.79 4.13 3.80 3.76 3.99 3.77 4.0C)ceania 0.09 0.09 0.11 0.11 0.10 0.10 0.11 0.11 0.12 0.13 0.1Ladn Amerka 0.24 0.50 0.73 0.80 0.97 1.09 1.33 1.83 3.19 4.60 5.8Far East' 9.10 7.42 9.78 10.46 11.27 11.61 13.06 13.93 15.10 15.78 16.5Near East 0.33 0.38 0.43 0.43 0.40 0.43 0.41 0.43 0.43 0.42 0.4Afrka 0.45 1.03 1.52 1.56 1.59 1.71 1.83 1.84 1.95 2.09 2.3

WORLD TOTAL 20.50 21.20 25.24 27.01 28.31 29.83 30.81 32.13 35.60 37.73 40.5

ROUNDWOODREMOVALS

TOTAL

PRODUCTION OFFOREST PRODUCTS

Total industrial woodFuelwood

SawnwoodPlywood

FibreboardWood pulpNewsprintOther paper and board

' Including estimates for Mainland China.

very slightly greater than in 1960. European pro-duction was about the same as in 1960, but theoutput in the U.S.S.R. is estimated to have increas-ed by 5 percent over the previous year. In NorthAmerica the production of sawn softwood fell con-siderably, but the situation gradually improved dur-ing the year. In Japan a high level of buildingactivity caused sharp increases in the prices of rawmaterials including wood which, together with bal-ance of payments difficulties, brought an increasedoutput of sawn softwood during 1961, partly becauseof greater volumes of coniferous logs imported fromthe U.S.S.R. and North America, and partly becauseof heavier fellings at home. Australian output ofsawn softwood in 1961 was more or less unchangedfrom the level of the previous year, and anti-infla-tionary measures resulted in heavily reduced importsduring the first half of the year, but exports of sawnhardwood were considerably higher than in 1960.

The increase in the production of hardwood logsin Africa and Asia in 1960 resulted in heavier stocksin the main consuming and importing countries ofEurope throughout 1961. European output of sawnhardwood increased by almost 6 percent, but a largepart of the increase went into stocks. In NorthAmerica the production of sawn hardwood fell byalmost one fourth in 1961. As a result of thesetrends, world output of sawn hardwoods in 1961,at 64.6 million cubic meters, was about 4 percentless than in 1960.

Million metric tons

Million cubic meters

1956

941

729

1 670

1957

933740

1 673

3.3 3.449.6 50.112.0 12.348.2 49.3

1958

938725

1 663

1959

1 001732

1 733

1960

1 022710

1 732

4.358.914.059.9

1961

(Prelimi-nary)

1 050700

1 750

4.461.314.463.6

The world production of plywood is estimatedto have risen by 3 percent in 1961. In North Amer-ica, the main producing region, gains were onlyslight. European production increased by about2 percent, and there was a further gain in the U.S.S.R.Japanese output of plywood slightly decreased. Areason for the limited progress in the productionof plywood may be found in the competition fromparticle board, output of which in Europe, for exam-ple, rose by roughly 25 percent in 1961.

Pulpwood production is estimated: to have in-creased by about 4 percent in 1961. In Europe, inmany roundwood producing areas, the use ofpulpwood has increased so much as to compete forraw material with alternative wood uses, and atthe same time competition is often increasing be-tween the alternative end-uses of pulpwood for thepaper industry or for board manufacturing. Forwood pulp, the major feature of the year has beenthe transition from a suppliers' market to a buyers'market for pulp, largely because of the considerablevolume of new pulping capacity brought into opera-tion during the year, notably in Callada, Finland,and Sweden. By the end of 1961 it was estimatedthat world: pulping capacity already exceeded require-ments by some 2 million tons, half the surplusbeing located in Callada and most of the other halfin Sweden and Finland. World output of woodpulp (chemical and mechanical) in 1961 exceeded62 million tons, an increase of more than 5 percent

Average1948-52

1953 1954 1955

730 774 839 910711 697 714 727

1 441 1 471 1 553 1 637

TAB 1-12. - ESTINIATED WORLD 1- ROUNDWOOD REMOVALS AND PRODUCTION OE FOREST PRODUCTS

326.014.9

330.015.4

330.715.8

270.68.3

302.010.9

294.011.9

299.611.4

305.813.1

278.29.0

242.35.9

2.0 2.4 2.9 3.233.1 39.1 42.4 46.58.6 9.8 10.4 11.2

32.6 38.5 40.8 45.6

3.6 4.150.0 55.012.1 13.150.7 56.0

over 1960. All regions contributed to this increase,but it was especially marked in North America be-cause of both improving home demand and largerexports. European output of pulp in 1961 wasabout 6 percent higher than in 1960, with especiallylarge increases in chemical pulp.

All major regions contributed to the increase ofmore than 5 percent in world paper and paperboardproduction in 1961, though North America andEurope continue to be dominant in the world's outputof paper products. In recent years the rate of pro-duction increase has slowed down in North America,but increases were still relatively large in Europe,the U.S.S.R., and the Far East.

World production of newsprint increased by about3 percent. North America showed only a slightincrease. As in the case of pulp, world newsprintcapacity has expanded faster than demand in recentyears with the result that, by the end of 1961, capa-city, estimated at 17.8 million tons, exceeded outputby about 2.4 million tons. In 1961 no less than fivenewsprint machines commenced operation in Fin-land, resulting in a 50 percent increase in capacity.Whereas Latin-American countries in aggregate pro-duced only 14 percent of the region's newsprintrequirements in 1957, by 1960 they supplied 23 per-

Mainly as a result of the check in the expansionof world production, the over-all level of stocks ofagricultural commodities was reduced in 1961/62

for the first time since 1957/58, when productionliad suffered a similar setback. However, the de-cline in stocks was a good deal greater in 1961/62than in 1957/58, because of the additional factorin 1961 of a substantial import demand for grainsby Mainland China. Stocks of grains, the "sur-plus " commodities of longest standing, were appre-ciably reduced in 1961/62. Stocks of coffee, soybeans,butter and cheese were the principal exceptions tothe downward movement.

The wheat stocks of th.e four leading exporterswill probably show a decline of as much as 15 per-cent by the end of the 1961/62 season (Table 11-13).This would bring them back close to the level thatprevailed for some years before the renewed expan-sion of the United States wheat stocks in 1958/59.Canadian stocks of wheat were reduced by about

Chano-,es in Stocks

27

cent of the region's needs, even though consumptionrose by 100,000 tons over these years. Newsprintwas produced for the first time on the African con-tinent in 1961; about 27,000 tons of South Africannewsprint was used by local newspapers, and thequantity is expected to rise to 45,000 tons in 1962.

Fibreboard production rose in all regions of theworld except North America, and world productionincreased by about 6 percent. European productionrose by almost 6 percent and nearly equaled that ofNorth America. Together these two regions producedin 1961 nearly 85 percent of the world production.World production in 1961 stood at 30 percentabove the 1957 level. Further increases of consid-erable magnitude (in some countries 20 to 40 per-cent) are reported in the world production of par-ticle board. Since 1955, when world production wasestimated at 400,000 metric tons, particle boardproduction has risen to over 2 million tons in 1961.The increase has been particularly large in Europe,where the production of the Federal Republic ofGermany and France, Europe's two major producers,again showed a considerable increase. In NorthAmerica, production of particle board was influencedby the reduced economic activity that prevailed inthe early period of 1961.

one half to th.eir lowest level since 1952, becauseof the drought in the prairie provinces as well aslarge sales to Mainland China. In the United States,the lower output brought a fall of about 3 percentin wheat stocks, which remain, however, more thanfive times as large as in 1952, when the postwaraccumulation of surpluses began. Little change isexpected in the wheat stocks of Argentina and Aus-tralia, which had already been substantially reducedduring 1960/61 as a result of the small harvest inArgentina and Australian sales to Mainland China.

For coarse grain.s North American stocks havedeclined for the first time for more than a decade,and are expected to be about 12 percent lower thanat the beginning of the 1961/62 season. In Calladathe reduction will be as much as two thirds, and aswith wheat the causes are the combined effects ofdrought and of purchases by Mainland China. Incontrast to wheat, however, much the greater decline(in absolute terms) is in the United States, where

TABLE 11-13. - ESTIMATED STOCKS OF MAJOR AGRICULTURAL AND FOREST PRODUC'rS

28

(continued on next page)

Date 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962(Forecast)

Million metric tonsWHEAT

United States 1 July 7.0 16.5 25.4 28.2 28.1 24.7 24.0 35.2 35.8 38.4 37.2Canada 1 Aug. 5.9 10.4 16.8 14.6 15.8 19.9 17.4 14.9 14.6 14.3 7.4Argentina 1 Dec. 0.1 2.0 1.6 2.4 1.2 1.6 1.9 1.8 1.6 0.7 0.7Australia 1 Dec. 0.5 1.0 2,6 2.6 2.4 1.1 0.5 1.8 1.7 0.8 0.6

Total 4 major exporters 13.5 29.9 46.4 47.8 47.5 47.3 43.8 53.7 53.7 54.2 45.9

RICE (milled equivalent)A,slan exporters' 31 Dec 0.7 1.4 1.6 0.8 0.7 0.6 0.5 0.5 0.3 0.2 0.2United States 31 July 0.1 -- 0.2 0.8 1.1 0.6 0.6 0.5 0.4 0.3 0.2

Total of above 0.8 1.4 1.8 1.6 1.8 1.2 1.1 1.0 0.7 0.5 0.4

COARSE GRAINS

United States 1 July 18.5 24.7 29.4 37.3 39.3 44.4 53.8 61.7 67.9 77.2 70.4C:anada 1 Aug. 3.6 5.1 5.6 3.7 4.3 6.6 5.2 4.9 4.3 4.2 1.4

Total 2 major exporters 22.1 29.8 35.0 41.0 43.6 51.0 59.0 66.6 72.2 81.4 71.8

BUTTER

United States 0.03 0.13 0.17 0.07 0.01 0.05 0.03 0.01 0.03 0.17Canada 0.02 0.03 0.04 0.05 0.04 0.03 0.04 0.05 0.05 0.06 ...European countries' 0.04 0.06 0.05 0.04 0.10 0.12 0.08 0.06 0.12 0.14Australia and New Zealand 0.05 0.05 0.06 0.06 0.05 0.06 0.06 0.05 0.07 0.07

Total of above 31 Dec. 0.14 0.27 0.32 0.22 0.20 0.26 0.21 0.17 0.27 0.44

CliEESE

United States' 31 Dec. 0.11 0.20 0.25 0.24 0.20 0.19 0.13 0.14 0.15 0.24 ...

CONDENSED AND EVA PORA'FEDMILKUnited States 31 Doc. 0.18 0.12 0.10 0.10 0.11 0.10 0.09 0.10 0.10 0.10 ...

DRIED SKIM MILKUnited States' 31 Dec. 0.08 0.23 0.06 0.04 0.04 0.05 0.06 0.04 0.14 0.15

LINSEED AND OIL (oil equiva-lent)United States 1 July 0.41 0.38 0.29 0.17 0.10 0.22 0.13 0.18 0.07 0.09Argentina 1 Dec. 0.30 0.23 0.08 0.03 0.06 0.06 0.06 0.05 .7 0.10 0.03

Total of above 0.71 0.61 0.37 0.20 0.16 0.28 0.19 0.23 0.17 0.12

LIQUID EDIBLE VEGETABLE OILSAND OILSEEDS (oil equivalent)United States 1 Oct. ' 0.24 0.63 0.52 0.35 0.29 0.29 0.33 0.55 0.39 0.50 0.80

SUGAR (raw value)Cuba 31 Dec. 2.2 1.5 1.9 1.6 0.6 0.7 0.5 1.2 1.1 1.1

World total ' 31 Aug. 10.6 9.9 11.3 11.1 9.7 8.7 8.3 11.8 12.2 13.8 ...

COFFEE

Brazil 0.18 0.20 0.20 0.20 0.63 0.44 0.84 1.45 2.32 3.03 3.40

Total' 30 June 0.53 0.51 0.49 0.38 0.84 0.69 1.17 1.85 2.88 3.69 4.8-4.1

TABLE 11-1 3. - ESTIMATED STOCKS OF MAJOR AGRICULTURAL AND FOREST PRODUCTS (concluded)

coarse grain stocks fell by 6.8 million tons, or 9 per-cent, as a result of the lower output of maize andsorghum under the Emergency Feed Grain Program.

The expansion of total agricultural production inthe United States has for many years proved verydifficult to check, in spite of a variety of govern-ment measures, and generally any reduction thathas been achieved in the production and stocks ofone commodity has been offset, at least partly, byan increase for some other product. In 1961/62much of the acreage diverted from maize and sor-ghum was planted with soybeans, encouraged by a25 percent increase in the support price for thiscrop. United. States stocks of soybeans are expectedto exceed 2 3nillion tons by October 1962, thoughstocks of soybean oil may be reduced slightly. With

the sharp drop in Chinese exports of soybeans and

29

1

1961

1.70 1.68

1.55 1.640.73 0.731.40 1.12

3.68 3.49

0.77

0.93

6.043.94

16.95

1.330.524.46

1962

(Forecast)

NOTE: Quantities shown include normal carry-over stocks.' Burma, Thailand, Viet-Nam. - Barley, oats, maize, sorghum and rye. - Maize and sorghum, 1 October. - Manufacturers' stocks

and CCC uncommitted supplies. - Austria, Belgium, Finland, Federal Republic of Germany, Ireland, Netherlands, Norway, Sweden,Switzerland, United Kingdom, and (from 1957) France. - Cottonseed, 1 August. - ' Excluding U.S.S.R. and Mainland China. - ° Includ-

ing also Colombia, Ivory Coast, Uganda, and United States. - Flue-cured types, 1 July. - Excluding the U.S.S.R., eastern Europe andMainland China, and 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, Federal Republic of Germany, Nether-lands, Switzerland, United Kingdom. -" Austria, Norway, Sweden, Yugoslavia. - Belgium-Luxembourg, Federal Republic of GermanY,United Kingdom. - Austria and Yugoslavia.

oil, however, these stocks may not prove difficultto dispose of.

There were large increases in stocks of butterand cheese during 1961, and for butter the riseappears to have continued in 1962. Here too mostof the accumulation is in the United States where,as a result of a sharp expansion of d.airy production,stocks of butter are estimated to have increasedmore than fivefold during 1961 and of cheese by60 percent. The increase in European butter stocks,which had doubled. in 1960, was smaller, but therewere significant increases in France, the Netherlandsand the United Kingdom. United States stocks ofdried milk have remained at the high level of 1960.

Apart from coarse grains, world stocks of coffeeare the largest in relation to the level of international

trade. They are also the main surplus stocks out-

Date 1952 1953 1954 1955 1956 1957 1958 1959 1960

Million metric tons1-Cm407° (farni vVeight)United States 1 Oct.' 1.56 1.66 1.69 1.83 1.89 2.00 1.89 1.81 1.74

COTTON 01110United States 0.60 1.22 2.11 2.43 3.14 2.47 1.89 1.93 1.64Other net exporters 1.00 1.08 0.78 0.80 0.56 0.65 0.85 0.76 0.69Importers 1.34 1.21 1.26 1.26 1.08 1.30 1.32 1.14 1.30

World total" 31 July 2.94 3.51 4.15 4.49 4.78 4.42 4.07 3.83 3.63

NATURAL RUBBER

World total" 31 Dec. 0.73 0.72 0.73 0.76 0.74 0.76 0.75 0.70 0.77

NEWSPRINTNorth America" 31 Dec. 0.89 0.80 0.77 0.69 0.92 0.92 0.99 0.98 0.93

M llion cubic meters

SAWN SOFTWOODEuropean importers" 31 Dec. 5.74 6.19 5.10 6.10 5.32 5.63 5.42 5.12 6.19

European exporters" 31 Dec. 4.31 3.63 4.05 4.50 4.26 3.75 4.42 3.60 3.80

North Aanerica 31 Dec. 14.01 15.68 14.23 14.18 16.23 15.88 14.96 15.18 17.48

SAWN HARDWOODEuropean importers" 31 Dec. 1.29 1.13 1.06 1.22 1.29 1.24 1.25 1.18 1.25

European exporters " 31 Dec. 0.31 0.28 0.27 0.32 0.47 0.45 0.41 0.39 0.38

North America 31 Dec. 5.11 5.41 4.62 4.17 4.76 4.73 4.77 4.79 5.06

side North America, being held chiefly in Brazil.It appears likely that stocks of coffee increased bya further 10 percent or so during 1961/62, in spiteof the policy of destroying or denaturing low-gradeholdings in Brazil, though there was some declinein Africa as a result of the lower crops. The mid-1962 world stocks, estimated at about 4 million tons,are about one and a half times as large as annualworld exports, which in the case of this commodityconstitute the major part of total world consumption.

World cocoa production has continued to runahead of consumption, although the latter appearsto be increasing fairly rapidly. While there are noreliable statistics, stocks of cocoa beans in mid-1961 were estimated to have reached about sixmonths' consumption, and since then they haveprobably remained close to this level.

Sugar stocks rose sharply in Europe during 1961,following the exceptionally large beet harvests of1960/61. By the end of the 1961/62 season, however,when production was much lower, they should beconsiderably reduced. In Cuba the small harvestof 1961/62 is likely to have taken stocks well belowa million tons for the first time in three years.

There was a reduction of about 5 percent in cottonstocks during 1961/62. Importers' stocks, which hadbeen at an exceptionally high level, were drawn onheavily, and as a result of the consequent fall inimport demand there was some increase in UnitedStates holdings, the first for some years.

Among forest products, stocks of sawn softwoodin Europe at the end of 1961 were at about the samelevel as a year earlier, though they fell in the UnitedKingdom by about 7 percent. Stocks of tropical(especially west African) hardwoods, however, rosesubstantially. In Africa stocks of round and sawntimber rose slightly despite a small increase in localdemand. In northern Europe, notwithstanding in-creasing demand, producers' stocks of pulp roseduring the year. Canadjan producers were able tokeep their stocks at reasonable levels because ofsatisfactory demand from the United States.

Economic activity in the industrialized countriesin 1961 was characterized by a revival in NorthAmerica after the mild recession of 1960, continuedgrowth in western Europe, and boom conditions in

30

Figure 11-4 brings together, in the form of a price-weighted index, the movements in the stocks ofindividual commodities (excluding forest products)discussed above. It brings out the significant reduc-tion in world stocks in 1961/62, and also indicatesthat, while there has been some reduction in theproportion of total stocks located in North Amer-ica, this proportion is still close to 70 percent OHthe basis of price-weighted aggregates. With thelarge reduction in Canadian grain stocks in 1961/62,the North American stocks must now be almostentirely in the United States. The sharp declinein maize stocks in 1961/62 brought a further reduc-tion of about 3 percent in the total value of theholdings of the United States Commodity CreditCorporation (Annex Table 12). As of 30 April 1962these stocks were valued (under the CCC's newaccounting policy) at $7,184 million.

FIGURE II-4. INDICES OF THE MAIN STOCKS OF AGRICULTURALCOMMODITIES IN THE WORLD AND IN NORTH AMERICA

world stocks;952z100

NORTH AMERICA

200

150

00

o

1952 1954 1956

WORLD

1956 1960 962

NOTE: Indices are based on stocks shown in Table 11-13 only,and exclude forest products

Economic activity and the demand for agricultural products

Japan. During the first half of 1962, however, theNorth American recovery has failed to take economicactivity to the high level that had been expectedQarlier, while in western Europe and Japan

the expansion oí recent years has slowed down.Industrial production in the United States, which

continued to decline until February 1961, rose bysome 9 percent in the six months from March toAugust 1961 but by less than 5 percent in the tenmonths from September 1961 to June 1962. Neworders for manufacturers' durable goods declinedsteadily in the first ix months of 1962 and inventoryaccumulation remained disappointing. This was inspite of a continuous expansion of retail sales, whichthe increase in p:rsonal incomes had taken 8 percenthigher in May 1962 than a year earlier, and largerexports. Private housing starts were almost onethird more in April 1962 than 12 months before,while plans for new plant and equipment in 1962have now been revised upward to a level 11 percenthigher than in 1961. Unemployment in June 1962,although still 5.5 percent of the civilian labor force,was considerably below the peak of 6.9 percentreached a year before.

In Callada the level of domestic ecniomic activ-ity in 1961 was adversely affected by the overvalua-tion of the Canadian dollar. While the devaluationof May 1962 has made exports more competitive,it has also resulted in a net capital outflow, andemergency measures were therefore introduced inkite 1962, including a surcharge on certain classesof import, tightening of credit, reductionsgovernment expenditure, and the reinforcement offoreign exchange reserves by drawings from the In-ternational Monet:sy Fund and other arrangements.

En western Europe the rate of growth in the coun-tries of the European Economic Community hasslowed down somewhat after the exceptional expan-sion of 1960, when industrial prod.uction had risenby as much as 13 percent in one year. In 1961 theincrease in industrial production was about 6 percent.During the early months of 1962, the slower rise ofgross national product, exports, investrnent, per-sonal incomes and private consumption have con-tinued in western Europe. In particular, investmenthas shown signs of weakening, owing to reducedprofits and some labor scarcities. Wages and priceshave continued to rise, and some governments aretrying to slow down the rate of expansion in orderto avoid the inflationary effects of a too rapid in-crease in domestic demand. In the United Kingdom,mainly On account of the balance-of-payments po-sition, economic activity has been held back bydeflationary' measures.

The economic recovery in Australia has progressedrather slowly in the first months of 1962, and un-

employment has remained heavy. In Japan theboom carried industrial production 17 percent higherin the sec3nd than in the first half of 1961. Thecontinued increase in employment and wages hascaused further price rises and a greater demand forconsumer goods, while rising imports have strainedthe balance of payments position. Measures havetherefore been introduced to limit imports and toreduce the rate of growth of gross national productto 5 percent in 1962, as compared with 13 percentin 1961.

The steady expansion of economic activity appearsto have continued in the U.S.S.R. and eastern Europe.Between the first half of 1960 and the same periodof 1961 there were increases ranging from 9 to 17percent in gross industrial p;-oduct in the U.S.S.R.and most pasts of eastern Europe except EasternGermany, where the rise was about 5 percent. InSOMC parts of eastern Eutope, especially in EasternGerrnany, shortages of agricultural products havedeveloped in relation to the rapidly rising demand.

Little up-to-date information is available for theless developed countries, but generally speaking theexecution of development plans and projects hascontinued at a rapid tempo, and economic activityand demand have been maintained at high levels.India, however, is having considerable difficulty inobtaining the foreign exchange needed for the exe-cution of the third five-year plan, and has liad re-course to a further standby credit from the Interna-tional Monetary Fund. In Latin America a new stim-ulus has been provided by the Alliance for Progress,which started to gain momentum during 1961/62.

The comparatively favorable economic situationin the main importing arcas in 1961 strengthenedthe demand for agricultural raw materials, althoughimports were not always affected correspondingly.Trade in rubber was maintained by a heavydemand from the Sino-Soviet area, especially at thetime of the Berlin crisis. For wool, the demand atauctions was reduced early in the 1961/62 seasonby the retrenchment measures in Japan, but Japanesedemand later recovered and, together with Chineseparticipation, has been a major strengthening factorat the Australian auctions. Demand for jute hasbeen strong, with the replenishment of depleted.stocks and the resumption of a more normal levelof mill activity than was possible during the supplydifficulties of 1960/61. Import demand for cotton,on the other hand, has been atncted by the high levelof stocks in consmning countries at the beginningof the 1961/62 season.

The demand for forest products has a complexrelationship with the level of economic activity;the building industry is the largest user of sawnwood,the major primary forest product but, with economicgrowth, demand is steadily shifting toward morehighly processed wood products. In the UnitedStates in 1961 the demand for sawnwood was muchweaker than in previous years. The demand forother wood products, though also affected by theslower expansion of the economy toward the endof the year, remained at or slightly above 1960 levels.In Europe the strong demand for wood and woodproducts continued during most of 1961, though inthe latter part of the year demand reflected theslackening in economic activity. In the U.S.S.R.the development of residential and industrial construc-

World per caput food production (excludingMainland China) is estimated to have averagedabout 13 percent more in 1959/60-1961/62 thanbefore the war (see Table II-3). Because of theaccumulation of stocks, the improvement in actualconsumption levels must have been slightly slowerthan the rise in per caput production. Nevertheless,for the world as a whole the index of per caput foodproduction gives a fairly good indication of the courseof average food consumption per person.

Such broad averages, of course, mean rather littlein a world where production is very unevenly distrib-uted in relation to population. Moreover, forindividual regions and countries, food supplies andconsumption are affected not only by per caputproduction but also by changes in imports and ex-ports of foodstuffs, which in some cases have beenquite substantial. Figure II-5 attempts to takeaccoun.t of these changes for the main region.s ofthe world.' Averages for periods of several yearsare considered, so as to minimize the effect of year-to-year fluctuations in production and changes instocks. Allowances for stock changes have beenpossible only for North America, and deductionsfor imports of animal feedstuffs only for westernEurope, but each of these factors is of much lessimportance elsewhere.

Trade has the biggest effect on the food supplies

In addition to Mainland China, it has been necessary to excludeEurope and the U.S.S.R., because of inadequate data on the tradebetween these countries.

Food supplies and consumption

32

tion has maintained a rapid and steady growth inthe demand for forest products.

For foodstuffs, the changes that have occurredin economic activity appear to have had little effecton domestic demand. Moreover the import demandfor these products is influenced less by general eco-nomic conditions than by the level of production inimporting countries, the availability of supplies oncortcessional terms, and balance-of-payments con-siderations. In 1961 and 1962 the main factor ofthis nature has been the large import demand forgrains by Mainland China, to make good the lossesin domestic production. Purchases by the U.S.S.R.and Mainland China from Cuba have also substan-tially increased the world import demand forsugar.

of the more developed regions, and in the less de-veloped regions net imports or exports amount toonly a small fraction of domestic production.Western Europe's net imports of food were equiva-lent to about one fifth of the region's total produc-tion in 1958/59-1961/62. Before the war, however,they amounted to about one fourth, and it is signifi-can.t that net food imports have hardly increased(on a per caput basis they have declin.ed sharply), sothat the rise in per caput food supplies in this regionhas come erttirely from larger domestic production.

North America's small prewar net import of foodchanged durin.g the war to a large net export, whichhas recently averaged about 7 percent of domesticproduction. In Oceania the large rtet export hasincreased slightly less rapidly than food produc-tion, of which in recen.t years it has representedabout 45 percent.

Thus in the more developed regions, with the ex-ception of Oceania, per caput food supplies haverisen less rapidly than per caput production. hithe less developed regions, on the other hand, theopposite is the case, and as a result of changes inimports and exports the tren.d of food supplies ap-pears to have been slightly more favorable than thatof per caput production. Food supplies per headappear to have been maintained at more than theprewar level in each of these region.s, in spite ofthe fact that, except in the Near East, the regainin.gof the prewar level of per caput production has sofar proved only temporary.

WESTERN EUROPE

1948 5

1953 57

1958 6

NORTH AMERICA

1948-52

1953-57

1958-61

FIGURE 11-5. ESTIMATED PER CAPUT FOOD PRODUCTION, NET TRADE, AND SUPPLIES, BY REGIONS(Indices, prewar average of per caput supplies = 100)

OCEANIA

1934-38

1

0 10 20 30 40 50 60 70 80 90 100 110 120

1948-52

1953-57

1958-61

0 20 40 60 80 100 120 140 160 180 200

Excluding Mainland China.

Per caput production

Per caput produCtionA-411,=:,:.= for, net export

Per coput productionadded to stocks

33

i/FAR EAST

1934-38

1948-52

1953-57

1958-6

NEAR EAST

1934-38

1948-5

1953-57

1958 61

LATIN AMERICA

1934-38

1948-52

1953-57

1958-61

AFRICA

1934-38

1948-52

1953-57

1958-61

0 10 20 30 40 50 60 70 80 90 100 110 120

Per coput net import

Per caput supply for domestic consumptionfrom production and imports

In Latin America the net export of food has onlyrecently begun again to approach its prewar magni-tude, and in 1958/59-1961/62 amounted to aboutone ten.th of production, as against about one fifthbefore the war. In the Far East (excluding Main-land China) the small prewar net export of foodchanged to a rapidly growing net import in thepostwar years, which is now equivalent to some 5percent of domestic production. The same changeto a net import basis occurred in the Near East.In Africa net export has hardly increased over theprewar level.

A slow improvement in per caput food suppliesappears to have continued throughout the postwarperiod in Latin America, the Far East (excludingMain.lan.d China) and the Near East. In Africa, onthe other hand, changes in trade do not seem tohave been quite sufficient to compensate for recentdeclines in per caput production. In addition, how-ever, th:', available data suggest that in the drought-stricken countries of the Near East there may havebeen quite serious falls in per caput supplies, chieflyof grains, in the last few years an.d especially in 1961/62,even though the regional average for 1958/59-1961/62remains higher than the averages for earlier years.

While changes in trade have tended to mitigateslightly the disparities in per caput production be-tween the more and the less developed regions, theyhave been far smaller than the changes in produc-tion and, above all, in population, that have workedin the other direction. As was shown in Table II-3,per caput food production has increased sharplyover the prewar period in each of the more developedregions except Oceania, while the Near East is theonly one of the less developed regions to show evena moderate increase, far smaller than those in theother group of regions. Thus recent trends havetended to accentuate the already wide gulf betweenthe per caput food supplies of these two gr, oups.

The data shown in Figure II-5 are, of course,not based on nutritional considerations, but are:price-weighted indices. They reflect mainly the rela-tive cost of the diet, though in fact this is roughlyrelated to its quality, and particularly to the share ofthe more expensive livestock products. Figure II-6,

FIGURE 11-6. aTIMATED PER CAP U'r CALORIE SUPPLIES, BY

REGION3, 1956-58 AVERAGE(Calories per caput per day)

ternational trade in agricultural products

The year 1961 saw no fundamental change in the trade in the past several years. Ample exportabletendencies that have dominated world agricultural supplies continued to compete for outlets that are

OCEANIA1 1 i A

i 1 ,NORTHAMERICA d

I I,I

COUNTRIESI I

EUROPE /.*:'..*: ..*:*.'..*: .*:".*:*.'.'.'.1

NEAREAST

ÁltITETICAY 1 Ni

AFRICA1

1

FAR FAST :':':','.:*.*:*.'.. ....*:*.*:*:1 1

1 I I

c.d. 0 500 1000 1500 2000 2500 3000 3500

100001 Calories from cereals, starchy roots and sugar

Calories from animal proteins

Calories from other sources

' Excluding River Plate countries

on the other hand, shows estimates of the energyand nutrient content of the diet in the various re-gions of the world. It brings out very dearly thewide variation in calorie supplies per caput betweenthe more an.d less developed regions, which is muchwider than the variation in estimated calorie require-ments. Even more strikingly, the figure shows howheavily the starchy staple crops predominate in thediets of the less developed countries, since theirsupplies of calories from other sources, in particularfrom animal proteins, are very small. The percaput supplies of animal proteins in the less develop-ed countries are estimated to average only aboutone fifth of those in more developed countries. Fortotal protein supplies the figure is about two thirds,as part of the deficit is made up by proteins fromvegetable sources.

Within the broad regions discussed above, thereare naturally considerable variations between indi-vidual countries, but information on a country basisis available for rather few of the less developed coun-tries. Ann.ex Table 13 shows the usual estimates ofthe food supplies available for human consumptionand their calorie and protein content in those coun-tries for which food balance sheets can be calculated.

expanding at only moderate rate, and the generallevel of agricultural export prices again fell. An-other increase in prices of manufactured exportsfurther eroded the purchasing power of agriculturalexport earnings; these in any case have been risingonly slowly, especially those of the primary producingcountries. Special measures to expand the outletsfor agricultural surplus products of industrial countriescontinued to play an important role in internationaltrade. At the same time, the markets for a numberof products were kept reasonably stable only withthe help of national and international efforts toregulate exports.

The highlights of the developments in world agri-cultural trade in 1961 (Table II-14) were:

The volume of agricultural imports into countriesother than the U.S.S.R., eastern Europe andMainland China, which had started to level offin 1960, showed no increase in 1961.There was, however, a sharp increase in thevolume of agricultural imports into the Sino-Soviet area from outside sources, and largelybecause of this the total volume of agriculturalexports of the rest of the world rose by about 4percent.Most agricultural products were in plentifulsupply, and for many the import demand roseonly slightly, if at all; the long-term falling trendin agricultural prices was therefore resumed.

TABLE II-14 - INDICES OF THE VOLUME, UNIT VALUE AND TOTAL VALUE OF WORLD TRADE

Average1948-52

1954 1955

35

The average decline of over 4 percent more thancanceled the small recovery in prices in 1960.It also almost exactly balanced the rise in thevolume of exports, so that the value of exportswas nearly the same as in 1960.Average prices of manufactured goods 011 worldmarkets rose by about 2 percent from 1960 to1961, thus somewhat intensifying the fall in the" terms of trade " for agricultural products.These have now declined for seven years insuccession and in 1961 were 24 percent lowerthan in 1952-53.Although the global value of agricultural ex-ports was about the same as in 1960 there weresignificant shifts between regions. Both thevolume and value of exports from the moreindustrialized regions rose, partly because ofincreased sales under special terms. In contrastthe value of exports from the less developedregions fell by about 4 percent in Latin Americaand Africa and by about 10 percent in the FarEast and the Near East. This continued a trendunder which the share of these regions in thevalue of world agricultural exports has declinedfrom 56 percent in 1952-53 to 52 percent in1960 and 49 percent in 1961.Exports under special terms remained an im-portant factor in world agricultural trade, par-ticularly in exports of the United States. Theyare of special importance in wheat, where they

1956 1957 19581961 Change,

1959 1960 (Prelimi- 1960nary) to 1961

' Excluding trade between the U.S.S.R eastern European countries, Mainland China, North Korea, North Viet-Nam and Mongolia,but including the trade of the rest of the world with these countries. - 2 United Nations index of the volume of world trade, adjusted to1952-53 base. - Excluding United States shipments under special terms. - 4 Deflated by United Nations index of unit value ofexports of manufactured goods.

(agricultural and nonagricultural) .. 87 108 118 128 135 133 143 159 167 +5.2

TRADE IN AGRICULTURAL PRODUCTSVolume of exports 95 102 109 119 122 119 128 136 142 +4.5Volume of commercial exports' 95 102 103 110 113 112 120 127 132 +3.9

AVERAGE EXPORT UNIT VALUEAt current prices 100 99 94 92 94 87 85 85 81 4.6In real terms (terms of trade) 104 103 97 91 90 84 82 81 76 6.4TOTAL VALUE OF EXPORTSAt current prices 94 101 103 109 114 105 108 115 116 +0.5In real terms^ 98 105 106 108 110 101 105 110 108 1.4

VALUE OF COMMERCIAL EXPORTSIn real terms 98 105 101 100 103 95 99 103 101 2.0

',dices, average 1952-53 10 Percent

TOTAL VOLUME OF WORLD TRADE

TABLE 11-15. - INDICES OF THE VOLUME OF WORLD 1 IMPORTS OF AGRICULTURAL PRODUC FS, BY COMMODITY GROUPS

ALL AGRICULTURALPRODUCTS

FOOD AND FEEDSTUFF'S

CerealsSugarOilseeds and vegetableoils (edible)

Fruit, fresh and dried ...

Meats, dairy products andcattlo

BEVERAGES ANDTOBACCO

AGRICULTURAL RAWMATERIALS

Excluding imports of the U.S.S.R.. eastern Europe and Mainland China.

now account for more than one third of worldexports.

7. The concern of primary exporters about theunfavorable trends of their export earnings washeightened by uncertainty of the effects of theagricultural and trade policies of the EuropeanEconomic Community and of the terms underwhich the United Kingdom may join. Moreintensive international consideration is, however,being given to the problern of stabilizing commod-ity prices and earnings from exports.

VOLUME OF IMPORTS INTO NON-COMMUNIST AREAS

Despite the generally favorable economic climate,the volume of agricultural imports into countriesother than the U.S.S.R., eastern Europe andMainland China was unchanged in 1961. To alarge extent this reflects developments in three im-portant trade flows (see Table II-15, Annex Table 14 Aand Figures II - 7 and II - 8). In the first place,western Europe's gross imports of food and feedstuffs,which constitute the largest and one of the mostrapidly expanding sectors of world agricultural trade,showed no increase in 1961. Secondly, the food importsof the less developed regions, another fast risingand important sector, fell somewhat in 1961. Third-ly, the agricultural raw material imports of westernEurope declined while those of North America

36

remained at the rather low level of recent years.There was an increase in the imports of beveragesand tobacco into nearly all regions, while raw mate-rial imports into the Far East and other less devel-oped regions also rose, but these increases servedmerely to compensate for a reduced volume of tradein other sectors.

Foodstuffs

The small decline in the combined food importsof western Europe and the less developed regions

FIGURE II-7. DISTRIBUTION OF WORLD 1 AGRICULTURAL EXPORTSAND IMPORTS, BY VOLUME, 1959-61 AVERAGE

Per,oni

Average1934-38

Average1948-52

1954 1955 1956 1957 1958 1959 19601961

(Preliminary)

Indices, average 1952-53 100

100 94 101 107 116 121 118 126 132 132

99 92 100 108 120 126 129 135 141 138

98 91 90 94 114 115 116 123 130 129

78 89 104 106 108 115 119 116 117 110

129 94 115 127 139 146 144 153 172 155

87 83 109 116 111 125 125 139 146 146

104 96 104 118 129 142 146 150 155 155

87 94 100 109 113 117 116 121 126 132

110 96 102 103 110 115 101 112 118 120

Western Europe A Food and feedstuffsETT::A North America and Oceania Beverages and tobacco

1 ILess developed countries Raw materials

' Excluding trade between the U.S.S.R. Eastern Europe andMainland China.

EXPORTSP" en,

IMPORTS

150

140

130

120

110

100

90

80

190-

'80

170

160

150

140

130

120

110

100

FIGURE 11-8. INDICES OF VOLUME OF AGRICULTURAL IMPORTS, BY REGIONS AND COMMODITY GROUPS

INDICES,AVERAGE 1952-53 = 10 0

WESTERN EUROPE

FAR EAST

001954 1956 1958

4

1960

INDICES,AVERAGE 1952-53 = 100

37

901954 1956 1958 1960

MEOW= IS MMS110 Food and feedstuffs

02110141100U Beverages and tobacco

Agricultural raw materials

All agricultural products

' Excluding Mainland China. - 2 Latin America, Near East, Africa, and Oceania

was mainly the result of a sharp increase in foodproduction in these areas in 1960/61. In westernEurope, food production had in 1960/61 risen byas much as 6 percent (see Table II-2), and withsubstantial increases in the output of coarse grains,sugar, dairy products and beef, imports of eachof these products were reduced in 1961. Importsof fats and oils were limited also by a reductionin the manufacture of margarine, because of a trans-fer of demand to butter, the prices of which werefalling in many countries. In the Far East, wherethere had been large increases in domestic foodproduction both in 1959/60 and 1960/61, the fallof 7 percent in food imports was entirely accountedfor by smaller imports of cereals. The main declinewas also in cereals in Latin America, where largergrain crops were harvested in Brazil and Chile, twomain importing countries, though production waslower in Argentina, the main exporting country.In the Near East, although food production showedno increase in 1960/61, imports of food grainsfell in 1961 from the exceptionally high level of1960.

The food imports of western Europe and theless developed regions, which together account fornearly half the total volume of world agriculturaltrade, have shown a rising trend throughout mostof the postwar period, and there is no reason tothink that the pause in 1961 was more than a tem-porary reflection of the sharp jump in output in1960/61, except perhaps in Latin America. In thatregion food imports, which until 1958 had risenalmost without interruption, have tended to fall inrecent years. In 1961 their volume was about onefifth below the peak in 1958. However, recentstudies of longer-teini trends and prospects " indicatethat in western Europe a more rapid increase inthe production than in the consumption of certainfoodstuffs is likely in the 1960s, and this may welllead to some slowing down in the growth of theregion's food imports. Thus the imports of wheatand sugar, which liad been rather stable in the late1950s, are likely to fall, while the until nowrapid increase in imports of feed grains, vegetablefats and oils, dairy products and meat is likely toslow down. On the other hand, in most of theless developed regions food production would haveto increase very much faster in the 1960s than hith-erto in order to keep up with the rapid rate of

6 FAO commodity review, 1962, special suppkment: Agriculturalcomtnodity projections for 1970. Rome, 1962.

38

growth of demand expected to result from risingpopulation and higher incomes. In Latin America(other than Argentina and Uruguay) the rate ofincrease of production may now be sufficient to keepimports from rising further. In the other less devel-oped regions, however, the gap remains wide. In theFar East (other than Japan) and also in the NearEast and Africa (other than South Africa), demandis expected to rise by some 4 percent a year. Thiscompares with an estimated average annual increaseof production of between 2 and 3 percent duringthe 1950s. To what extent the resulting gap willbe made up by imports from outside sources willdepend partly on the export earnings of the import-ing countries in the less developed regions, andpartly on the continuing availability of cereals andother surplus products as grants or on concessionalterms. It seems likely, however, that the foodimports of the less developed countries, with thepossible exception of Latin America, will remainone of the faster growing sectors of world agricul-tural trade.

Agricultural raw materials

The reduction in western Europe's raw materialimports in 1961, despite a high level of economicactivity in most of the region, was accounted forin part by special factors, such as the scarcity ofjute in world trade because of smaller export sup-plies from Pakistan and a decline in the importdemand for cotton in the EEC countries, particu-larly the Federal Republic of Germany, where stockswere being reduced. But in the longer term, too,the raw material imports of western Europe, andstill more of North America, have been among theleast dynamic sectors of world agricultural trade.Between 1952-53 and 1961, when the volume ofworld agricultural imports increased by over 30percent, raw material imports into western Euloperose at only half the rate, and those into NorthAmerica fell by one third, mainly owing to declin-ing imports of rubber and wool.

Among the factors responsible, the substitutionof synthetic for natural raw materials is the bestknown and easiest to measure. Thus in western Europethe total consumption of all rubber in3re.a5ecl moreUrn four fifths between 1952-53 and 1961, but thatof natural rubber rose by only 13 percent, as theshare of synthetic jumped from 7 to 42 percentof total rubber usage. In North America the

share of synthetic rubber in total consumption hadby 1952-53 already risen to about 60 percent, andit increased further to 72 percent in 1961. Of textilefibers, rayon, the first of the important man-madefibers, had already made much of its impact beforethe war, and its share in the total mill consumptionhas in the last decade remained stable in NorthAmerica and risen only moderately in western Europe.Of the postwar synthetics, nylon has affected mainlythe consumption of silk, and to a less extent rayonand cotton, while some of the still newer fibers havetended to substitute for wool. In North Americathese were the only fibers whose consumption showedany increase at all between 1952-53 and 1959-60.In western Europe they have so far had less impact,although their share in the total fiber consumptionrose from 1 to 6 percent.

Factors other than the substitution of syntheticfor natural products have also slowed down thegrowth of imports. One is the slow increase inNorth American consumption of all types of rubber

by only 17 percent between 1952-53 and 1961which has magnified the effect of the substitutionon imports. The trend of imports since the firsthalf of the 1950s has also been affected by the ces-sation of purchases of rubber for the United StatesGovernment strategic stockpiles in 1954, and theirgradual disposal since 1959. As a result, while theconsumption of natural rubber in the region fell by15 percent between 1952-53 and 1961, its importswere alrnost halved.

For wool, too, the effects of substitution havebeen magnified by the slow increase in final con-sumption of apparel fibers in North America. Be-tween 1952-53 and 1959-60 the total consumptionof all fibers rose by only 5 percent, and a relativelysmall increase in the share of synthetic fibers inthe total was sufficient to cause a 3 percent fall inthe consumption of wool. The effect on raw woolimports was further magnified by an 8 percent in-crease in the domestic clip in North America, anda substantial rise in the imports of wool tops, yarnand textiles. The imports of raw wool consequentlyfell by more than one fourth.

In western Europe, cotton imports have beenmuch affected by the growth of textile industriesin the less d.eveloped countries, and the recoveryof textile manufacturing in Japan. Gross exportsof cotton manufactures from Europe have risenhardly at all since 1952-53, while gross importshave more than doubled. The consequent two thirdsreduction in net exports of cotton manufactures

39

has affected mill consumption and therefore importsof raw cotton. While the final use of cotton fiberin western Europe has grown by nearly 30 percent,mill consumption and imports of raw cotton haverisen by only 12 to 13 percent.

Most of the small increase in the total volumeof trade in agricultural raw materials in 1961 wasthus due to a rise of some 10 percent in importsinto the Far East region, where Japan is the mainimporter. Other less developed regions also in-creased their imports, but in the world picture theseimports are of minor importance. Far Eastern im-ports, now nearly twice as high as in the early 1950sand several times larger than those of North America,consist mainly of cotton and wool. Japan's cottonmports were particularly high in 1961, but wool

imports also rose substantially.

Beverages and tobacco

Little need be said about developments in theother sectors of world agricultural imports. Therewas a general expansion in imports of the groupbeverages and tobacco, in particular of cocoa. Theconsumption of cocoa is rising as a result of thefall in prices, but some of the 10 percent increasein the volume of imports in 1961 was added to stocks.Imports of coffee and tea rose more moderately,the greatest increases occurring in continental westernEurope for coffee and in the United Kingdom fortea.

Fishery products

Trade in fishery products also expanded in 1961.Important exporting countries, such as Denmark,Iceland, and the Netherlands, were able to increasetheir shipments of fresh and frozen fish. Cannedfish exports from several countries, among themPortugal and South Africa, also increased.

Moreover, there was a substantial rise in theexports of fishmeal, which reached a total of 1.2 mil-lion tons, one fourth more than in 1960. The in-crease in the fishmeal trade was rnade possible byfurther strides in the development of the industry,particularly in Peru, which since 1959 has been thelargest exporter, but also in other countries of SouthAmerica and in South Africa. The demand forfish mea] has been stimulated by the general trendtoward improved methods of animal feeding. In

1961, moreover, the crop failures in Mainland Chinaresulted in a sharp curtailment of soybean mealshipments to eastern Europe, causing these coun-tries to substitute other feed concentrates, includ-ing fish meal.

Forest products

World trade in forest prod.ucts, which is stronglyinfluenced by the economic conditions in the indus-trial countries of the world, benefited in 1961 fromthe widespread prosperity. Thc total volume oftrade increased by 3 percent. Mainly because ofexpanding import demand in western Europe andJapan, there were still larger increases in the tradein roundwood and in wood pulp and its manufac-tures. European imports of sawn softwoods wereslowed down, despite a high rate of consumption,by unfavorable winter shipping conditions and bythe unusually large stocks in early 1961 in the UnitedKingdom, the main European importing country.Other regions, including the Far East, increasedtheir imports somewhat, so that the world totalshowed little change. Trade in sawn hardwoodsexpanded slightly, with good demand for tropicalvarieties in both Japan and western Europe, butwith a reduction in European imports for sleepersdue to the growing replacement of wooden sleepersby other material.

Foreign trade in newsprint increased again moder-ately, but trade in wood pulp was affected by slug-gish demand in Europe. Production of mechanicaland chemical pulp in that region has increased somuch that the Scandinavian countries have decidedto cut their output in 1962 by 1 million tons, or15 percent, to reduce stocks. Nevertheless, expand-ing trade in the other regions resulted in a smallincrease in world trade in 1961. European ply-wood imports were also slightly down partly owingto larger stocks in importing countries, and partlyto the increasing substitution of particle boards andnonwood materials in some of the traditional usesof plywood.

IMPORTS INTO MAINLAND CHINA, THE U.S.S.R. ANDEASTERN EUROPE

Just as the sharp rise of production in westernEurope and many of the less developed regionsin 1960/61 checked the growth of food imports,

40

so the series of poor harvests in Mainland Chinaled directly to greatly increased cereal imports.Acute shortages in China also influenced worldtrade in vegetable fats and oils and rice. The largeincrease in sugar imports into the U.S.S.R. and China,the other main trade development among this groupof countries in 1961, resulted mainly from the situa-tion in Cuba (Table II - 16).

Mainland China, which in 1960/61 had a secondsuccessive below-average harvest, found it necessaryto import large quantities of wheat and other grainsfrom countries outside the Sino-Soviet area, mainlyAustralia and Callada. Altogether in 1961 it tooka total of 3.9 million tons of wheat and some 1.4 mil-lion tons of other cereals, mainly barley. The1961/62 harvest apparently has again been poor,and further purchases already made will result inthe imports of at least 3 7 million tons of grains,and probably more, in 1962, while substantial deliv-eries have also been agreed on for the followingyears.

The reduction by more than a half in China'srice exports to destinations other than the U.S.S.R.affected markets elsewhere mainly through higherprices, as exportable supplies in most other coun-tries were also smaller than in 1960. There wasno increase in the volume of shipments despite agood import demand in Asia's rice deficit coun-tries. Similarly exports of vegetable fats and oilsfrom Mainland China (mainly soybeans) fell fromover 500,000 tons (oil equivalent) in 1959, andsome 450,000 tons in 1960, to less than 200,000tons in 1961. Countries both within the Sino-Sovietarea and elsewhere, who normally buy a part oftheir supplies from Mainland China, had to makelarger purchases in other countries. Coupled witha decline in the export supplies from the UnitedStates, this led to a steep rise in soybean and soybeanoil prices in the early part of 1961, but abundantsupplies from the large 1961/62 harvest in the UnitedStates caused the prices to fall again later in the year.

The rise in the Sino-Soviet area's sugar importsfrom Cuba continued in 1961. Altogether, theU.S.S.R., Mainland China and eastern Europepurchased in 1961 some 5.7 million tons, thusbecoming the world's largest sugar importingregion. This compares with gross imports of about2.5 million tons in 1960, the first year when tradein sugar was affected by the breach between Cubaand the United States, and an average of about500,000 tons in the preceding years. With 75 percentof Cuba's crop going to the Sino-Soviet area, the

TABLE - GROSS IMPORTS AND EXPORTS OF SELECTED AGRI-CULTURAL COMMODITIES BY THE U.S.S.R., EASTERN EUROPE

AND MAINLAND CHINA, 1959-61

' Preliminary, partly estimated. - As wheat equivalent. -' Including re-exports. - 4 Nearly all to eastern Europe.

outlets of other exporters increased, although greaterdomestic production in western Europe and theUnited States made good some of the difference.

Natural rubber imports into the U.S.S.R.also expanded markedly, probably respondingto the low prices, though there may have beensome demand for stockpiling. At 530,000 tons,the combined rubber imports of the U.S.S.R.,eastern Europe and Mainland China accounted forjust over one fourth of the world total, comparedwith only one tenth in the early 1950s. As thegrowth of imports into North America and westernEurope is limited by the increased use of synthetic

41

rubber, the imports of the Sino-Soviet area coun-tries have become an important factor in the worldrubber trad.e. There, too, however, the demand islikely to be increasingly affected in the longer runby synthetic rubber.

Imports of other tropical products into the U.S.S.R.and eastern Europe have continued the upwardtrend which has been evident in the last severalyears as a result of rising consumption and closertrade links with many of the less developed countries.Imports of coffee increased in both 1960 and 1961,reaching 80,000 tons, four times as much as inmid-1950s, though barely 3 percent of world trade.At 100,000 tons, however, imports of cocoa into thisarea now account for about one tenth of world trade.

PRICES IN WORLD MARKETS

Owing largely to developments in trade with theSino-Soviet countries, there was an over-all expansionin the volume of world agricultural exports by about4 percent, including an increase of 12 percent inexports of foodstuffs from North America, and of26 percent from Oceania. The total volume ofexports of beverages and tobacco also increasedslightly, but not those of raw materials (Table 11-17and Annex Table 14B).

The developments in Mainland China contributedto a rise in the export unit values of wheat, rice,soybeans and, toward the end of the year, barley.There were also moderate increases in the prices ofsome other products, but most commodity prices werelower in 1961 than in 1960 and the FAO index ofunit values of all agricultural exports fell by over4 percent. This more than canceled the modestprice recovery registered in 1960, and the fallingtrend of agricultural export prices evident for mostof the past decade thus continued (Table II-18). It

also offset the effect of the 4 percent expansionin volume.

The decline in prices was smallest, at around 2percent, for foods and feedstuffs. The index for thebeverages and tobacco group, which had fallensubstantially in the preceding years, fell by a further 5to 6 percent. Unit values for agricultural raw materialsas a whole fell by 7 to 8 percent, thus losing thebetter part of their gain in 1960.

The main general factor behind this continuedweakness of agricultural prices is the abundantexport supplies of most agricultural commodities.The list of surplus products is lengthening, and to

Gross imports

1959

Million

1960 1961'

metric ions

GRAINS (excl. rice)Mainland China - _ 5.3of which; wheat and wheat flour' (-) (-) (3.9)

barley (-) (--) (1.3)

SUGAR (raw value)U.S.S.R 0.3 1.7 3.6Mainland China - 0.5 1.6Eastern Europe 0.2 0.3 0.5

TOTAL 0.5 2.5 5.7

NATURAL RUBBERU.S.S.R 0.24 0.17 0.33Mainland China 0.15 0.14 0.08Eastern Europe 0.07 0.11 0.12

TOTAL 0.46 0.42 0.53

Gross exports

RICEMainland China 1.7 1.2 ...of which to: U.S.S.R (0.7) (0.4) (...)

other destinations' (1.0) (0.8) (0.35)

OILSEEDS AND VEGETABLE FATSAND OILS (oil equivalent)Mainland Chinaof which to: U.S.S.R. and

eastern Europe

0.51

(0.35)

0.45

(0.26)

0.18

'(0M)other destinations (0.16) (0.19) (0.07)

SUGAR (raw value)U.S.S.R 0.2 0.2 0.9Eastern Europe 1.2 1.1 1.9

TOTAL 1.4 1.3 2.8

NET EXPORTS(AU agricultural products)

NET IMPORTS(All agricultural products)

Western EuropeNorth America

NET EXPORTS(Food and feedstuffs)

NET IMPORTS(Food and feedstuffs)

TABLE 1 -1 7. - REGIONAL INDICES OF THE VOLUME OF GROSS AND NET TRADE IN AGRICULTURAL PRODUCTS

Indices, average 1952-53 100

118

228

100

21

1956

103 108 120

64 4

' 1956 100. - 2 Net importer. - 1953 -- 100. - 2 Net exporter.

42

1957 1958 1959 19601961

(Preliminary)

126 141 143 145 158 170

126 136 123 128 158 164

110 113,

103 ' 125 121 138

117 111 1 117 126 128 129

113 112 i, 108 I 113 113 120

104 113 i 106 ! 128 126 118

128 130 130 138 141 146

122 126 123 129 134 135

96 96 97 107 101 104

123 129 138 129 131 120

101 118 122 114 118 103

120 128 122 127 151 153

137 151 155 183 199 189

133 137 130 150 164 171

Average1934-38

Average1948-52

1954 1955

Gitoss EXPOR'I'S(All agricultural products)

Western Europe 95 79 117 128

North America1

61 102 89 90

Oceania 97 91 105

Latin America . 105 100 103 108

Far East (excl. MainlandChina) 159 95 102 113

Near East 83 86 108 104

Africa 76 90 113 121

GROSS IMPORTS(All agricultural products)

Western Europe 113 95 106 112

North America 81 100 86 93

Oceania 66 95 122 128

Latin America 57 91 106 106

Far East (excl. Mainland

China) 106 80 98 99

Near East 50 91 96 117

Africa 66 85 110 120

100 139 87 64 200 210

109 111 100 124 120 139

120 109 116 129 131 134

71 11 24 24

67 71 52 67 45

126 128 130 135 134 139

North America 'Oceania 80 97 91 103

Latin America 116 102 103 109

Far East (excl. MainlandChina) 491 184 132 197

Near East 119 81 122 89

Africa 79 91 114 122

142 126 119 142 162 189

114 106 96 121 115 146

147 150 162 156 179 184

124 114 148 108 85 91

North America 95 65 86

Oceania 87 95 94 105

Latin America 178 122 126 128

Africa 94 94 133 123

129 119 122 134 130 124

100 122 141 119 147 117

228 278 295 497 532 504

Western EuropeFar East (excl. Mainland

China)Near East

125 106 94

61 78

115

102.

57

171

122 117 125 128 124

the original items wheat, coarse grains, and cottonhas been added coffee, while supplies of tea, cocoa,sugar, and butter are also pressing heavily on themarket.

Among individual commodities, a number of whichare shown in Figure II-9 and in Annex Table 15the price of sugar traded under the InternationalSugar Agreement, until its quota provisions ceasedto operate at the end of 1961, fell on theaverage by 10 percent, and the unit value ofsugar exports as a whole (including shipmentsunder bilateral agreements) fell by 3 percent. Theaverage prices in world trade for all vegetable fatsand oils fell by about 7 percent. Reduced demandin western Europe, together with somewhat largersupplies, caused prices of copra and coconut oil tofall steeply, and some other oils reacted in sympathy.This more than offset the steep rise in the pricesof soybeans and soybean oil in the early part ofthe year.

Among livestock products, prices of exported beefand veal declined moderately, while a more seriousfall took place in prices of butter. Large suppliesof butter were shipped to the United Kingdomfollowing increased output and higher export sub-sidies paid by some western European countries.The average export unit value for the year fell 14percent below that of 1960. Towards the end of1961 the United Kingdom imposed quantity ceilingson the imports from the various countries to preventa further fall in prices and to safeguard the outletsof traditional exporters.

TABLE 1 8. - AVERAGE WORLD EXPORT UNIT VALUE OF AGRICULTURAL AND FOREST PRODUCTS, BY COMMODITY GROUPS

13

Some of the sharpest falls in prices were amongbeverage crops. The average export unit value oftea fell by 14 percent during the year. There wasalso a further slide in coffee prices, despite intensifiedefforts under the International Coffee Agreement andby regional producers' organizations to regulate themarket. The average export price of cocoa fellstill more, by nearly 20 percent. The 1960/61 crophad been even larger than the record of the previousyear, and a further increase was expected in 1961/62.Consumption has been rising in response to fallingprices, but not fast enough to catch up with the growthof output, and since 1958 stocks equal to half a year'sconsumption have accumulated, mainly in importingcountries. In the meantime, the main lines of anInternational Cocoa Agreement have been workedout by the governments participating in the FAOCocoa Study Group, and a negotiating conferenceis envisaged early in 1963.

Among raw materials, prices of silk, jute, andmedium staple cotton rose, while those of long andextra long staple cotton, wool, and particularlyrubber fell. Jute, as already mentioned, was affectedby the reduction in export availability from Pakistan.Although prices fell rapidly after the first monthsof the year with the prospects of a larger crop in1961/62, the average export unit value was nearlyone fifth higher in 1961 than the year before. Pricesof United States cotton tended to rise, owing to arecovery in domestic demand coupled with smallercurrent output. Prices of long staple cottons fromthe United Arab Republic and Sudan however fell,

' Not included in " All agricultural products ". - United Nations index of average unit value of manufactured goods in internationaltrade, adjusted to 1952-53 base. - ' Indices of current prices deflated by index of average unit values of manufactured goods.

AT CURRENT PRICES

Average

1948-521954 1955 1956

Indices, average

1957

1952-53

1958

100

1959 19601961

(Preliminary)

All agricultural products 100 99 91 92 94 87 85 85 81

Food and feedstuffs 102 93 89 89 91 87 87 86 84

Beverages and tobacco 87 123 105 98 98 99 87 84 79

Agricultural raw materials 107 92 96 91 95 79 78 86 80

Forest products' 93 93 94 95 94 90 88 91 92

Manufactured goods 96 96 97 101 104 104 103 105 107

IN REAL TERMS 3

All agricultural products 104 103 97 91 90 84 82 81 76

Food and feedstuffs 106 97 92 89 88 84 85 82 78

Beverages and tobacco 90 128 108 97 94 95 84 80 74

Agricultural raw materials 111 96 98 90 91 76 76 82 74

Forest products' 97 97 97 94 90 87 86 87 86

FIGURE 11-9. AVERAGE EXPORT UNIT VALUES (AVERAGE PRICES) OF SELECTED AGRICULTURAL PRODUCTS IN WORLD TRADE(Semilogarithmic scale)

U.S. $per

metric ton200

U.S.per

metric ton

45 1

1952 19154 19156 19158 1960

1000

90 0

800

700

4501952 1954

CEREALS AND SUGAR

RAW MATERIALS

U.S. $per

metric ton450

400

200

I 80

1952

0COCONUT 0D

OIL

U.S. $per

metric ton

1000

9 00

800

700

15 00

VEGETABLE OILS

3001952 1915 4 19 ' '5 6 195 8 1 960

LIVESTOCK PRODUCTS

TEA.\

"4_.1000 e r COFFEE

1958

900

8 00

700

600

500

4501952 19601960 1954 1956

1954 1956 1958 1960

U.S. $per

metric tonBEVERAGES

largely because of the declining demand from westernEurope and India. Wool prices went through botha rising and a falling phase during 1961.

The largest change in prices of raw materials wasin rubber. After rising steeply from mid-1958 tillmid-1960, rubber prices fell rapidly in the secondhalf of 1960, and again, after a period of stability,in the late months of 1961. The average unit valuefor 1961 was nearly 30 percent less than in 1960,and not far above that of 1958, when prices weredepressed by the recession in the United States. Inpart the precipitous drop of rubber prices wasmerely a reaction to the high level reached earlier.With technical improvements and increased manu-facturing capacity for synthetic rubber, prolongedperiods of high prices for natural rubber have becomeincreasingly unlikely. Other factors, however, werean increase of 5 percent in the production of naturalrubber, and the expectation of raster disposals fromthe United States and the United Kingdom stock-piles from late 1961 onwards.

Fishery products

Prices for fishery products in international marketswere on the whole somewhat higher in 1961 than in1960. With good demand in the main importingcountries, the prices for most types of fresh, frozenand canned fish improved. There was also a sub-stantial recovery in the prices of fishmeal, which inthe course of the two previous years had fallendrastically. At the end of 1961, United Statesmenhaden meal was quoted at $120 a short ton,compared with only $90 a year earlier. More activedemand and more orderly selling were in the mainresponsible for the improvement. The major excep-tions to the tendency for firmer prices were saltedcod and fish and whale oils. The latter were affectedby increased marketing of fish oil resulting from theexpansion of the fish meal industry in Peru andel sewhere.

Forest products

The average export unit value of forest productscontinued to rise in 1961, though at a lower ratethan the year before (see Table II-18). This wasthe composite result of divergent changes in the pricesof the various products. Sluggish demand in NorthAmerica and the presence of considerable stocks in

45

western Europe caused the prices of sawn softwoodto fall in both regions, in North America to theirlowest level since 1950. In general, hardwoods faredsomewhat better, although North American pricesdecreased steadily during 1961 to the low 1957-58level and prices for most tropical species also weak-ened toward the end of 1961 when considerableshipments from west Africa exceeded current demandin Europe.

On the other hand, coniferous log prices in Europewere generally higher than in 1960, reflecting anincrease of sawmilling capacity in central Europe outof proportion to the supply of raw material. InJapan, the main market in the Far East, prices ofstructural timber rose by 25 percent, owing to veryhigh demand for housing construction.

Pulp and paper prices were on the whole ratherstable. World prices for mechanical wood pulpremained at the 1960 level throughout the year.In Europe, however, prices of chemical pulp fellsharply in the second half of the year in the face ofexcess production capacity, high stocks in the ex-porting countries and less optimistic expectations offuture demand. Newsprint prices remained gener-ally firm throughout the year. Canadian pricesaveraged 4 percent above 1960 level and at the endof the year Scandinavian manufacturers raised theirprices by $4 per ton.

The contrast between firm or rising prices foral-most all categories of industrial roundwood andthe weaker trend in most processed forest productsis worth noting. This development was observed forthe most important forest industries, that is for logsversus sawnwood and for pulpwood versus pulp andpaper categories.

AGRICULTURAL EXPORT EARNINGS

With the reduction in the average prices more orless canceling the expansion in the export volume,the value of world agricultural exports remained in1961 nearly unchanged at the previous year's level.In real terms, moreover, even the very modest in-crease in the current value of exports was eliminatedby a two point rise in the average export unit valueof manufactured goods, so that the purchasing powerof agricultural exports for imported manufacturesshowed no increase at all.

The situation was more satisfactory for westernEurope, North America and Oceania than for theless developed primary exporting countries. The

value of exports from western Europe, mainly intra-regional, which have grown rapidly since the end ofthe war, again rose by 4 percent, and those of NorthAmerica and Oceania by 9 percent. In contrast,the export earnings of each of the less developedregions fell, in Latin America and Africa by about4 percent, and in the Far East and the Near Eastby nearly 10 percent. In the Near East, both thevolume and price of exports fell, but in otherregions the reduction in export earnings was dueentirely to lower prices (Table II-19 and AnnexTable 14B).

Although much of this divergence in 1961 was dueto the large cereal shipments to Mainland Chinafrom Australia and Callada, it was also in line withthe postwar tendency for the agricultural exports ofthe industrialized regions to grow faster than thoseof the primary exporting regions. The trend wasless evident in the earlier postwar years, but since

WESTERN EUROPEat current pricesin real terms

NORTFI AMERICA (total)at current pricesin real terms

NORTH AMERICA (com-mercial)aat current prices . .

in real terms

LATIN AMERICAat current pricesin real terms

FAR EASTat current pricesin real terms

NEAR EASTat current pricesin real terms

AFRICAat current pricesin real terms

OCEANIAat current pricesin real terms

WORLD aat current pricesin real terms

Average1934-38

Average1948-52

46

the first half of the 1950s the disparity has beenvery marked (Table II-20). Thus from 1952-53 and1960-61, the value of agricultural exports from theprimary producing regions as a whole rose by only5 percent, compared with an increase of 36 percentin the value of the agricultural exports from NorthAmerica and western Europe. This disparity resultedmainly from the faster growth, of the volume of ex-ports from the industrialized regions, which from1952-53 to 1960-61 rose by more than 60 percent,while those of the primary producing regions showedan increase of only 28 percent, though exports fromAfrica rose much fastcr than exports from otherprimary exporting regions. The course of exportprices has on the whole been rather more uniform,most regions losing on average between 10 and 20percent.

Only a detailed analysis could account in full forthe disparities in the rate of growth of exports from

19601961

(Preliminary)

' Deflated by United Nations index of unit value of exports of manufactured goods. - Excluding exports under special terms from1955 onward. - ' Excluding Mainland China. - Excluding the U.S.S.R., eastern Europe. and Mainland China.

Indices, average 1952-53 100

41 83 109 118 120 136 130 130 144 151

81 86 114 122 119 131 125 127 138 141

24 102 84 82 110 117 104 103 124 13447 106 87 85 109 127 100 100 118 126

24 102 84 58 71 79 75 71 88 9647 106 87 60 70 76 72 69 84 90

26 92 110 102 106 105 98 95 99 9551 95 114 105 104 101 95 93 94 89

47 102 97 114 107 106 97 111 112 10394 105 100 117 106 102 94 108 107 96

30 97 105 10D 105 118 97 105 111 9960 101 109 102 104 113 95 102 106 93

23 86 116 112 114 116 121 117 116 11246 89 121 115 124 112 116 114 111 105

29 95 93 98 101 113 87 107 104 11459 98 97 100 100 109 83 104 99 106

31 94 101 103 109 114 105 108 115 11662 98 105 106 108 110 101 105 110 108

TABLE -19. - VALUE OF AGRICULTURAL EXPORTS, BY REGION

1954 1955 1956 1957

TABLE 11-20. - CHANGES IN THE VOLUME, VALUE AND UNIT VALUEOF GROSS AGRICULTURAL EXPORTS FltOM THE INDUSTRIAL AND

PRIMARY PRODUCING REGIONS. 1952-53 To 1960-61

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

different regions, but among the major factors af-fecting the picture may be noted:

the availability of supplies: food exports frommany less developed countries have been curtail-ed because of the rapid growth of domesticneeds, while in a number of more developedcountries production has grown much morerapidly than demand;differences in the competitive position of countries,reflecting differences in costs and productivity;differences in the cormnodity composition ofexports between regions : import demand forsome commodities (e.g., feedgrains, meats, fats,and oils) has grown quickly during the pastdecade, while demand for others (e.g., tea,wool, jute and, rubber) has tended to lag;export subsidies and sales under special termswhich have stimulated exports from some coun-tries, though not necessarily at the expense ofothers: many shipinents of foodstuffs underspecial terms to less developed countries, forexample, would probably not have been possibleunder commercial conditions.

Of these, the effect of the first two factors is im-possible to measure statistically. Some indicationof the effect of differences in the commodity composi-tion of exports, however, may be obtained by compar-

47

ing the actual growth of export with that whichwould have resulted if each region's exports of thevarious commodities had risen at the saine rate asworld exports of these products (Figure II-10).

FIGURE II-10. ACTUAL AND HYPOTHETICAL INCREASE IN nil;VOLUME OF AGRICULTURAL EXPOR1S FROM INDUSTRIAL ANDPRIMARY PRODUCING REGIONS, 1952-53 AVERAGE TO 1960-61

AVERAGE

INDUSTRIAL REGIONS

WESTERN EUROPE

NORTH AMERICA

PRIMARY PRODUCING REGIONS

LATIN AMERICA

FAR EAST E/

NEAR EAST

AFRICA

OCEANIA

TI Hypothetical volume of exportsL< Actual volume of exports

' Excluding the U.S.S.R., eastern Europe, and Mainland China.Excluding Mainland China. - Volume which would have re-

sulted if the exports of the main products of each region had in-creased af the same rate as world trade in these products

EXPORTS UNDER SPECIAL TERMS

Among government measures to assist agriculturalexports, export subsidies are undoubtedly of greatimportance, although their effect on the volume oftrade cannot be estimated in quantitative terms. In1960/61, for example, the United States spent some$300 million to subsidize the exports of wheat andcotton. In western Europe export subsidies paidin 10 countries for which data are available amountedin the three years 1958-60 to $125, $140 and $350

million, respectively.Another major factor has been the rapid growth

of exports under special terms, which now make upan appreciable part of world agricultural trade.They include a considerable proportion of exportsas gifts for relief purposes, barter trade and exportsagainst foreign currencies (much of which is thenlent to the importing countries on favorable terms).To these may be added commercial exports assistedby the provision (or guarantee) of credits. Forexample, the recent large sales of Canadian wheat

lnereose le world Yvolume ol exeorle

Percent

Western Europe +4g 10 14North America +61 +29 20 23

Industrial regions +62 +36 16 37

Latin America +28 3 25 21

Far East +16 +7 14Near East +22 + 5 14 4

Africa +43 +14 21 13

Oceania +29 +9 16 11

Primary producing re-gions +28 +5 18 63

WoRLD +39 +15 17 loo

Share inVolume Value Unit value total volume,

1961

to Mainland China were facilitated by governmentcredit, while in the United States substantial quantitiesof farm products are sold under the Export CreditSales program of the Corrunodity Credit Corporation.

All these methods, which as a rule less developedcountries cannot afford, tend to increase the exportsof the more developed countries, and to a largeextent also the total volume of world shipments ofagricultural products. In the reverse direction, ex-ports of some less developed countries have beenstimulated by the provision of guaranteed outletson favorable terms in certain import markets, forexample, in some of the former metropolitan countriesor under the Commonwealth and United States sugarimport arrangements. But the effect of such meas-ures is small in relation to the assisted exports ofthe industrialized countries, and in any case they arelikely to result largely in a shift in the pattern oftrade rather than an over-all expansion.

At this point a clear distinction should be madebetween the volume and also the total value of agri-cultural exports as shown in Table II-20, and exportearnings of foreign exchange. For clearly, while

1954/55 1955/56 1956/57

411

gifts and sales under special terms swell the volumeand nominal value of the exports of the more in-dustrialized countries, they do not bring in foreignexchange. On the other hand, the exports of theless developed countries are in the main commercialexports, and the f.o.b. receipts from such exportsdo in fact represent earnings of foreign currency.To estimate the earnings of foreign currency of theindustrialized regions from agricultural exports itwould be necessary, to deduct the value of sales underspecial terms.

Comprehensive statistics on the magnitude of suchsales are published only by the United States (TableII-21), although some information is also available fromCanada and some other exporters. if the UnitedStates exports under special terms are deducted fromthe figures for North America in Table 11-20, the growthin the volume of exports is only about 13 percent,while the value of exports fell by 8 percent. Thisgives a more realistic estimate of the developmentof earnings of foreign exchange, and brings thefigures below those for the less developed regionsof the world. No comparable data are available

TABLE 21. - UNITED STATES AGRICULTURAL EXPORTS UNDER GOVERNMENT PROGRAMS IN RELATION TO TOTAL UNITED STATESAGRICULTURAL EXPORTS

Total shipments under Public Law 480 and Mutual Security Programs

251.5 1 259.9 1 304.1 1 541.4 709.9 728.3

Shipments under special programs as percentage of total U.S. agricultural exports

Million dollars

474.9 554.4 646.2 818.9 360.5 430.5103.9 114.6 150.2 145.7 66.6 76.4

44.9 36.2 73.4 80.2 39.7 9.7155.9 94.4 61.6 64.9 26.3 35.9114.0 139.8 125.9 106.0 57.4 47.0288.1 260.2 155.9 229.5 130.8 98.8

25.9 34.0 68.7 72.4 28.3 27.943.9 26.3 22.2 23.8 0.3 2.1

July/Dec. July/Dec.1960 1961

Percentage of total value

Wheat 66 72 69 66 72 74 71 70 65Coarse grains. 29 61 66 26 21 28 27 25 29Rice 7 52 73 47 36 54 61 60 22Dairy products 71 67 76 79 65 51 61 52 69Fats, oils and oilseeds 19 25 28 21 27 20 17 17 15Cotton 32 57 41 34 63 19 24 31 28Tobacco 5 15 11 8 10 20 19 10 10Other agricultural exports 2 10 10 5 3 2 2 8

TOTAL 28 39 41 31 34 29 31 36 36

WheatCoarse grains .RiceDairy productsFats, oils and oilseedsCottonTobaccoOther agricultural exports

TOTAL

322.966.74.2

137.784.4

221.015.314.0

425.9235.2

45.2165.1143.7211.357.183.3

656.9226.0136.4175.3178.4455.235.993.5

866.2 1 366.8 1 957.6 1

1957/58 1958/59 1959/60 1960/61

for western Europe where, however, exports underspecial terms of this type are relatively small.

Exports under concessional terms are especiallyimportant for wheat, an.d the secretariat of theIn.ternation.al Wheat Council has published estimatesof the significance of various types of ariartgements,based on the shipments of 10 leading exporterscovering some 95 percent of world trade. Thepercentage of total world exports made undervarious types of special arrangements were estimatedas shown in Table II-22.

TABLE 11-22. - PERCENTAGE OF WORLD WHEAT EXPORTS MADEUNDER CERTAIN SPECIAL ARRANGEMENTS

1957/58 1958/59 1959/60 1960/61

The report also shows exports under other cate-gories, such as "sales under special currency arran.ge-ments " and " trade type arrangements, " whichbring the total to 46 percent in 1957/58 rising to52 percent in 1960/61.

The sum of $4,500 million has been authorizedby the United States legislation for operations underTitle I of P.L. 480 (sales against local currencies)in the calendar years 1962-64. Title II authorizations(famine relief) have been continued at the annualrate of $300 million. These funds will permit disposalsin the three years covered at approximately the samerate as in 1958-59, when the authorizations underTitle I averaged $1,500 million a year. In 1960-61supplementary appropriations had brought the annualaverage of Title I authorizations to $2,500 million.Unless, therefore, further appropriations are made,or exports under Titles III and IV (foreign donationsand barter, and long-term supply and dollar creditsales) expand markedly, the shipments in 1962-64will not be quite as large as they were in the precedingtwo years. Up to the end of 1961 only three a.gree-MentS, stipulating the exports of goods valued at

7 Data from INTERNATIONAL WHEAT COUNCIL, Trade arrange-ments involving wheat, London, December 1961. Countriescovered were Argentina, Australia, Canada, France, FederalRepublic of Germany. Italy, Snain, Sweden, United States, andU.S.S.R.

49

40 million, had been signed under Title IV. Title IIIexports have in the last few years fluctuated around.260-270 million, and have not shown any tendencyto rise since the reduction in barter operations after1956/57.

Additional food exports on concessional termsin this case as donations will in the next threeyears be made under the newly established UN/FAOWorld Food Program. Expected to start its opera-tions toward the end of 1962, the Program will usefoodstuffs and cash donated by participating countriesto ineet emergency food needs, to help schoolfeed-ing programs, and to implement labor intensivedevelopment projects. With a fund of up to $100million, of which two thirds are to be in commodities,the program is modest compared with the bilateralprograms and its special significance lies in its ex-perimental nature. It may be extended after theend of the initial three-year period if the Programproves successful.

INTERNATIONAL TRADE POLICIES

The serious effect on the economic developmentof primary exporting countries of the continuingdecline of commodity prices has for long givenrise to international concern. In 1961 the anxie-ties of many countries were increased by uncertain-ties of the effect of regional integration schemes ontheir export prospects. In particular, the detailedworking out of the agricultural policies of the coun-tries of the European Economic Community, andthe conditions under which the United Kingdommay join the Community, are of great importanceto agricultural exporters. This applies particularlyto Commonwealth countries, both those exportingthe products of temperate agriculture, and the Afri-can and other exporters of tropical products. In1958-60, for example, the EEC and the UnitedKingdom together took nearly 80 percent of allbutter exported, around 50 percent of all citrusfruit, meat, feed grains, and wool, about 50 percentof all fats and oils, tea, and jute, and between 25and 40 percent of all cotton, bananas, wheat, coffee,rubber, and sugar.

During the past year there has been much moreactive consideration of these problems, often 011 awider basis than before, and a more evident deter-mination to find ways of mitigating harmful effectsof falling prices. Significant among efforts to en-sure a freer entry of agricultural exports to the Eu-

Percent

Sales for local currencies 17 20 23 25Gifts and donations 4 3 3 5Barter agreements 4 5 6 3Sales with noncommercial credit 1 1 2

TOTAL 26 29 32 35

ropean Economic Community were the tariff nego-tiations between the United States and the EECduring the 1960-61 Tariff Conference of GATT.As a result, the European Economic Communityagreed to bind or reduce the common external tariffof a number of agricultural items, including, cotton.,unmanufactured tobacco, various vegetable fats andoils, meats and meat products. The same conces-sions became automatically valid for all other coun-tries enjoying most-favored nation treatment withthe EEC. Further efforts of the United StatesAdministration to lower the general level of tariffsand to facilitate the entry of agricultural exportsto the EEC are contained in the proposed TradeExpansion Act of 1962, which was being consideredby the United States Congress at the time of writ-ing. Among other provisions, the Act would auth-orize the President to make tariff reductions ongroups of products rather than individual items asunder the present law, thus giving greater freedomof maneuver. The Act would also authorize thePresident to reduce or eliminate duties on tropicalagricultural and forest products not produced inthe 'United States, provided the EEC took similaraction on a nondiscriminatory basis.

In regard to international commodity arrange-ments, the International Wheat Agreement was re-newed in 1961/62. As already indicated, a nego-tiating conference for an international cocoa agree-ment is envisaged early in 1963. There are prospects,too, of a wider coffee agreement, embracing import-ing as well as exporting countries, and some hopethat the sugar agreement may be revived in the nottoo distant future.

Discussion has also been initiated in variousinternational forums on possible world-wide commod-ity trade arrangements of a new type. Groups to study

Farm prices

Reasonably comprehensive information on farmprices and incomes is generally available only forsome of the more industrialized countries. In thesecountries domestic farm prices are to a large extentinsulated from prices on international markets byvarious measures of agricultural support and there-fore do not reflect closely the continuing downwarddrift of prices of agricultural products in world trade.In most of the countries for which data are available

50

the possible form of such arrangements for cerealsand meat have been appointed under the auspicesof GATT, and the idea has also been suggested inthe course of the negotiations for the entry of theUnited Kingdom in the European Economic Com-munity, as a means of safeguarding the trade inter-ests of the overseas Commonwealth exporters. Asat present visualized, the scheme for cereals wouldcombine arrangements for world trade at higherprices than those now prevailing with a centralizedprogram of food aid to the less developed countriesas a means of disposing of surpluses not marketableat the higher price.

Another type of scheme now under discussion isthe proposal for a scheme of " compensatory fi-nancing " as a means of evening-out the fluctuationsin the export earnings of prirnary producing countries.A report by a group of experts on the subject wasdiscussed in the United Nations Commission on Inter-national Commodity Trade in May 1961 and again,together with supporting studies, in May 1962 at ajoint UN/FAO meeting. In the experts' report,proposals had been drawn up for the establishmentof a development insurance fund, to operate alongthe principles of a social insurance scheme, withthe developed nations' contributions exceeding theirdirect benefits from the fund.

In view of their complex nature and the diversityof the interests to be reconciled no early decisionson these new types of arrangements can be expected.Serious consideration of them does, however, in-dicate the growing appreciation of the importanceof agricultural trade as a major factor in generaleconomic development, and of the contribution whichthe expansion of such trade could rnake to theobjectives of the United Nations developmentdecade.

and incomes

farm prices in 1961 were in fact somewhat higherthan in 1960, and in more than half of them farmprices were significantly higher than they had beena decade earlier.

It does not follow from this, however, that priceshave moved in favor of farmers. On the contrary,in every country for which they are available indicesof prices paid by farmers for prod:uction purposes,including wages, interest, and taxes (sometimes in-

FIGURE II-11. CHANGES IN INDICES OF PRICES PAID AND RECEIVEDBY FARMERS AND IN RELATIONSHIP BETWEEN TFIE TWO INDICES,

1961 IN RELATION TO THE 1952-53 AVERAGE

Index of prices paid by farmers1:22:=1 Index of prices received by farmers

Ratio of prices received/prices paid

' First half of year. - 2 First nine months.

eluding living expenses as well) have risen signifi-

cantly in recent years. Except in a few countries,price relationships have become less favorable foragricultural products in spite of subsidies and othermeasures to raise or stabilize farm prices.

Changes in price relationships in twelve countriesfrom 1952-53 to 1961 are shown in Figure II-11. Theindices themselves are national indices and not suffi-ciently comparable for close intercountry comparisons,particularly of prices paid. Within each country,however, they show the general trend of prices andprice relationships. In the first five, our of themexporting countries for agricultural products, thewealcness of agricultural prices during the period isapparent in falls ranging from I to 12 percent inprices received by farmers. During the sarne periodprices paid by farmers increased in these countriesby from 7 to 35 percent. In consequence the ratioof prices received to prices paid moved againstfarmers by as much as 17 percent in the "UnitedStates rising to 27 percent in the Netherlands.

In a second group of five countries,' all agriculturalimporting countries, the situation was somewhat

Australia, Belgium, Callada, Netherlands, United States.Austria, Federal Republic of Germany, Japan, Norway, Swit-

zerland.

51

different. In each of these countries prices receivedby farmers rose between 1952-53 and 1961 as a resultof various support measures, from 7 percent in Japanand 8 percent in Switzerland to about 20 percent inAustria and Norway. In each case, however, therise in prices paid by farmers was still greater, sothat here too price relationships moved againstfarmers. In Austria the change amounted to I 1

percent, but in Japan and the Federal Republicof Germany the decline over the whole period wasonly about 2 percent. In Norway approximate parityin relation to 1952-53 was reached at the end of 1961as a result of increased prices for cereals and dairyproducts, though the average for the whole year wassomewhat less favorable. In Greece, where similarprice ratios are available from 1954, approximateparity also appears to have been maintained sincethat year between prices received and paid by farmers.

Finally, in the last two countries shown in Figure1I-11, prices received by farmers have increased appre-ciably more than the prices paid, in Finland by 7percent and in France by 15 percent. The same wastrue in Italy up to 1960, the latest year for whichfigures are available. It need hardly be added thatthe data in Figure II-11 show only price movementsand give no indication of the level of prices or theirprofitability. In France, for example, as is well

known, there has been much unrest among farmersconcerning price relationships in spite of the upwardtrend in recent years.

So much for the longer term trend of prices. Inthe short run, from 1960 to 1961, changes in thecountries included in Figure II-11 were rather lim-ited. In Belgiuin, France, Japan, the Netherlands andSwitzerland a rise of a few points in prices paidwas balanced by a comparable rise in prices receivedby farmers. In Australia, Canada, Finland and theUnited States price indices changed hardly at all.Finally price relationships moved slightly in favor offarmers in Norway and the Federal Republic of Ger-many, but moved, sharply against farmers in Austriawhere prices received declined slightly while pricespaid rose by about 5 percent.

General indices of prices received by farmers areavailable for a few other countries, though theirsignificance is more limited in the absence of dataon prices paid. For example, in Ireland and Swe-den the index of prices received by farmers remainedrather stable in 1961. In Denmark, on the otherhand, farm prices were some 5 percent lower in 1961than in 1960 because of the depressed values ofbutter and bacon in export markets, though these

Perm, -20 0 *20l

+40

NETHERLANDS1

BELGIUM

AUSTRALIA li

GANADA

UNI1 ED STATES

AusrRIA

SWITZERLAND

NORWAY

JAPAN

GERMANY Fed . Rep.

FINLAND .a/

FRANCE

1

1srr

....

7

,, .....1

.2ZZ72:ZZZI

were partly offset by a change of policy to perrnitthe maintenance of domestic prices at a higher levelthan those on international markets.

For the less developed countries information onprices is more scanty. An index of agriculturalwholesale prices is published for all India whichshows a steady rise since 1954, though the increasebetween 1960 and 1961 was slight. In additionthree Indian states publish indices of prices paidand received by farmers; these suggest that pricerelationships have moved in favor of farmers overrecent years in Assam and West Bengal, but havefluctuated with no definite trend in the Punjab.In so large a country as India, where marketing isnot yet fully organized, sizable variations betweenstates would not be surprising.

More data are, of course, available on the pricesof individual commodities in less developed countries.To mention only a few of th.e more striking changes,official purchase prices of wheat in 1961 were increasedaround 20 percent in Argentina and somewhatmore in Turkey. Wheat prices in Pakistan appearon the average to have been somewhat higher in 1961,but in the last quarter of the year were appreciablylower than in the same petiod of 1960. In Indiawheat prices varied only slightly, but floor priceswere introduced early in 1962 to prevent sharp re-ductions immediately following the harvest. Pricesof barley in Korea were raised by more than halfand of rice by 27 percent. Prices of barley and oatsin Turkey were raised by 10 percent; oats and grainsorghum in Tunisia by 8 percent; rnaize prices bymore than one fourth in Colombia, and 13 percentin Argentina. Prices of rice (paddy) in Madagascarwere 10 percent higher than in 1960, while in Co-lombia the changes in grading and classification in-creased rice prices from 5 percent for ordinary va-rieties to as much as 43 percent for some superiorgrades.

Prices are of course only one component of farmincomes. Gross farm incomes vary with year-to-year changes in the volume of output, and in manycountries are considerably affected by direct govern-ment payments as well as by price supports. Netfarm incomes are influenced by the continuing risein the volume as well as the prices of inputs, especial-ly in the more developed countries. Finally, per cap-ut incomes in agriculture in the more developedcountries tencl to rise more quickly than the totalincomes of the sector, because of the steady declinein the number of people engaged in agriculture.In the less developed countries the reverse is true as,

52

in spite of a gradual fall in the percentage of thepopulation dependent on agriculture, in absolutenumbers the farm population still tends to rise.

The longer-term effects of these factors were dis-cussed at some length in The state of food and agri-culture 1961, where the growth of farm incomes andnational incomes as a whole was cornpared on botha total and per caput basis. The paragraphs whichfollow, therefore, are concerned only with develop-ments during the past year.

Preliminary data on farm income in 1961 or 1961/62are available for several European countries and forJapan, Australia, Canada and the United States.These indicate that net earnings in agriculture rosein most of these countries. A higher volume ofsales for domestic consumption and somewhat higherprices for some commodities offset, at least in part,increasing expenditures on production items, taxesand interest. To counterbalance rising productioncosts and to maintain or improve the relation be-tween agricultural incomes and those in other sectors,guaranteed or fixed prices to farmers for some majorcrops and livestock were raised in several countries,and larger government expenditures incurred forprice support and other subsidies to farmers. Netfarm incomes " (including government payment) wereestimated to have increased by 2 to 3 percent in Bel-gium, Germany and Switzerland; by 4 to 5 percentin Yugoslavia and in Norway; by about 7 percentin Japan, 9 percent in France and the United States;and by over 10 percent in Austria, Greece, Italy,Poland and the United Kingdom. However, netincomes declined in Australia, Canada, Spain andPortugal because of smaller crops and rising pro-duction costs.

In the United States net income from farming in1961, excluding inventory changes, was estimated at$ 12,700 million, $ 1,000 million more than in 1960.Gross returns on rnarketings and a higher rate ofgovernment payments brought $ 1,500 million moreto farmers than in 1961, but the increase in expendi-tures, particularly on taxes and interest, amountedto $ 500 million more than in the previous year.

" In the paragraphs which follow, gross farm income is in gen-eral used to indicate gross sales at market prices plus specificgovernment payments to agriculture, while net income representsgross income less current expenses. While these national esti-mates of farm incomes indicate the trend within the country, theyare not strictly comparable between countries. For e;.arnple.the estimates for the United Kingdom and the Federal Republicof Germany include wages of hired labor in current expenses,and the estimate of " net income " thus comes near to the incomeof farm operators. In some other countries, however, they ap-proximate CO the net income of the farm sector.

A significant cut in the volume of marketings offood and feed grains reduced income from this source,though prices were higher. Receipts from livestockmarketings were higher, particularly marketings ofpigs, mainly because of an increase of 7 percent inprice. Prices of cattle, calves, sheep and lambs weresomewhat lower, however, and returns from salesof poultry a,nd eggs dropped significantly because ofdepressed prices from increased supplies. Soybeans,tobacco, and cotton earned more in 1961 becauseof an increase in both output and prices. The totalvolume of marketings of all products increased by1.5 percent and average prices by 1 percent; totalreceipts were thus over 2 percent higher than theyear before. Government payments to farmers morethan doubled in 1961 as a result of the new FeedGrains Program which provided increased compen-sation to farmers for diverting 20 percent or moreof the land area normally under maize and grainsorghum to soil conservation or other approveduses. Where in 1960 income from government pay-ments amounted to $ 693 million, in 1961 it roseto $ 1,484 million.

In Callada farm cash incomes from marketingsrose by about 5 percent to over $ 2,900 million inspite of the striking fall in grain production. Thelarge wheat carry-over and the removal of grain de-livery quotas at many delivery points for the firsttime for a decade enabled farmers to maintain mar-ketings at a level only slightly below that of 1960,while incomes were increased by the somewhathigher prices paid by the Canadian Wheat Board.However, net farm income for 1961, excluding re-ceipts from previous years' stocks, fell by 24 percentto the lowest level since 1945. Increased sales oflinseed, tobacco, cattle, pigs, dairy products, andpoultry products contributed to the increased cashincome, but were partly offset by smaller sales ofpotatoes, oats and barley.

In Australia developments were less favorable in1961 than the year before. Gross income fromfarming fell by about 2 percent and net income by7 percent. Returns from marketings of wool, dairyproducts, lamb and mutton did increase significantly,but these gains were offset by a smaller cereal har-vest and the rise in production costs.

In Japan, according to a preliminary estimate, netincome in agriculture in 1961 increased by 7 percentover 1960. Agricultural production had risen byabout 3 percent, and agricultural prices averagedabout 6 percent higher than in the previous year.However, production expenses rose by an estimated

53

12.5 percent due to larger purchases of farm machin-ery, insecticides and animal feed, together withincreased prices of feedstuffs.

Net farm income for the year ending 31 May inthe United Kingdom was forecast at L 431.5 million,compared to the revised estimate of E 389.5 millionin the previous year. Exchequer support of agri-culture increased by more than 30 percent and wasestimated at E 351 million in 1961/62 comparedwith E 263 million in the previous year. Thisincrease was occasioned by a sharp fall in meatprices which necessitated increased deficiency pay-ments to farmers. An increase in farm wages, rentsand machinery expenses is estimated to have raisedthe total cost of farming by E 19.5 million, aboutthe same amount as in the previous year.

In 1960/61 agricultural receipts in France wereabout 9 percent higher than in the previous year;both production and prices had increased. Expensesalso went up; but because agricultural price relation-ships had improved, gross output minus expenseswas estimated at NF 27.3 thousand million as com-pared with NF 25.0 thousand million in 1959/60.No information is yet available for 1961/62.

Although receipts from farm sales in the FederalRepublic of Germany increased from DM 19,300million in 1959/60 to DM 20,200 million in 1960/61and an estimated DM 20,400 million in 1961/62,net income in 1961/62 at DM 6,150 million is esti-mated to be little higher than the year before andconsiderably less than the net income of DM 7,060million in 1959/60. In 1960/61 net incomes werereduced by substantially higher farm expenditures onfeedstuffs following the 1959 drought. In 1961 thegovernment spent under the Green Plan 16 percentmore for structural improvements and supplementarysubsidies, including some nonrecurring payments, tocompensate for income losses in 1960. Total ex-penditures under the Green Plan amounted to DM1,600 million in 1961, an increase of DM 130 million(nearly 9 percent) over 1960. Appropriations for1962 have been increased by DM 500 million. Fromthe beginning of the Green Plan in 1954/55 until1960/61 agricultural labor income per head hasincreased by 73 percent, and the industrial paritywage by not more than 55 percent. In the first yearof the Green Plan agricultural labor income perhead amounted to 66 percent of the parity wage,while in 1960/61 it was 74 percent. Thus the gapbetween earnings in agriculture and those in com-parable occupations in industry has narrowed.

The net added value in agriculture and forestry

in Austria increased by 11 percent at current pricesfrom Sch. 16,600 million in 1960 to Sch. 18,400

million in 1961, or by about 7 percent in real terms.Although prices received by farmers had declinedslightly, the volume of production and marketingsincreased and there was a 6 percent rise in subsidypayments from the government, mainly in the dairysector. A contraction in the labor force by 3 per-cent was accompanied by an increase of 9 percentin expenditure on agricultural machinery and fer-tilizers, due partly to higher prices.

Agricultural production in Switzerland fell by 2percent, but prices averaged 4 percent higher in

1961, partly as a result of higher price supports. InItaly agricultural production was up by some 5

percent, in spite of a decline in agricultural manpowerby some 307,000 workers, about three times thenumber of those who left farms in the previous year.A high level of demand for food and agriculturalproducts was maintained and the gross saleableproduct of agriculture rose by 9 percent to 3,712

The upward trend of retail prices, which has per-sisted almost without a break since the second worldwar, continued in 1961. Of 79 countries for whichdata are available for 1961, the index of retail foodprices remained stable or declined during the yearin only 15 of them. In most instances the rise inprices was modest and often amounted to not morethan 1 or 2 percent, but in 27 countries there wasa rise of more than 5 percent over 1960, while in 9of these the rise was greater than 10 percent.

The considerable cumulative effect of the continu-ing rise in food prices and in the cost of living duringthe 8 years from 1953 to 1961 is evident in Table

TA13LE II-23. - Risi IN COST 01' LIVING IN 87 COUNTRIES, 1953-61

Consumer prices

25TOTAL 87 62

thousand million lire. Prices of production items,interest and taxes remained constant or declined,and total farm expenses, including ainortization, roseonly 2 percent. Total net income is thus estimatedto have risen by 11 percent in 1961.

Farm income developments were unfavorable inSpain and Portugal. In Spain the gross value ofoutput in 1961 rose by 2 percent, but productionexpenses increased by 4 to 5 percent, and net farmincome was estimated at 3 percent less than in 1960.In Portugal receipts from livestock products increas-ed, but there was a sharp decline in returns fromcereals, the main source of income. As a resultof an increase in the prices of farm products, the in-come of the rural population in Yugoslavia rose byabout 4 percent. In Greece the value of the grossproduct of agriculture recorded a rise of about 17percent, while that of industry increased by 8 per-cent. Government expenditures in support of agri-culture were substantially increased in 1961, mainlyto improve and promote livestock farming.

11-23. In only about one fifth of the 87 countriespublishing indices was the rise in the cost of livingless than 10 percent; this includes four countriesin which the index declined slightly. In anotherone fifth of the countries there was a strong infla-tionary trend with prices rising by more than 50percent. In the remaining three fifths of the coun-tries the rise in prices fell within the range of 10 to50 percent. While runaway inflation occurred almostentirely in the less developed countries, the rise inconsumer prices in more industrialized countries hasalso been very substantial and, in about one third,exceeded 25 percent.

Food is so large a constituent of the cost of livingthat there is seldom any great divergence in thelong term between the retail food and the cost-of-living indices. Thus in about two thirds of the 25more developed countries included in Table II-23the divergence between the two indices over theeight-year period was less than 3 percent.

In the less developed countries, however, tile di-vergence has been rather greater, even though foodmakes up a larger share of consumers' expenditurethan in more developed countries and is thus likelyto be more strongly represented in the cost-of-living

Under 110 18

111 - 125 32

126 - 150 18151 - 200 11

Over 200

Cost-of-living Number of countriesindex 1961

(1953 =100) Total More developed Less developed

14

19

11

10

13

7

1

e

index. On the whole it appears (Table 11-24)that in countries where prices remained fairlystable the retail food price index tended tobe close to or lower than the cost-of-living index.Conversely in countries where inflation was markedfood prices tended to rise more quickly thanthe cost of living; this was the case in half thecountries where the cost of living rose by over50 percent. This trend was noticeable, for example,in Argentina, Uruguay and Bolivia, all countrieswhich experienced marked inflation asid where therise in the retail food index exceeded that of thecost-of-living index by 8 percent, 14 percent and 26percent respectively between 1953 and 1961.

It is likely that in less developed countries, wherepurchasing power is very limited, food scarcities andmounting food prices would divert expenditures fromother things to food, thus intensifying the pressureon food prices a,nd relieving the pressure on pricesof other goods. Any resulting divergence in p1-iceswould be intensified by, for example, rent and otherprice controls for, while price controls on foodstuffsare also common, they can seldom be enforced intimes of scarcity. Food shortages can thus be amost potent inflationary force in the less developedcountries; and conversely adequate supplies in rela-tion to demand are the most effective safeguardagainst inflation.

In most countries of Europe and North. Americathe changes in the food p1-ice index between 1960and 1961 averaged no more than 2 percent; the pricerises occ,,rred mostly in the second half of the yearand continued into the first months of 1962. Else-where TIO definite regional pattern emerges in themovement of consumer prices. Inflationary forcestended to be strongest in some countries of LatinAmerica, Africa, and the Far East where there were afew very sharp increases, ranging from 10 to 50

percent in 1961 as compared with 1960. But in

55

many other countries of the same regions food andliving costs were relatively stable or even declined.

In Europe and North America increases in supportprices to producers for cereals, livestock and dairyproducts influenced the upward trend in retail prices,while in Europe another important factor was arelative scarcity of fresh fruits and vegetables. Themain impact of these developments came in the sec-ond half of the year. Thus in France there wasrelative stability in the first part of the year, butprices rose after midsummer, mainly for fruits, veg-etables, wine, bread, and dairy products. The aver-age level of the food price index in the calendaryear 1961 was 4 percent higher than the year before,while in January 1962 it was 6 percent higher thana year earlier. Similarly in Denmark, Norway, asidSwitzerland the food index in 1961 averaged 2 percentabove the previous year and in Sweden 3 percent,but because of the rise toward the end of the yearthe index of food prices in January 1962 stood 6 to7 percent above the level of January 1961. There wasa similar uneven though smaller rise in both Italyand the Federal Republic of Germany. The largestprice increase in Europe, however, was a rise of 11percent in retail food prices in Iceland followingofficially authorized increases in retail prices of ce-reals, sugar, fats, and other foodstuffs in late 1961,and the decontrol of prices of canned foods for atrial period of one year beginning in September 1961.

In Australia food prices liad shown an uninterrupt-ed rise in the last few years, at a slightly faster ratethan the general price index, but in the latter halfof 1961 the food price index began to decline and thegeneral cost-of-living index reached a point of sta-bility. In New Zealand, on the other hand, foodprices began to rise slightly in the second half of1961 after an abrupt decline from the peak reachedin the previous December; both the food and gener-al price indices averaged only slightly more in 1961as a whole than in the previous year.

In almost half of the 21 countries in Latin Americawhich publish retail food and cost-of-living indicesfor 1961 the changes in average levels were less than2 percent. Sharp increases, however, were registeredin nine countries, ranging from 5 percent in Peruand Costa Rica, to 7 percent in Argentina and Ja-maica, 10 to 15 percent in Colombia and Uruguay,35 percent in Brazil, and 50 percent in Paraguay.Poor harvests were only partly responsible, andmuch was due to the rapid growth of demand.

Poor harvests, difficulties of distribution and ris-ing demand were mainly responsible for marked

TABLE 11-24. - RELA'FION BETWEEN RISE IN COST OF LIVING ANDRISE IN RETAIL FOOD PRICES IN LESS DEVELOPED COUNTRIES

1953-61

Cost-of-living

Number of countries

index 1961Food prices rose Food prices and Food prices rose

(1953=100) Total faster than over-all cost of living

cost of livingrose at about

the same rate

more slowlythan over-alu,st of living

Under 110.. 14 3 4 7111 - 150... 30 9 14 7Over 150... 18 9 5 4

increases in the level of food prices in several NearEast and African countries. In Iran and Ghana thefood price index rose in 1961 by more than 10 per-cent, and in Tunisia, Senegal and Turkey by about5 percent. In these countries food prices rose at a-faster rate than the general price level, while in Israelfood prices rose by 4 percent and the general indexby 7 percent compared with 1960. In most otherAfrican countries for which data are available, onlyslight upward changes were reported in the consumerprice level.

Good harvests and an improved supply position inseveral Far Eastern countries such as Ceylon, India,Malaya and Pakistan gave stability to food prices.On the other hand, a setback in rice production andinternal distribution difficulties led to marked in-creases in the food price index in Viet-Nam, Burmaand Indonesia. In Japan a sharp rise in the secondhalf of the year in prices of fruits and vegetables,livestock and dairy products, due to seasonal factorsand to rapidly rising demand, raised the index offood prices by 7 percent in 1961, while the generalcost-of-living index increased by 6 percent. In Indiathe index of food prices scarcely increased in 1961as increases in the price of fruits and vegetables wereoffset by the fall in cereals prices; the general cost-of-living index, however, went up by 2 percent. In bothIndia and Japan the food price index continued to risein January 1962 when it stood 9 percent higher inJapan and 3 percent higher in India than a year earlier.

A number of policy developments took place in1961/62 which are likely to influence the courseof world agricultural development for many yearsto come. In the United States more determinedefforts than ever before are being made to reducethe costly burden of agricultural surpluses to moremanageable proportion.s, even though progress todate is limited. In western Europe there have beenimportan.t developments in the evolution of a com-mon agricultural policy for the European EconomicCommunity, which will become still more signifi-cant if the Community is joined by other countries,notably the United Kingdom. Negotiations formembership have been very largely concerned withagricultural problems. In the U.S.S.R. a new per-spective plan foreshadows a much more intensive

Agricultural policies and development plans

56

Continuing inflationary price movements have ledto intensified control measures in several countries.Price ceilings introduced in Korea in July 1961,

reinforced by other stabilization measures, halted theupward trend of prices; at the beginning of 1962the retail price index stood at the same level as inJanuary 1961 after reaching a peak of 10 percentabove that level in September, while the food indexwas somewhat lower than a year earlier. The strength-ening of price controls in Ceylon has broughtabout a gradual decline in the food price indexwhich in 1961 was slightly lower than in 1960. Short-age of rice in Viet-Nam led to suspension of exportlicenses early in 1961 in order to stabilize domesticprices. Cambodia and the United Arab Republicalso suspended rice exports to maintain internal pricestability. In Liberia retail price ceilings were estab-lished by presidential proclamation in 1961. Morestringent monetary measures to halt price insta-bility were taken in Brazil following the devaluationof the currency, while price supports to farmers wereincreased to stimulate production. In Mexico a newagency was created known as the CONASUPO(Compañia Nacional de Subsistencias Populares) toprovide rural consumers with necessities at reasonableprices and to replace with more extensive functionsa previous agency known as CEIMSA. The newagency operates directly through mobile supply mar-kets, which carry a wide range of staple food andother consumer necessities.

form of agriculture, and production policies havealready been drastically modified to hasten its achieve-ment. In the economically less developed coun-tries a steadily increasing emphasis on agriculturalplanning is evident. More and more countries inAsia, Africa, and Latin America are integratingtheir agricultural programs into wider plans forgeneral economic growth in an endeavor to bringto an end the age-old ills of poverty and hunger.

In January 1962 a common agricultural policywas inaugurated for the six member countries ofthe European Economic Community. The objec-tive is to establish, over a tran.sition.al period ofseven and a half years, a single Community-widemarket for agricultural products, protected from theoutside by a uniform system of import levies. The

gradual implementation of the common policy islikely to bring about significant shifts in Europeanproduction and trade pattern.s, and unavoidably togive rise to problems for -many countries whichare traditional suppliers of the European market.

One aim of the common agricultural policy, longagreed upon, is to bring about gradually a moreefficient use of the agricultural resources of themembers of the Community. For the achievementof this aim, principal relian.ce will be placed on theprice mechanism. Prices of farm products are grad-ually to be brought into line, and at the end ofthe transition period the intention is to have onlyon.e price level for each main commodity throughoutthe Community. The crucial question of where theultimate common level will fall has n.ot yet beendecided, but target prices for gains in 1962/63 areto be within the present range of prices, and thisis likely to apply also to the final common price.There will thus be a controlled movement of pricesfor all main farm products during the transitionalyears, upward from current levels in some coun-tries and downward in others. The upward pricechanges are expected to encourage production andthe downward ones to reduce production. In prin-ciple, therefore, the pattern of farming in any areawithin the Community should change gradually to-ward the lines of production best fitted to localconditions. The process of adjustment will be assist-ed by measures to improve the farm structure,financed at least in part from a central fund builtup by the Community as a whole.

General experience with agricultural price policiessuggests that while it is not difficult to raise farmprices, if governments have the financial means, thepolitical obstacles to lowering them are extremelyhard to overcome. Moreover within the Communitythere is a common social policy of raising farmincomes. It will thus be easiest to get agreementon price alignments which involve very little down-ward price adjustment. A second point for whichthe strongest evidence comes from the United Statesis that while upward price movements for farmproducts usually promote increased output, down-ward movements do not usually reduce output toany comparable extent, if at all. If a balance ofsupply and demand is to be achieved in the Commu-nity, it appears that such measures as productioncontrols and the promotion of exports, possiblyunder special tenns, may become necessary. Thesepossibilities are already under discussion for somecommodities.

51

In North America the agricultural policy of theUnited States is still dominated by the problemof surpluses, especially of grains. Previous effortsto restrain production by moderate reduction infarm prices and by allotting reduced acreages forindividual crops were defeated because farmersadopted more intensive methods of cultivation toraise yields per acre. In 1961, therefore, a newapproach was tried as an emergency measure withmaize and sorghums. Farmers received subsidies todivert land under these grain.s to approved conser-vation uses and farm prices were raised to protectincomes. But only the output of the allotted areasat normal yields was eligible for price supports,and the incen.tive to intensify cultivation on thereduced acreage was thus removed.

In 1961 this program was successful in reducingboth the acreage and output of maize and sorghums,and in 1962 it was extended to barley and in a modifiedform to wheat. Legislation aimed at a permanentsolution of the problem of grain surpluses was sub-mitted to Congress e,arty in 1962, but narrowlydefeated. For the present, therefore, a limited pro-gram for coarse grains and wheat on the lin.es ofthe 1962 program is likely to be contin.ued, althoughit is reported that the administration intends toresume at a later date its efforts for a more basicsolution of the problem of grain surpluses.

The United States was almost alone in havingto place primary emphasis of policy upon reducingoutput, though this problem begins to become se-rious in other industrialized countries and also forsome tropical export crops. In western Europe,however, the main emphasis is still on internal read-justment under the Community. In other regionsof the world the desired balance between productionand demand is almost always being sought throughan increased output.

In eastern Europe, the U.S.S.R., and MainlandChina, the developments of policy toward agriculturein 1961/62 were far from uniform. In the U.S.S.R.,which was still faced with lagging agricultural outputin relation to demand, a long-term perspective planof agricultural development to 1970 and 1980 hasbeen formulated. It follows a similar pattern toother countries with rising incomes, envisaging anincreased production and consumption of fruits,vegetables and livestock products, and a decliningconsumption of cereals and potatoes. To build upagricultural production a new farming system is

being adopted with a swing from fallows and rota-tional grasses to more intensive cropping with the

help of fertilizers, while the tren.d to give moreautonomy to collective farms has been reversed.Meantime prices of livestock products have beensharply increased, partly as a production incentiveand partly to restrict demand.

In eastern Europe, except Poland, the trend ofagriculture is still toward in.creased socialization, insome cases with increased centralized direction, butwith a greater reliance on prices to balance supplyand demand. On the con.trary, in Mainland China,following a series of harvest failures, the communesystem was further decentralized, giving local pro-duction brigades and teams more authority to takedecisions on what to plant and when.. New econ.omicincentives of a limited character have also beenin.troduced. Qualitative statements about increas-ing output seem for the present to have replacedquantitative production goals.

In other developing regions there has been acontinued extension of planning for agriculturaldevelopment, often closely integrated into plans foroverall economic growth. In the Far East mostcountries have been formulating, reviewing andimplemen.ting national economic development planswith varying degrees of success over many years.In Latin America, the Near East, and particularlyAfrica, however, a number of countries have recentlyprepared or laun.ched their first development plans.Marty of the new plans in these regions are compre-hen.sive in scope, though the majority still cover onlythe public expen.diture sector. Often they are morecon.cerned to provide a framework for the effectiveutilization of foreign aid than to mobilize fully themodest domestic resources of the country. These newbeginnings in economic planning in the less developedcountries hold great hopes for future development.

In Latin America the Alliance for Progress hasbegun to gain momentum. Under this importantco-operative ten-year agreement the United Stateswill provide aid resources of a scope and magnitudedesigned to enable the Latin-American countriesto achieve a breakthrough to self-sustaining growth.On their part the Latin-American countries haveundertaken to prepare plans for their own develop-ment including the use of their own resources andthe institution of necessary social reforms. Agri-culture has been selected, along with housing andeducation, as a specially suitable sector for improve-ment under the Alliance, and Latin-Americangovernments have agreed to initiate reforms in thesystem of land tenure. In the past year at leastsix countries of the region approved or were pre-

58

paring legislation to reform the agrarian structure,an.d so ease or remove a long-standing handicapto agricultural advance.

In the Near East, as in Latin America, the pastyear saw the establishment of more comprehensiveforms of planning in a number of countries for thefirst time. Both new and old plans gave considerableattention to the developmen.t of the scant waterresources characteristic of the region, and theirutilization for the in.ten.sification of land use. Im-portant new legislation on land tenure has beenintroduced in a number of countries.

In Africa, too, the comprehen.sive approach todevelopment plannin.g was gaining attention, althoughmost plans are still concerned only with the publicsector. The development of industry is featured inthe plans of some countries such as Ghana, Malian.d Nigeria, but considerable attention continues tobe devoted to improvement of the economic infra-structure an.d to agriculture, especially export crops.Much interest has been focused on the rationaliza-tion of land holding preparatory to the greater parti-cipation of Africans in modern agriculture. InGhana and Mali the trend is toward co-operativeand state farming while, in cast Africa and SouthernRhodesia, governments are moving to settle qualifiedAfrican farmers on economic holdings purchasedfrom former European farmers or established in

unoccupied areas.In man.y of the new plans the proposed rates of

growth, both for the over-all economy and for agri-cultural production., have been pitched very muchhigher than the rates achieved in the recent past.Such targets reflect the aspirations of the peoplesconcerned. They call, however, for close attentionto the measures that must be taken to en.sure thedesired break with past slowness or stagnation. Inparticular, plans must provide for decisive chan.gesat village levci in markets, resources, knowledge,techniques, or communications. Otherwise it will behard to convince the farmers that a new era hasbeen born, or to encourage the changes in traditionalfarmin.g decision.s which alone will result in fulfill-ment of the agricultural and economic goals.

NORTH AMERICA

United States grains programs

In the United States, policy developments are stilldominated by the vast unsold surplus of grain,

despite some reduction in stocks in 1961/62. Theobjective, as stated by the President, is to reducefarm output below needs for several years, and thenallow it to increase to balance demand. This goalis considered the key to success in implementingother United States policies for in.creasing farm in-comes and reducing the burden of surpluses, whileconserving agricultural resources.

The objective of reducing grain output is beingpursued with resolution. The Emergency Feed GrainProgram, approved in March 1961, was successfulin reducing production; the 1961 crop of maize wasdown by 7 percen.t and of sorghum by 22 percent,while crop acreages were reduced by as much as18 percent artd 29 percent, respectively. For thecrops to be harvested in 1962, acreage restriction.sfor maize and sorghum were maintain.ed and extendedto barley. To participate in the barley programproducers were required to reduce their acreage byat least 20 percent below 1959/60, and to refrainfrom increasin.g acreages under maize and sorghumabove the level of that year. The conservationaspects of the 1961 prograrn for maize and sor-ghum were also continued in 1962 and extended tobarley; they provide for payments to producers whodivert land from these crops to an approved conser-vation use.

The latest available information indicates thataltogether some 19 percent of the barley acreage atthe 1959/60 base period, 27 percent of theand 32 percent of the sorghum, may be diverted in1962. As in the 1961 program, in order to discouragea more intensive cultivation of th.e reduced croparea, only an output equivalent to normal yieldsof these grains will be eligible for price support.Producer prices for maize, barley, and sorghumwere unchanged from 1961.

Under the 1962 Wheat Program the nation.al min-mum wheat acreage was reduced below the previous

minimum of 55 million acres for the first timesince the 1930s. The reduction of 10 percent wasapplied Oil an individual farm basis. For wheat,too, inducements were provided for voluntary diver-sions of up to a further 30 percent of the farm wheatallotment to soil conserving uses. Price supportsat the same level as in 1961 were made conditionalupon diversion.. In April 1962 it appeared that thearea under wheat would be about 27 percent lowerthan in 1961 as a result of participation in the WheatProgram. The official June forecast of the 1962crop anticipated a reduction of about 14 percent.

The above measures for 1961 and 1962 were offi-

59

cially described as emergency programs and a morecomprehensive bill was submitted to Congress earlyin 1962. Among other things it provided for greaterpowers to divert croplan.d to other uses, togetherwith acreage allotments and marketing quotas forall grains The bill was passed with some amend-ments by the Senate, but n.arrowly defeated in theHouse of Representatives. At the time of writing,a " compromise bill" WaS uRder consideration, essen-tially an extension for a further year of the grainsprograms for 1962.

United States Sugar Act

The Sugar Act which expired at the end of June1962 was extended to the end of 1966 for domesticgrowers and for the Philippines, and to the en.dof 1964 for other foreign suppliers, except Cuba.The new bill allocates about 60 percent of the esti-mated United States' annual requirement of 9.7million short ton.s to domestic growers, whichimplies an increase of about 625,000 short tons.About 11 percent is allocated to the Philippinesand about 13 percent to other foreign countries,except Cuba. A quota of 1,634,000 short tons(almost one half of the 1957-59 average quota) isbeing reserved for Cuba when diplomatic relationsare re-established. In the meantime, this quantitywill be purchased at world market prices, givingpreference to countries in the Western Hemi-sphere and to countries purchasing United Statesa.gricultural commodities. From this quantity thePresident has allocated, under the authority given tohim in another bill, an additional 130,000 shorttons a year to the Dominican Republic, and a newannual quota of 20,000 short tons to Argentina.Except for the Philippines, there will be a gradualreduction in the premium paid over the world price.An import fee of 10 percent of the difference betweenthe world price and the United States price willbe levied: in 1962, rising to 20 and 30 percent respec-tively in 1963 and 1964. For the future, 65 percentof any increase in United States requirements willbe reserved for domestic producers, instead of 55 per-cent as at present.

Canadian agricultural support policies

In Canada the Government is proposing to con-tinue acreage payments to western farmers in 1961/62

to offset the effect of the exceptionally small crop.At Can $1.00 per acre up to maximum of 200 acres,payments would be on the same basis as in 1959 and1960. The powers of the Canadian Wheat Boardwere extended in March of 1962 for another fiveyears, and will cover the marketings of rapeseed aswell as wheat, oats, barley, rye, and flaxseed.

The method of support for the basic commoditiesunderwent no major chan.ge in Canada in 1961.

Support prices under the Agricultural StabilizationAct were raised slightly for eggs, lambs and gradeA hogs for 1961/62. The Agricultural StabilizationBoard has been authorized to purchase creamerybutter at 64 cents per pound and to resell it at 52cents per pound. To do this, the board has arrangedwith the trade to buy all the creamery butter man-ufactured and to resell it immediately at the lowerprice. Hence the lower price will be passed on toconsumers in an attempt to stimulate consumption,which has been declining. Farmers who producemilk expressly for the butter market will receive anequivalent subsidy, but other dairy farmers will bediscouraged from expanding any surplus milk pro-duction.

A significant change will take place in the methodof support for sugar beets, following a review ofsugar policy in the light of the depressed world sugarprices. The support program for 1962 will take theform of a deficiency payment to Canadian beetgrowers, at the rate of 1.22 cents per pound for eachcent that the average declared value of imported rawsugar falls below 4.5 cents per pound.

WESTERN EUROPE

In January 1962 the Ministerial Council of theEuropean Economic Community approved the firstcommodity regulations for the common agriculturalpolicy of the six countries. 1' The aims of thispolicy, as outlined in Article 39 of the Treaty ofRorne are: to increase agricultural productivity byencouraging tecluncal progress and by ensuringthe rational development of agricultural productionand the optimum utilization of the factors of produc-tion, particularly labor; to ensure thereby a fairstandard of living for the agricultural population,particularly by increasing individual earnings of

" Belgium, France, Federal Republic of Germany, Italy, Luxem-bourg, Netherlands.

60

persons engaged in agriculture; to stabilize markets;to guarantee regular supplies; and to ensure reason-able prices for consumers. The main elements of thecommon agricultural policy are: a common marketingpolicy; a common commercial policy toward non-member countries; a policy for co-ordinating nationalprograms for the structural improvement of agri-culture; a social policy for minimizing an.y adverseeffects on farmers arising from the adoption of thecommon agricultural policy itself, and a commonpolicy for financing its implementation.

At its meeting in December/January (1961/62)the Council took important initial decisions in relationto all these elements of the common agriculturalpolicy. Guiding principles were laid down for thedevelopment of a common market for cereals, pork,poultry, eggs, wine, fruit, and vegetables, in theform of regulations which were to come into force on30 July 1962. Decisions for dairy products, beef, veal,and rice were to be taken before 31 July 1962 andto come into erect on 1 November 1962 (1 Octoberfor rice). For sugar, decisions were to be made by1 November 1962, to come into force on 1 January1963. Plans for fats and oils, raw tobacco, fish,alcohol, and potatoes were still to be presented at thetime of writing. When these are covered, thecommon policy will apply to more than 80 percentof the total agricultural production of the sixcountries.

Basically the EEC Council's decisions aim atcreating progressively over a period of seven and ahalf years (that is, by the end of 1969) a unifiedmarket for agricultural products, with the character-istics of a protected domestic market, with pricesabove those prevailing outside. There are variationsin the methods adopted for different commodities,but essentially two processes are involved: theprotection of the Community agricultural market,and the gradual development of free trade and auniform price system for domestic agricultural prod-ucts within the Community as a whole.

Although in the cases of grains and butter actionwill be taken to suppOrt domestic prices, and forwines import quotas will be in effect, the commonagricultural policy will depend primarily on a flex-ible, Community-directed pricing system. This sys-tem is inten.ded to encourage increases in productionof those commodities for which the region is a netimporter, though care is to be taken, to discouragethe generation of surpluses. The free movement ofcommodities between member countries is intendedto promote " specialization conforming to the eco-

The Community holds that its farmers need someprotection against outside competition., owing to theprevailing structural weaknesses of a.griculture in theCommunity and the subsidization of many commod-ities in world trade. Hence the decision to maintainthe agricultural price level of the Community abovethat in the world market. 'LJp to june 1962, eachof the six countries protected its farmers againstimports 'fr om the others, as well as from third countries,by a battery of import duties, taxes, quotas, subsidies,and similar measures. With the coming into forceof the Council's new regulations ia July 1962, thesemeasures are be.ng replaced by a system of importlevies.

The system of variable import levies is intended toresult in a level of protection which falls within therange of the present national measures. For grainsand milk, " target " prices will be established eachyear, " at levels designed to provide producers withequitable prices without conflicting with the MOW-meat: towards " the oeonoinically rational speciali-zation of production within. the Community." Levieswill then be adjusted so as to ensure that imports sellat these target prices. For pigmeat, poultry, andeggs, levies are designed to compensate for feedprice differentials inside and outside the Community,supplemented by a margin to offset differences inother conditions of production,. For dairy productslevies will be set with a view toward. maintaining,prices of imports at, or slightly above, domesticprice levels of the previous few years. For beefand veal, fixed import duties will be the principalmeans of protection.

During the transition period levies ma.y also beimposed on trade between member countries, al-though these are to be gradually reduced until theyare completely eliminated in 1970. In all cases theyare to be lower than those applied to third countriesin line with the principle of Community preference.Fo.r fruit, vegetables, and wine there will be no levies,reliance being placed on a common external tariffand quality control provisions which will progres-

" During the transition period target prices will be set in eachcountry. but from 1970 there is to be only one for the wholeCommunity.

If imports cause " great disturbances or threat ofsuch disturbance in their market," member countriesmay resort to special safeguards, including the sus-pension of imports. The application of a safeguardclause by any of the Six is subject to ratification orrejection by the Commission. If rejected, appeal.may be made to the Council, but such an appeal.does not suspend the Commission's decision exceptin the case of cereals (for 10 days). Titus the decisiono the majority (through the Council) may overruleany objection on the part of an individual country.These safeguard clauses may also be applied to intra-Community trade during the transition period,always with due regard to the maintenance of Com-munity preference. Import licenses will be liableto suspension, if necessary, after the transition periodalso.

For beef, veal, eggs, poultry, and pigmeat, stillfurther protection from imports is provided by a" lock-gate " price system, and for fruit and vege-tables during the transition period, by a system ofminimum prices. For each product a single lock-gate price has come into effect for the Communityas a whole which, like a minimum price, preventsthe admission of imports from third countries whentheir price falls below a certain level; either theprice must be raised or the bnporting state increasesthe levy correspondingly. Except for pigmeat, wherethe system is applicable to member country tra.deduring the transition period, the lock-gate prices maybe appl.ied only to imports from third countries.,For frozen beef, \,vhich constitutes the bulk of thesupplies coming from 'Latin America, no lock-gateprices will be in effect. Instead, :import certificateswill be required, and their issuance ma.y be suspended" whenever home prices are subject to too muchpressure."

Agricultural exports

Since exports of agricultural. products are importantin the trade balance of some of the Six, a logical.measure consequent on Community protection is theprovision for payment of a refund on exports. Forgrain.s the refund will be based on the difference

nomic structure natural conditions within the sively allow standardized and graded goods toCommunity. circulate freely within the Community.

Import levies Special safeguards

between internal prices in the Community and exportprices; and for poultry, eggs, and pigmeat on thedifference between internal and external prices ofcoarse grains, taking into account average feedconversion ratios for tbe particular product.

Target prices

The second process which will take place duringthe transition period, the movement towards a uni-fied system of prices, will not be initiated un.tilthe 1963/64 season, '3 although the main guidin.gprinciples have now been decided. For grains, thekey will be the progressive Community-wide align-ment of the target prices. Durin.g the transitionperiod these will be set by the individual membergovernments anywhere within limits specified an-nually by the EEC Council. Each government willalso set " intervention prices " tied to its targetprices (5 to 10 percent less); these will be the pricesat which national marketing organizations will makepurchases in their domestic markets as necessaryfor support purposes. It has been already mentionedthat the variable import levies to be fixed by individualgovernments during the transition period will bebased on the target prices. Each year the limitsprescribed by the Council within which target pricesmay be set will be narrowed until, in 1970, a singleCommunity-wide target price, and hence Community-wide levies and support prices, will be in effect.For beef asid dairy products roughly similar processeswill take place, while for poultry, eggs, and pig-meat, price differentials will disappear as grainsprices come together since the import levies onthese livestock products are based largely on feedcost differentials.

The limits of the target prices for wheat, rye, andbarley were defined for the 1962/63 marketing sea-son as falling between the guaranteed price at thebeginning of 1961/62 in the Federal Republic ofGermany (upper) and that in France (lower). Thecontroversial issue of the first alignment of thenational target prices was thus postponed. TheEEC Council was to agree before 1 September 1962on the general criteria for price harmonization,and apply them to the determination of target prices.This will take place by 1 April 1963 for the 1963/64

It is not clear from the information on the regulations pro-Posed for beef and dairy products (these have not yet been ap-Proved) whether a similar postponement will also be effective forthese products.

62

season, by 1 September 1963 for the 1964/65 season,and subsequently by 1 July each year.

Neither the speed at which the target prices willbe brought together, nor their eventual Communitylevel, has yet been decided. It is these decisionswhich will determine the degree of protection andthe nature of the shifts in production and tradepatterns which will take place over the long run.Production of any commodity in any member country,and consequently its imports from third countries,will be encouraged or discouraged to the extentthat the Community-wide target prices differ fromthe present level of producer prices.

The present pattern of national prices is a variedone, and exactly how far prices within the Commu-nity will exceed the world level remains to be seen.The establishment of a high level would be easiestpolitically since it would involve less of a downwardadjustment in some member countries. But thelevel of prices will have to be set not only with aview to preventing hardship among agriculturalproducers, but also to obtaining increases in pro-ductivity and a more efficient pattern of agriculturaloutput in the Community as a whole. Compara-tively high prices might not only tend to conflictwith these latter aims and, under the method ofsupport adopted by the Community, result in highconsumer prices, .but might lead to the developmentof substantial surpluses which would somehowhave to be paid for and disposed of. A high pricelevel, moreover, might provoke measures of retal-iation against the Six by affected third countries.

The target price range already set for wheat, rye,and barley for the 1962/63 season suggests that inthe end prices will probably be set somewherebetween the present French and German ones.This would mean that, in the long run, producerprices, for example for wheat, would rise in France,and probably in the Netherlands and Belgium aswell, and fall in. the Federal Republic of Germanyand in Italy, thus stimulating production in theformer countries and discouragirtg it in the latter.However, the response of supply to price in.creasesis likely to be more elastic than the response toprice falls, at least in the medium term. Thus, thefinal effect may well be a stimulation of Communitygrain output, with some contraction of imports(although substantial amounts of high quality wheatwill continue to enter the Community) as well asan in.crease in supplies for export. Production ofanimal products is also expected to increase, partic-ularly in the Federal Republic of Germany where

the common policy will result in some loweringof feed prices.

On the whole, the agricultural price policies whichhave been worked out arc very flexible. Althougha " unified price system " will result, this does notmean that prices throughout the Community willbe uniform; within certain limits they will be influ-enced by such factors as supply, demand, and transportcosts. Prices will be supported when interventionprices are in operation. On the other hand, theimport levies will tend to put a ceiling on prices,since above a certain price level unlimited suppliesmay enter from the outside.

Thus for grains prices will fluctuate around thetarget level: import levies will ensure that importsare sold at the target price, and purchases of in-ternal production will take place when prices fallbelow a given level (the intervention price). Aroughly similar system will be in effect for dairyproducts, although in this case the draft regulation(the full text of which is not yet available) specifies thepurchases of butter in quantities " needed to com-pensate for the seasonal deficit. " For the othercommodities no price supports are envisaged, al-though the beef and veal regulation (not approvedat the time of writing) specifies their considerationat the end of a three-year period. Stabilization ofmarket prices in the meantime is to be attemptedonly by the regulation of imports.

Impact on other countries

In all sectors, an expansion of intra-Cornmunityproduction and trade raises questions for many ofthe present nonmember suppliers of agriculturalcommodities. Denmark, which has, however, alreadyapplied for membership, could be faced with a con-tracting market for dairy products, pigmeat, poultrymeat and eggs as well as competition on outside mar-kets from subsidized exports of growing Communityproduction. The same could apply in many otherinstances: recent measures to restrict egg productionin Israel, for example, reflect some apprehension aboutexport outlets. Even for rice, where it is proposedto maintain Community production at current levels,increased imports into other member countriesfrom Italy could replace some supplies now comingfrom elsewhere. The EEC countries have madeclear their readiness to open negotiations on grainimports from third countries at a future date, andto consult with them on any damage to their trade

63

caused by the application of the common grain policy.It is, in fact, not yet clear how much difficulty

will be experienced by nonmember countries. Ac-cording to the EEC, the external levies are to createa level of protection no higher than the average ofthose currently in force, a principle which has beenembodied in almost all the regulations so far ap-proved. But although the average may be no higher,difficulties may still arise for many specific non-member suppliers. During the transition periodthe effective level of protection will probably bedetermined largely by the extent to which the safe-guard clauses are utilized and if restraint is exer-cised, the flow of trade between the Community andthe rest of the world may not be greatly disturbed.The extent to which the Community protects itsagriculture will also be influenced by outside forcespressing for a liberal attitude towards the importsfrom nonmember countries. Aside from opinions infavor of such an attitude expressed in GATT andother international consultations, the safeguardingof the export outlets of outside countries was one ofthe main stated objectives of the United States inits tariff negotiations with the Community in 1961/62,and it is also one of the aims of the proposed UnitedStates Trade Expansion Act of 1962. In general,h.owever, the present trend of thinking appears to betoward more organization, rather than greater liber-alization of world trade, and the Six have alreadyproposed the negotiation of world-wide commodityagreements.

Tropical products

It is not yet fully clear what the impact will be onthe producers of tropical products. Of these pro-ducts, only sugar and vegetable oils will be coveredby the regulations of the common agricultural pol-icy. The others, being neither produced withinthe Community nor competitive with its production,are not included. In most cases, however, importsof tropical products from the former overseas ter-ritories of the member countries are being givenpreferential treatment. At the outset, the intentionwas to ensure to them benefits at least equivalentto th.ose enjoyed previously. Much emphasis hassince been put, however, on the need to protectother producers. The position of Commonwealthproducers has been an important aspect of the UnitedKingdom negotiations for membership, while theUnited States has exercised some pressure on behalf

of Latin-American producers. Increasing weight isnow being given to aid through the DevelopmentFund rather than tariff preferences. The DraftAgreement on Associated African Countries, underdiscussion between the Ministerial Committee andthe African associates, proposed substantially lowerexternal tariffs for coffee, cocoa, tea, spices, etc.,with duty-free entry for imports of these and someother tropical products from the associated territories.

Method of financing agricultural measures

The refunds on exports, or payments of exportsubsidies, to be made on all commodities exceptfruit, vegetables, and wines, will also have an impacton trade. The refunds will roughly compensate fordifferences between Community and world marketprices and so make any surplus production of theSix competitive on the world markets. Arrange-rnents for financing this policy were approved bythe EEC Council in Jan.uary 1962. It is intendedthat export subsidies will be paid from a commonfund which by 1970 will be fed by the proceeds fromimport levies an.d from contributions from generalbudgets. This seems to imply that the principalbenefits will go to the largest surplus producers,and the greatest burden will be borne by the majorimporting countries. It should make the Commu-nity as a whole reluctant to set intervention pricesat a level which might in the end result in the accu-mulation of sizable surpluses.

Financing was a major question taken up by theCouncil. It was decided in early 1962 that thefinancial obligations arising from the common agri-cultural policy would eventually be assumed by theCommunity as a whole. This would include alloutlays for market stabilization measures, exportsubsidies and for the structural reform of agriculture,insofar as the latter were agreed to arise from imple-menting the common policy. During the transitionperiod financial responsibility for these measureswill be gradually shifted to the Community. Forthis purpose the European. Agricultural Guidanceand Guarantee Fund (Fonds européen d'orientationet de garantie agricoles) was established. The Fund'scontribution to the above expenditures was pro-gramed to rise progressively each year from onesixth of the total in 1962/63 to 100 percent in 1970.It was decided also that the Fund itself would befinanced from national budgets in 1962/63, the pro-ceeds from import levies being retained by member

64

countries in the first year. In 1963/64 the leviesare to make up 10 percent of the total Fund, 20 per-cent in 1964/65 and so on progressively until by1970 all levies are to be paid into the Fund. Duringthe transition period maximum limits have been seton the contributions of all member countries exceptFrance, the chief beneficiary: 10.5 percent for Bel-gium-Luxembourg, 13 percent for the Netherlands,28 percent for Italy, and 31 percent for the FederalRepublic of Germany.

On the administrative side, managing boards(comités de gestion) will be created for each commod-ity group, consisting of representatives of membercountries." The powers of the boards will beconsultative only they will advise on proposalssubmitted by the Commission, which will take thedecisions, subject to review by the Council withinone month if a board's advice has not been follow-ed. Support operations, including stockpiling,withdrawal of surpluses from the market and theirdisposal abroad, and other market interventions areto be carried out as heretofore by the various nationalmarketing organizations, adapted as required tobring the common agricultural policy into effect.

Negotiations with other countries

It must be borne in mind that the policies and prob-lems of the Community may be considerably mod-ified if the countries at present negotiating with theCommunity join, or become associated. At the timeof writing negotiations were under way with Den-mark, Ireland and the United Kingdom for fullmembership, and with Turkey for associate mem-bership. Norway has applied for full membership,and negotiations are expected to begin in October.The associate membership of Greece was await-ing formal ratification. In addition, applications forassociate membership have been made by Austria,Sweden, Switzerlan.d and Spain, while Portugal hasrequested negotiations for some form of association.

The admission of the United Kingdom wouldhave a particularly widespread impact, both withinthe Community and outside, because of the greatimportance of that country in world agriculturaltrade, and its links with Commonwealth agriculturalexporters in both tropical and temperate zones.

Voting will be weighted according to the scale laid down inArticle 148 of the Treaty of Rome, that is, France, Germany andItaly, 4 each; Belgium and the Netherlands, 2 each; Luxem-bourg, 1.

The outcome of the negotiations with the UnitedKingdom were far from decided at the time of writ-ing, and no conclusions can yet be drawn on theeffect on Commonwealth trade. In very broad terms,however, the offer of some form of association forthe tropical exporting countries has been discussed,though no conclusions have been reached. To safe-guard the trade of overseas temperate zon.e export-ers, some other typ,--.7F. of interim arrangement per-missible under the Treaty of Rome have been con-sidered, with the suggestion ultimately of world-wide arrangemen.ts for the affected commodities.The first steps for considering such arrangementshave already been taken in the form of groups setup within GATT to study the world trade in cerealsand meat. Further study groups may be establish-ed later.

Structure of agriculture

Although the price and market policies are thecore of the Community agricultural policy, the pro-gram for promoting structural reform is also im-portant. European agriculture is hampered by manysmall and often fragmented holdings. Measures toimprove this situation have been adopted in mostEuropean countries in recent years. Communitypolicy will be directed towards accelerating the trendtowards the establishment of more medium-sizedfarms at the expense of the small ones, both throughthe co-ordination of national policies and, in part,by making some financial contribution.

The governments of France and Germany gaveparticular attention in 1961 to increasing the sizeof individual holdings. In the Federal Republic ofGermany, over 40 percent of the DM 2,060 milliondevoted to agriculture under the green plan willbe spent for land consolidation, enlarging smallholdings and the dispersion of farmsteads. InFrance, the fourth modernization plan envisagesthat some 5 percent of the country's 4,800,000farmers will leave agriculture during the period1962-65. The plan provides for a 250 percent in-crease in expenditure for land consolidation andstorage and processing facilities. A law has beenpassed setting up semipublic buying offices withprior right to purchase land as it comes on themarket in order to enable young farmers with fewfunds to obtain land on lenient ten-ns. Other pro-visions are aimed at restricting land ownership bypersons or concerns not considered to be in the

65

farming profession and at preventing both excessivegrowth of holdings and their reduction to a sizetoo small for profitable operation. Other legislationrevises existing inheritance laws in order to maintainagricultural holdings undivided. In the Netherlands,a three-year land consolidation program with annualtargets of 40,000 hectares has been initiated, whilein Belgium measures have been taken to speed upa similar program started earlier, and to preventthe breaking up of areas already consolid.ated. Else-where in Europe, similar steps were being taken.The Austrian green plan, for example, envisages aprogram similar to the Gennan one.

The growing realization of the need for structuralreform if production is to be more competitive hasbeen accompanied by efforts to improve productionpatterns. In Italy, a shift from wheat to livestockand fruits and vegetables is being encouraged, main-ly by providing low cost loans or grants to financethe change. In Belgium, taxes on imported feedgrains have been adjusted to encourage a shift fromwheat to coarse grains. In Greece, the quantitiesof wheat covered under price support programs havebeen lowered to shift emphasis from wheat to ani-mal production. Larger subsidies are being givento increase the forage crop acreage and to provideimproved seed and breeding animals.

Greater funds for agricultural research and edu-cation were provided in France, the Federal Republicof Germany and the United Kin.gdom. In Greece,the farmers' insurance system will be in full ope,rationin 1962, providing old age pensions, sickness benefits,and compensation for crop damage from hail andfrost. In Sweden, a new type of insurance wasintroduced to compensate farmers if their cropyields fall more than 15.5 percent below establishednorms. Two thirds of the premium cost will beborne by farmers and the remainder by the govern-ment. In France, the basic rate of social securityretirement pensions to farmers OVer the age of 65was doubled in order to give them additional incen-tive to transfer their land to younger people.

E,ASTERN EUROPE AND THE U. S. S. R.

The main developments in agricultural policy in1961/62 include the preparation of a long-rangeperspective plan for U.S.S.R. agriculture, and somemajor changes in its administration and croppingpattern. There has been a continued strengtheningof the socialized sector of agriculture in most eastern

European countries and a sharp increase in agricul-tural prices in both eastern Europe and the U.S.S.R.

U.S.S.R. perspective plan

The U.S.S.R. seven-year plan (1959-65) has beenprojected in broad outline to 1970 and 1980, in linewith the objectives laid down at the twenty-secondCongress of the Communist Party in October 1961.The purpose was to assess development needs, tak-ing into account the probable increase of popula-tion to about 280 millions by 1980. In the aggre-gate, agricultural and industrial production in 1970were both scheduled to reach 2.5 times their 1960levels. From 1970 to 1980 agricultural productionis ptojected to increase by a further 40 percent, andindustrial output to grow at the same rate as from1960 to 1970.

The increased production in agriculture is to beachieved with a stable agricultural labor force upto 1970, after which the absolute size of the agri-cultural labor force would decline. Thus the achieve-ment of the plan targets assumes a rapid rise inagricultural productivity, to release workers for thegrowth of industry.

The projected expansion of agriculture follows thepattern established in other countries where incomeshave increased. By 1970 per caput consumptionof fruit is expected to increase 5 times; meat2.5 times; rnilk, vegetable oils, eggs and vegetablestwice, and butter and sugar by 50 percent. On theother hand the consumption per head of grains andpotatoes is expected to fall. From 1970 to 1980the projected increases in per caput food productionrange mostly from 5 to 15 percent, but egg and fruitproduction (and presumably consumption) are ex-pected to rise further by more than 50 percent.

The great increases in production and productivityenvisaged are to be brought about partly by in-tensifiying cropping at the expense of grass andfallow, and partly by plowing up more virgin lands,but mainly by a very large increase in yields basedmainly on a vast increase in the use of artificialfertilizers, the extension of irrigation and mecha-nization, and the more rational organization of labor.

Yields of grain.s in the Russian Soviet Federated

Between 1953 and 1961 the natural growth in rural popula-tion was already being absorbed in towns, and the increase inthe urban population (28 millions) was practically the same asthe increase in total population (29 millions).

66

Socialist Republic, for example, are projected as risingfrom 10.2 quintals per hectare in 1956-60 to 20.8in 1980, and yields of wheat in Kazakhstan from8.4 to 20.0 quintals per hectare during the sameperiod. The production of chemical fertilizers is

scheduled to in.crease tenfold by 1980.

Cropping patterns in the U.S.S.R.

The desire to fulfil the seven-year plan and thetwenty-year program, and to find an immediatesolution to the slow growth of agricultural productionin the last time years, resulted in the official condem-nation at the Party Conference on Agriculture inMarch 1962 of the farming system in general useduring the last 30 years. The lan.d was planted tograss for several years in the crop rotation, to im-prove the structure and organic matter content ofthe soil, thus helping to offset the lack of fertilizerswhich were seldom applied to grains. Thus heavycapital allocations for the fertilizer industry couldbe postponed. The system was supported underStalin, an.d declared "inseparable from Socialistagriculture. " The area sown to annual or perennialgrasses rose from 3.3 million hectares in 1913 to36 million in 1961, that is, from 3 percent to 18percen.t of the total crop area. The developmentof the fodder resources of the U.S.S.R. from 1940to 1961 is set out in Table II-25.

The new directives propose a reduction of the areaunder grasses and bare fallow, their replacement inthe rotation by maize, pulses an.d fodder beet, andthe greatly increased use of chemical fertilizers. Ap-proximately the present 11 million hectares of al-falfa and clover will be retained, but the area underoats is to be reduced. As a first step in 1962, 22million hectares are to be diverted from grasses orfallow, of which 18 million hectares is for grainsand the balance for other crops. If this policy issuccessful, the 1962 grain harvest should greatlyexceed the 1961 level, bringing the 1965 target of180 million tons within reach. However, such anextension of the grain acreage by nearly 15 percentin one year may create bottlenecks in the supply offarm machinery and manpower.

Agricultural organization

Important institutional changes were also decidedon at the March conference. New agricultural

TABLE I1-25. - PRINCIPAL FORAGE RESOURCES OF THE U.S.S.R.

Converted to dried grain equivalent.

boards are being established to control and guidethe activities of the collective farms (kollchozes) andstate farms (sovkhozes). This decision reverses themeasures taken in recent years to give greater auton-omy of kolkhozes. Each territorial board willdeal with a group of collective or state farms, aver-aging, for example, about 60 in the R.S.F.S.R.Each board will be assisted by a committee of farmdirectors, technical experts, and representatives ofthe Government and the Communist party. Theboards are to be served by " inspector-organizers,one for each group of five to seven collective andstate farms. The functions of the boards are verywide, including the formulation of plans integratedwith the state plan, the determination and supervi-sion of farm cropping patterns; the control of equip-ment and livestock, the supervision of the state col-lection of produce, and direction of the associatedagricultural and veterinary laboratories, artificialinsemination stations and incubation centers.

Above the territorial boards, provincial boardsand committees are being set up, the latter presidedover by the Provincial First Secretary of the Party.Each of the federal republics has, therefo:.e, its agri-cultural committees and its ministries of agriculturalproduction and procurement. On top of this pyra-mid is the All-Union Agriculture Committee, pre-sided over by a vice-chairman of the Council ofMinisters, and including representatives of all theadministrations concern.ed with agriculture. Thecommittee is to examine the plans for productionand the state purchase of agricultural products andthe building up of state stocks. It is to decide theneeds of agriculture for machinery, fertilizers andpesticides, and hence ultimately for manpower andinvestment. The Agriculture Committee can submit

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proposals to the Central Committee of the Partyand to the Council of Ministers.

Agricultural socialization in eastern Europe

In eastern European countries the most strikingdevelopment in 1961/62 was the further strength-ening of the socialized sector. The formation ofcollective and state farms was virtually completedin Hungary in 1961 and in Romania in 1962. Thereorganization liad been completed earlier in Bulgariaand Czechoslovakia. In Eastern Germany, however,where 90 percent of the cultivated land is in principlesocialized, most of the co-operative farms are ofthe type where only labor is collectivized, in manycases nominally. The authorities complain that pea-sants give too much time to private plots and live-stock; and collective livestock rearing is now beingencouraged.

The amalgamation of co-operative farms into larg-er units has gathered momentum. In Hungary,for instance, the average size rose in 1961 to 1,080hectares, as against 450 hectares a year earlier.There were also mass mergers of farms in Czecho-slovakia, the average size rising to 796 hectares in1961, compared with 450 hectares in 1960 and 321hectares in 1958.

In Poland, where only 13 percent of the cultivatedland is in collective or state farms, there was a de-cline in the number of state farms, due partly toamalgamation and partly to sales of land to farmers.During the three and a half years since the Agri-cultural Bank began the sale of state land, a totalof 120,000 hectares have been purchased by 46,000farmers, of whom 11,000 have started independent

1940 1953 1954 1955 1956 1957 1958 1959 1960 1961

Million metric tons

Barley and oats 28.8 17.9 18.6 22.2 26.1 21.2 26.4 23.6 28.0 22.1Maize (dried grain) 5.1 3.7 3.7 11.6 9.9 4.6 10.2 5.7 9.8 16.9Maize at milky wax stage' 3.1 2.6 2.4 6.5 6.4 8.9 7.2Green maize for silageOther silage tropa 5.2 16.4 20.3 43.4

4.656.57.0

63.915.0

145.916.4

152.617.8

206.3 186.1

Forage roots 12.4 10.2 9.7 11.8 11.9 11.3 14.7 10.5Hay:

Perennial grass 10.2 16.2 16.0 17.0 16.1 18.8 21.5 23.9Yearly grass 4.2 8.2 7.0 10.7 14.4 16.1 25.9 25.1Natural meadows 53.5 43.5 42.5 37.0 37.1 34.3 37.9 31.4

farms. The government is planning to check therecent trend towards the fragmen.tation of farms intouneconomic units. The specific Polish type of agri-cultural co-operation known as " agricultural cir-cles " gained strength in 1961, and made a consid-erable amount of farm machinery available to pri-vate farmers on a rental basis. Cash incomes ofindividual farmers in Poland were estimated to in-crease by 11 percent in 1961, compared with an in-crease of only 3 percent in industrial wages. How-ever, this gain has been offset by an increase ofabout 16 percent in the annual land tax as fromthe beginning of 1962.

Price policies in eastern Europe and the U.S.S.R.

Much greater incentives, however, are now bein.ggiven to producers to expand their output in botheastern Europe and the U.S.S.R. In Bulgaria, forexample, state purchase prices for meat, eggs, andtomatoes were raised 17 to 20 percent in 1961;for poultry, rice, and onions, 40 to 45 percent;for pepper, 57 percent; and for tobacco, 40 to 100percent. State purchase was confined to stapleproducts, leaving more than 80 products open forvoluntary sales in official or free markets. To assistagriculture in mountainous regions, produce fromhill farms was given a price premium of 20 to 30 per-cent, and important production requisites were soldthem at a discount of 30 to 50 percent. In Hungary,also, purchase prices were raised in October 1961for milk (by 17 percent), lard, and sunflower seed.

In spite of the attention given to livestock produc-tion since 1953, shortages of livestock products,especially meat, remain the most pressing agricul-tural problem of the U.S.S.R. To give greaterincentives to producers the prices paid by the stateto the kolkhozes for both cattle and pigs was raisedby about 12 times from 1952 to 1959. This compareswith increases of rather more than twice for cropsas a whole, and an average of nearly six times forall livestock products. Even so, according to arecent official statement, prices paid to kolkhozeswere below their production costs.

From 1 June 1962, therefore, prices paid for alltypes of livestock were raised by a further 35 percentand for butter by 10 percent. In general, the in-creased prices will be passed on to consumers. Re-tail prices of beef are to go up by about 30 percent,of pigmeat by nearly 20 percent and of butter by25 percent. Nevertheless an element of subsidy

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still enters into retail prices, which are below the costto the state of procurement and distribution. Tooffset the effect of these increases on the cost of liv-ing, retail prices of sugar have been reduced by 5percent and prices of staple fibers by 20 percent.It appears that the increase in prices of meat andbutter was also designed to limit the demand as,according to official statements, an alternative pol-icy to leave retail prices of meat and butter unchangedand to recoup losses by an increase in prices ofdrink and tobacco was rejected because presentscarcities of meat and butter compel consumers topay higher prices to speculators.

AUSTRALIA AND NEW ZEALAND

Australia

Although Australia had a good trading year in1961/62, with exports at a record level, attentioncontinued to be focused on the long-term exportprospects for the rural industries. The year's goodresults were mainly due to large sales of grain toMainlan.d China an.d the temporary allocation ofa sugar quota in the high priced United States mar-ket. Un.certainties con.cerning the European Com-mon Market, and especially the possibility of theUnited Kingdom's entry, clouded future prospectsfor Australian grains and meat in their tradition.almarket. These uncertainties encouraged Australia'sactive search for opportunities to sell its agricul-tural products outside the United Kirtgdom.

Two committees of inquiry set up by the FederalGovernment to report on various aspects of primaryindustries presented their reports in 1961. Thecommittee on the sugar and manufactured fruitindustries recommended some changes in. the for-mula for determining tile domestic sugar price, butafter considering the report the Govem.ment extendedon much the same basis as in the past the Austral-ian Commonwealth-Queensland Sugar Agreementgoverning the domestic marketing of sugar.

The Wool Marketing Committee of Enquiry foundno occasion to recommend any major chan.gethe free auction system, such as a reserve pricescheme, although some possible improvements wereindicated. The committee proposed the creation ofan Australian Wool Commission to integrate woolresearch, promotion and market studies. Woolgrowers agreed to an increase in the wool promotionlevy from 5 shillings to 10 shillings per bale.

The current wheat stabilization scheme is due toexpire in September 1963. In recent years thewheat stabilization fund has been almost exhaustedin view of the continuous increase in the officiallycalculated national average cost of production andthe resulting annual in.creases in guaranteed producerprices. For the first time since the fund was estab-lished in 1948, wheat exports had to be subsidizedin 1959/60 an.d the two subsequent years. Thewheat growers have suggested a new stabilizationplan to the Federal Government, against the expiryof the present scheme. It is rather similar to thecurrent plan.

The Federal Government announced that it wouldpropose a further five-year stabilization plan for thedairy industry when the current scheme expired on30 June 1962. It is likely that the new schemewill be fairly similar to the old one, involving thecontinuance of a subsidy, with possible increasesif necessary to compensate for an.y consequencesof the United Kingdom's entry into the EuropeanCommon. Market.

Government assistance to import-saving rural in-dustries, including cotton and tobacco growing, hasbeen contin.ued or strengthened. Rice productionis increasing, with the greater availability of irriga-tion water from the Snowy Mountains Scheme.Federal funds are being used for the constructionof so-called " beef roads, " which will permita better exploitation of the distant cattle-grazinglands.

New Zealand

The serious consequences for New Zealand whichseem likely if Britain joins the EEC have been inthe forefront of discussions on agricultural andgeneral economic development. The greatest con-cern is for dairy exports. Although wool wouldnot be adversely affected, there is anxiety for thefuture of the jointly-produced mutton and lambmeat which is exported predominantly to the UnitedKingdom.

The only policies which have appeared feasibleto New Zealand have been to press strongly forspecial treatment in the United Kbagdom impo:1market and, at the same time, to promote exportsales to other markets. To boost exports in general,an Export Promotion Council has been set up withco-ordinating and advisory functions. A campaignto expand the sale of meat and dairy produce is

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taking place in 1962, both in the United Kingdomand elsewhere, especially in the Far East. A newtrade agreement with Japan, signed in March 1962,provides for full GATT relations between the twocountries.

In 1961 a plan was announced to establish milkcompanies in the less developed countries for theproduction of " reconstituted " milk using importedNew Zealand milk powder. Such plants are nowoperating in Singapore and Mauritius; another wasscheduled to start operating in Hong Kong in July1962 and other milk plants are planned for theFederation of Malaya and the Philippines. As inAustralia, the levy OR wool to finance expandedoperations of the International Wool Secretariat hasbeen increased.

The n.ew Dai_ry Products Price Authority madeno change in the basic price for butter for 1962/63,but the basic price for cheese was reduced slightly.The criteria for determining these prices was alteredin 1961 the Authority is no longer required totake into consideration production and marketingcosts or price levels ruling for other fatm productsbut must take account of rnarket prospects, currentrealizations, and the state of the dairy industry'sfinances. The prices may not be varied more than5 percent above or below those fixed. for the pre-ceding season.

LATIN AMERICA

The Alliance for Progress, announced in thespring of 1961, started to gain momentum during1961/62. Under this important ten-year programthe United States has agreed to " provide resourcesof a scope and magnitude " adequate to achievea breakthrough in self-sustaining growth for theLatin American. countries. In order to match andto make full use of external aid, the Latin An_iericancountries on their side have agreed to formulateplans for economic development, to mobilize theirinternal resources, and to make basic social reformsin the land tenure and tax systems. Progress ininstituting these reforms will not be easy as they cutdeeply into established social and economic patterns.Although al] sectors of the Latin American econo-mies will receive assistance, a few, such as housing,education, and land use, have been singled out asespecially important.

Nearly $1,030 million in loans and grants weremade available in the first year, although much

is still unspent as many projects were just startingto take shape. Deep-rooted problems, such as landand tax reforms, and several legal and organizationaldifficulties prevented the program from moving asquickly as liad been hoped during the initial period.The United States Administration has asked Congressfor an authorization of $3,000 million for this pro-gram for the next four years.

The largest beneficiaries in the first year weieBrazil with $357 million (together with $305 millionfor the refinancing of old debts), Argentina with$159 million, Chile with $135 million, Mexicowith $106 million., Venezuela with $99 million,Colombia with $69 million and Peru with $66 mil-lion. Of the total allocated, $132 million weregrants and $898 million loans, of which $360 millioncarne from the Export-Import Bank, $401 millionfrom the Association for International Development,and $268 million from other sources, including theInter-A.merican Development Bank, administering theSocial Progress Trust Fund, Food for Peace, thePeace Corps and the Inter-American Highway.However, actual expenditures of these conunitmentsare conditional on the soundness of the proposedprojects and on whether the individual countryfulfills its obligations under the Charter. The Al-liance could already point to progress in some fields.Every country now has a planning board, aid fundsare being used to stabilize financial crises, food aidis being provided to relieve natural disa.sters andshortages, while land reform legislation is beingformulated in several countries.

Economic integration

The Montevideo Treaty of February 1960 estab-lishing the Latin American Free Trade Association,was ratified in May 1961 by Argentina, Brazil, Chile,Mexico, Peru, and Uruguay, and thus became effectiveand operational in June 1961. The seventh originalmember, Paraguay, ratified the Treaty in the samemonth. Later in 1961 Colombia and Ecuadorjoined the Association, and in April 1962 Boliviaannounced its decision to adhere. All South Amer-ican countries except Venezuela would then bewithin the Association, an.d in Venezuela officialstudies are being carried out on the implicationsof membership. After the first negotiations, agree-ment was reached on a total of 2,735 items thatwill ertjoy customs rebates; of these over 1,000 wereagricultural. Member countries seem in favor of

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eliminating trade barriers in a shorter period thanthe 12 years stipulated in the treaty.

The other main trade arrangement in the LatinAmerican region is the Central American IntegrationProgram (CATS). The General Treaty of EconomicIntegration of 1960 (signed and ratified by El Sal-vador, Guatemala, Honduras and Nicaragua) led

to the immediate establishment of a free trade sys-tem, under which over 90 percent of coinmoditiesproduced within the participating countries willmove without customs tariffs. Progress has contin-ued in negotiating a uniform list of commoditiesand a common import tariff. A n.umber of studiesby a standing trade subcommittee of CAIS are tobe placed for approval before the next CAIS meet-ing, scheduled for mid-1962. In addition to itstrade activities, CAIS has established the CentralAmerican Bank for Economic Integration, whichmade its first loan to a member country in Decem-ber 1961.

Development plans

During 1961/62 many countries announced newdevelopment plans. Some of these are over-all plans,while others relate to particular regions or are de-signed to ease particular problems. Bolivia approve:Ia ten-year national plan for economic and socialdevelopment. Ecuador moved ahead with the imple-mentation of oil palm and sheep development pro-grams, and was seeking foreign loans for otherprojects, including the development of the Amazon.region. A four-year development plan (1962-65)was being implemented in Honduras: the govern-ment also announced an area development projectin the east, to include the construction of roads,schools, clinics, banking facilities for the purchaseof agricultural equipment, seeds, and livestock, andthe provision of agricultural extension services.The Economic Planning Council of Guatemala putforward projects estimated to cost $82 million forthe development of Indian communities and forland resettlement schemes. Nicaragua started a five-year road development program to link potentiallyproductive agricultural areas with urbu.n centersand with a seaport on the Pacific coast, and initiatedpreliminary studies for an area development planon the Atlan.tic side.

Panama announced a $200 million four-yeardevelopment plan including provisions for increasedagricultural credit and extension services. A

Paraguay-United States co-operative enterprise wasestablishing a pilot project to aid in developingthe meat industry. Peru has allotted 112 millionsoles ($4 million) from its 1960 budget surplusfor agricultural development projects, including irri-gation and rural schools. A 300 million soles($11 million) loan from the Development LoanFund is to be used for developing jungle highlandsand for building access roads.

The National Planning Board of Colombia is

incorporating the present four-year plan in a newten-year general development plan. Total investmentover the decade 1961-70 is estimated to reach $10,000million of which just over 12 percent is for agri-culture and livestock developmen.t. The gross na-tional product is expected to increase by 5.6 percentper annum, and substantial increases in agriculturalproduction and exports are planned.

Agricultural price policies

Concern over declining export earnings fromagricultural commodities was a main reason forchanges in price policies in Latin-American countries.In Argentina the government increased the priceof wheat substantially, while in both Argentinaand Uruguay most of the export taxes on animals,meat, and meat products were removed in an effortto stimulate production for export. Export taxeson coffee were slightly reduced in Mexico, and landis to be diverted from coffee to other crops. Co-lombia also moved to stimulate exports by reducingtemporarily the retention on coffee exports from15 percent to 4 percent at the end of 1961, and byformulating legislation for a permanent reductionin export taxes. Other countries were reviewingtheir policies for coffee with the aim of bringingproduction more in line with demand. Brazil an-nounced a program to uproot 2,000 million coffeetrees and to replant only 100 to 150 million high-yielding trees.

In a few countries domestic problems of inflationand food shortages led Lo policy revisions. InBrazil support prices were no longer attractive afterdevaluation and were raised for wheat, dry beans,peanuts, soybeans, and cotton. In Venezuela, thesupport price of sesame was increased, and milkproduction was encouraged by requiring merchantsto purchase two units of domestic dry whole milkfor each unit imported. (Previously they purchasedonly one unit of domestic for each five imported.)

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Aga/Hair reform

In many countries the system of land ten.ure is

recognized as a major obstacle to agricultural devel-opment and, as already noted, increased progressin agrarian reform has been made recently underthe stimulus of the Alliance for Progress, despiteinevitable opposition. In the past year the Colom-bian Congress reaffirmed the principle that landownership is justified only if the land is used, andhas established an institute of land reform to imple-ment the legislation passed in 1961. El Salvadorannounced the beginning of a pilot scheme of landreform. Mexico intensified its land redistributionprogram and is to complete the allocation of 700,000hectares of newly expropriated land on easy termsto small farmers and settlers. Land reform legis-lation was at the drafting stage or before Congressin Brazil, the Dominican Republic, Ecuador, Nica-ragua, and Peru.

In Cuba the state now controls directly 3.8 mil-lion hectares, or roughly 40 percent of the totalagricultural area. Of the state-controlled land,2.6 million hectares are people's farms, that is, statefarms managed by the government with paid labor;these are given first priority for investment. About1.2 million hectares, once owned. mostly by sugar-:mills, were turned, over to sugar cane co-operativeswhose members receive a daily wage and a periodicbonus from profits. A considerable arca of land hasbeen distributed as individual farms to some 31,000peasants; this forms part of the 60 percent of thetotal farmland which remains in the private sector.Efforts have been made for a greater diversificationof agriculture, but although many formerly importedfood products are now being domestically produced,the goverment has liad to ration meat, milk, poultry,rice, and fats and oils.

Farm credit

Goverrunent help in the financing of agriculturalcredit appears to be gaining momentum in LatinAmerica. Argentina, Brazil, and Honduras easedcredit conditions for purchases of farm machinery.The Bank of Paraguay was replaced by the newDevelopment Bank of Paraguay which will be anew source of credit for agriculture. In Chile afurther issue of mortgage bonds of four millionescudos was authorized to finance agricultural loans.A record amount of 200 million bolivares ($60 mil-

lions) was loaned to farmers in Venezuela by theAgricultural Bank. The Institute for Economic Devel-opment, Panama, will provide credit facilities andtechnical assistance to medium and small farmersto enable them to carry out farming and livestockdevelopment programs.

FAR EAST

Economic development plans, including plans forthe agricultural sector, have for long played animportant role in efforts toward improving levelsof living in Asia and the Far East. Almost allcountries have formulated at least their first develop-ment plan, and some have already implemented morethan one plan over the last decade or so. Morein.terest is becoming apparent in. the implicationsfor national planning of the plans of other countries.The formation in early 1961 of the Association ofSoutheast Asian States, comprising the Federationof Malaya, the Philippines and Thailand, was the firstconcrete step towards closer economic co-operationin the Far East. The Federation of Malaya, Singa-pore, Brunei, North Borneo, and Sarawak arenowexploring possibilities of a political union, to beknown as Greater Malaysia, to further their economicand social progress. The two last named establishedin January 1962 a Borneo Free Trade area to easethe way for eventual participation in the proposedunion.

Agricultural development plans

During 1961/62 Burma, South Korea, Thailandand Bhutan began the implementation of new eco-nomic development plans Generally the agricul-tural sector will receive somewhat more attentionthan in previous plans, but in some cases the pro-portion of investment funds allocated still seemsrelatively low.

Un.der Burma's second four-year plan (1961-64),which aims at increasing the annual rate of growthof the economy to 6 percent, agriculture is allotted12 percent of planned investment in the public sectorof 2,629 million kyats ($550 million). The plancalls for diversifying the predominantly rice economy,for achieving self-sufficiency in sugar, oilseeds, cottonan.d wheat, and for expanding exports of pulsesand tobacco. Rice production is to be increasedby about 20 percent to provide an exportable sur-

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plus of 2.8 million tons by 1965/66, compared withexports of 1.5 to 2 million tons in recent years. Agreat strengthening of the co-operative movementis proposed, and after an initial educational perioda rapid transition to co-operative farming is envis-aged. More agricultural credit will be providedat lower rates of interest and multipurpose co-opera-tives established in association with existing villagebanks. As an incentive measure the government willraise the price of rice and will attempt to maintainequitable prices for other agricultural pi oducts.The Pydawtha scheme will also be strengthened togive local authorities greater freedom of action inimplementing development projects.

South Korea's new five-year development plan(1962-66) aims at building an industrial base tocompensate for the loss of the industrial north,with major emphasis on electric power, coal, trans-portation, and such key industries as cement, ferti-lizer, iron, and steel. Increased agricultural pro-duction and improved balance of payments arealso important goals. Agriculture, forestry, andfisheries receive about 17 percent of the total plannedinvestment, and efforts are to be made to raise theann.ual growth of farm production from 2 percentto 6 percent. Crop output is to be increased by34 percent, and grain production by 30 percentby 1966, while the output of livestock productsis to go up by 59 percent. To this end an addi-tional 91,000 hectares will be brought under cultiva-tion, another 99,000 hectares will be irrigated, andencouragement given to double-cropping and otherimproved practices. To provide incentives, prices willbe stabilized by timely purchases by the governmentthrough the agricultural co-operatives and throughthe Rice Lieu Program which is already in opera-tion, while credit facilities will be expanded.

In October 1961 Thailan.d initiated a six-year de-velopment plan (1961-66) to raise the gross nationalproduct by 5 percent annually and per caput incomesby 3 percent. These rates are only slightly abovewhat has been achieved before the plan was in.tro-duced. About a third of the planned expenditures,equivalent to $662 millions, will be on communica-tions and roads, while agriculture and irrigationreceive just under a third. To diversify agriculture,the output of rubber, maize, lac, cassava, livestock,and fish products are to be stepped up. Rice pro-duction is expected to increase at the rate of only1.3 percent annually, which seems to imply a gradualreduction of exportable supplies since population isnow growing at about 3 percent. Regional plans

have been prepared within the framework ofthe six-year plan to develop transportation, irrig-ation, and electric power in the less developedn.ortheast section of the country, where one thirdof the population lives, and also in the southernprovinces.

South Viet-Nam, Nepal, and the Philippines havenew over-all development plans under consideration.So far as the agricultural aspects are concerned,the South Viet-Nam plan calls for a 20 percentin.crease in rice production and regrouping the pop-ulation of the flood-stricken delta of the MekongRiver into new villages. The Nepal draft three-yearplan emphasizes tran.sportation, cominunications andelectric power; goals for agriculture include a 75,000ton increase in grain production, and a higher outputof jute and sugar. The five-year program for thePhilippines is wide in scope, but on the side of agri-culture lays stress on achieving self-sufficiency infood production, especially for rice and maize.

A comprehensive ten-year master plan has beenprepared in West Palcistan to combat salinity andwater logging, which have forced millions of acresout of cultivation and adversely affected productionon a larger area. This plan, outside the frameworkof the second five-year plan, is estimated to involvea total expenditure of Rs. 5,900 million (over $1,200million) for drainage and tubewells, as well as forthe generation of electric power; it will benefit about20 million acres. The second five-year plan itselfis being revised to include Pakistan's contributionto the In.dus Basin Development Fund and alsoto take into account the rising costs of other develop-men.t measures.

The establishment of two agricultural developmentcorporations in Pakistan, one in the East and onein the West, was reported last year. About one thirdof the government expenditures in the agriculturalsector are now channeled through them. The WestPakistan corporation has been entrusted with thedevelopment of the Ghulam Mohammed barragearea. A co-ordination board has been establishedto assist the two corporations in co-ordinating theiractivities. The government of the Philippines is

establishing a similar development organization, theMindanao Development Authority, with an appro-priation of 30 million pesos (about $8 million) a yearfor 10 years, to promote the development of thesouthern islands of Mindanao, Sulu and Palawan.These comprise 40 percent of the Philippines' totalland area, but have only 20 percent of the popula-tion.

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Agricultural price policies

Severa.1 countries made substantial changes inprice policies during the year, usually to brin.gproduction more closely into line with plan objec-tives, an.d to give added production incentives tofarmers.

India, the Philippines and South Korea took stepsto stabilize grain prices. For the first time since1955, India established a floor price for wheat ofRs. 13 per maund ($7.31 per quintal), to be imple-mented by purchases by state governments fromfarmers when n.ecessary. To stabilize the consumerprice of rice and to encourage production, the Philip-pines Government is buying rice from farmers andco-operatives, but not from merchants, for sale inareas where consumer prices are high. The Agri-cultural Price Support Act of South Korea authorizesthe fixing of floor prices for specified agriculturalcommodities before the sowing season; the govern-ment being prepared to buy all produce offered atthese prices. So far, floor prices for rice, barley,sweetmpotatoes, peppermint, linen flax, vegetable oils,castorbeans, and cocoons have been announced. Toprotect consumers, maximum prices were also speci-fied for rice and barley, for which official farm priceshad been considerably increased.

Both Ceylon and Japan are making efforts toreduce the high cost to government of subsidieson rice. Ceylon in effect has withdrawn the subsidyon rationed rice from the higher income groups.In Japan, where all sales of rice by farmers are madeonly to the government, a proposal has been putforward so that farmers could dispose of their riceto an.y buyer, though the government support pricewould still remain in force.

In Japan, where agricultural price policies arehighly developed, an Animal Products Price Stabil-ization Law was enacted in October 1961. The lawprovides for minimum and inaximum prices to befixed by government for dairy products, meat, andeggs, to control price fluctuations and to encourageproduction to meet the continuing growth of demandexpected over the next decade. A special foundationwill administer the policy through buffer stockoperations, and will also be the sole importer oflivestock products. In March 1962 the JapaneseGovernmertt adopted a comprehensive policy tostabilize consumer prices which had been risingrapidly. It included stringent firtan.cial measures, aflexible system to regulate the imports of commoditieswhich significantly influence the cost of living, and

measures to adjust production to a changing patternof demand.

A number of new price policies are concernedwith sugar. In Taiwan the guaranteed price of sugarto farmers has been raised to stimulate production.On the other hand, the difficulty of exporting excesssupplies of fairly high cost sugar has led to the reg-ulation of centrifugal sugar production in India.A mandatory cut of 10 percent has been made in theoutput of each mill in 1961/62, but cane prices toproducers were unchanged. Thailand too has enact-ed legislation to regulate sugar supplies. Controlsare to include the maximum output of each mill,minimum price of sugar cane, maximum price ofsugar and dates of the milling season. A sugarindustry fund will be set up to assist planters, and topromote exports which, like India's, have to besubsidized.

To adjust production to demand, the Public Ware-house Corporation of Thailand reduced its purchaseprice for maize by 10 percent and increased the pricefor jute by one third. Maize exports were placedwader govetnment control in order to standardizequality, while minimum export prices were establishedas a stabilization measure. Actual prices, however,remained well above the minimum in 1961. Stepswere also taken to regulate rice exports from Thai-land to safeguard domestic supplies and prices.

There were developmen.ts in fiber price policies inIndia during 1961/62. The floor price for cottonwas increased by Rs. 30 ($6.30) per quintal in orderto encourage production, although also in this caseruling prices remained well above the new supportlevel. On the other hand, fears of depressed pricesfollowing the large jute crop harvested in 1961/62led the Jute Mills Association to set up a bufferstock agency to stabilize the market.

To conclude, there were several instances whereincen.tive prices were given for minor commoditiesin order to stimulate production. For example,the support price for coffee was raised in the Philip-pines to encourage production because of the fastgrowth of imports. In Pakistan, on the other hand,the price of high quality basmati rice was raised tostimulate production for export.

Fertilizers

In most countries of the Far East the main increasesin production sirtce the war llave come from an in-crease in the crop area. Several countries are 110W

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seeking to increase yields by en.couraging the consump-tion of fertilizers. India reduced fertilizer prices in1961/62 by about 10 percent. In the Philippines,fertilizer is being distributed at about one half of thecommercial price under the government's maize andrice program. Ceylon withdrew in 1961/62 the re-striction that only co-operative members who cul-tivated less than five acres could receive subsidizedfertilizers. In South Korea maximum prices werefixed for fertilizer imported by commercial interests.The first fertilizer factory in East Pakistan went intooperation during the past year.

Farmers' indebtedness

Several countries llave recently taken importantsteps to lighten the load of farmers' indebtedness.South Korea put into effect the Usurious LoanLiquidatiort Act to reduce high irtterest debt. Bothlender and borrower were to report outstanding loanswhich carried interest rates higher than 20 percent,and on which the principal was less than 150,000hwan ($115). Upon certification, the AgriculturalBank assumed the debt from the creditor, whowas issued five-year bonds in payment. Debtors areto repay the loan to the bank over a period of sevenyears at 12 percent interest. To increase institutionalloans to farmers the former Agricultural Bank andthe agricultural co-operatives were amalgamated toform the National Agricultural Co-operatives Feder-ation. The new organization will use governmentloaned funds to channel low interest productioncredits to farmers. The Government of Burmacanceled all agricultural loans outstanding on 30September 1961, except loans advanced by the Agri-cultural Bank, and also wrote off unpaid land rev-enue assessments against cultivators.

Co-operative farming.

Co-operative methods in farming have receivedattention in rnany countries during the last year.As already mentioned, Burma is looking into sometype of co-operative farming to rationalize productionmethods. Co-operative farms are being promoted inJapan, as one approach to the problem of creatingeconomically viable farming units. India has setup a National Co-operative Farming Advisory Board,and a start was made with 3,200 pilot co-operativefarms.

Co-operative farming will also be encouraged inPakistan to increase agricultural production throughthe regrouping of small holders and encouraging theuse of agricultural machinery. A system of incentives,including subsidized services, supplies and machinery,and preferential treatment for co-operatives will bedeveloped to help implement this policy. Anotherscheme has been announced for the co-operativesettlement of landless ten.ants and small holders innewly irrigated areas of West Pakistan. In theMultan region of Pakistan, 125 existing co-operativesare to receive 250 tractors over the next three yearsto help their 10,000 farmer members till 140,000acres.

Mainland China

In view of its acute food shortages, Mainland Chinacontinued to give priority to agriculture, while industrywas set the task of aiding agriculture with suppliesof tools and fertilizers. Within agriculture the orderof priorities as set out by the National Peoples Con-gress in 1962 was g-rains, cotton and oilseeds. Thecommune system has been readjusted further as partof the efforts to increase production, and still moreauthority vested in the production team (villagelevel), which in 1962 was made the accounting unitinstead of the brigade (co-operative level) as before.Regional advisory certters have been set up to fo:m-ulate production plans which take fully into consider-ation local conditions. The production teams andsquads (groups of 10 workers) are to make theirown decisions on production rather than to followdetailed directions from the commune headquartersor from the brigade as in recent years.

Unofficial reports indicate that new incentives wereintroduced during the year. For example, ruraltrade fairs have been revived in most parts of thecountry. Originally designed to be held from timeto time to provide an outlet for produce raised bythe better cultivators, the fairs have become estab-lished on a permanent basis and manufactured goodsare also being sold. There are indications that in someareas compulsory deliveries to the state have sufferedas produce finds its way into the " free " marketsat substantially higher prices, as also happenedbefore 1958 when free markets were for a periodabolished only to be revived later. It has apparentlybeen found impracticable to concentrate distributionin the hands of the state.

Further support was given to the agricultural

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sector in an effort to raise production. No workersare to be recruited from the countryside for indus-trial work for the next three years. On the contrary,the shift of urban workers and officials to ruralareas for farm work has been mounting steadilysince the first half of 1961 and is to be con.tinued.

NEAR EAST

Comprehensive plan.s of development, coveringboth the public and private sector, are increasinglybeing adopted by countries in the Near East. Inaddition to the comprehensive plans already beingimplemented in Syria and the United Arab Repub-lic, such plan.s have recently gone into operation. inAfghartistan and Iraq, while in Iran, Jordan., Sudan,and Turkey they are due to commence in the nearfuture. New plans of more limited scope are alsobeing executed or are in an advanced stage of prep-aration in several other countries. In a number ofcountries the planning, machinery has been strength-ened.

Agrarian reform is again receiving much atten-tion in the region. Earlier measures have beenmodified in Syria and in the United Arab Republic,and new programs are under way or in preparationin Iran and Turkey.

There have been further developments towardsregional economic co-operation. A draft agreementon Arab economic unity was signed at the June 1962meeting of the Arab League's Economic Council byJordan, Kuwait, Morocco, Syria, and the UnitedArab Republic. A fund for Arab economic de-velopment has been established by the Governmentof Kuwait with an initial capital of £50 million($140 million) to provide loans for public develop-men.t projects in the Arab countries.

Development plans

The main featur s of the new development p ansare briefly summarized below. In Iraq, the five-year economic plan (1961/62-1965/66), which in-

corporates the four-year interim program, envisagesan investment of Iraqi dinars 556 million ($1,557million). An increasing proportion of the oil rev-enues will be used to finalice over half the plan.Agriculture and irrigation have been allocated 20percent of the total development expenditures; theDibis land reclamation scheme on. the Lesser Zab

will be started to provide perennial irrigation for330,000 hectares.

The second five-year plan of Afghanistan. (March1962 - March 1967) proposes the expenditure, largelyby the public sector, of 44,500 million. afghanis(about $1,000 million), of which about two thirdsrepresent fixed investment. This is substantially inexcess of the realized investment of the first five-year plan. More than one fourth of fixed invest-ment has been allocated to agriculture and irriga-tion, which in monetary terms is seven times thatof the first plan. The general objective of the planis an increase of 8 percent per an.num in nationalincome, while the principal agricultural objectivesare to expand food production and agricultural ex-ports, especially of cotton..

In several countries comprehensive plans will sooncome into operation. The five-year plan of Iran,starting in September 1962, aims at an in.crease ingross national product of 6 percent per annum,fuller use of labor, particularly in rural areas, anda more equitable distribution of income. It is plan-rted to raise agricultural production by 4.5 percentan.d food production by 4 percent annually. De-velopment expenditures over the plan period willamount to 348,000 million rials ($4,594 million), ofwhich rather over one half will be in the publicsector. Of the 36,000 million rials assigned toagriculture (19 percent of public sector investment),more than two thirds is in the basic or " coreprogram. Small irrigation works are included in thecore program because of their rapid impact on pro-duction., while major irrigation schemes (a carry-overfrom the previous plan) are placed in the noncorecategory, and are allocated only 55 percent of thetotal investment in irrigation., compared with 90percent under the previous plan. The irrigatedarea is to be extended by 140,000 hectares, and thewater supply improved on an additional 260,000hectares. Another major change is the increasedemphasis on such sectors as credit (in.cluding asystem of supervised credit), land reform, co-opera-tives and fertilizer and seed distribution schemes;such projects will receive 64 percent of public sectoragricultural development expenditures, compared with27 percent in the earlier plan. The resources ofthe Agricultural Bank are to be doubled.

In Sudan the main objectives of the comprehensiveseven-year plan of economic and social development(1962/63-1968/69) are to expand and diversify themodern sector of the economy. The emphasis ison major irrigation and land settlement schemes

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such as the Roseires dam, the Kasm El Girba schemeand the Managil extension, which absorb 63 per-cent of the planned investment in agriculture. It ishoped to raise gross domestic product by 44 percentand per caput income by 16 percent over the 1960/61level, and to reduce regional income disparities.Gross fixed investment over the period is expectedto reach £380 million, two thirds of which is inthe public sector. Agriculture is to receive 36 per-cent of the total public sector investment. Atten-tion will be given to securing a proper balance be-tween food and forage crops, and also on importsubstituting crops such as rice, wheat, sugar andcoffee. For example, it is planned to meet thedomestic demand of 5,000 to 6,000 tons of ricethrough local production and to bring a large areaof rain-fed land under mechanized wheat cultiva-tion..

The comprehensive five-year program of econ.om-ic development in Jordan (1962/63-1966/67) hasthe main objectives of an. 8 percent annual increasein gross domestic product, a 20 percent in.creaseemploymen.t, and a reduction in the courttry's de-pen.dence on foreign aid. The program envisagesan investment of 127 million Jordanian dinars ($356million), 53 percent in the public sector. Agriculturehas been allocated one third of total investmentand 43 percent of the public sector program. Waterresources development is to receive about 90 per-cent of public-sector development expenditure inagriculture.

In Turkey a comprehen.sive five-year plan to beginin February 1963 is in preparation; it is un.derstoodthat the aim is to raise per caput income by 4 per-cent per annum, for which the investment require-ments have been estimated at $6,000 million.

New plans covering the public sector only includethe five-year program of economic development inCyprus. The program is based largely on the pro-posals of a United Nations survey mission and hasset an investment target of £62 million ($174 mil-lion) for 1962-66, of which £20.9 million ($59 mil-lion) is for agriculture. This compares with a totalrealized investment for the five years 1957-61 of£12.4 million, including £4.7 million ($13 million)in agriculture. One half of the proposed develop-men.t expenditure on agriculture is for the conserva-tion and utilization of underground and rain water.An economic planning commission has been estab-lished.

In Saudi Arabia a two-year interim program(1962-63) is being implemented, consisting mainly of

prein.vestment surveys of water and mineral resources,and of training and research projects in prepara-tion for long-term planning. The Ministry of Plan-ning of Lebanon has been reorganized and strength-ened, and the preparation of a five-year publicinvestment program is nearly complete. A five-year development program is also in preparation inLibya. In Yemen a development council has beenestablished.

Land tenure

In the United Arab Republic a new law has loweredthe maximum ownership of land per family from200 feddans to 100 feddans (80 to 40 hectares),prohibiting the renting of more than 50 feddans(20 hectares) per person. It reduces by one halfthe installments on the principal and interest payableon lan.d distributed under the earlier agrarian re-form law. The distribution of Wakf land is alsoto be accelerated. Under the new charter, the gov-ernment has ruled out the collectivization of land.

Under a new law promulgated in Iran in January1962, each landowner is permitted to own only onevillage, the remainder being bought by the govern-ment. The owners will receive compensation as-sessed on the basis of taxes paid plus 10 times theannual gross income in 10 annual installments, whilethe farmers to whom the land will be sold will maketheir repayments in 15 annual installments. Member-ship of co-operatives is compulsory for the newholders. Thus in Maragheh, where the new law isnow being applied, a co-operative has been estab-lished for every 10 villages of the 300 affected. Itwill provide seeds, fertilizers, tools, and tractors. TheAgricultural Bank has been authorized to play anactive role in the development of these co-operatives.

In Syria the agrarian reform law of 1958 has beenrevalidated, but with some amendments. Maximumownership has been fixed at 80 hectares of irrigatedland, and 300 hectares of unirrigated land, with theexception of the provinces of Hassetche, Dairaz-Durand Al-Rashid, where the maximum is 450 hectares.Each member of the landowner's family can alsoreceive 10 hectares in irrigated areas and 40 hectaresin unirrigated areas. The new holders have to payfor their land in 10 annual installments if the purchaseprice is below £S 100,000 ($28,000) or in 15 yearsif the cost is higher.

A draft land reform bill prepared in Turkey pro-poses that the maximum ownership of land should

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be 506 hectares for dry land and 202 hectares forirrigated land, with certain regional variation.s. Landheld above the limit would be purchased by the stateand distributed. The bill stipulates that no farmfamily shall own less than 15 hectares, and includesmeasures to prevent the further fragmentation ofholdings.

Price and marketing policies

Among the far-reaching economic measures de-signed to further socialization that have been introd-uced in the United Arab Republic, the Egyptian Cot-ton Commission has been set up to purchase cottonfrom growers at prices fixed by the government, andthe Egyptian Cotton Organization to sell the cot-ton either for export or for sale to local textile pro-ducers. A public organization has been set up forthe promotion of exports. Multiple exchange ratesfor exports and imports have been abolished, butall exports and inward transfers of currency nowenjoy a 25 percent premium.

There have been rather few changes in agriculturalprice policies. In Lebanon, the government hasfixed minimum prices for silk cocoons and fruit,and the Fruit Office will in future be responsiblefor purchasing directly from producers all fruitwhich is to be exported. In Turkey, the purchaseprice of wheat, which was raised in June 1961 be-cause of drought, had to be increased again in Sep-tember 1961 and then again in June 1962 becauseof higher prices on the free market of domesticwheat and of wheat imported under Public Law 480.The support prices for coarse grains were also raised,but those for sugar beet reduced. The governmentalso started the support purchase, but not at uniformfixed prices, of animals sold by farmers. The pro-ducer price of cotton in Afghanistan has been raisedby 20 percent. In Libya, the government has decid-ed to fix guaranteed prices for wheat, barley, andolive oil.

AFRICA

Nearly all African countries are already operat-ing, or are formulating, economic development plans.Some of these are comprehensive, including theprivate as well as the public sector, and a few arebased on long-term perspective plans or economicappraisals. Others are more restricted in scope and

limited to the co-ordination of public developmentexpenditures and investment. Important develop-ments in respect of land tenure and settlement havetaken place in a number of countries. Furtherprogress has been made in the movement to buildinstitutions for regional co-operation in the econom-ic and other spheres.

Developtnent plans

New long-term development plans have come intooperation in Tunisia and Mali. The Tunisian tenyear perspective plan (1962-71) aims at raising grossdomestic product by 6 percent yearly, and agricultur-al production by 5.5 percent per annum, comparedwith the current rate of rather over 2 percent. Agri-culture is to receive about one third of the totalinvestment of 1,177 million dinars ($2,802 million).A principal objective is to achieve and maintainself-sufficiency in the main food requirements. Agri-cultural production is also to be diversified througha shift from cereals to higher-value crops. The co-operative system will be extended, and a comprehen-sive, training scheme for agricultural technicians andextension workers started. Mechanization is to bewidely introduced. A ceiling will be placed onindividual ownership of irrigated land, and anyarea above this limit redistributed, though the largeFrench estates which are being purchased by thegovernme,nt will be exploited directly by the state.A three-year operational program based on theperspective plan is being implemented.

The five-year development plan of Mali (1961-65)has as its general objective an annual increase ingross domestic product of 8 percen.t. Investment isestimated at CFA fr. 65,000 million ($263 million).Within agriculture, which is one of the prioritysectors, the developmen.t of co-operatives is givenspecial importance. Several of the Light industriesto be established will utilize agricultural raw materials,notably cotton, fcr which production is to be increas-ed from 9,000 tons in 1959 to 55,000 tons in 1965,and groundnuts which are expected to be increasedfrom 125,000 tons to 200,000 tons. It is also proposedto expand the production of paddy from 188,000tons to 322,000 tons and to increase the sheeppopulation from 800,000 in 1960 to 1,800,000 in 1965.

The three-year program of Niger (1961-63) proposeda government investment of CFA fr. 15,000 million($61 million). Livestock and crop yields, partic-ularly on the lan.d under staple food crops, will

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be raised through encouraging improved methods offarming. Swampy lowlands and river valleys will

be reclaimed and put urtder cash crops, largely forexport. Improvements in the marketing of vegetables,tobacco, and hides and skins for example, are alsoemphasized.

The development program of Mauritius, originallydue to end in 1962, has been extended to 1964/65in order to take account of recent developmentproposals and to repair the 1960 cyclon.e damage.

The first national plan of Nigeria (1962-68), com-prising the integrated capital expenditure programsof the federal government and the three regionalgovern.ments, has been announ.ced. The total govern-ment capital expenditure over the six-year periodwill amount to L Nig 676.5 million ($1,894.2 million),of which the federal development program absorbs£Nig 412.5 million ($1,155 million) an.d those ofthe three regional governments Nig 264 million($739 million). Of these totals, primary productionhas been allocated E Nig 20.5 million. and Nig 25million. ($57.4 million. and $70 million) respectively.The scope of the federal government program willno longer be confined largely to projects of exclusivefederal concern, but will cover all new activitiesindispensable to rapid growth. The first stage ofthe Niger dam scheme at Kainji, the major projectin the federal program, will be completed in thisplan.ning period at an estimated cost of Nig 68million ($190.6 million). Although it is primarilya power project, agriculture too will bertefit. TheNiger Delta Development Board receives Nig 2.3million ($6.5 million) to undertake a systematicsurvey of the development possibilities of the Delta.

The Western Nigeria Development Plan, the onlyregional plan so far available, aims at diversifyingthe economy, both within agriculture and awayfrom agriculture, and at a large expansion in employ-ment opportunities. Primary production is to ab-sorb 20 percertt of the total capital expenditure ofE Nig 90.3 million ($252.8 million). Of the agri-cultural allocation, investment in the developmentof tree crops, mainly for export, absorbs Nig 5.6million ($15.7 million), including E Nig 1 million($2.8 million) for equity participation by the Gov-ernment in plantation projects promoted by over-seas interests, and E Nig 2 million ($5.6 million)for the completion of the Development Corporation'sexisting agricultural schemes. The other major allo-cations are E Nig 5 million ($14 million) for agri-cultural credit, and Nig 5.6 million ($15.7 mil-lion) for a scheme to establish young men trained

at Farm Institutes on co-operative farm settlements.The Government of Uganda has raised the invest-

ment target of its public investment program fromthe £52 million ($145.6 million) suggested by therecent International Bank mission to £54.2 mil-lion ($151.8 million). The present plan, followingthe mission's report, regards agriculture as providingthe main opportunities for economic growth in thenext five years. About 13 percent of total publicinvestment is allocated to agriculture, which sub-stantially exceeds the present allocation. Of thetwo main export crops more emphasis will be laidon cotton than on coffee, but to reduce the depen-dence of the economy on these two products cropproduction will be diversified and livestock developed.

In Ethiopia a comprehensive second five-year planwill be launched in September 1962; it is understoodto stress agriculture an.d small-scale industry. APlanning and Development Board with a permanenttechnical secretariat has been established in theoffice of the Prime Minister.

A draft four-year plan has been published by theGovernment of Northern Rhodesia setting out thedevelopment policy and the projected public-sectorcapital expenditure. Of total public investment of£30 million ($84 million), rural economic develop-ment and settlement on crown lands has been allo-cated nearly £11 million. ($30.8 million) and Africaneducation and staff training £5 million ($14 million).In Nyasaland, a three-year development plan hasbeen placed before the legislature; the biggest itemin the program is education, and it is proposed todevote £1.5 million ($4 million), out of the totalexpenditure of £19 million ($53 million), to agricul-ture and fisheries.

In Sierra Leone a draft ten-year plan is awaitingapproval, and the International Bank has beeninvited to send a mission to study the develop-ment needs and resources of the country. In Zan-zibar, the government has placed before the legis-lature a report on the economic development ofthe protectorate, calling attention to the problemsencounte:YA in the crop diversification scheme, andrecommending the establishment of a land bankto assist selected farmers.

A number of other countries are currently engagedin formulating development programs. In Dahomey,a twenty-year perspective plan which will be sub-divided into medium-term plans of five-year periodsis in preparation. Meanwhile, a four-year ruraldevelopment program (1962-65), whose main objec-tives are to increase agricultura.1 production and to

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impart a rural bias to education, is being carriedout. In Upper Volta the general policy and over-all targets of the first five-year plan (1963-67) havebeen determirted, and work is proceeding to fillout the general outline.

With the suspension of the five-year developmentprogram (1959-64) of Ghana, the recently establishedNational Planning Commission has been entrustedwith comprehensive planning functions including thepreparation of a new over-all seven-year plan whichis expected to be ready by 1963. Meanwhile, Ghanahas started work on the Volta river project estimatedto cost $324 million altogether.

In Somalia, a Planning and Co-ordination Com-mittee for Social and Economic Development hasbeen established in the Prime Minister's office.

Land tenure

Two new land settlement schemes have beenstarted in Kenya which involve a radical changefrom the policy of reservin.g certain agricultural areasfor Europeans. Under the first, 180,000 acres willbe purchased from European owners for resale inunits of 15 to 100 acres each to 8,000 African farm-ers havin.g some capital, previous agricultural exper-ience, and managerial capacity. This project is

expected to cost £8.8 million ($24.6 million) ofwhich over one half will be financed through loansand grants from the United Kingdom; the rest willcome froni an International Bank loan ($8.4 mil-lion) which will be used for developing the landprior to its sale to the new owners. Under theother scheme, financed entirely by the United King-dom, 12,000 African small holders are to be settledwithin the next two years, mainly in the Europeanfa-ming areas of the Kenya Highlands.

In Southern Rhodesia, the 3,000 African farmerson the waiting list for the purchase of land are tobe provided with suitable farms and a start has alreadybeen made on the worlc of subdivision on " unre-served land " where many of these farms will belocated. Negotiations have begun for the purchaseof 500,000 acres of privately owned land to be resoldto African farmers.

The Government of Tanganyika has announcedits ireert'ion to make a far-reaching change in landtenure rela'ionships. Freehold title will be convertedinto some form of long-term leasehold at a nominalrertt, both because freehold title is considered tobe an alien concept and also because it is claimed

that a leasehold which incorporates developmentconditions will lead to the optimum development ofthe land.

In Ghana a policy of establishing large-scale co-operative farms is being pursued, as it is consideredthat the land will be farmed more efficiently in thisway than under individual holdings, which are oftenuneconomically small and undercapitalized. In someareas farms are being merged to form single holdingsof 200 hectares or more on which it is proposedto produce a wide variety of food and export crops,other than cocoa.

Price and marketing policies

There have been a number of changes in agricul-tural price and marketing policies. Because of thecontinuing fall in prices of coffee and cocoa, whichhas placed a strain on stabilization funds, producerprices of these commodities were reduced in a numberof countries in 1961/62. As well as cocoa, producerprices of groundnuts an.d cotton were reduced inNigeria. Producer prices of cocoa were maintained,however, in Ghana. Ghana is now selling cocoaonly in Accra, and Nigeria in Lagos as well as inLondon. In Tunisia cotton prices were increasedas well as those for oats and sorghum, while aproducer price for olive oil has been fixed.

Under a five-year agreement with the Ivory Coast,France has undertaken to import 100,000 tons ofcoffee each year at a relatively high price, unrelatedto prices on interrtational markets. Tariff preferenceswill also be extended to wood and cocoa, and Francehas agreed, in addition, to buy bananas from theIvory Coast.

To replace its quota under the CommonwealthSugar Agreement, South Africa has negotiated withthe United Kingdom a five-year bilateral agreement(1962-66) under which the United Kingdom willpurchase 150,000 long tons of raw sugar each yearat a fixed price of £ 35.15 ($98.42) per ton. SouthAfrica has agreed that from 1964/65 on.wards salesof Swaziland sugar in South Africa will not berestricted to the present limit of 80,000 short ton.s,but to 8.5 percent of the total sales of South Africanand Swaziland sugar. While the producer price ofwheat in South Africa was increased slightly in1961/62 to offset an increase in production costs,maize producers received a lower price, and the pricesof dairy products were reduced substantially to stimu-late consumption and reduce the accumulated surplus.

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Regional economic co-ordination

Further efforts have been made to promote re-gional economic co-ordination in Africa and tocreate regional institutions. Meetings were held inParis late in 1961 and in Brussels early in 1962between the European Economic Community andthe twelve African associated members to frame anew convention regulating their relations whichshould replace the present one due to expire inDecember 1962.

The twelve French-speaking countries which, at theirmeeting at Yaounclé in March 1961, established theAfrican and Malagasy Organization. for EconomicCo-operation (OAMCE), signed at Tananarive inSeptember 1961 the charter of the African andMalagasy Union (UAM) which is open to all inde-pendent African states. A general secretariat has beenestablished as well as four technical committees onscien.tific and technical research, monetary problems,foreign trade, an.d econ.ornic and social development.

These 12 states, together with Ethiopia, Liberia,Libya, Nigeria, Sierra Leone, Somalia, Togo, andTunisia, met in Monrovia in May 1961 to discussAfrican co-operation an.d appointed a committee ofexperts to work out a concrete program and themachinery for economic, technical, educational, andscientific co-operation among African countries.This committee in a series of recommendationsaffirmed that the creation of an African-Malagasycommon market, whose essential organs would bea customs union., an investment fund, a paymentsunion, and a regional price stabilization fund, wouldbe the most concrete eviden.ce of the solidarity ofthe members. The parent body, meeting at Lagosin January 1962, adopted, in principle, a resolutioncreating a new Inter-African and Malagasy StatesOrganization. The proposed charter of this Organ-ization lays down the principles and purposes ofco-operation among the African states and alsosuggests the establishment of an assembly of Headsof State, a council of ministers, and a general secre-tariat. It was decided to set up a standing com-mittee of finance ministers who will be responsible forthe creation by stages of regional customs unions,the regulation of currency exchan.ges, price stabili-zation for primary products, and the pooling ofstatistics.

At the first session in Conalcry of the economiccommittee of the Casablanca group, consisting ofGhana, Guinea, Libya, Mali, Morocco, the United

Arab Republic, and the Provisional Government ofthe Algerian Republic, it was resolved to establisha permanent economic planning council and, withinfive years, a free t:ade zone, provided that dutieson certain commodities were reduced by membersin a specified period. Resolutions on reciprocalpreferences, on an African development bank andpayments union, and the adoption of a commonexternal economic policy were also approved bythe committee.

The Equatorial CUStOMS Ulli011, namely the CentralAfrican Republic, Chad, Congo (Brazzaville), andGabon, decided at a meeting in Bangui in June1961 to adopt a common external tariff, to holdperiodic consultations to harmonize fiscal structures,and regulate trade exchanges through a specialconvention.

FISHERY POLICIES

In many of the more developed countries (forexample, in Denmark, France, Japan, and Sweden)governinent assistance for fisheries has been directedmainly toward improving the economic structure ofthe industry. Fishery credit policies in these coun-tries have been designed primarily to make theindustry more competitive through the moderniza-tion of facilities. At the same time, emphasis hasbeen placed on experimental and exploration fishingaimed at locatirtg resources which can be exploitedmore economically and at developing less costlymethods of fishin.g.

Until technological improvements result in increasedptofitability of operations, however, the governmentsof some countries will have to continue, or evenincrease, direct financial support, because of specialhardships experien,ced by some sectors of the industry.Thus, in the United Kingdom, fishery subsidies werefor the first time made available also to the distarttwater fleet. Iceland and Norway, as a result ofpoor catches in certain branches of the industry,had to provide supplementary appropriations in 1961to subsidize the sectors concerned. Iceland, in addi-tion, appealed to the OECD to examine its diffi-

culties in marketing fish products, especially frozenfillets, in member countries.

Exclusion from customary fishing grounds follow-in.g the extension of fishing limits has contributedto a worsening of economic conditions in somefisheries. In this connection, the new subsidies inthe United Kingdom include one for vessels of the

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near and middle water fleet which liad traditionallyfished for part of the year in the waters off the FaeroeIslands now closed to them. Extension of limitshas created problems evert for the fishing fleets ofthe countries which have closed adjacent waters tocertain types of operation.s. Thus Iceland's trawlerfleet, barred from rich grounds within the 12-milelimits, had a bad year and turned to the governmentfor relief. The government saw itself faced witha choice of either making an exception for Icelandictrawlers by allowing them to enter the limits orprovidin.g new funds to assist the trawling industry.

In general, the question of fishing limits, afterbeing for several years in the forefront of internationalattention, was somewhat in the background during1961. This was partly because of the negotiationson the expansion of the membership of EEC, theoutcome of which would affect competitive relation,ships in some of the leading markets for fish. Whileno further changes in fishing limits took place, anumber of countries (for example, the United King-dom, the U.S.S.R., the Federal Republic of Gennany,and Poland), entered into negotiations with a view toobtaining temporary fishing rights in waters fromwhich they had recently been excluded.

Negotiations were also carried out un.der variousfishing conventions. The U.S.S.R. and Japan., forexample, sought agreement on the management ofthe salmon and the king crab fisheries, two of thefisheries of major interest to them.

While governments in the more developed countrieshave continued to rely in their fishery programspreponderantly upon measures stimulating productiv-ity, in the less developed countries developmentefforts have required more radical forms of assistance.Financial concessions and protective measures haveconsequently played a much more prominent partin these countries.

Recent measures have included new loan schemes(for example, in Sierra Leone); the lowering ofduties on fishing equipment and requisites (duty-free import of certain types of vessels into Argentina,lower tariffs on the imports of nets into Ecuador);tax exemptions for new industrial enterprises (fish,meal plants in Chile and Mexico); exe:mption fromexport duties (for example, fishmeal exports fromAngola); price reductions for fuel (diesel oil in An-gola). Newly enacted protective measures (in Bur-ma, Iran and Nigeria) have, in many instances, thedouble purpose of saving scarce foreign exchangeand of strengthening developing industries.

Technological help to bring about improvements

in facilities and methods used in production., pro-cessing, and distribution, has not been neglected,however, nor has the need to establish a soundadministrative organization. Libya, for instance,recognizing the importance of a suitable administra-tive structure for the formulation and implementationof development plans, established new offices respon-sible for fisheries matters in 1961.

The more developed countries have made increasin.gcontributions to fisheries development in the lessadvanced regions. In many instances these contri-butions have taken the form of direct investmentin the industry. Grants and loans have also beenmade for fisheries development, and joint ventures,providing for collaboration with less developed coun-tries in the exploitation and utilization of fisheryresources, have increased. All the importartt fishingcountries have participated to some extent in theseefforts, and almost all less developed countries witha seashore or with significant inland fisheries havebeen among the beneficiaries.

FOREST POLICIES

Countries continue to elaborate or revise theirforest policies, or to establish forestry plans orprograms at more or less long term, the trend beingtoward a closer integration with general plans foreconomic and social development. However, it doesnot seem that enough atten.tion is paid to the imple-mentation of these plans, either because governmentsgive them less priority than they give to plans inother sectors, or because basic data, technicians andfinance are lacking, and the economic and institu-tional conditions remain unfavorable for forestrydevelopment.

In the first of these cases, only a conscientiousrecognition of the importance of the economic andsocial role of the forest can bring the public authoritiesto give the necessary priority to the forestry sector.In this connection forestry services are trying tomake a social evaluation of forest works in orderto show the importance of the forestry and forestindustry sectors in the over-all economy. In thcsecond case, the forest services are trying, simul-taneously with the elaboration of forestry programsintegrated into economic and social development, tofacilitate their implementation by improving dataon forest through inventories, by developing edu-cational and vocational training and by makingavailable the necessary funds.

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In Europe, in order to increase timber production,particular importan.ce is given to the plan.tation ofquick-growing species, afforestation, and the revisionof the working plans of the forests-in-use. Themain feature of these working plans is the flexibilityof the regulations applicable to the forest, from thestandpoint of production as well as silviculture.This flexibility is the result of new inventory processeswhich permit continuous research into the rotationsgiving the maximum utility. In France, the fourthplan of economic and social development (1962-65)gives more emphasis to the forest than did the preced-ing one; this plan not only sets out objectives, suchas an increase in production by 1.25 million cubicmeters, and a program for erosion control and soilconservation, mountain grassland improvement andnatiortal park development, but also specifies thevarious institutional pleasures and financial meansfor reaching these objectives. Detailed informationis given on the revision of working plans, forestequipment, forest inventories, forest ownership, vo-cational training, and tax policy.

In Yugoslavia, within a long-term perspectiveplan, the five-year plan envisages an increase in thevolume of fellings from 19 5 million cubic metersin 1960 to 22.5 million cubic meters in 1965, or arise of 15 percent, with a simultaneous increase inthe output of industrial timber from 6.4 to 9.2 millioncubic meters, or 44 percent. Other objectives includethe improvement of degraded forest and scrub onan area of 200,000 hectares; the planting of conifer-ous species in broadleaved forest on an area of100,000 hectares; the clearing of degraded forestsand their replacement with poplar artd coniferousforests with the application of intensive methods,on an area of 25,000 hectares; the creation of 50-75,000 hectares of forest plantations, primarily withpoplar. An over-all sum of 75,000 million dinars,or 15,000 million dinars a year, has been earmarkedfor the execution of these schemes, which is twiceas much as was invested in previous years.

In Finlartd, the state Council has established aplanning committee responsible for the elaborationof an over-all plan for the improvement of the forestand the increase of production. The report of thiscommittee recommends that the present allowablecut of 45 million cubic meters should be raised to47 million cubic meters for 1963-70, and to 48 millioncubic meters for 1975-82, provided that artificialregeneration, drainage, thinning, and better loggingtechniques are undertaken.

In Poland, long-term development planning and

general outlines for annual plans, as well as forestinspection, are still the main task and responsibilityof the Ministry of Forestry and WoodworkingIndustry. As the allowable cut has been exceededin recent years, fellings in the next few years in theforests under the management of the ministry willbe decreased step by step from the present 15.2million cubic meters of industrial wood to 14 millioncubic meters in 1965. The execution of these p!ansand the preparation of detailed working plans have,however, been decentralized both in the forestryand woodworking industries.

In the U.S.S.R. there is clear progress towarddecentralization as compared with the period before1955. The general outlines of development planningand inspection in forestry are the responsibility ofthe forestry sections of the Federal Council of NationalEconomy and of the corresponding national councilin each republic.

While some countries in the Near East have suc-ceeded fairly well in elaborating forestry programs,most of them only have a forest policy which aimsbroadly at satisfying immediate needs through theplantation of quick-growing species, at protectingthe forest against illegal cutting and settlement,an.d at developirtg educational and vocationaltraining in order to make possible the recruit-ment of foresters and technicians, who are alwaysneeded. However, because of the lack of financialmeans and technical staff, these policies are notfully implemented, and the necessary institutionalmeasures are not taken. In Sudan a seven-yearforest development plan has been elaborated andwill be integrated with the other sectoral plans;a provincial administration act facilitates the appli-cation of forest policies and programs drawn up bythe central government by delegating certain re-sponsibilities to provincial authorities. In Lebanona ten-year plan for the physical and social improve-ment of the mountain areas, mainly through affor-estation and soil conservation, is under way. InSyria a working plan has been prepared for theLatakia forest which, together with the poplarplantations, is the main source or timber for all

the country.In order to meet the requirements for wood prod-

ucts, wood-using industries have developed rapidlyin the Far East, especially in pulp and paper produc-tion. New pulp and paper mills are being set upin India and elsewhere, thus partially offsetting theunfavorable balance of supply and deman.d for pulpand paper in the region. Some of the pulp and paper

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mills under construction or planned will use ricestraw or bamboo as raw material in addition to wood.However, in Japan the expected timber shortagehas already manifested itself, and emergency stepshave been taken for the cutting of more domestictimber, the import of additional foreign timber, andthe production of more waste wood chips for pulp-ing purposes. In other countries governments arepromoting the creation of artificial plantations ofquick-growing species, and showing interest in thedevelopment of mechanical logging and forest roadconstruction. Policy has been changed in orderto assure a continued supply of raw material forindustries, formerly based on short-term corttracts.But in some countries, namely Burma, Thailand,and the Philippines, teak forests continue to beovercut, owing to the lack of proper working plans,and a sharp decrease in production is expected inthe near future.

Especially in the Lower Mekong basin area, someattempts at forest Unprovement have been made byregulating shifting cultivation. A new game law hasbeen promulgated in Thailand in order to preservewildlife species which are on the verge of extinctionparallel with the rapid disappearance of forests anddue to the lack of legal control for the protectionof nature.

Forest policy has been increasingly integrated withland-use policy in the Far East, within the frame-work of general economic development. Water-shed management is receiving more and more attentionin most countries in the region, owing to growingpressure and competition in land use, especially inthe countries where the decrease in land produc-tivity is combined with soil erosion. In some countriesstrong emphasis is being placed on the establishmentof farm woodlands to supply fuelwood as well aswood for other uses on the farm.

Latin American countries are becoming moreconscious of the n.eed for a stronger program of affor-estation and industrial development, and new creditplans are being prepared for more coniferous plan-tations or forest renovations. In Argentina thestates now apply the national tax exemption forplantations and related investments. In Paraguaya forest economic section has been proposed in theIndustrial Development Bank for extending creditfacilities for sawmills, the lumber trade and forestdevelopment. In Venezuela, Argentina, Paraguay,and Bolivia, steps are being taken to set up throughthe forest services a federation of lumber associationsin Latin America, which will serve as a clearing

house for information artd arrange marketing agree-ments between countries in order to develop intra-regional trade.

In federal countries, especially Argentina, there isan increasing tendency to return the administrationof public land to the states themselves. As thesestates do not yet have forest services in operation,training facilities are being given the highest priority.Forestry schools an.d research institutes were openedthis year in Brazil, Argentina, and Chile, whileothers are in preparation..

Following the operation of recent colonizationprojects in the Andean region of Ecuador and Peru,the participation of the forest services has beenassured in the national plannin.g of the resettlementof upland populations, where the lumber an.d fuel-wood shortage is very serious.

Some recent developmen.ts in North America de-serve consideration. In Canada, the Forest Act hasbeen revised, and the Department of Forestry, headedby the Minister of Forestry, has been established.The minister is now responsible not only for researchleading to the protection, management, and utiliza-tion of the forest resources of the country, and thebetter utilization of forest products, for forestrysurveys, and for the wise use of the forest resources,but he also may enter into ag,reements with thegovernmen.t of any province for forest protectionan.d management or forest utilization. Under suchagreements the minister can make contributions tothe provinces equal to half the amounts spent bythem in establishing forest access roads and trailsfor the attainment of adequate fire protection, aswell as other aspects of forest management, and inthis way he can influence the forest exploitationpolicy of the provinces. In the United States, wild-life,!national parks, and recreation are more and morethe order of the day, and a First World Conferenceon. National Parks was being orgartized in Seattle inJune/July of this year. A Wilderness Bill, the pur-pose of which is to establish a wilderness preserva-tion system, is nol,v under consideration.

The economic outlook for the remainder of 1962and for 1963 in the leading industrialized countries,which account for the bulk of world import demandfor agricultural products, is somewhat unclear at

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In Africa the main problems facing the new inde-pendent governments are the delimitation of a foreststate domain in a period of econ.omic and socialgrowth, and the education and vocational trainin.gof young people to staff the forest services. InLiberia, which is in the closed rain forest belt, thenational forest has been delineated (1 6 million hec-tares, 17 percent of the total land area) through theinterpretation of aerial photographs. It is estimatedthat another 1.6 million hectares of primary andsecondary forest are located outside the nationalforest. Under the new forest land use policy aninventory of this area has to be made by the conces-sionaires, to whom a permit for forest survey isissued. On completion of the inventory the con-cessionaire may negotiate a contract for forest prod-uct utilization for selected tracts within the areaof option. In Gabon, which is practically the onlyproducer of okoumé, the main objective of forestdevelopment is focused on sustained output of thisproduct. For the proper exploitation of the forestthe government has initiated the division of theforest into two zones: a zone of 2 million hectaresof easy accessibility to be utilized by Gabonnationals, and a zone further in the hinterland re-quiring heavy investment for construction, open tolarge foreign enterprises.

Considerable efforts are being made in Africa todevelop forestry education and training at threelevels: for forest guards, rartgers, and professionalforesters. For the time being it is planned to estab-lish forest faculties within the framework of theexisting universities, and to raise the level of forestguards' schools to that of rangers' schools throughinternational aid. Wildlife management continuesto retain the attention of various African govern-men.ts. In east Africa wildlife management, gamecropping an.d game farming are already being widelyurtdertaken. In west Africa, hunting regulationscontinue to be the basis for wildlife management,though in parts of Mali an attempt is being madeat proper wildlife management plan.ning.

the time of writing. In general, however, the rateof growth of economic activity in these countriesseems likely to be slower than had been expectedearlier. Supplies of most agricultural products are

Short- term outlook

expected to remain ample, and there seems no reasonto expect any great increase in demand that wouldhalt the decline in prices on world markets.

AGRICULTURAL PRODUCTION OUTLOOK FOR 1962/63

The liraited data available so far suggest that in1962/63 the rising trend of world agricultural pro-duction will probably be resumed with a furthersizable increase. Climatic conditions seem generallyto have been more favorable than in. 1961/62, whenbad weather was widespread.

Production in western Europe should surpass thehigh level of 1960/61. Large grain harvests areexpected in most parts of the region, but beet sugarproduction is n.ot likely to show much change fromthat of 1961/62. Livestock numbers have continuedto rise in most countries; while there may be someslowing down in the rate of expansion of the region'sproduction of beef and veal, poultry meat, an.d alsomilk, considerable increases are likely for pigmeat.

Conditions have been less favorable in eastern.Europe, and bad weather, especially the cold springand summer drought in the Danube basin, are re-ported to have greatly reduced the production ofgrain.s an.d sugar beet. In the U.S.S.R. grain pro-duction is expected to exceed the 1961 level. Thegrain area, especially of maize and pulses, has beenconsiderably expanded, an.d the area under grassescorrespondingly reduced. However, difficulties areagain reported in Kazakhstan and some other areasas a result of insufficient maintenan.ce of agriculturalmachinery.

In the United States a further fall of 14 percentis forecast in wheat production in 1962/63, with thereduction in acreage under the Wheat Stabilization.Plan. The production, of coarse grains is also expect-ed to decline further, with the extension to barleyof the measures that were successful in limitingmaize and sorghum output in 1961/62. United Statescotton production is likely to be close to the levelof the last two years. A further large expan,sion isexpected in pigmeat production., but beef and vealproduction will probably increase only slightly, andpoultry meat production may be adjusted down-ward following recen.t price declines. In Can.ada,while grain production will recover substantially overthe drought-strickert 1961/62 level, a below-averagewheat harvest seems possible in view of the depletionof soil moisture reserves in the prairie provinces.

Little information is yet available on probable

85

levels of production in 1962/63 in the other regionsof the world. In the countries of n.orthwest Africarainfall has been good, and grain production appearsto have recovered sharply, while this should alsocoincide with the upswin.g in the two-year productioncycle for olive oil. In the Near East, as a resultof abundant and well-distributed rainfall, large graincrops are finally expected in Iraq, Leban.on, andSyria, three of the countries that have been hit bycontinuous droughts over the past four years, thoughin Jordan conditions have subsequen.tly become lessfavorable after abun.dant rains early in the season.Turkish wheat production is expected to be largerthan the poor crop of 1961/62. Because of favorableweather an.d a low degree of pest infestation, afurther record cotton crop is expected in Sudan,an.d the harvest in the United Arab Republic is almostcertain to be a great deal larger than last year.

In the Far East, assuming normal weather forthe rese-of the season., the gradual increase in theproduction of foodgmins should continue in 1962/63outside Mainland China, where, however, adverseweather is reported to have seriously affected spring-sown grain.s and other food crops for the fourthsuccessive year. The jute acreage in India andPakistan is less than in 1961/62, when the largecrops resulted in declining prices.

In Latin America, a smaller coffee crop is expectedin Brazil in 1962/63; to offset the lower productionand higher costs, the Coffee In.stitute has increasedpurchase prices. In Argentina an appeal has beenmade to farmers to increase the area under wheat an.dmaize by 1 million hectares each. The efforts beingmade to diversify agricultural production in Cuba,as well as a number of other factors, appear to beexerting a downward influence on sugar output,which is unlikely to regain. the 1960/61 level in 1962/63.

COMMODITY PROSPECTS

The general tone of the world grain market appearslikely to remain firm durin.g 1962/63. However, thechan.ged distribution of supplies may result in adecrease in the world wheat trade for the first timein four years. A larger crop in western Europemay lead to lower imports, and the import require-ments of northwest Africa and the Near East willalso be considerably reduced compared with recentyears. Shipments of wheat to India and Pakistanshould contin.ue at about last year's level and therewill again be substantial imports in.to Mainland

China, though the exact volume is uncertain. Onbalance, total wheat exports in 1962/63 may fall to41 million tons, or even lower, as compared withan average of 43.2 million ton.s in 1960/61 and1961/62. 011 the other hand, the volume of theworld trade in coarse grains is expected to remainabout the same as in 1961/62, for which the provi-sional estimate is 24.5 million tons. In both cases,the volume of trade should be sufficient to causefurther reductions in end-of-season stocks in theNorth American exporting countries.

With the reduced 1961/62 harvests in some export-ing countries and stocks gen.erally low, exportablesupplies of rice are smaller than last year and thevolume of trade will probably show a further moder-ate decline. As import demand has been maintained,especially in Indonesia and elsewhere in Asia, " freeinternational prices showed a pronounced increaseduring the first half of 1962, rising to their highestlevel for eight years. Stocks carried over into 1962/63are therefore likely to be small, and the outlookfor the season will be determined by the size of thenext harvest. There are no expectations that Main-lan.d China will export rice on an.y appreciable scaleand an early resumption of Viet-Nam's sales seemsdoubtful. International markets for rice should thusremain gen.erally stron.g in 1962/63.

Few significant changes are anticipated in the worldsugar situation in 1962/63. In view of the domesticharvest situation, western European demand shouldbe maintained at roughly the same level as in 1961/62,an.d the Sino-Soviet area will doubtless continue toabsorb the bulk of the Cuban surplus. As indicatedabove, this is likely to remain lower than in thepast, mainly because of the program of crop diver-sification that is being pursued. Under the newUnited States Sugar Act, United States supplierswill have the opportunity of meeting a larger partof the domestic demand, but other countries willcontinue to benefit from the redistribution of theCuban quota. Hence no undue pressure of supplieson world markets is anticipated.

Supplies of citrus fruit for marketing during thesummer and autumn of 1962 can be expected tobe substan.tially larger than last year. In SouthAfrica prospects are for a crop about 10 percentabove the 1960 record. Brazil is reported to haveabout 4.5 million boxes of oranges available forexport this year compared with 3.3 million boxesshipped in 1961. Smaller supplies, on the other hand,must be expected from California, where the cropof summer oran.ges is the smallest in the last ten

36

years. Supplies of lemons and grapefruit will notsubstantially vary from those of last year. Fruitcrops in importing countries will also be larger thisyear, although the increase may n.ot be as great aspreviously anticipated because of the cool weatherin spring, which may also have affected the 1962/63citrus crop in the Mediterranean. area. In general,however, the greater availabilities of both importedand domestic fruit may be expected to result in somepressure on prices durin.g the comin.g months.

World supplies of oils and fats were large in early1962, reflectin.g mainly the large harvests in autumn1961 of groundnuts in Africa, sunflowerseed in theU.S.S.R. and soybeans in the United States, as wellas a record output of butter, tallow an.d fish oils.Barring unusual weather conditions, this favorablesupply situation is likely to continue in 1962/63.The production of slaughter fats will probably Con-tinue to increase, since livestock numbers are risingin response to heavy consumer demand for meat.Hence it is likely that the general level of internationalprices will contin.ue low in 1962. However, theweakness of European import demand rnay be ofa short-term character.

The world meat trade in 1962 is unlikely to belarger than in 1961. Exportin.g countries have beenmaking strong efforts to fin.d new outlets, but forthe time being the volume of trade will continue tobe determined by the situation in the main importmarkets of western Europe and the United States.The volume of beef entering world trade may increaseslightly. Exportable supplies in Oceania an.d insome western European countries, including Franceand Denmark, have risen, while the United Statesand eastern. Europe absorbed much larger quantitiesin the first half of the year. Imports into the UnitedKingdom will be influenced to a considerable extentby the supply situation in Latin America and pricesof manufacturing beef in the United States, butthese are not expected to be below those of 1961.The substantial increases in pigmeat production inthe major importirtg countries of western Europewill reduce their import requirements. Pigmeat pricesmay therefore be lower, but meat prices generallyare expected to remain similar to those of 1961.

Unfavorable weather conditions in Eu,-ope andNew Zealand have temporarily slowed down therising trend in milk production. Nevertheless, theincrease in effective demand will not be sufficient toprovide outlets for the expected increa.ses in supply,particularly as the introduction of an import licensingsystem in the United Kingdom has accentuated the

difficulties in marketing surplus milk in the form ofbutter. These import restrictions have led, however,to a considerable streiagthenin.g of butter prices onthe:Lon.don market, which can be expected to con-tinne in the immediate future. The outlook forinternational trade in eggs is not en.couraging. Inview of expanding production, import demand inthe Federal Republic of Germany is unlikely to bemuch greater than in 1961, while in the United King-dom it may be reduced. Import demand in westernEurope as a whole, which accounts for nearly fourfifths of world imports, is not expected to exceed that of1961, but exportable supplies will be larger and pricesare therefore likely to continue at relatively low levels.

Although the world coffee harvest in 1962/63 isexpected to be lower than in the previous year,supplies will remain abundant because of the heavystock accumulations in Latin America, and nosignificant strengthening of prices is anticipated,particularly if production increases in countries pro-ducing robustas and secondary milds. In the re-mainder of the 1961/62 season., the one-year Inter-national Coffee Agreement will continue to exert astabilizing influence on the market, and prospects for1962/63 will be enhanced if the lon.ger-term, and morewidely based, agreement n.ow under discussion is

successfully negotiated. Although an InternationalCocoa Agreement may also be negotiated early in 1963,this could not materially influence the situation untilthe marketing of the 1963/64 harvest. Meanwhile,cocoa supplies and demand are approximately inbalance, and if consumption continues to expandat the recent rate the market should be better situatedto absorb another crop in 1962/63 of the same sizeas those of the previous two years. Tea suppliesalso remain closely in line with the demand, withprices of high quality leaf showing the betterprospects.

With little chan.ge in the United States crop andrecovery in the United Arab Republic an.d Uganda,world cotton production in 1962/63 is expected toreach a new peak. The upward trend in cottonconsumption, on the other hand, is likely to flatten

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out under the impact of the European stock cycle,the Japan.ese restrictions on textile output, and moreintensive competition from rayon. The greater sta-bility of wool prices apparent since the beginning of1962 may continue into the new season. Jute pro-duction is likely to recede from the high level reachedin 1961/62, and export availabilities may be reduced,thus checking the present fall in prices. A furtherincrease in the output of hard fibers in 1962 is ex-pected to be matched by a sizable expansion indernand. The production of natural rubber is againlikely to show a slight increase, and with continuedexpansion in the consumption of syn.thetic rubberin western Europe, Japan and the U.S.S.R., pricesmay remain un.der pressure during 1962.

The future of markets for fishery products forhuman consumption in Europe and North Americadepends to a large extent on successful qualityimprovement and, especially in some Europeanmarkets, on more vigorous promotion of frozenproducts. In less developed countries market expansionis still con.tingent on improved technology and thestren.gthening of the infrastructure. In the marketfor industrial fish, both the present situation and theoutlook for fish meal are substantially better thanin the last two years. Present efforts are in thedirection of increasing utilization in markets wherefish meal has not yet been used as extensively inanimal rations as in North America and westernEurope. The increased production of fish meal,however, has affected the less elastic markets forcomplementary products such as fish and whale oils.

The expansion of production an.d trade in forestproducts is expected to be more moderate in 1962than in 1960 and 1961. In North America a recoveryfrom the low level of sawnwood production in 1961appears likely, and the consumption of pulp andpulp products is expected to grow steadily. Europeanproduction and imports of sawn softwood shouldremain at a high level, but the consumption of sawnhardwood is likely to show little or no increaseand the former rapid growth of imports of tropicalhardwood may temporarily level off.

Forest industries present many special features.They furnish a very wide range of products, bothconsumption goods and intermediate goods flowinginto many sectors of the economy; the demandfor these rises sharply with economic growth.The industries vary considerably in their rawmaterial and other factor requirements. In most ofthem alternative technologies can be successfullyemployed. They are based on a renewable resource.This resource is intimately linked with agricul-ture.

These features suggest that potentially forest in-

The postwar period has seen a growing awarenessof the need for economic development in thoseareas of the world which the industrial revolutionhad left untouched. Development problems haveacquired first place not only in the attention ofgovernments and international organizations but alsoin the social sciences, where they have provided thecommon denominator for the integration of differentbranches of analysis and of different disciplines.This impact is also being felt in the specialized fieldsof study devoted to the economic and technicalproblems of single sectors or industries. Specialistsand technicians can no longer disregard the widercontext in which industries and sectors operate; thatcontext is not a constant but a variable perhapsthe most important variable. Today sector problemsand targets are at once subordinate to, and integralinstruments of, general problems and aims ofdevelopment.

In the following pages an attempt will be madeto look at the forest industry sector in the light ofthe growth problems of economies at the beginningof their development processes. Forests are a most

Chapter III. I ROLE OF FOREST H 1USTRIES IN THE ATTACK ON

ECONOMIC UNDERDEVELOPMENT

dustries can play a significant part in promotingeconomic growth in presently low income countries.This chapter represents a preliminary attempt toassess their potential role. The analysis is far fromcomplete, and many important aspects are treatedcursorily or not at all. The purpose of tbe chapterwill have been served, however, if it succeeds indrawing the attention of policy makers to certainmajor considerations which are sometimes over-looked, and if it encourages economists and forestersto undertake a more profound and detailed studyof some of the problems raised.

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important asset of a country's wealth an asset thateven very poor countries possess or could possessfor they provide a renewable raw material for awhole range of industries which have acquired greatimportance in many industrially advanced countries.This asset is very often neglected in less developedeconomies, or exploited only as a raw material forexport. This raises a number of obvious questions.What are the propulsive possibilities of the forestindustries sector for the less developed areas? Whatcan the role of this sector be in a development pro-gram aimed at attaining self-sustained growth?

To answer these questions vague and generalconsiderations on what prima facie appear to bethe merits of forest industries will not suffice. Eco-nomic theory and techniques of development pro-graming have progressed considerably in the pastfew years. Although the field is certainly not clearof controversy and many unsolved points yet re-main, substantial agreement has been reached asto the criteria which should orient choices and asto the data which are necessary to apply the criteriain practice. Thus sector analysis should follow

Some aspects of development policy

the main lines set by general economic analysis,if the necessary integration between the two forthe purposes of development is to be reached.

We shall therefore start by reviewing in generalterms some of the considerations relevant in sectoranalysis, and by defining the data and the elementsof knowledge needed to appraise the economicpossibilities of the forest industries sector.

DEVELOPMENT AIMS - A POLITICAL CHOICE

Underdevelopment is a relative and to some ex-tent a subjective notion. Some economies are de-fined as underdeveloped insofar as there are otherswhich are more developed; and the former "arethose which are dissatisfied with their presenteconomic condition and want to develop. " 1. Forsuch countries economic growth has become or isbecoming a matter of ideology, since it is boundup with the achievement of a truer independenceeconomic as well as political and of higher stand-ards of human dignity as well as of material well-being for the population. An understanding ofthe fact that development in its aims and moti-vations is not solely a matter of economics is essen-tial in order to avoid false controversies on a num-ber of points, and to apply economic tools withmore accuracy and to better purpose.

First among these points is the need for publicintervention. This follows almost by definition fromthe decision to change the existing situation of back-wardness and from the fact that the existing situationis frequently the outcome of nonintervention orintervention of the wrong kind. If that decision isaccepted, there can be no argument as to whether apower external to the market, for example, thestate, should interfere with the "free play of marketforces. " in underdeveloped economies the objectof intervention must be defined in very broad terms;since it is a question not of a single sector or of asingle area, but of the whole economy lagging be-hind, intervention should, directly or indirectly, inmilder or more energetic form, embrace the wholesystem. This, of course, amounts to saying thatplanning is necessary, meaning by planning the over-all co-ordination of public intervention in variousfields, aimed at attaining clearly defined and mu-tually consistent targets of policy. Over-all plan-

' ROBINSON J.. Notes on the theory of economic development.In Collected economic papers. V. 2. Oxford, Blackwell. 1960. p. 96-97.

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ning does not necessarily mean direct public inter-vention in all fields. It is compatible with the predom-inance of private enterprise (provided it is guidedby an adequate system of incentives and sanctions).It means essentially awareness of the ends to bereached in the first place, and then systematic pro-graming of the use of all the available policy instru-ments with these ends in view.

From this approach to development policy itfollows that, once the plan frame is defined, a num-ber of excessively debated issues, such as the demar-cation of public and private sectors, or the contra-position of agricultural development to industrial-ization, take on a truer significance. The solutionof these and other similar problems cannot be reach-ed in the abstract, but must be instrumental to thefinal aims, and even more important, the actualadministration of the plan. This also applies to alarge extent to the controversy of light versus heavyindustry or more generally of immediate welfareversus long-term growth. In all cases, while thesolution will depend on the structural conditionsand the physical endowments (that is, the data) ofthe economy concerned, the main element of choiceis political, since the definition of the general endsof the plan is mostly the result of a political decision.

FINANCIAL APPRAISAL AND SOCIAL EVALUATION

A second and equally important consequencefollowing from the principles stated above Con-

cerns the evaluation of benefits and costs of invest-ment policies and projects. Benefits and costsshould be estimated with reference to the aims setin the plan, and policies and projects be classifiedaccordingly. Since the aims of the plan or moregenerally of development policy concern the entirecommunity and not single producing agencies, it is

not surprising that this kind of evaluation may di-verge, and indeed will often diverge, from the pri-vate criteria of evaluation.

The principle of distinguishing between privateevaluation and social evaluation between fman-cial appraisal (in terms of monetary returns in theshort run or to special groups) and economic ap-praisal (in terms of both short and long-term returnsto all people affected) has already full acceptancein the advanced economies for all the so-called pub-lic utilities, that is for sectors of general interestin which it is admitted that financial benefits andcosts to particular firms may not coincide with the

benefits and costs for the community. The goodreason why the same principle has a much broaderapplication in less developed economies is that insuch conditions, at least for a time, nearly all eco-nomic activities must be considered as public util-ities since the historic trend has shown a generaldivergence between private and social interest.

Private and social evaluations may diverge forreasons which have their origin in micro- as wellas macro-economic, in static as well as dynainic,considerations. First of all the price system in anunderdeveloped economy is often not " significant,"that is, is not such as to insure either a technicalor an economic optimum, since it does not reflectthe relative scarcity of goods and factors; nor, afortiori, does it reflect the scale of priority estab-lished in a development policy. Secondly, a giveninvestment project may have a number of " sec-ondary " benefits which do not appear in the formof money returns to the firms most directly involved,but which should be included in an economicappraisal; these consist essentially in " the in-crease in net incomes in activities stemming from, orinduced by, the project. " 2 Finally, account shouldbe taken of secondary effects from a dynamic pointof view. These can be grouped under the headingof external economies of production and consump-tion: investment in a propulsive sector will on theone hand create favorable conditions on the supplyside for investment in other sectors; on the otherhand, through its demand for inputs and throughthe new demand arising from the higher incomesof the newly employed, it will enlarge the marketfor other industries, thus providing the incentivesfor new investment on the demand side. This lastconsideration reflects the fact that, with lack ofcapital, lack of demand is also a most importantobstacle to development.

THE DATA NEEDED FOR INVESTMENT DECISIONS

Whichever investment criterion is adopted certaintypes of data are needed to evaluate the economicimpact of investment in a given sector. These canbe grouped as follows:

This is the definition given in: UNITED STATES INTERAGENCYCOMMI I DIE ON WATER RESOURCES. SUBCOMMITTEE ON EVALUATIONSTANDARDS. Report to Interagency Committee on Water Resources;proposed practices for economic analysis of river basin projects.Washington. D.C., 1958.

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Technological data

Such data regard the shape and the range of theproduction function. Independently of whether thechoice is oriented toward higher or lower capitalintensity, it can be said that the wider the range ofthe production function (that is, the higher the num-ber of techniques available), the more suitable,ceteris paribus, a sector is for investment in a lessdeveloped country, because the possibility of adap-tation to the general aims of policy and to the struc-tural conditions of the country is greater. Thestudy of the production functions requires:

a knowledge of the internal structure of thesector (the wider and the more integrated thisis, the greater the flexibility in decisions, owingto the possibility of combining different tech-niques at different levels of production);

a knowledge of labor productivity, value added,capital output ratio and surplus per unit ofoutput and capital for each technique available;in this connection it should be noted that theproduction function relevant for an underde-veloped economy does not necessarily coincidewith that of a more advanced country; tech-nical progress has undoubtedly been biased byfactor availability and prices of advancedcountries, and there are possibilities, to whichnot enough thought has yet been devoted, ofdevising techniques more suitable to differentconditions.

Investment and cost data

These data are needed not so much for estimatingactual production costs, which vary with inputprices, as for checking the consistency of projectsagainst the availability of funds and the size of themarket. Technological indivisibilities may preventthe adoption of a given technique at less than acertain minimum scale, which might turn out tobe too large relatively to the size of the market andto the amount of ftmds available. This group ofdata can also include the physical characteristicsof inputs and outputs, the relative weight of whichplays an important role in deciding to what extenta sector has, in a given country, a relative advantagevis-à-vis the rest of the world and where the indus-try should be located.

Demand data

These data, on the other hand, give an idea ofthe ii_nportance of the sector and condition thechoice of techniques and sizes. Demand projec-tions also make it possible to estimate the grossimport saving effect of investment in a given sector.

Secondary and indirect effects

Some of these effects belong to the general cate-gory of external economies. Others are more pre-cisely connected with the creation of a new supplyof some goods or service which will stimulate thedevelopment of other activities outside the sector.Still others stem from the creation of new demand

The products of forest industries in the economy present an.d future

In this section we shall: (a) examine the structuralcharacteristics of the demand for forest products,their role in the world economy, and the interde-pendence between forest industry and other sectors;(b) illustrate the present situation of production,consumption and trade of forest products in thetwo great blocks 3 into which the world can todaybe divided - the developed areas such as western Eu-rope, North America, the U.S.S.R., Oceania andJapan, and the less developed areas in Africa, LatinAmerica and the rest of Asia; (c) analyze the dy-namic characteristics of demand for forest productsin order to estimate its prospects in the less devel-oped areas; (d) draw some conclusions regardingthe extent to which future requiremeMs should besatisfied by local production in the less developedareas.

STRUCTURAL CHARACTERISTICS OF DEMAND

Even if one decided to overlook the variety oproducts, techniques and economic organizationsof the sector under examination, some major dis-tinctions must nevertheless be traced inside it.Wood removed from forests can be used either as

The main justification for this crude dichotomy (with debat-able components in either block) is statistical convenience.

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which widens investment opportunities in other sec-tors: this happens through increased consumptionexpenditure by the newly employed, and throughthe input requirements of the new producing activity.The degree of backward and forward linkage of asector with other sectors is considered a very im-portant index of priority in sectoral allocation,since it measures the cumulative expansionary effectthat a given investment may have on the wholeeconomy.

In the following sections an attempt will be madeto provide some of the data and elements of know-ledge listed above for forest industries. We shallstart with an assessment of present and future de-mand conditions for forest industries products, sincethese constitute an essential frame for the problemswe are considering.

fuelwood or for industrial purposes; here we shallonly be concerned with industrial wood, since itis evident that fuelwood is secondary 4 from thepoint of view of economic growth. Industrial woodcan be employed either in uses where, though un-dergoing several transformations, it maintains intactits chemical and physical structure, or as a rawmaterial in chemical processes where it loses, soto speak, its individuality. Thus we have on theOrle hand sawlogs transformed into sawnwood, whichis in turn used for construction, shipping and manu-factured products; veneer logs, transformed into ve-neers, plywood and blockboard, also used for con-struction and manufacture; logs transformed intosleepers; pitprops, piling and poles. And we have,on the other hand, pulpwood transfornied into pulpby mechanical and/or chemical action, and thenmanufactured into paper and paperboard. An in-termediate position between these two groups is

occupied by two more recent products fibreboard

° Secondary, but by no means negligible. Examples of a situa-tion where fuelwood can contribute to economic growth are:(a) in heterogeneous hardwood forests, if alternative fuels areexpensive or unavailable, species of negligible commercial valuecan be used to power wood transformation industries; (b) severalsuccessful iron smelting operations make use of wood charcoal,thereby reducing the need for good coking coal; (c) in fuel-hungrysouth Asia, where most dung is burned instead of being returnedto the soil, village fuelwood plantations may be the key to a risein agricultural productivity.

and particle board; from the manufacturing pointof view they are nearer to the second group, butfrom the point of view of demand characteristicsthey should be considered in the first group, sincethey are employed in much the same uses as sawn-wood and plywood.

In physical terms sawlogs account for a muchgreater volume than pulpwood. By far the mostimportant use of sawnwood is construction, fol-lowed by packaging and manufacturing; the latter,however, covers an enormous number of products -from furniture to railroad cars, parts of motor ve-hieles, handles, toys, ladders, and pencils. In res-idential building wood is essentially used for fram-ing, sheathing, millwork and flooring. The raajorpulpwood product is paper, followed by paperboard;and the most important types of paper are news-print, printing paper, paper for wrapping, and bags.

It is unnecessary to give further details to showthat wood products, directly or indirectly, musthave a large share of final demand, and a sharewhich is spread over a very large number of items. 6

Both these facts are confirmed by quantitative ob-servations. In 1953 the sector of forest and forestproducts (including both wood products and fur-niture and paper and paper products) accountedfor 7.2 percent of the total value added and for9.25 percent of total world employment of miningand manufacturing industries in the world, thusranking fifth among industries in terms of valueadded and fourth in terms of employment. 6 Thebreakdown for the two main blanches is the follow-ing: 4.2 and 3.1 percent of value added and 7.9and 2.2 percent of employment respectively forwood products and furniture and for pulp, paperand paper products. This shows a remarkabledifference between the two main branches in laborproductivity, which is higher than the average inpaper and paper products and much lower than theaverage in the other branch.

The " spread " of uses of forest products, orrather the extent to which they enter into otherproducts (the degree of indirectness of the sector), isevidenced, with some limitations, in the availablestudies of interindustry interdependence by meansof input/output tables. Two coefficients are relevantin this connection: the ratio of the value of pur-

The maior wood transformation industries, and the uses towhich their products are put, are shown graphically in Figure 1on page 000.

6 UNITED NATIONS STATISTICAL OFFICE. Patterns of industrialgrowth 1938-1958. New York. 1960.

92

TABLE - INDICES OF INTERDEPENDENCE OF FORESTINDUSTRIES

SOURCE: Based on CHENERY H.B. and CLARK P G., Interindustryeconomics. New York, Wiley, 1959, p. 230.

chased inputs to that of total production of a sector,which indicates how far production in a sector" involves the indirect use as compared to the di-rect use of capital and labor; " 7 and the ratio ofthe value of intermediate demand to that of totaldemand for the products of a sector, which showsthe extent to which the sector " sells its output forfurther use in production. " 8 These ratios for agiven sector should be compared with the averageor mean values of the ratios for the whole economy.This comparison is provided in Table III-1 for fourcountries - Japan, Italy, the United States of Amer-ica, and Norway - which shows the average ra-tios for the economies as a whole and the ratiosfor wood and wood products and paper and paperproducts taken separately.

It appears from these figures that in both sub-sectors and in all countries (with the exception of theUnited States for wood and wood products) theratio of the value of purchased inputs to the valueof total production is considerably higher than theaverage; it should be noted, however, that the pur-chase of inputs is concentrated, as is to be expected,in agriculture and forestry, from where the rawmaterial is taken. More significant, as an indica-tion of the linkages of the sectors considered withthe rest of the economy, are the ratios of intermediatedemand to total demand. Here there is a divergencebetween paper and paper products, where the valueof the ratio is very much higher than the average,and wood and wood products, where it is lower(though not very much lower) than the average.

CHENERY H.B. and CLARK. P.G., Interindustry economics. NewYork, Wiley, 1959, p. 205.

° Op. cit. p. 201.

Japan 48.7 68.2 62.8 46.1 29.6 80.2Italy 43.8 71.6 53.8 41.1 43.1 75.3United States 42.6 42.1 56.6 41.9 40.4 79.2Norway 36.4 51.5 55.7 30.4 29.1 42.5

Averageall

dustries

Woodand

woodproducts

Paperand

paperproducts

Averageall in-

dustries

Woodand

woodproducts

Paper

and

paper

products

Ratio of value of pur- Ratio of value of inter-chased inputs to value mediate demand toof total production value of total demand

This is essentially due to the fact that in input/outputtables, construction is included in final demand;as a consequence the share of wood and woodproducts used in construction, which would nor-mally be considered as intermediate products (forexample, wood for framing and sheathing or forconcrete forms), appears only in final demand. Thusthe values of the second set of ratios tend to beundervalued for wood and wood products relativeto other sectors. When this is taken into account,and considering the high values of the ratio forpaper and paper products, we reach the conclusiontha.t the sector of forest products as a whole has ahi h degree of indirectness and of interdependencewith other sectors.

CONSUMPTION, PRODUCTION AND TRADE

Table 111-2 gives, for the two groups of areas,developed and less developed, the production, totalconsumption and consumption per head of the maincategories of forest products. Several striking factsemerge from this table.

The production of forest products is very heavilyconcentrated in the developed world. Constunptionis even more highly concentrated, the less developedareas relying on the advanced regions for a sub-stantial proportion of their supplies of certain cate-

gories. At the same time the population of the lessdeveloped areas is over twice that of the developedareas. Thus consumption per head of forest prod-ucts in the less developed areas is extremely low:one seventeenth of that in the developed areas forsawnwood; one twenty-third for paper and board.

The position of less developed areas vis-a-visthe rest of the world is further illustrated in Table111-3. Also in the case of forest products the lessdeveloped countries are exporters of raw materialand importers of manufactures; they export saw-logs; are more or less in balance, in quantities, forsawnwood (considering that their deficit is to a largeextent due to the lack of coniferous forests, so thatin aggregate they are exporters of broadleavedsawnwood but importers of coniferous sawnwood);and they are net importers of fibreboard and espe-cially of pulp, paper and board. (The table doesnot include wood manufactures, such as furniture.)As a result, in spite of their very low level of con-sumption, the less developed countries show a netdeficit in value terms. Not only is the unit valueof products much higher than the unit value ofmaterials (though not by so much as in the caseof products of other industries, since raw materialaccounts for a very large part of inputs, especiallyin wood products), but also the value of importsis increased, relatively to the value of exports, bythe whole amount of freight, which, for the largest

TA13LE - PRODUCTION AND CONSUMPTION OF FOREST PRODUCTS, 1957-59 AVERAGE

' Including an estimate of 9.4 for unrecorded production. Including an estimate of 0.61 for unrecorded production.NOTE: (r) roundwood: (s):=,sawnwood.

93

UnitA

Developed areasB

Less developed areas

RatioA:B

POPULATION (1958) Million 923 1 956 Just under half

PRODUCTION

Industrial wood Million cubic meters (r) 842.9 103.2 8

Sawnwood (including sleepers) Million cubic meters (s) 288.3 ' 33.7 8

Wood-based panel products Million cubic meters (r equiv.) 38.01 ' 3.04 13

Paper and board Million metric tons 60.0 3.4 18

APPARENT CONSUMPTION: TOTAL

Sawnwood Million cubic meters (s) 286.7 ' 35.0 8

Wood-based panel products Million cubic meters (r equiv.) 38.3 ' 3.0 13

Paper and board Million metric tons 58.1 5.3 11

APPARENT CONSUMPTION: PER 1,000 CAPITA

Sawnwood Cubic meters 310.0 18.0 17

Wood-based panel products Cubic meters (r equiv.) 41.7 1.5 28

Paper and board Metric tons 63.0 2.7 23

TABLE 111-3. - TRADE OP LESS DEVELOPED AREAS, 1957-59 AVERAGE

part, accrues to developed regions who OW11 thelargest share of merchant fleets.

The final figures in Table III-3 show a net over-all deficit in value tenns (for SITC DiViSiOnS 24,25, 63 and 64) of U.S.$467 million. Besides theitems listed in the table, this figure includes certainmanufactures of wood and paper. It excludes,however, many finished goods of wood and paper,such as furniture, .prefabricated houses; books,newspapers and other printed matter, and so on.Were these included the deficit would be consider-ably greater.

This situation is all the more striking consideringthat many of the less developed areas llave theirraw material ready at hand, and that not all thedeficit sectors necessarily require, as will be seenlater, exceptionally complex techniques.

DYNAMIC CHARACTERISTICS OF DEMAND

In estimating demand trends for forest productsthe main variable to be taken into account, as inthe case of all other products, is income. However,a rather precise relationship between income andconsumption holds only for pulp products. In thecase of other forest products this relationship iscomplicated by the interaction of other factors,and especially by an interdependence, which be-

91

' -I- - export surplus; - - import surplus. - Including some manufactured products (SITC 24, 25. 63, 64).NOTE: (r) roundwood; (s) --= sawnwood.

comes relevant particularly in low income areas, be-tween demand and supply.

Very high correlations have been obtained be-tween consumption per head of paper and boardand national income (normally gross national prod-uct) per head. These relationships hold both forpaper and board in total, and for the several broadcategories of paper and board. They hold whetherthe parameters are studied in space, through cross-sectional analysis, comparing many countries at agiven time, or in time, comparing the evolution ofconsumption and income in a given country or re-gion over a period of years.

The relationship is not a linear one; in fact, in-come elasticity declines as income rises. Thus atincome levels of around $100 per head, elasticityis as high as 2.5 to 3; at levels of around $200 to $400per head, it ranges from about 1.5 to 2.5. At Euro-pean income levels, roughly $500 to $1,000, it is

well over unity. For the United States of America,with an income per head of well over $2,000 it is

below unity for most categories.This decline in elasticity as income rises applies

to each of the major categories of paper and boardas well as to paper and board as a whole. Butthe decline is not uniform. Thus at low incomelevels of $50 to $150 per head the elasticity for

FAO. World demand for paper to 1975. Rome. 1960.

UnitQuantity Value

Exports Imports Net trade' Exports Imports Net trade '

Million stated units Million $

SAWLOGS Cubic meters (r) 7.6 1.2 + 6.4 152.3 40.0 + 112.3

SAWNWOOD

Coniferous Cubic meters (s) 1.5 3.6 - 2.1 68.8 155.3 - 86.5Broadleaved Cubic meters (s) 1.6 0.8 -1- 0.8 83.5 46.7 -i- 36.8Sleepers Cubic meters (s) 0.2 0.2 - 5.7 29.3 - 23.6

Ven eers Cubic meters (s) 0.07 0.02 1- 0.05 4.6 3.9 4, 0.7Plyvvood Cubic meters (s) 0.18 0.25 -0.07 21.5 24.7 - 3.2Fibreboard Metric tons 0.04 0.08 - 0.04 3.3 10.2 - 6.9Pardcle board Metric tons 0.02 0.02 - 1.1 2.1 + 1.1

Pulp Metric tons 0.06 0.57 -- 0.51 9.9 83.4 - 73.5

Newsprint Metric tons 0.03 0.91 0.88 3.6 152.3 -- 148.7Other paper and board Metric tons 0.05 1.05 -1.00 13.1 258.6 -245.5

TOTAL VALUE 406.0 873.0 -- 467.0

cultural papers (newsprint, printing and writingpaper) is somewhat higher than that for industrialpapers (other papers and paperboard). At $200to $250 per head the elasticity is about the samesomething under 2. At higher income levels, from$800 and up, the elasticity for industrial paper ismuch higher than that for cultural papers. Thesedata lead to the conclusion that a remarkable ex-pansion in the demand for paper and papel- prod-ucts is to be expected in the less developed countries

an expansion much more rapid, for equal rates ofincome growth, than in more advanced countries.

There has, in fact, been a marked increase in con-sumption per caput of paper and board in the lessdeveloped world over the last decade, as the figuresin Table III-4 show:

TABLE, 111-4. - CHANGES IN PER CAPUT CONSUMPTION OF PAPERAND BOARD, 1946-48 TO 1957-59

Developed areas

Less developed areas

1946-48 1957-59

Kilograms per copra

38.6 62.9

1.49 2.85

Percentageincrease

63

91

In the light of the earlier quoted dernand elastic-ities, it may seem surprising that relative progress inthe less developed world has not been more marked.It should be recalled, however, that during the 1950sthe rate of per caput income growth in the lessdeveloped areas lagged considerably behind thatin the more advanced areas.

When we turn to the other principal forest prod-ucts, however, it is much more difficult to pro-nounce with certainty on demand trends. Factorsother than income heavily influence the demand forsa.wnwood and for wood-based sheet materials.Demand for all these products consists overwhelm-ingly of derived demand. In many of the end-uses in which they are employed, these productscan substitute each other to a high degree. Thusfor many purposes plywood, fibreboard and par-ticle board are all technically feasible solutions, andthe material a.dopted will depend on relative prices.Moreover, all three can take and have taken toa considerable extent over the last decade or twothe place of sawnwood over a broad range of end-uses. Finally, there is a high elasticity of substi-tution in many avenues of utilization between all

95

the products of the forest industries sector and 'theproducts of other sectors of the economy such asbricks, cement, steel in construction, metals andplastics in furniture and packaging. These con-siderations tend to deprive the concept of incomeelasticity of demand of much of its empirical rel-evance, since the coefficients which can be esti-mated 011 the basis of time-series or of cross-sec-tional analysis conceal the effects on demand of theother factors which have been mentioned.

From what has been said it is clear that the trendin demand for these products vvill depend largelyon their price relative to each other and to the prod-ucts of other sectors. Simple price relatives furnishno clear guide, however, since technical progresswhich always tends to be material-saving, both forwood and for its competitors can considerablymodify the impact of relative price movements.

An assessment of the available data lo leads tothe conclusion that, taking sawnwood and wood-based panel products together, demand does in-crease with income, and, at low levels of income,increases at a rate equal to or greater than the rateof increase in income.

Thus for sawnwood and wood-based sheet ma-terials as well as for pa.per and board economicgrowth will bring rapidly increasing requirements incountries at present with low incomes.

FUTURE REQUIREMENTS AND ALTERNATIVE. SUPPLY

POSSIBILITIES

There have recently been prepared estimates offorest products requirements in thc underdevelopedregions of the world by 1970. These estimates arebased largely on regional studies of timber resourcesand requirements presently under wa.y, or recentlycompleted., by FAO in collaboration with theregional Economic Commissions of the United.

Nations.A substantial rise in industrial wood requirements

by 1970 is foreseen in all the less developed regions(Table 111-5). This increase ranges from 56 percentfor Latin America to 83 percent for Asia. For theless developed areas as a whole the increase is 72pe rcen t.

For these regions, the current decade will thus

" Notably detailed surveys carried out recently in Uganda,Kenya, Tanganyika and Ghana by Pringle, Arnold, de Backerand von Maydell.

TABLE - FOREST PRODUCTS: RECENT CONSUMPTION AND ESTIMATED 1970 REQUIREMENTS IN THE LESS DEVELOPED REGIONS INROUNDWOOD EQUIVALENT

bring need for an additional 32 million cubic meters(sawn) of sawnwood, 8.6 million tons of paper andboard, and 8 million cubic meters (in roundwoodequivalent) of plywood, fibreboard and particleboard.

These estimates are relevant to the problem ofinvestment in the sector of forestry and forest prod-ucts, since they show the demand on which anexpanded productive capacity could rely, or, al-ternatively, the cost, in terms of foreign exchangeof not expanding productive capa.city at a ratesufficient to meet additional demand.

Table 111-6 provides a tentative estimate of these

96

TABLE III-6. - ALTERNATIVE SUPPLY PROSPECTS POR ADDMONAL FOREST PRODUCTS REQUIREMENTS

' Includes in addition to wood used in the round some miscellaneous products not included under other categories (e.g.. woodfor turning. cooperage and shingle bolts etc.).

costs, under various hypotheses. Hypotheses Aand B represent two extremes: under A it is assumedthat productive capacity will not be expanded atall so that all additional consumption will be satis-fied by imports, and under B that production willbe expanded so as to meet entirely the increasein consumption (that is, leaving net imports un-changed). Both hypotheses are rather unreal, butare interesting insofar as they show that the capitalcost of expanding productive capacity (hypothesisB) and hence of ensuring a constant flow of output,is not much greater than that of importing the re-quired additional quantity of product in one year.

NOTE: A = If all additional requirements are imported; B = If volume of net trade remains constant - e g.. all additional requirementsare produced at home. (r) = roundwood; (s) = sawnwood

' Does not include nonwood pulp.

Sawlogs and ve-neer logs

Sawnwood

Afood-based sheetmaterial

Pulpwood

Pulp '

Paper and board

TOTAL

Unit:millions of

1957/59

Averageannual

consumption

Estimatedannual

consumptionby 1970

Additionalannual

requirements

A BCumulative

capitalrequirements

to 1970

Annual costof additionalimports by

1970

Additionalannual

productionneeded by 1970

Additionalannual woodrequirements

Million $ Stated unit Million m' (r) Million $

Cubic meters (r)

Cubic meters (s)

Cubic meters(r equiv.)

Cubic meters (r)

Metric tons

Metric tons

51

35

3

...

1.7

5.3

67

11

13.9

32

8

8.6

1 600

314

1 956

70

32

8

18

5.7

8.6

70

(64)

(8)

18

(18)

(18)

800

277

1 710

2 220

3 968 88 5 007

SawnwoodWood-based sheet

materialPaper and paperboard

Wood used in theround'

Total, industrial wood

1957-59 1970 1957-59 1970 1957-59 1970 1957-59 1970 1957-59 I1970

Million cubic meters (r)

Latin Atnerica 28.0 42.0 1.5 3.4 5.8 12.0 7.5 9.6 42.8 67.0

Asia (excluding Japan) 41.1 85.7 0.9 6.4 6.1 15.8 34.7 43.4 82.8 151.3

Africa 6.3 9.0 0.6 1.2 1.9 3.5 6.2 10.0 15.0 23.7

TOTAL 75.4 136.7 3.0 11.0 13.8 32.3 48.4 63.0 140.6 242.0

SUMMARY

It is now possible to draw some conclusions re-garding the " demand side " of forest products withreference to less developed areas.

Forest products account, in the world total, fora substantial share of industrial production andindustrial employment.

Consumption, however, is very unevenly dis-tributed between the developed and the less de-veloped regions per caput consumption in thelatter being extremely low.

The expansion of the forest products sector isstrictly connected with general industrial ex-pansion and with the growth of income boththrough technological interindustry relations andthrough income/demand relations. The formerare shown by input/output tables in the formof a high degree of indirectness of the sector; thelatter find expression in high coefficients of incomeelasticities of demand. These relations show that,if the expansion of demand for forest productscan be considered as an effect of income growth,the expansion of supply of forest products, on theother hand, owing to its forward linkages, canbe a stimulus to the expansion of other sectors.

The share of less developed areas in total pro-duction is even lower than their share in totalconsumption. In other words, their productivecapacity is not even up to their very modestrequirements. As a consequence they are heavyimporters of manufactured products, althoughnet exporters of raw material (sawlogs and ve-neer logs).

The net trade situation in value terrns is evenmore unfavorable. Transportation costs are veryhigh for the exported raw material and are fairlyhigh on the imported products, but transporta-tion profits seldom accrue to the less developedareas, since they do not own important mer-chant fleets. On the other hand, the f.o.b. priceof imported products is much higher than thatof exported raw material, since the former em-bodies all the value added in manufacturing.

Future prospects for the less developed areasare no brighter as far as their net trade positionis concerned. Income elasticity of demand isvery high, not only for paper and paper prod-ucts but also to a lesser extent for wood prod-ucts. Even if the rate of expansion of produc-

97

tive capacity continued at the rate of recentyears, the net deficit would increase substantiallyby 1970, with a considerable addition to thealready heavy burden in terms of foreign ex-change. Only if something more is done canthis burden be reduced. The economic problemis to see which cost is higher relative to bene-fits - that of investing in the sector or that ofpaying for increasing imports.This problem will be considered in subsequentsections, but two things should be said imme-diately. First, the problem of comparing costs andbenefits is economic and not financial; all benefits,direct and indirect, short- as well as long-term,should be considered and weighed against costsfor the community, that is, social costs.Secondly, the problem cannot be given a ready-made solution on the basis of the traditionaldoctrine of international trade and specializa-tion. A static theory cannot account for dynam-ic phenomena, nor can it justify the result ofpast trends, such as the concentration of forestindustries (or of any other industries for thatmatter) in more advanced areas. Traditionalinternational trade theory takes for granted thatindustries are where they are, but cannot explainwhy they are there. Such a theory is foundedon a given distribution of external economicsand is valid within its limits, but it cannot beused to infer that such distribution is the opti-mal one or that it cannot or should not be al-tered. Very few advantages are really natural,in the sense that they cannot to some extent becreated in the long run. In the case of forestproducts the natural element underlying the ex-isting forest industry pattern might be the distri-bution of conifers. This in turn depends, how-ever, on the favored position of conifers, whichtechnical progress, especially if consciously ori-ented, could undermine, not to speak of thefact that it might also be possible to alter theexisting distribution of conifers. In any case,all arguments in favor of maintaining the statusquo which are based on the theory of internationalspecialization are only valid when long-term ad-vantages in terms of accumulation and reinvest-ment, a,nd social advantages in terms of externaleconomics, are neglected that is, only whenapplied to a static context, but cease to haveany relevance when the question is exactly thatof creating those advantages in order to changethe status quo.

THE GLOBAL PATTERN

The simplified forest products flow chart shown inFigure III-1 demonstrates schematically the place ofprimary forest industries in relation to the forest onthe one hand and to other branches of the economy(including final consumption) on the other. It alsobrings out some important interrelations betweenthe forest industries, whose demands on raw mater-ials are largely complementary but in part compet-itive, and whose products, too, are to some extentsubstitutive and hence competitive, but also com-plement each other in many respects in satisfyingthe needs of other sectors and of final consumers.

A general idea of the relative importance of themajor primary forest industries can be obtainedfrom Table III-7.

The contrasts between the four main groups emergeclearly from a comparison of some of the ratiosinvolved (Table III-8).

The pulp and paper industry, followed by boardproducts, is a good deal more capital-intensive thaneither plywood manufacture or sawmilling. Moreover, it yields the highest gross product per unitof raw material. Since both pulp and paper andboard products operate mainly on small-dimen-sioned woods, do not make use of high value timbersand are in fact utilizing to an increasing extentwood residues, both from other forest industries andfrom forest operations, their lead over plywoodmanufacture and sawmilling in terms of valueadded per unit of raw material is even more pro-nounced than is shown in the table.

These aggregates and averages, however, concealgreat differences in the scale of operations (andfactor requirements) within each main group, aswe shall see shortly when we discuss some of theprincipal features of each industry group in turn.First, however, we should note that there arc a

Characteristics of forest

911

ber of minor primary forest industries omitted fromthese tables: other industries concerned with woodtransformation, such as charcoal, wood-wool manu-facture and wood distillation; and industries con-cerned with the extraction and refining of tanningmaterials, resins, lacs, oils, and the like. Thus, totalemployment in the primary wood-transforming for-est industries reaches close on 6 millions, whileabout the same number are engaged in the secondaryforest industries - furniture, container, box, matchand other wood-working, and various paper con-verting industries.

TABLE II-8. - SELECTED RATIOS: WORLD'S PRIMARY FORESTINDUSTRIES (1960)

THE SAWMILLING INDUSTRY

In the sawmill ing industry, the size of establish-ment varies from small mills (often mobile) in theforest, producing a few cubic meters a day forlocal needs, to highly mechanized mills with anannual capacity of several hundred thousand cubicmeters, producing for export or serving large con-sumption centers. All have their place; optimum

TABLE 111-7. - WORLD'S PRIMARY IORESF INDUSTRIES COMPARED (1960)

Forest industry

Gross valueof output per

unit of rawmaterial

_

$ per rn* (r)

Investmentper personemployed

1,000$

Investmentper unit of

raw material

Employmentper unitof raw

material

$ per m' (r) to, 01 oc .1 mpe r(r)

Sawmilling

Pulp and paper

Plywood..

Board products

27

57

40

57

2.6

23.8

4.2

9.3

15

151

45

74

5.7

6.4

10.5

8.0

Million in' Million $ Million $ Millions le

Sawmilling 561 65.2 15 100 48.4 8 400 17.2 3.2 60.3Pulp and paper 252 29.3 14 300 45.1 38 000 77.8 1.6 30.2Plywood 38 4.4 1 500 4.7 1 700 3.5 0.4 7.6Board products 10 1.1 573 1.8 740 1.5 0.08 1.9

TOTAL 861 100.0 31 773 100.0 48 840 100.0 5.3 100.0

Roundwood equivalent of output Gross value of output Investments Labor forceForest industries --------- -- -

FROM TiFORESTS

LOGGING ANDTRANSPORTATION

LAMES AND'OR EST II ESIDUES

PROM TREESOUTSIDE

THE voliEsT

VENEER LOGS

PW001,1

1.01.1W

01 HERINDUNI IDA Woof,

POTTS,

DISTILLATION WOOD,WAS CII11 C.

FWD-WOODNocksIlog wuu4tor Oor,usl /

VIMIES

PAL 10

Port.,

-PlioDucTIoN

V ENIMUIS.PLYWOOD ANDLILOCEOP/Alt 0

PRODUCTION OFWOOD PULP:

NI EC /I A N IC A LDISSOLVINGOTHER CHEMICASEMPCHEMICAL

PRODUCTION OPO'TIONI /OHRE PU.

99

UTILIZATIONOF WASTE

PAPE.

r-, RAI, VTIONI MILL .IIS 1,10 I

I

Go,

L_ Jr--CONSUNIP PION OFMILL PSI.' '

1 Fout. 1

PRODUCTION OPPAPER BOA/I 0

PRODUCTION OFNEWSPR I NTOTIIER PRINTING

AND WRITINGOTHER

PRODUCTION OPCHARCOAL

INEI S

WOOD MANUFACTUllPORT EQUIPMurrr

DLISOLTEXT1

OTHER TRANSPORT EquivniErrrMININGPOWER USES

.TE BUILDINGS'AGINN.W.ELS AND MASIIII IALS

CONSTRUCTION, BUILDINGSPACKAGINGCONTAINERS AND NIATEMALSNEWSPRINT USES,

OTHER PRINTING ANDWRITING

OTHER USES

COAL MINESOTHER MINING

O

COMMUNICATIONSCONSTRUCTIONOTION1 1.,SES

'RUCTION

CUIPORTATION AN»

MMUNICATIONNI MIES0 ILLATION AND OTHER

CHEMICALSAGRICULTURE0111.1 USES

AGRICULTUREPOWER PRODUCTIONHOUSEHOLIWOTHER USES

LOGS PORSLEEPERS

PRODUCTION IIAILW A NM,um. USESr

_

OF SLEEPERSISAWN, BEWNI

IMILL

RESIDUES

SAWDUST.

ïgl':/1L T

. OTHER CONSTRUCTION. INCL.MAINTENANCE C REPAID

FURNITUREI L._ COMMONERS

SAWLE/OS PRODUCTION OF JOINER Y

SAW NV, 000 P./ HER WOOD MANUFACTURESSHIP

FIGURE - FOREST PRODUCTS FLOW CHART

C I AIR

size and location can be determined only in thecontext of raw material supply, markets served, andcommunications between the two. Communica-tions bulk largely in determining location, given thehigh incidence of transport costs on the raw mate-rial delivered mill and the finished product deliveredto the market. Value added in processing is small,and economies of scale in the mill installation notof decisive importance. Typically the cost of logsdelivered mill represents 50 to 70 percent of millproduction costs. Because of this, and because ofthe need to carry an adequate stock of logs to assurecontinuous operation and of processed sawnwoodto meet customers' requirements, working capitalneeds are heavy, often amounting to as much asfixed investment.

Labor needs vary within very wide limits, depend-ing on the type of material sawn, the degree of mech-anization and, of course, on the efficiency of oper-ations. To produce 1 cubic meter of sawn soft-wood in a mill of 10-15,000 cubic meters of annualcapacity in a less developed European country re-quires 10 to 14 man-hours ; in a larger mill of20-35,000 cubic meters of annual capacity, only 7 to10 man-hours are needed. The more homogeneousthe log intake, the greater the possibilities of mech-anization and labor-saving. Hence, labor produc-tivity (as measured by output per man-hour or ma.n-year) is normally much higher in sawn softwoodmills than in mills sawing hardwood. In predom-inently coniferous forest areas North America,the U.S.S.R. and northern Europe softwoodscomprise 85 to 95 percent of the raw material forsawmilling as compared with 10 to 40 percent inAsia, South America and Africa.

International trade in coniferous sawlogs is onlyabout one third that in hardwood sawlogs ; more-over, a much smaller proportion of the trade is inter-continental. The interregional hardwood sawlogtrade consists mainly of tropical timbers. It is

obvious that advantage would accrue to the devel-oping countries if a greater proportion of their trop-ical timbers could be processed before export. In-deed, several countries have successfully adopted meas-ures to favor exports of sawnwood instead of logs.There are limits, however, to what can be achievedin this direction since technical factors, perhaps noless than political factors, have determhaed the wayin which this trade has developed historically.

International trade in tropical hardwoods includesa variety of stock, constructional tin-tbers, but con-sists mainly of higher value woods for use in furniture,

100

etc. In the past there have been many developingcountries, for example in west Africa and centralAmerica, which have achieved a considerable exportof hardwood logs, and sometimes also of sawnhardwood, while the domestic market has absorbedlittle or no sawnwood. Today, domestic marketsfor sawnwood are beginning to grow. If efforts aremade to find local markets for secondary species(perhaps after treatment) and subexport grades of thebetter-known species, the cost of forest operations canbe reduced, exporting power strengthened and perhaps,in some cases, the way opened for more processingbefore export. With greater emphasis in the devel-oping countries on centrally-inspired programs forhousing, school building and so on, there are newopportunities for positive action in this direction.

A large proportion of the raw material enteringthe sawmill, a proportion ranging from 25 to 50percent perhaps averaging 40 percent for the worldas a whole emerges from the process in the formof slabs, edgings and sawdust. This material, atone time wasted, today can be almost all turned toindustrial account if there are appropriate forestindustries in the vicinity to use it. The slabs andedgings can be chipped for pulp or board manu-facture and even the sawdust and shavings fromplaning mills can be utilized in other wood-processingindustries. The possibility of utilizing sawmill res-idues has already considerably modified the econom-ics of sawmilling in the developed areas of theworld and has in many cases encouraged the inte-gration of forest industries.

As yet, these potentialities have scarcely beenrealized in the developing countries. But if in mostof these countries the time is not yet ripe for creatinggiant integrated forest industry complexes, there arefew where it is not already possible to introducesuccessfully one or more small industries operatingwholly or partly on mill residues, manufacturingparticle board, or wood composition boards orblocks for constructional purposes. Alternatively,when a new sawmill is planned, the possibility ofassociating with it from the outset such a relatedenterprise may enhance both its prospective financialreturn and its social evaluation.

Sawmilling is usually the first fofest industry tobe established. It does not require a high degreeof technical skill on the part of its labor force, butonly on the part of a few key technicians. It is muchmore flexible in location, in size of plant, and infinished product than any of the other primary forestindustries. If export demand is good, th industry

TABLE 111-9. - RELATIVE IMPORTANCE OF VARIOUS COST ITEMS IN TUB PRODUCTION OF PULP AND PAPER

can concentrate on high-quality production of lumberto dimensions required by the overseas market, usingsubstandard production resawn for the local market.Should export demand cease or require differentspecifications, the industry can quickly adapt itselfto the changed requirements.

THE PULP AND PAPER INDUSTRY

Second of the primary industries in terms of rawmaterial requirements and value of output, but farand away the largest in terms of capital invested, thepulp and paper industry has grown rapidly in recentyears. During the decade 1950 to 1960 world produc-tion of pulp rose from 34 million tons to 59 milliontons, and of paper from 43 million tons to 74 mil-lion tons.

This industry is much more heavily localized thanthe sawmilling industry, mainly because, althoughwood costs represent the main item in total produc-tion costs and a cheap wood supply is essential,other process naaterials and production factorsassume considerable importance. '1 The pattern ofproduction costs varies considerably with the processused, the size of plant, the location, and accordingto whether the process is integrated (pulp and paper)or not. Some of the main characteristics are deduc-ible from Table 111-9.

While wood costs still represent one third to onehalf of total production costs, it will be observed

" Nonintegrated paper production operating on purchased pulP,and production using a substantial furnish of waste paper or non-wood fibres, are not, of course, tied to the wood supply.

I 01

Newsprint,integratedmechanical

pu I p

NSSC -'corrugating

boardintegrated

that first, capital charges are high; secondly, processchemicals assume a considerable importance, espe-cially for bleached grades; thirdly, power, steam andwater represent a very important element; andfourthly, labor costs are relatively small.

Obviously wood costs have an important, thoughnot, as in sawmilling, a dominant influence on totalcosts. The wood costs shown in Table III-9 are forwood delivered mill; labor represents the major ele-ment in this cost. Thus, while the mill operationitself is not labor-intensive, the associated forestextraction operations are so. Investment needs for thisindustry are certainly heavy. Typical requirements(fixed investment in the mill only, excluding workingcapital and any necessary infrastructural investment)for medium-sized mills of 100 tons per day capacity(or 30 thousand tons per year) in a less developedcountry range from $12 million to over $20 million,depending on location, process and productionprogram.

More than one half of this investment consists ofequipment, engineering fees, etc., normally requiringforeign exchange outlay in a less developed country.On the other hand, pay-out time (total investmentdivided by annual gross output) is not high rangingfrom eighteen months to three years.

However, there are a number of indivisibilitiesin the technological process which make for sizableeconomies of scale. These are particularly pro-nounced for newsprint and for kraft pulp and paper.A general indication of the variation of capital costswith size of mill for some typical mills is affordedby Table III-10.

Clearly, given the high impact of capital chargesOn production costs, a small mill must enjoy com-

P rcentage of the total ploduction cost at the ,,r(1I

Fibrous raw material .... 40 29 36 32 50 43 35 32 39 31

Chemicals 12 3 18 4 12 14 15 3

Other materials 3 3 4 3 3 3 3 3 4

Power, steam, water 21 18 12 10 2 4 5 s 15 13Labor, incl. repair 7 7 9 7 7 6 8 8 9 9Supervision overhead 5 5 4 6 s 6 7 5

Capital costs 24 26 31 28 28 27 29 30 28 34

Cost itemMechanical

pulp,integrated

Chemi-groundwoodintegrated

NSSC - pulp'(broadleaved wood)

integrated

Sulphate pulp ' non-integrated

Unbleachedconifers

Bleached

Unbleached Bleached ConifersBroadleaved

Strawwood

' With recovery of chemicals: NSSC - neutral sulphite semi-chemical process. Production cap ities: about 100 tons per day.

TABLE III-10. - INFLUENCE OF TYPE AND SIZE OF PULP ANDPAPER MILLS ON FIXED INVESTMENT

Daily capacity, metric tonsMill type

25 50 100 200

Fixed investment in 1,000 5 per daily ton

NONINTEGRATED

SOURCE: Report of FAOIECAFE conference on pulp and paperdevelopment prospects in Asia and the Far East, Tokyo,1960.

pensating advantages to compete successfully witha larger rival.

Power requirements are also high, normally rang-ing from 350 to 550 kilowatt-hours per ton ofbleached sulphate pulp to 1,700 to 2,000 kilowatt-hours per ton of newsprint. Hence the importanceof cheap power supplies, especially for mechanicalpulp and newsprint. Conversely, this industry, as amajor industrial consumer, can assure power de-velopments a needed outlet, thus influencing thefeasibility of projected hydro works.

The fresh-water requirements in pulp and papermanufacture are quite high, especially for bleachedgrades of chemical pulp and certain special papers.Typical needs (in cubic meters of water per ton ofpulp or paper) are: groundwood, 50; unbleachedsulphate pulp, 300; bleached sulphate pulp, 450;dissolving pulp, 600; newsprint (integrated withgroundwood), 100; kraft paper (integrated with pulp),400; paperboard (integrated with pulping of strawand waste paper), 400; and cigarette paper up to1,000. An integrated paper mill with a daily outputof 100 tons consumes about 40,000 cubic meters ofwater, which equals the needs of a city of some150,000 inhabitants; in Finland forest products in-dustries account for about 80 percent of the entirewater consumption. 12

For the production of chemical pulp considerablequantities of chemicals are required, both for cook-ing and bleaching. Thus, for every 1,000 tons ofbleached pulp ptoduced, 200 to 500 tons of chemicals

" TOrntiatAN, HARALD, Die Wasserfragen der FinnischenZellstoff- und Papierindustrie. Paperi Puu, 43(4)1961.

102

are consumed. This shows the importance, so far aschemical pulp operations are concerned, of convenientaccess to the basic materials, salt and limestone.

The bringing of large quantities of raw materialsto the mill, and the shipping of the finished product,entails a considerable transport problem. Thus, fora 100 ton per day mill, daily transport tonnage mayaverage 500 to 1,000 tons, and considerably exceedthese figures at peak periods. Thus, not only isgood transport organization necessary: heavy ex-penditure may be required on transport facilities,such as roads, rail, harbors, and trucks. This pointalso serves to underline the intimate relationshipbetween pulp and paper development and generalinfrastructural development.

Space precludes a detailed discussion of availablepulping processes, and of the fibrous materials towhich each is specially adapted. It is sufficient tomention here that, even though the major part ofthe world's pulp and paper is still made from tradi-tional coniferous species, there are very few timbers,coniferous or broadleaved, which cammt today bepulped by one or other of the available processes,and that there are processes suited to a wide varietyof nonwood materials, including bamboo, espartoand other grasses, cereal straw and bagasse (sugarcane waste). It should be added, too, that one of thecheapest sources of fiber for paper-making is wastepaper, which can replace fresh fiber to a considerableextent in many grades, and wholly in some grades ofpaperboard. Thus, in western Europe, no less than25 percent of paper consumed is recovered for re-manufacture, and waste paper accounts for 36 percentof the fiber furnish of paper grades other than news-print and kraft paper. The cost of waste paper ismade up largely of collection and sorting costs;hence the higher and more concentrated the consump-tion of paper, the cheaper is waste paper as a rawmaterial. With consumption rising rapidly in thedeveloping countries the opportunities for utilizingwaste paper are growing, and there are very manycountries which could already support a small buteconomic paperboard production based on thismaterial.

Though labor requirements for pulp and papermanufacture are modest, a fairly high proportion,ranging from 35 to 45 percent, needs to be skilled.Hence the need for schemes of intensive mill train-ing when starting new projects in the developingcountries.

The characteristics of the pulp and paper industryalready described may hay,; given the impression that

Unbleached chemicalpulp 235 175 135 105

Bleached chemicalpulp 325 240 190 150

INTEGRATED

Unbleached paper 300 230 180 140

Bleached paper 390 295 235 185

there is no scope for small-scale operations, for millsof 5 to 10 tons/day, for example. This is not so.Even in the industrialized countries, small millsoften comprise 80 percent of the total number,though accounting only for some 10 to 25 percentof the total output of paper and board. Theseinclude mills making speciality papers, " such ascigarette, electrical and currency papers, which arealmost universally produced in small units. Butthey include many more mills (usually nonintegratedmills) making strawboards, tissues and other gradesof paper and board for local consumption. Small-scale operations have the following favorable aspects:utilization of local fibrous raw materials and reducedtransport charges; local sale with low distributioncosts and ready adjustment to local market require-ments; adaptation to limited water supply; fewertechnical personnel and skilled labor needs; relativelysma.11 capital requirements (though this will notnecessarily apply to certain, high-value, specialitypapers); use of locally made machinery; geographicaldispersal of employment opportunities. Quality neednot necessarily suffer in small-scale operations.

Thus, while it would clearly be mistaken policy toplan the long-term development of the pulp andpaper industry mainly on the basis of small-scalemills, such mills can sometimes play an importantpart in the early stages of the industry.

PLYWOOD, FIBREBOARD AND PARTICLE BOARD

Plywood

World plywood production, around 3 million cubicmeters in 1938, today stands at well over 15 millioncubic meters, having more than doubled during thelast decade. There has been a great expansion bothin the use of hardwood plywood for decorativepurposes (panels, d.00rs, table tops and the like)and of utility softwood plywood for constructionalpurposes. This expansion has been largely boundup with technical developments (improved glues,surface treatments, new products), with the favorableprice trend of plywood as cornpared with sawnwood,and with labor saving applications of plywood inthe construction industry.

The most important factor in the location of ply-wood mills is the availability of large-diameter logs

" For which demand is likely to be very small in countries inthe early stages of industrialization.

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of good form, whether indigenous or imported,suitable for peeling or slicing. Much of the industrywhich has been built up in Europe and Japan hasbeen based on imported tropical hardwoods. Withveneer size logs becoming progressively scarcer,technical progress in the industry has concentratedon making use of smaller diameter logs and lowerquality material, for example, by cutting out defects,patching and reducing core size. The transformationcoefficient in plywood manufacture is fairly low,losses on conversion amounting to 50 to 70 percent(40 to 60 percent on veneer manufacture). Frequentlyall or part of these residues will be used as fuel forsteam and power needed in the plant for hot presses,dryers, etc. But if a corrunercial outlet is availablefor them, this can have a decisive influence on theeconomics of operation. Blockboard manufactureis largely a branch of the plywood industry. Thereis also a notable trend to integrate the plywood andparticle board industries, not only because the latteruse the residues of the former, but also becausemuch particle board is veneer-faced and becauseboth industries serve the same consuming sectors,construction and furniture.

The cost of wood raw material represents 30 to50 percent of total manufacturing costs, the otherimportant process material being adhesives (resins,casein, blood albumen, soya bean, etc.) of which about25 to 35 kilograms are required per cubic meter ofplywood. With the growing importance of moisture-resistant and waterproof plywood, the consumptionof urea and phenol resins has increased rapidly.

Investment costs, though higher than for sawmill-ing, are much lower than for pulp and paper manu-facture - about $100-$200 per cubic meter of annualcapacity. Scale economies are less pronounced thanfor pulp and paper; they relate mainly to power andpresses, only mills operating on large quantities ofhomogeneous material (for example, Douglas firplywood) and manufacturing standard grades canfruitfully introduce much mechanical handling andsome automation control.

Labor needs per cubic meter of output vary sub-stantially, depending upon the degree of mechaniza-tion, log sizes, average thickness of veneer, need forpatching, and so on. In less developed countriesmore than 100 man-hours per cubic meter may beused if circumstances favor heavy reliance on manualhandling. The proportion of skilled labor needed mayrange from 20 to 35 percent.

What has been said under sawmilling concerningthe opportunities in developing countries for carry-

ing out further processing before export applies alsoto plywood manufacture. Here it is perhaps usefulto note a recent trend toward establishing non-integrated veneer plants, making green or drierveneer, to feed local or overseas plywood plantsequipped simply with a press or drier and press.Such veneer mills require little investment, and canoperate on a limited supply of veneer logs. Ship-

ment of veneers saves weight and space comparedwith shipping logs.

Blockboard, laminated board, etc., are includedin the broad category of plywood, and output ofthese products has increased parallel with the produc-tion of particle board. Blockboard can be manufac-tured almost manually, with but limited equipment.It is of considerable interest to many developingcountries since it can not only replace imports, butalso offers an outlet for thinnings and small-diameterlogs from coniferous plantations as well as for saw-mill residues.

Fibreboard

The fibreboard industry, with a world output(1960) of well over 4 million tons, has many affinitieswith the-pulp and paper industry. The problems ofwood supply are similar, as is the stage of pulppreparation, if the traditional wet processes are em-ployed. Process chemicals are not normally requir-ed, and the sizing materials and additives whichimpart particular qualities to the finished productdo not represent an important element in total costs.Wood costs may account for 20 to 40 percent of thetotal, depending on the size of mill (though they mayfall to 10 percent if cheap residues are available),while fixed charges (mainly depreciation and intereston working capital) may account for 30 to 20 percent,again depending 011 size of mill. Thus, as with pulpand paper, scale economies are significant. Fixedinvestment per daily ton may range from $90,000 to$100,000 for a mill of 6,000 tons annual capacity,down to around $30,000 for a mill of 50,000tons annual capacity. In fact, fibreboard productionlends itself to small-scale operations less readilythan several branches of the pulp and paper industry.

An adequate supply of fresh water is required;water needs are similar to those for newsprintproduction. Power requirements, at 300 to 800

kilowatt-hours per ton of product, are less than fornewsprint but more than for chemical pulp. Laborneeds (in the mill) are modest, ranging from 12 to

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40 man-hours per ton. Fibreboard production canbe based on a wide variety of coniferous and broad-leaved species, including suitably blended mixtures,and is eminently suitable for utilizing residues (in-cluding even bark and sawdust) from other forestindustries. There is a growing trend to the use ofunbarked wood.

In recent years several dry processes for fibreboardmanufacture have been developed. These processesmay well come to have an interest for developingcountries since investment is somewhat lower andthere is no need for large supplies of fresh water.Resins are, however, needed for bonding purposes.

Particle board

The particle board industry is essentially a post-war developraent. Over the 1950-1960 decade worldproduction grew from about 15,000 tons to nearly2 million tons. Like fibreboard, particle board canmake use of a very wide variety of species, coniferousand broadleaved, as well as flax, bagasse, and woodresidues; indeed, this industry developed in the firstinsta,nce to make use of wood residues. It is, infact, this tolerance in raw material requirements thatconfers on both these board industries a specialattraction for countries with tropical forests, whereinfrequently only a small proportion of the availabletimber (species and sizes) are suitable for the othermajor forest industries.

Investment in a particle board mill of intermediatesize represents roughly half that in a fibreboard millof comparable tonnage. Though there are economiesof scale, relatively small mills can be economic,particularly if operating on locally available residuesor serving a captive market. The average capacityof mills in 1956 in Europe, North America and theworld as a whole, was 4,200, 2,500, and 3,500 tonsrespectively. Investment cost ranges from about$12,000-$30,000 per daily ton, depending on theprocess used and hence on the type of board pro-duced.

There are fewer restrictions on location than in thecase of fibreboard. Water is not needed. Powerrequirements are modest, 100 to 300 kilowatts perhour per ton of board, as are mill labor require-ments, 5 to 20 man-hours per ton. A key consider-ation, however, is the availability and cost of resin,normally urea, or phenol resin. This bonding ma-terial, which represents about 5 to 8 percent of theweight of the finished board, may account for 15

to 35 percent of production costs, depending on theprocess used and the cost of resin. Thus resincosts may frequently exceed wood costs. Obviously,if resin has to be imported, this sharply diminishesthe import-saving value of the project.

MISCELLANEOUS AND SECONDARY FOREST INDUSTRIES

In addition to the major forest industries justdiscussed there are very many other smaller industriesbased on raw materials of forest origin. Theseare so diverse that no simple grouping is whollysatisfactory for classification purposes.

Though some of these smaller industries are littlemore than extensions of the sawmilling and veneerindustries, they may be separately established, par-ticularly where the existence of a suitable resourceor the needs of a consumption center make thisadvisable. In some instances the raw materials mayeven be imported. Wood turning, with handles foragricultural implements and sports goods, wooden-ware and spools as principal products, is one example.The manufacture of match blocks in the form ofsawnwood or veneer is another. Small plants (orunits within larger plants) are suitable for producingshingles, pencil slats and briarwood pipe blocks,often for export, where appropriate raw materialsare available. The manufacture of cooperage andother wooden containers and of wood wool arecomplementary to certain food and drink exportingindustries as well as to the shipping of many manu-factured goods. The capital requirements per unitof wood consumed are of about the same order asthose for smaller sawmills. Mills may, however, bequite small in size. A large proportion of the pro-duction costs are made up of charges for skilled andsemiskilled labor but this varies considerably fromindustry to industry. Raw material costs tend tobe quite important in the total.

The chemical distillation of wood yields a largevariety of products, the more important of whichare charcoal and methyl or wood. alcohol. Whenconiferous woods are used various oils and tars arealso produced. In addition to its common house-hold and commercial uses for cooking and heating,charcoal has a number of important industrial uses,such as in steel manufacture, water purification, andtobacco curing. One of the developing countrieshas recently made a major use of charcoal in themanufacture of Portland cement. The capital re-

105

quirements for wood distillation plants are notexcessive. Charcoal alone may be produced in simplepit methods requiring no capital. The other prod-ucts are, of course, lost in this case.

A number of extractives from wood and barkprovide the raw material for several small but im-portant industries. Some species of pine are suit-able for the tapping of a resinous exudate used forthe manufacture, by a distillation process, of tur-pentine and resin. A considerable amount of laborand little capital are required in the industry. Thetrees may also be used for their timber. Productsof this industry are important in a variety of chemicalindustries.

The production of tannins, most important rawmaterials in the hide and leather industries, may bebased on a great number of woody and herbaceousplants. The most important sources have been thewood of the quebracho, which is common in SouthAmerica; bark of the chestnut, oaks and hemlock,which were the important materials in North Americaand Europe; mangrove bark, common to manytropical coasts; and the bark of wattle, which hasbecome an important plantation tree for this purpose.A wide variety of species found in the developingcountries are suitable for tannin production. Exportmarkets have been poor in recent years but domesticproduction for local leather industries is logical formost developing countries.

The final group of industries to be briefly summar-ized here are the secondary wood and paper manu-facturing industries, which use as their raw materialsthe products of sawmills, plywood and veneer plants,board mills and paper mills. They may be closelyassociated with mills producing their raw materialsor may, by contrast, be widely decentralized nearconsuming centers. Their products are most varied,supplying consumers, literally, from cradle to grave.Among the more important of the secondary woodusing industries are furniture manufacturing; joineryplants producing such things as doors, windowsashes, moldings, and even prefabricated houses;boat-building; manufacturing of vehicle bodieswagons, truck bodies, etc. Although they mayfrequently do their own initial processing, wood-turning and container plants sometimes are simplysecondary manufacturing units. Paper-using plantsalso produce a great variety of goods, includingcorrugated boxes, carbons, paper bags and sacks,waxed containers, envelopes, napkins and exercisebooks. These industries tend as a group to belabor-intensive calling for a wide range of skills

and to use relatively high cost raw materials. Capitalrequirements are generally modest to low. Plantscan often be small and decentralized but there aresome economies of scale for the more mechanizedThese industries can often be developed as units inindustrial estates. They are often well-suited to de-veloping countries because they tend to be labor-intensive, and can usually vary in size. Even incountries with little or no forest resource they can

Many of the characteristics of the forest industrieswhich we have just discussed are determined largelyby the nature of the raw material on which they op-erate and the conditions under which that raw materi-al is supplied. Our assessment of the potential roleof forest industries in developing countries wouldtherefore be incomplete without at least a cursoryglance at the forestry sector.

Supplying wood, the raw material of the forestindustries, is the major function of the forestrysector of the economy. There are two fundamentalphases of the timber-supplying forestry operation:logging, the felling and transportation of logs tothe market or to the wood-user; and forest manage-ment, which is concerned with the provision ofstanding trees ready for felling. These two phasesare intimately interwoven and, in turn, they oftenhave a distinct bearing on the other major functionof forestry - assuring the flow of nontimber goodsand services inherent in the forest environment.The nonwood production of the forest is consideredin a later section. Here we are concerned withthe forest as the " woodshed " of the forest industries.

SOME CHARACTERISTICS OF FORESTRY

A most striking, although not always obvious,characteristic of forestry is the complexity andvariability of the production function. The forestgrows, not as the simple summation of trees growingas individuals, but in a competitive race for spaceand nutrients in which the development of eachtree affects that of its neighbors. According toenvironment and to their historical developmentforests vary from simple groups of trees of the same

be operated on imported materials saving appreci-able foreign exchange on the value added. Manywood-deficient developing countries are now import-ing products of the secondary wood and paper in-dustries to a value in excess of their imports of allother wood and paper products. By contrast somecountries in this category, such as Israel and theUnited Arab Republic, have developed these second-ary industries to a high degree.

106

age and of the sarna species to heterogeneous mix-tures of trees of many ages and of a vast numberof species. Fairly homogeneous forest stands of afew coniferous species and of fairly simple age struc-ture, which are typical of the more northern tem-perate areas, lend themselves well to the techniquesand economies of mass production logging. Thetropical rain forest with its myriad diverse species,typical of many of the developing areas, demands,in its exploitation, either a search over sizable areasfor individual trees, or logging and processing tech-niques capable of handling most heterogeneous rawmaterials. Trees grow at vastly different rates,according to their species, their physical environ-ment and the competition from their fellows. Theage of felling depends not only on the numerouscombinations of these factors, but also on the kindof product being cropped. Thus there may bepulpwood cut from fast-growing plantation speciesafter six or eight years of growth, or veneer logsharvested from 200- to 300-year-old trees from thenatural forest.

As a tree grows it builds upon its former frame,making it larger and larger, accumulating annualgrowth from year to year. Over any appreciablearea, however, individual trees at various stages oftheir life fail to withstand competition and die.The rate of mortality is high when many trees ofsimilar sizes are competing or when numerous indi-viduals reach " old age." In the natural forest,except in times of epidemic losses due to disease orinsects, the mortality losses balance the accumulationof annual increments and the net result of the dynamicchange within the forest is little or no change intotal volume of standing trees.

Natural forests do, however, represent an accu-mulation of past annual growths which have, gen-

Characteristics of the forest base

erally, built up heavy volumes of large, old and fre-quently valuable trees. Such forests have often beenexploited as a cost-free timber mine or reservoirof forest capital without regard to problems ofreplacement. In the early stages of development inmany countries, this exploitation without renewalhas enabled the accumulation of other forms ofcapital. Such a "free loan" has often broughtin its train the social costs of abrupt declines inlocal economic activity and of abandoned towns.Nevertheless, exploitation of the natural forest hasplayed an important role in the development ofthese countries.

The use of natural forests without concern forreplacement, that is, the liquidation of forest capital,can occasionally be justified but only under veryspecial conditions. Normally, where continuity ofsupply has to be assured, there must be provisionfor successive croppings from the same areas. Plansand schedules for this may take a variety of fonnsand involve different intensities of use.

These are largely conditioned by two inherentcharacteristics of the forest. The first characteristicis the identity of factory and product, a charac-teristic shared to some extent with meat productionand fisheries. The act of cropping destroys a partof the forest capital (the wood factory) but in sodoing harvests as a product an accumulation ofannual " interest " or growth. It is thus possibleto vary the actual volume and time of harvestwithin fairly wide limits to delay the harvest,storing the crop as it stands, or to accelerate thecutting temporarily, borrowing from the capital.This flexibility of the harvesting period is a charac-teristic of forestry which offers distinct advantages.Of course, continuous harvesting in excess of growthpotential will eventually destroy the forest. At thesame time, the removal of trees does profoundlyaffect the growth of their neighbors or permits theestablishment of new trees. Thus, within limits,harvesting can promote the net growth or rate ofproduction of the forest.

The second characteristic concerns the very largeareas upon which forestry is practiced. This makesclose supervision difficult, and the progress of pro-duction equally difficult to observe.

In its least intensive form forest management maydiffer from capital liquidation only in that it ensuresa future crop, either from trees not felled at thetime of the initial cut or from new trees. The mostelementary approach to supply continuity consistsof a simple progression of harvesting throughout

107

the forest, returning to the first area of cutting whenthe next crop matures.

Most natural forests have such a variationtree size that a complete cropping of conunercialspecies at the time of initial felling is inappropriate.In such cases, two or more crops may be takenfrom a given area during the span of years thatcorresponds to a rotation.

Intensive management is characterized by morefrequent returns to the same area. Not only arefinal crop trees removed; thinning, the removal ofsmall and intermediate-sized trees, is also undertaken.This reduces potential losses through mortality andfavors the growth of the remaining trees, permit-ting the annual growth to accumulate on fewer andlarger individuals.

With increasing intensity of use come other meas-ures, including protection from fire, insects anddisease. Harvestable growth has been doubled ortrebled in many well-managed natural forests bymeans of a wide range of techniques including thin-ning, weeding, pruning, enrichment planting, seedsource selection, and drainage.

Planting forest trees in unforested areas or withincutover areas in thc natural forest has, of course,long been a recognized. technique. But plantationforestry has made spectacular advances in recentdecades. Forestry genetics can assure high qualitybreeding material. With the use of selected seed-lings, by tilling and fertilizing the soil, plantationscan produce as much as ten times the growth oft he natural forest.

The shift to what are essentially agrotechnicalmethods presents many advantages; convenient selec-tion of species and rotation period; a more homo-geneous crop, lending itself to rnass productionremoval and processing techniques; co-use of theland with agricultural crops in the first few yearsafter establishment; reduction of supervision andtransport costs by concentration; and freedom toplan the sequence of age groups for orderly harvest-ing (as distinct from accepting the age patternsin the natural forest). Another distinct advantageis the possibility of complementing prod.uction fromthe natural forest.

Prospects for further development in plantationforestry are most promising. fncredible growthrates, particularly in tropical regions, have beenobtained, sometimes with species which have donepoorly in their native habitat. A promising areaof investigation, as yet scarcely explored, is theapplication of fertilizers, trace elements and hormone

compounds. Along with more widespread and betterorganized research and experimentation, facilities forthe exchange of information have expanded. It isthe improved organization, no less than the increas-ing scale of research effort which guarantees- newbreakthroughs.

An adaptation of plantation forestry now com-monly called linear forestry has evolved in a num-ber of countries, usually those with much land inagricultural use. Fast-growing species are planted inrows along motor roads, railroads, canals, rivers,terrace edges and field boundaries. They have oftenbeen established as boundary markers and for theirshade, windbreak and erosion control functions.These plantations have often supplied much in-dustrial wood as well as fuelwood. In some areas,they have proved so profitable that they have ledto forest plantations of the normal type on landformerly under agriculture.

THE LOGGING PHASE

Logging methods, in addition to being greatlyaffected by the nature of the terrain and by theclimate, are also much influenced by the natureof the product harvested, by the structure of theforest and by the form and intensity of forest man-agement. Methods vary from the most elementaryof hand methods to heavily mechanized operations.Generally, the more highly mechanized operationshave developed under one of two conditions wherea uniform forest and easy terrain encourages massproduction techniques, or where difficult terrain posesspecial problems. Although some measure of mechan-ization improves efficiency, there remain many instan-ces where hand methods, or at least methods requir-ing little capital, are equally or even more effective.

Logging must often have a seasonal pattern be-cause of rainfall and resultant ground conditions,because of snow or ice conditions, extreme firehazards, or volume of stream flow. In many casesseasonal labor requirements for logging complementthose for agriculture, some types of manufacturing,and building a.ctivity.

SOME ADVANTAGES INFIERENT IN FORESTRY

The characteristics described above are those whichare responsible for the flexible productive function inforestry (forest management plus logging), permit-

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ting ready adaptation to conditions which varygreatly in space and time.

On the one hand, output itself may readily bevaried with little change in the nature or quantityof inputs. There is at any time a considerablechoice of the foul,. in which the output will be har-vested. With new opportunities opened up by thetechnology of processing and changed economic con-ditions, a shift in the product can be readily accom-modated. In this way, material originally plannedor grown for veneer logs or sawlogs can be used,with few limitations, for pulpwood even afterbeing felled and transported to a mill. Wood con-sidered originally only of fuelwood quality may,with technological improvements, be used as pulp-wood or as raw material for particle board. Muchpulpwood may even be used for sawlogs. The timeof harvesting is flexible within considerable limits,permitting adaptation to short-term fluctuations indemand, without danger of spoilage or excessiveproblems of storage.

On the other hand, there exists marked flexibilityand possibility of variation in the combination ofinputs. Even in the exceptional case where forestcapital is liquidated without planned replacementthere are a variety of choices on land input (landhere in the sense of land plus forest growing stock).One can harvest little from much land, or morefrom less; the choice determines the relation betweendirect and indirect costs of harvesting. The formerchoice means relinquishing timbers of marginalvalue; but it may serve an " opening up " functionover and above forest exploitation.

If, as is normal, continuity of supply is the aim,then to the choice of variation in logging input isadded numerous alternatives within forest man-agement, as well as between the two major phasesof forestry. Generally, the greater the input ofland, the larger is thc,' portion of wood cost madeup by logging cost; the less the use of land, thelarger is the portion composed of timber grow-ing costs. More extensive forestry over large areascalls for less labor for timber growing but morefor the creation of what may be temporary infra-structure, and more into logging labor and trans-portation capital because of the greater distances.Plantation forestry is the extreme case of limitingland input.

In the growing of timber, time itself is an impor-tant input, which varies with the type of forest,the product and management intensity. The costof time is interest on engaged capital; this is why

the more intensive practices tend to be associatedwith a short rotation period.

Evidently the many choices available, both asregards combination of input and patterns of out-put, give rise to numerous problems of decision.What is relevant in our present context, however,is that they also offer a multitude of possibilities inthe supplying of raw material for domestic industry

Features of forest industries relevant to development

A general appraisal of investment prospects in theforest industries sector can now be attempted. Thequestion is: Given a decision to undertake industrialinvestment, to what extent can investment in thesector under review be recommended for its short-and long-term advantages?

The individual situations in the countries includedin the group of less developed regions vary greatly.Therefore, arguments and conclusions will neces-sarily have to be stated in very broad and generalterms. The general indication they provide will

apply more to some countries and less to others:this indication, however, may provide an incentive toundertake more detailed country reviews to showhow far the propositions of this chapter are rele-vant in individual cases.

DEMAND EXPANSION AND IMPORT-SAVING EFFECT

A partial argument for investment in the forestindustries of less developed countries arises fromthe present situation and future prospects of de-mand relative to present supply possibilities. As hasalready been seen, the group of less developed Coun-tries, in spite of their very low levels of incomeand per caput consumption, already now presentsa substantial deficit in net trade of forest products,and this trade deficit is bound to increase very rap-idly, at least in absolute terms, tmless very largeinvestment is undertaken.

Final and intermediate goods with an income elas-ticity of demand as high as that of forest products(and especially of paper and wood-based panelproducts) pose difficult problems to developingcountries. One of the most important obstaclesthat these countries have to face in their growth

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or for export. This range means that there is vir-tually no country, whatever its stage of economicdevelopment, whatever its forest endowment, forwhich forestry is not an appropriate economic activ-ity. Experience has shown that, even in countrieswith little natural forest of value, plantation andlinear forestry can transform the situation speedily,opening up entirely new perspectives.

process is their balance of payments situation, sincethey normally have a structural deficit on currentaccount which is likely to become bigger and biggeras the growth process gets under way. The increas-ing deficit is normally due to imports of the capitalgoods necessary for industrialization, which may becompensated for by loans and grants restoring theequilibrium on capital account, and to imports ofcommodities the consumption of which increases inproportion or more than in proportion to income.In order to maintain the deficit within reasonablelimits, without holding in check the growth process,imports of goods other than capital goods mustbe restricted with tariffs and quotas, and at thesame time the domestic productive capacity of pre-viously imported goods must be expanded, so asto deal with additional requirements.

The magnitude of the import-saving effects re-sulting, from expanding domestic production of for-est products, is not by itself, however, a decisiveargument for investing in the sector, since an equallyrelevant import-saving effect might be obtained byexpanding the production of other goods with asimilarly high income elasticity of demand. Theheart of the matter consists in choosing which com-modities should be consumed at the expense of others.Since the given amount of capital will not suffice forexpanding domestic production of all goods, therewill be some goods the consumption of which mustbe restricted in order to prevent a growing tradedeficit. Hence the case for investment in forestindustries cannot rest simply on the import-savingeffect that an expansion of such industries wouldhave but should be supplemented by other argu-ments.

Of such arguments there are plenty, stemmingfrom structural characteristics of supply and de-mand, in part already examined in earlier pages.

CHARACTERISTICS OF THE RAW MATERIAL AND

LOCATIONAL FACTORS

One set of arguments derives from the nature andproperties of the raw material employed in forestindustries.

First, wood is the only raw material that nearlyall inhabited regions of the world have availableand can reproduce from existing forests, or couldpossess by establishing plantations. It is a generalprinciple of development policy that priority shouldbe given to industries processing local raw mater-ials, since the presence of the latter in part offsetsthe external diseconomies that have prevented in-dustrialization in the past. Nevertheless, it is oftenforgotten in underdeveloped economies that theirforests which the very lack of development hasin narty cases helped to preserve are as importanta source of natural wealth as mineral deposits;if properly exploited, forests represent a most im-portant incentive to the beginning of industrialization.

A second argument for expansion of forest in-dustries, again connected with the characteristicsof forest industries inputs, rests on location theory.Of all the major raw materials, wood is usually themost difficult to transport. Not only is forestrytied to extensive areas of land, so that transportcan never start from a permanent position, as itdoes for instance in the case of coal; in addition,wood as cut in the forest is a bulky material varyingin size and shape, and the extent to which these canbe altered for the sake of easier transport is severelylimited by the future use of wood and by otherfactors. Finally, forest industries, as was shownabove are typically weight-losing, and the wood rawmaterial accounts for a substantial proportion oftotal production costs.

Less developed regions, though already exportersof broadleaved sawnwood and plywood, still exporta considerable quantity of sawlogs, which are thensawn or felled in importing countries. Here, evi-dently, there is a prima facie case for expandingsawmilling and plywood capacity by an amountsufficient to satisfy not only growing internal demand,but also to substitute exports of processed woodfor exports of sawlogs. It is a case which, for once,could find support even in the tra.ditional theoryof international specialization, since this substi-tution of exports would result in a net decrease incosts owing to the saving in freight. This advant-age has so far been insufficiently exploited, partlyfor certain technical reasons (which are not, however,

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insuperable), but mainly because of the lack of in-frastructure which characterizes all less developedcountries. This, however, should no longer be anobstacle if a consistent development policy is pur-sued: as has already been stressed, investinentforest industries is appraised in this chapter not inisolation but in the general context of an over-alldevelopment policy which presupposes, as a pre-liminary step, the building of social overhead capitaland implies the installation of industries also indifferent sectors. In this case the cost of infra-structure can no longer be considered as a cost tobe borne for the sake of a single investment projectin a simple sector: what vvas true for the colonialexploitation of one or very few export goods (andmade it financially convenient to export the rawmaterial rather than process it locally) does notapply with reference to the over-all economicgrowth of a country. 14

Location factors are similarly important for wood-based panel products and for pulp and paper. Forthe manufacture of many grades of paper, however,an admixture of long-fiber pulp is needed, and manydeveloping countries at present lack indigenoussources of long fiber. In the long run, adequate for-estry development can usually fill the gap; in theshort run, long-fiber pulp has to be imported. Inthe meantime there are often excellent prospectsfor the local manufacture of short-fiber pulp to becombined with imported long-fiber pulp in the lo-cal manufacture of paper.

An even better utilization of local resources will,of course, be attained as technical progress leadsto the substitution of the types of wood which arelocally available for those which have to be im-ported especially of broad-leaved sawnwood andwood-based panel products for coniferous sawnwoodand of short-fiber for long-fiber pulp in pa.permanufacture.

TECHNOLOGICAL ADVANTAGES OF FOREST INDUSTRIES

Another set of arguments in favor of forest in-dustries rests on the characteristics of the technolo-gies in use in the industries themselves. It waspointed out earlier that the wider the range of theproduction function and the greater the flexibility

" The satne reason suggests that in the long run, where pos-sible, a policy of forestry development should be followed thataims at creating the supply of the types of wood (especially coni-fers) which are now lacking, in order to minimi7e the burdenof necessary imports.

relative to scale, the more suitable a sector is forinvestment in the less developed countries. Forest in-dustries, taken individually, present these advantages.

First, in the production of the raw material, ex-pensive mechanization can often be postponed andunskilled labor used instead. Logging often takesplace under conditions where expensive mechani-zation is not a pressing necessity, and is sometimesuneconomical owing to the heterogeneity of theenvironment and of the produce. Quite oftenand especially in regions where it tends to be plenti-ful, manual labor assisted by animals or relativelycheap machinery can hold its own in competitionwith expensive machines. Thus the owner of asmall forest industry is normally in a position todo his own logging without incurring heavy initialexpenses; and, as long as labor remains relativelycheap, larger operators will also be able to postponefar-reaching mechanization in the forest. The possi-bility of postponing the use of expensive machineryin the production of raw material is distinctly help-ful in less developed areas, since it reduces capitalrequirements while at the same time providing con-siderable employment possibilities for labor possess-ing only the types of manual skill commonly foundin agricultural areas.

Secondly, the physical properties of wood renderit relatively easy to work mechanically, so that manyproducts can be manufactured ad.equately with theuse of fairly simple machinery. The difficulty oftransporting the raw material on the one hand,and the ease with which it can be worked on theother, make it possible for small, or fairly small,units to be economical in the manufacture of suchbasic products as sawn timber, veneer, and mechan-ical pulp: the proximity of raw material supplies,and sometimes also the possibility of selling locallya large part of the product, go a long way towardcompensating for the disabilities of size. Whereconditions are favorable, the manufacturing unit canbe increased step by step, as additional capital andqualified manpower become available. Even certaintypes of integration are possible on quite a smallscale. This possibility of growth by degrees is veryuseful in developing economies.

DEMAND FOR FOREST PRODUCTS: INDIRECT ADVANTAGES

AND EXTERNAL ECONOMIES

We have noted that a major problem of develop-ment policy consists in the sectoral allocation of a

1H

limited amount of capital and in deciding for whichcommodities production should be expanded andfor which instead consumption must for some timebe restricted in order to prevent a growing balanceof payments deficit. Characteristics of supply, asexamined so far, provide good indications for thechoice; but, also independently of them, character-istics of the commodities and of the needs that theysatisfy can be of help.

Many commodities with a high income elasticityof demand are consumption goods, introduced intoadvanced countries at relatively high income levels.These are also demanded in less developed countriesin spite of lower average incomes, especially where,as is often the case, there are conspicuous inequali-ties in income distribution. Sometimes imitation ordemonstration effects are at work. Such goodscan, on all counts, be considered less essentialsince they satisfy less urgent needs. Admittedlythis is a value judgment more than an economicevaluation; but hardly anybody would or shouldhesitate in the choice between better food, moreclothes, and education on the one hand, and cars,radios and the like on the other. From this pointof view there can be little doubt that the consumptionof forest products in a country is as good an indexas any of the standard of social, as well as materialdevelopment of the population: in the less developedareas the products of forest industries can help theattainment of some of the essentials of material well-being and of human dignity ranging from suitablehousing and furniture to the possibilities of instruc-tion and the diffusion of books and newspapers.There can therefore be little doubt that the sectorranks rather high in the scale of priorities thatshould be established in determining for which goodsproduction should be expanded and demand com-pletely satisfied, and of which instead consumptionshould be restricted.

This consideration is reinforced by the consider-ation of other indirect effects of investment in forestindustries 031 the economy as a whole, mainly con-sisting in the creation of external economies in abroad sense.

The first group of economies to be noted arc notexternal to the sector, but concern the mutual re-lations between the industries within the sector:the installation of some forest industries tends topave the way for complementary production withinthe area concerned and make the sector as a wholeto some extent self-propelling. Forest exploita-tion commonly yields wood of different kinds and

grades, and the mechanical conversion of woodusually leaves a substantial amount of residue thatcan be utilized by other branches of forest industry.With rising demand for wood products of dif-ferent kinds on the one hand and increasing valueof the raw material on the other, existing industriesoften provide the incentive to the establishment ofnew enterprises and complementary types of utiliza-tion tend to develop. In sum, the heterogeneousnature of thc wood resource, together with theversatility of wood and its unwieldy characterin the raw state, tend to stimulate new industrialactivities within the area, often1 within the sameenterprise.

External economies of a most important type arisefrom the fact that forest industries should normallybe localized as near as possible to the forests, andhence are normally decentralized in the hinterlandof the regions concerned. This " back-wood " char-acter of forest industries creates a natural tie beteenthem and various infrastructural undertakings. Whena new road opens up forests to sawmilling and isused to transport sawn timber to the consumingcenters, the economic benefits thus derived maycontribute substantially toward amortizing the costof the road; logging roads may help to extendthe regional road system; the establishment of ahydro-electric plant may permit the building of anewsprint mill, which, once in operation, is boundto become a major customer of the electric plant;and so forth. This interrelation is an importantfeature of forest industries, notably in the earlystages of development, and may be a very effectivefactor in preventing the occurrence of " dualism "in economic growth, that is, of a cumulativedifferentiation between two parts of the sameregion.

A further indirect advantage arises in forestryfrom the high flexibility of forestry work, and fromthe consequent possibility of utilizing labor that istemporarily idle. Due to the perennial nature oftrees, neither intervention in their growth throughsilvicultural treatment nor the final harvest of thewood is tied to a strict time schedule; and althoughclimatic factors associated with the seasons of theyear affect different kinds of work in the forest,this influence is much less pronounced than in agri-culture. Such -flexibility is important in less de-veloped areas. Since many kinds of forestry workare well suited to the employment of relatively un-skilled labor, a labor potential which otherwise wouldbe wasted can be utilized in current production or

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for the formation of savings in the shape of futureyields of raw material.

But possibly the most important of the indirecteffects of installing forest industries is of an emi-nently dynamic character. Forest industries can beconsidered a propulsive sector, that is, a sector theexpansion of which is liable to induce spontaneousinvestment in other branches of production. Thisis due to the fact that the forest industries have avery strong forward linkage with other sectors. A

high degree of linkage makes a sector a good start-ing point for industrial growth: investment there, byinducing demand and providing supplies for othersectors, widens investment opportunities in the econ-omy as a whole and has a multiplier effect notin the traditional sense of the word, which is basedon final demand and on the consumption of incomeby the newly employed, but in the sense of increas-ing interindustry demand.

SUMIVIARY

Few of the advantages of forest industries thathave been listed so far can be translated into a fi-nancial evaluation, since they are not liable to findexpression in tenns of money. This makes it diffi-cult to attempt a quantitative comparison of costsand benefits and a precise assessment of socialprofitability. All the said advantages, however,should be taken into account by planners whenmaking decisions on the allocation of availableinvestment resources with particular care, since,in the case of forest industries, social benefitsmay sometimes be as important as the financialprofit.

A tentative estimate has already been made ofthe financial cost of an increase in productive capac-ity sufficient to prevent the trade deficit from rising.The capital cost per unit of additional productionis but little greater than the cost per unit of imports.But the former cost would be borne once and forall over a period of years; the latter would bea recurring cost. The total investment requiredover the decade some $5,000 million is aforbidding sum. But this must not be conceived asa sudden lump sum investment; it would be agradual, progressively rising investment, spread overa number of years. Viewed in this light, thereare no grounds for regarding such a target asunrealistic.

Analysis here has so far brought out many cogentreasons why countries in the early stages of economicdevelopment should give special attention to theestablishment or expansion of forest industries.These stem, essentially, from the structural anddynamic characteristics of the demand for forestproducts, from the flexibility and range of the pro-duction functions of forest industries, and from thefact that nearly all the less developed countriespossess unused or insufficiently utilized forest re-sources, or could possess them within a short spaceof time.

The first two points have been amply demonstrated.The third, commonly taken for granted, requiresexamination, since the naive assumption that unusedforests spell industrial opportunity has in the pastbeen the source and origin of much disillusionmentand many disappointments.

VARIETY OF FOREST RESERVES

It was pointed out earlier that in most develop-ing countries the forest reserves differ considerablyin composition and quality from those of the indus-trially advanced countries which have succeeded inbuilding up important forest industries.

Natural conifers

Perhaps a score of these less developed countriespossess significant areas of natural conifers. Theseconsist mostly of pine species and, while some ofthese areas are readily accessible, others lie in remoteplaces with difficult terrain. In general, given rea-sonable management, regeneration and growthrates are good usually much higher than in theconiferous forests of North America, northern Eu-rope and the U.S.S.R., but somewhat less than therates achieved in the intensively managed artificialconiferous forests of, say, Demnark and the UnitedKingdom.

Platited forests.

Quite a number of developing countries alreadypossess substantial areas of planted forests va-rious types of pine, and such broadleaved species

Resources, technology and research

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as poplar, willow and eucalypts. As has alreadybeen mentioned, phenomenal growth rates are fre-quently recorded in these plantations; more than fivetimes the rate in the natural coniferous forests ofthe north temperate zone is quite common

However, important as are these coniferous forestsand plantations (important precisely because cur-rently available technology is well adapted to theirutilization), they are nevertheless exceptions in theless developed regions of the world. In fact, morethan nine tenths of the forest reserves of Asia, Afri-ca and Latin America consist of broadleaved forests,and these vary greatly in their nature, and conse-quently in the problems and prospects of their de-velopment. A brief summary of the major typeswill illustrate this point.

Tropical rain forests

Tropical rain forests represent perhaps the pop-ular concept of undeveloped forest resources. Theseoccur in greatest abundance in high rainfall areasnear the equator, particularly in thc basins of theAmazon and the Congo and in the peninsular andinsular areas of southeast Asia, but they also rangequite widely in smaller concentrations over other partsof the tropics. They cover some 1,000 millionhectares and comprise 40 percent of the forests ofthe developing countries. The stands are dense andare composed of numerous spccies, only a few ofwhich at present provide important commercialwoods (such as the mahoganies, okoumé, wawaand greenheart). Of the total volume of growingstock, frequently no more than 5 to 10 percent con-sists of currently marketable species. The buttressedand fluted bases of the trees, and the abundantgrowth of climbing vines and creepers, add greatlyto the exploitation problem caused by the hetero-geneity of the stands.

Moist deciduous ,forests

Moist deciduous forests are found in tropical andnear-tropical areas which have seasonal variation intemperature and rainfall, often on mountain slopes.The stands are also dense but are less heterogeneousthan the rain forest. Conifers are sometimes foundin admixtures. This forest type is one which has

been subjected to considerable population pressures(with consequent clearing for agriculture and shift-ing cultivation) as well as to the exploitation of afew desired species such as teak and podocarpus.This type accounts for about 200 million hectaresnearly 10 percent of the forests in the developingregions.

Dry deciduous forests

Dry deciduous forests arc found in those tropicaland subtropical areas which have limited rainfall.They are particularly abundant in eastern SouthAmerica, south-central Africa and southern Asia.The density of the stands is greatly affected by theamount of precipitation, and in drier locations theybecome open and interspersed with thorn scrubthickets and frequent savannas. Many of theseforests have been subjected to frequent burning andsometimes to overgrazing. Except in the moisterlocations where a few species have conunercial value,the trees are very badly formed. These forestscomprise about 800 million hectares or 35 percentof the forests under discussion.

Temperate hardwood .forests

Temperate hardwood forests account for approxi-mately 50 million hectares of the forest reserves ofthe developing countries. These forests, found largelyin east Asia, pasts of the Himalayas and southernLatin America, sometimes include conifers.

Mangrove and bamboo firests

Miscellaneous types of more restricted distributioninclude the mangrove forests of tropical coastlinesand bamboo forests. Bamboos are an importantcomponent of wet evergreen, moist and dry deci-duous forests; they also are found at high altitudesand temperate climates in Asia, and pine bamboostands frequently follow in the wake of shiftingcultivation.

Over the greater part of these forests there has,as yet, been no systematic exploitation, but only ascattered and sporadic use of the forest by localpopulations for fuel and rudimentary construction-al material. Even so, there are vast areas whichhave been commercially exploited in the past or are

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being so today. To a large extent this exploitationhas been geared to the production of unprocessedwood for export. Progress in establishing localforest industries has been disappointing. And thereason is not that available technology has but limit-ed applicability to the kind of forest reserves whichthese countries possess. This much is clear if werecall that several of the less developed countriesdo possess " orthodox " coniferous forest reservesstill undeveloped, reserves which differ little from,and are no whit inferior to, those resources whichalready sustain sizable forest industries in the indus-trially advanced countries. These reserves remainan unrealized potential, even though their composi-tion would readily permit industrialization on thebasis of existing technology. Evidently, technologyis not all.

In any case, currently available technology is byno means as irrelevant to the circumstances of de-veloping countries as is often supposed. At thisstage it may be useful to take a quick look at someof the technological trends which have been at workin the industrially advanced countries over recentdecades.

RECENT TECHNOLOGICAL TRENDS

Two basic trends can be distinguished, and bothhave intensified in the postwar period: the broaden-ing of the raw material base for the forest industries,and the fuller utilization of the forest crop.

Both these trends have their origin in the particu-lar circumstances facing established foresti ndustriesin the advanced countries. Thus limited availability,or rising costs, of the species preferred for mechanicalpulping (spruce, fir, hemlock and pine) has led tothe use for groundwood of poplar, aspen and eu-calypts. Among the chemical processes, the ear-liest to be adopted on a large scale was the sulphiteprocess, also suited mainly to the dominant speciesof the north temperate zone spruce, firs, hemlockand some pines. Since the early 1930s, however,there has been a spectacular expansion in sulphatepulping capacity, an expansion due to the fact thatthis process, with greater flexibility and great toler-ance to partially decayed wood and bark, can beused for pulping practically all kinds of fibrous rawmaterials. Finally, since the last war, there havebeen developed a number of pulping processes whichcombine mechanical and chemical action, offeringhigher yields than those obtained by pure chemical

processes, and capable of substituting both mechanic-al and chemical pulps over a wide range.

Thus, over the last 30 years, the relatively narrowraw material base of the paper industry in the ad-vanced countries has been expanded to include all theresinous pines (especially in the United States), birch(formerly a " weed " tree in Scandinavia), mosttemperate hardwoods (alone or in mixtures) andvarious agricultural residues (notably cereal strawand sugar cane waste). For example, hardwoodsaccounted for 15 percent of pulping raw inaterials inEurope in 1961, as against a negligible percentagein 1945. At the same time, much greater use hasbeen made of wood residues from sawmills and ply-wood plants for pulping. The volume of residuesso pulped in Europe rose from 4.5 million cubicmeters in 1956 to over 11 million in 1961.

Though the technological progress which hasbrought about a broadening of the raw material baseof the pulp industry has had its main impulse in theraw material supply situation in the advanced areasof the world, it has incid.entally made possible theestablishment or expansion of the pulp industry inthe less developed areas which, by and large, arelacking in the coniferous species which constitutedthe industry's traditional material. The impact hascome not only through the devising of new pulpingtechniques, but also from a m.odification of thetraditional pulp furnish for the manufacture of differ-ent types of paper. It has become increasinglypossible to substitute short-fiber pulp for the conif-erous long-fiber fraction, without major sacrifice ofquality and strength properties. Today there arevery few developing countries that do not possessfiberous resources from which it is technically possibleto make most grades of paper.

Similar considerations (supply and price) haveprompted the remarkable expansion in the advancedcountries since the war of the fibreboard and ply-wood industries, and have brought into existence acompletely new industry particle board whichhas grown spectacularly over the last decade. Tech-nical improvements have enabled plywood to replacesawnwood, the real cost of which has risen, in manyend-uses. Fibreboard has made similar gains, thanksto improved properties, a broadened raw materialbase and an improved relative price. The case ofparticle board is even more striking. Initiated inwood-deficit Germany and making use mainly ofmill residues, the industry was favored by improvedand cheaper synthetic resins and captured a largepart of the market (for example, as furniture core)

1.15

previously held by sawnwood. However, the productproved so competitive that it soon spread to thewood-surplus countries of northern Europe, to theUnited States and to many other parts of the world.Tod.ay, particle board plants exist in nearly 50 coun-tries.

Even the sawmilling industry, which has seen noradical technical advance for half a century, hasbeen affected to some extent by the trends just dis-cussed: there is greater emphasis on precision sawingand high yield. Thanks to important advances inwood preservation techniques, less durable specieshitherto despised can be given a reasonable life inservice and hence find new markets.

These technical advances have been realized bymeans of research directed toward the solution ofthose problems which confront forest industries inthe industrially advanced countries. The volume ofresearch directed to the specific problem.s of theless advanced countries is still negligible. But anirnportant incidental effect of these advances is thatthey have created immensely greater technical pos-sibilities for successfully establishing forest industriesin the less developed countries. If these possibili-ties have so far scarcely been realized, the reasonis that as yet efforts to adapt and transfer existingtechnology to the circumstances of the developingcountries have been sporadic, unco-ordinated andoften halfhearted. This, in turn, is due to the factthat the socio-economic context necessary for theadaptation and application of teclinology has onlyrecently matured in many of the less developed coun-tries and has still to mature in others.

WHERE RESEARCH IS LAGGING

The main need is for the adaptation of availabletechnology, and for applied research rather than forbasic research. This is not to deny the need forfundamental research, both for the discipline andtraining it provides and for the possibility it alwaysoffers of radical new discoveries. But, in terms ofsimple cost/benefits, efforts on a less exalted planeare likely to be more fruitful.

In research, as in technology, emulation of theorganization and methods of the more advancedcountries is seldom appropriate. There is usuallymuch more to be learned from those countries whichhave themselves still to contend with serious problemsof regional backwardness and are vigorously tryingto face up to them. The special contribution which

such countries can make is still insufficiently appre-ciated.

Because the forest resources of the developingcountries differ considerably in location, composi-tion and distribution from those of the more ad-vanced countries, one of the most important areasfor applied research and experimentation is into theeconomic and technical factors which bear on thecost of extracting the raw material supply for in-dustry and hence on the raw material input costper unit on processed output. For the most partthese studies should be conducted on the spot, al-though there is great scope for the co-ordinationof parallel studies on a regional basis. Some ofthe subjects requiring urgent attention are: minim.uminput techniques for attaining certain types of forestfollowing exploitation of the original stand; inex-pensive methods of protecting from fire, grazing,etc., in ways that allow for the interests and tradi-tional habits of the local inhabitants; plantationforestry as related to all species of possible interest(here time is important, and the need is for small-scale experiments to be started as soon as possibleto gain time, without waiting for the funds neededfor a comprehensive program); suitable logging tools,and suitable combinations of different types of log-ging equipment with manual work and the use ofanimals, adapted to the local environment and la-bor supply conditions; and methods of low-costforest road construction and maintenance.

Another desirable area of research concerns prob-lems of storage and shipment, both before and afterconversion. So far inadequate attention has been paidto checking or controlling decay, warping, discolora-tion, etc., under varying climatic conditions. Speciallyimportant are the problems involved in shippingprocessed wood overseas under different conditions.

Much work has already been done 011 the physi-cal and chemical characteristics of secondary species,but this work has all too often been carried out inmetropolitan countries and aimed at testing candi-date export species. More helpful would be engin-eering studies of the usefulness of these species,with or without preservation, for local housingand nonresidential construction, harnessing pre-fabrication techniques. More work is needed onthe properties of plantation species and secondaryhardwoods in relation to different pulping pro-cesses and for various board products. Cheaper andbetter glues and resins, where possible manufacturedfrom locally available materials, are needed to im-prove the properties of plywood and particle board

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under severe climatic conditions. As regards re-search on pulp and paper processing, the great needis for scaling down the economic production ofpulp within the known processes (notably the semi-chemical and the soda and sulphate processes),and for adapting plant design to semiskilled labor.In sawmilling there is little need for new machines,but great need for improved plant layout as wellas considerable scope for the introduction of modernmethods of stock control.

These are but a few of the promising avenues forresearch and experimentation. All require essen-tially an objective review of what is already Icnown,and an intelligent adaptation of that knowledge tothe specific conditions of developing countriesparticularly as regards the local raw materials, thepossible scale of operations, and locally availablelabor and skills.

A large part of the problem is an informationalone. The volume of new and relevant informationincreases annually, and international and nationalarrangements for pooling, analyzing, transmittingand receiving the relevant information are failingto keep pace. Awareness of what has been doneelsewhere is a prerequisite for the successful exerciseof the imaginative approach and flexibility whichalone can ensure the effective adaptation of existingtechnology to the special circumstances of the de-veloping countries.

MAKING CAPITAL GO FURTHER

We have seen that several of the principal forestindustries are capital-intensive, so far as the process-ing plant is concerned. It is a common characteristicof countries in the early stages of the growth process

at any rate as soon as they have committed them-selves to a conscious development program thatcapital is scarce and expensive. On the other hand,most, though by no means all, the developing Coun-tries do possess a reserve of unemployed or underem-ployed rural labor, sometimes amounting to the equiv-alent of 30 percent of the active rural population.There is, therefore, a clear need for economizing incapital provided this is consonant with efThient andeconomic operation. It does not by any meansfollow that labor-intensive techniques are inv.?siablyto be preferred to capital-intensive ones.

While the choice of techniques must take intoaccount the alternative impact on operating costs,other considerations will frequently bear en the

final decision. Labor-intensive methods may be pre-ferred because for political and social reasons it isnecessary to create employment opportunities. Whatshould not be overlooked is that factor availabilitycan change rather quickly as the process of indus-trialization proceeds. Labor which is plentiful andcheap today will certainly, as it acquires skills, or-ganization and an increased sense of dignity, becomescarcer and dearer tomorrow. This is not a regret-table contingency; it is the very purpose of develop-ment. The corollary is that, in selecting techniquesand designing mill layouts, labor-intensive methodsshould be limited to those stages of the process whichlend themselves to ready mechanization at a later stagewhen it becomes economic. This applies above allto materials handling operations at either end ofthe production process.

Forestry and forest industries provide many op-portunities of absorbing under- and unemployedlabor. Even in the developed countries almost alloperations in the forest are carried out by manuallabor. Afforestation, thinning, pruning, nursery workand some aspects of insect and fu-e control, forinstance, do not lend themselves readily to mechani-zation: these operations are mechanized but rarely,and only in those countries where labor is extrernelyscarce and expensive. The same is true for manyaspects of forest exploitation save in those fewinstances where large log sizes compel mechanization.What should be emphasized here, however, is thatlimited or negligible mechanization should not implyprimitive methods of work. In all these phasesthere is ample scope for spectacular increases inproductivity by the provision of suitable transportand simple well-adapted tools. These tools shouldbe designed to meet local conditions, and in manycases it will be possible to organize their manufacturelocally in small workshops.

So far as the wood-processing plants themselvesare concerned, it is to be feared that in the past manyopportunities of capital-saving have been neglected.This may be due in part to the fact that it is frequentlyeasier for an entrepreneur, contractor or consultingengineer to operate from established designs andlayouts rather than think through every aspect witha view to capital-saving under local conditions. Inmill construction, for example, manual labor canoften be used in substitution of expensive construc-tion machinery for excavating foundations and road-making. Buildings can make use of cheap, localbuilding materials and, if the climate allows, outsideconstruction may be adequate for certain phases of

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the operations. Thorough advance planning by keypersonnel can do much to cut down actual construc-tion time and hence capital costs. For example,a pulp and paper mill which might take 18 monthsto construct in an industrially advanced countrycommonly takes three years or more in a less de-veloped country; this alone adds 5 to 10 percentto the investment cost. Seldom can the margin becut down to zero, but effective preplanning can reducethe margin and effect considerable savings.

Multipurpose machines offering flexibility in theproduction program often have advantages oversingle-purpose machines where production series aresmall; this is relevant not only in paper-making,but in such industries as furniture and joinery man-ufacture. Shonfield " attaches much importance togood obsolescent machines, claiming that 3nuch ofthe equipment required during the early stages ofindustrialization can readily be provided second-hand. Certainly this is a source not to be sconaed,for it should be recognized that the relative factor,availability that made these machines obsolescentelsewhere, is very different from that in the develop-ing countries. In fact, some of the important forestindustries existing today have made their start withsecondhand equipment. It would be a mistake,however, to exaggerate the part which secondhandequipment can play: (a) it is not always well adaptedto local raw materials; (b) spares and replacementsoften pose major problems; (e) it tends to makeexcessive demands on skilled labor. It may beobserved in passing that the recent trend towardautomation in process control in the industrializedcountries is very relevant to industrialization in thedeveloping countries. There is nothing either bi-zarre or contradictory in installing electronic equip-ment inside the mill, where it can replace specialskills that take many years of training and experienceto acquire, and making lavish use of manual laborin the woodyard.

It is common knowledge that operating ratios(the relation between actual output a.nd nominal orall-out capacity) are much lower in developingcountries than in industrialized countries. This isone of the main sources of capital wastage. Themost frequent causes of stoppages and high break-down time are low standards of maintenance anddelays in obtaining replacements and spares. Sus-tained effort can reduce these losses, for example, by

SEIONFIELD, ANDREW, The attack on world poverty. London.Chatto and Windus, 1960, p. 163 et seq.

special emphasis on planned preventive maintenanceor by standardizing auxiliary equipment such aselectric motors and pumps. There are, in fact,many types of auxiliary equipment common toforest industries and other sectors of industry. Care-ful study of joint requirements may well establisha case for domestic production of these items. Thisis not only a useful way of effecting import substi-tution; the fact of their being locally available cando much to employ fixed investment more effectivelyin all the industries served, by reducing shutdowntime. Central repair shops, serving several industries,can also contribute.

Many of the forest industries plywood, veneer,blockboard, joiners, furniture, paper conversion, toname a few are suitable for operations on a modestscale and can be accommodated on industrial estateswhere all types of common services can reduce thecapital needs for each individual venture and alsoassure efficient deployment of managerial and otherskills.

Forest industries in developing countries oftenrequire relatively much more working capital thantheir counterparts in industrially advanced countriesfor lack of effective co-ordination between productionprograms at the mill and sales trends. Specialattention to these problems, and the adoption ofvarious simple systems of stock control which havenow been developed can help to reduce workingcapital needs.

The difficulties imposed on developing countries bythe limited size of the domestic market have alreadybeen sufficiently stressed. At the same time it hasbeen made clear that, so far as forest products areconcerned, markets are in continuous, and often veryrapid, expaiasion. All new ventures, therefore, shouldbe planned from the outset with a view to subsequentexpansion. This concerns not only the raw materialcatchment area, but also land, buildings, plant lay-

Determining the

The intimate interrelation between the forestry andforest industry sectors means that a coherent forestryplan is a prerequisite for the sound long-term develop-ment of forest industries. Planning forestry withdue regard to the other economic sectors involves :

(a) estimating the future demand for wood andfor the noncrop utilities that the forests can

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out, etc., as well as, in some cases, the selection ofprocess plant. This may require slightly higherinvestment per unit of output in the first instance,but will lead to very substantial capital savings later

perhaps within two or three years. In the pulpand paper industry, for example, the new investmentneeded to add a given capacity expansion to anexisting mill is generally only 50 to 70 percent of thatrequired to establish a separate mill of equivalentcapacity.

This brief discussion of capital-saving possibilitiesis not, of course, comprehensive, but merely indica-tive. It serves to show, however, that many possi-bilities exist, not all of which have been realized inthe past. One reason, of course, is that hithertothe total market for forest industry equipment inthe developing countries has been rather small inrelation to the annual requirements in the industriallyadvanced. countries. The consequence has been thatbut few manufacturers have devoted much attentionto the special needs of the developing countries.Over the next decade these equipment needs willrepresent a very considerable market in their ownright. It was seen earlier that total investmentneeds in primary forest industries in the less developedcountries could amount to $5,000 million up to1970 if industrial development should take placeto the extent needed to prevent imports of processedwood goods from rising. Two thirds or more ofthis sum would represent expenditure on forestindustry equiprnent. It is clear that those equipmentmanufacturers who concentrate on designing andmaking what is needed, rather than on selling whatthey are accustomed to making, will be in the bestposition to take advantage of the opportunities thisexpanding market affords. It is clear, also, that thescale of expansion in many of the larger developingcountries offers opportunities for the domestic manu-facture of some, if not all, of the necessary equipment.

role of forestry

provide: this refers both to the forests alreadyin existence and to those that may have to becreated;

(b) estimating the size and the nature of the forestresource, and appraising the extent to whichessential production factors might be availablefor forestry ;

(c) determining the plan within the context of theeconomic needs of the country as also the measuresfor the execution of the plan.

Planners, especially in countries where the economythe early stages of development, will often find

inadequate the data on which decisions are to bebased. Such lack of data ought not to delay plan-ning unduly. Plans, however provisional, should beformulated and applied; they can be revised asadditional knowledge becomes available. This is

particularly important where tendencies hostile toforests are at work that may cause considerabledamage in a brief span of time.

ESTIMATING THE DEMAND FOR WOOD

Consideration must be given to the future internaldemand for wood in all forms, ranging from fuelwoodand saw timber to the wood-component of elaborateproducts such as paper and board, and to plansfor export, if any.

Projections of demand as conditioned by internalconsumption and export possibilities must be madefor the next 15 or 20 years, indicating the size andcomposition of the demand at convenient intervals,for example, of five years. These demand project-ions (which specify roundwood needs from the forest)are derivations of the more detailed demand projec-tions required to specify forest industry plans bothfor the next industry planning period, be it three, five,or seven years, and for the perspective plan of 15,20 or 25 years which, in this sector, should providethe frame for the shorter term plan. Since manyundertakings in forestry require considerably moretime than 15 or 20 years to reach fulfillment, changesin d:ernand in the more distant future should also beconsidered. It is true that the possibility of relevantaction within the period of the short-term plan maybe limited, but this is no reason for disregardinglikely long-teini changes. The long-tenn prospectsare particularly relevant to decisions concerning, andprovisional measures directed to, integrated land-usepolicies, including questions of forest reservation.

Internal consumption and export are interdependent.They are complementary when leading to economiesof scale, or when, by creating a more varied market,they permit a fuller utilization of the resource: asis well knovn, intensive forest exploitation conunonlyyields wood of different species, or of the samespecies but appropriate to different uses, or both,

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while the industrialization of the wood yields produceof different grades, and sometimes several jointproducts. On the other hand, there are also situa-tions where export and internal needs cannot bereconciled, and planners must weigh the advantagesof export earnings against future difficulties in sup-plying those needs.

In considering future demand, the possibilities ofdeliberately planned substitution should be appraised.Many products based on wood can be substitutedby others that are not, and vice versa; in addition,there are important and steadily expanding possibil-ities for substitution within the field of wood proper.Kinds and qualities of wood that are relativelyabundant or can be quickly grown in plantationsmay serve as substitutes for scarcer materials. Imag-inative substitution can be of great importance to agrowing economy as an import-saving or export-earning device. In certain cases it rnay be foundworthwhile to use temporary substitutes that areto some extent inferior. Substitution may involvetechnical study and, in addition, inertia and biasmay have to be overcome.

ESTIMATING THE DEMAND FOR THE NONCROP

UTILITIES OF FORESTS

These utilities, nowadays often termed forestinfluences, may be grouped as follows, using a recentclassification : la

Direct influences, roughly corresponding to me-chanical effects, or rather to influences in whichmechanical action appears to play a preponderantpart. This category includes the protective actionof the forest against fall of stone from rocksor screen areas lying above the forest, or againstavalanches, and especially the manner in whichit acts as a windscreen.

Indirect influences, comprising those in whichthe physicochemical influences play the principalthough not the only, role. These are the in-fluences which, by n-todifying the environment, letthe forest affect soil retention and the water cycle.

Psychophysiological influences a category thatapparently has to be differentiated although,as for the other categories, the influences that

FAO. Forest influences. FAO Forestry and Forest ProductsStudies No. 15, Rome, 1962, p. 248-249.

may be grouped in this category are derivedlargely from mechanical or physicocheraicaleffects. But they have now become so great,particularly in heavily industrialized countrieswhere there is a marked population increase,that they cannot be ignored. These are theinfluences which directly interest man, since theyprovide him with a better environment: purifiedair, rest and recreation areas (green belts), tour-ism, sports, and so on.

Forest influences form part of the socio-economicinfrastructure of a country; as might be expected,the general public is not aware of their usefulnessto the same extent as in the case of infrastructuralelements that enter the everyday life of most citi-zens, such as roads, schools, or medical services.Also, scientific knowledge on some of the morecomplex influences of forests is relatively little ad-vanced. Yet there can be no doubt that their over-all importance to a community is enorraous.

From the point of view of planning, forest influ-ences must be appraised in relation to the economicand other sectors of life that these influencesserve: the protective effects of a shelterbelt have nosignificance except in relation to the crops that areshielded from winds; the hygienic and recreationalvalues of a green belt only acquire meaning whenconsidered in relation to a town. In this sense,forest influences are the concern of the agriculturalplanner, the urban planner, etc., and it is theirfunction to decide whether the aims that they havein view should be attained with the aid of forestryor through other means, whenever there is a choiceof means.

However, since forests rarely serve only noncropfunctions they nearly always also produce, or canbe made to produce, wood at the same time andsince, on the other hand, every forest can acquiresome of the noncrop functions under certain cir-cumstances, these functions, or influences, of forestsare inseparable from forestry planning. It is nec-essary, therefore, to estimate future requirementsin relation to likely developments in farming, colon-ization, urban expansions, and so on. These ap-praisals are indispensable elements of the plan forthe forestry sector, but they can be derived onlyfrom the other economic sectors and the over-allneeds of the region.

In planning the treatment of a forest, it is oftendifficult to decide whether a certain area deservesspecial consideration on account of the noncrop

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functions that it may be exercising or may come toexercise in the near future; common sense suggeststhat uncertainty in this respect justifies cautioustreatment.

ESTIMATING THE SIZE AND THE NATURE OF THE FOREST

RESOURCE

This involves the perusal of the available data andthe collection of new data by means of forest surveysand related studies. In regions possessing majorforest resources, such surveys may require manyyears of work, yet some of the data may be urgentlyneeded for planning. Often situations arise thatcall for no small measure of judgment in decidingon geographic priority and the degree of precisionto be aimed at in surveys. It is convenient to dis-tinguish tliree types of survey, of different intensity,each appropriate to different phases of planning

Reconnaissance surveys are designed to furnishat low cost preliminary information concerning thelocation and extent of large areas of forest.

At the next stage, more detailed classification offorest areas is required, together with estimates ofvolumes of standing timber and some informationabout species and dimensions. Nation-wide cov-erage at this intensity will eventually be required;in developing countries areas so inventoried can beconsidered as the first contributions to the nationalforest hwentory. Though obviously more expen-sive than reconnaissance surveys, costs per unit areaneed not be high, and already provisional decisions,positive or negative, can be taken so far as thetimber supply is concerned about potential projects.

For a final decision, and in particular for the work-ing plan which will embody management decisionsin relation to the timber supply area, more inten-sive working plans inventories are required. De-tailed forest maps will be essential, as will volumeestimates, by species and diameter classes, and pref-erably also by quality classes. Costs per unit areawill be a good deal higher than for national forestinventories and, a fortiori, for reconnaissance surveys.

Until recently, one of the most serious obstaclesto forest industry development in the less advancedcountries was the high cost of obtaining essentialdata concerning the forest resource. This state ofaffairs has now been radically altered. The tre-mendous advances made in aerial photography andphoto-interpretation techniques: new high precisioncameras, wide-angled lenses, infrared photography,

improved films and electronic printers have all playedtheir part in producing better quality aerial photo-graphs from which more information can be ex-tracted. Again, the application of modem statisticalsampling techniques to forest surveys has madepossible greater precision at lower cost. Finally,modern methods of data processing have facilita.tedthe compilation and analysis of inventory data.

Information will be required not only on thephysical nature of the forests their area, location,composition, wood volume, growth, and so onbut also On their distribution according to owner-ship and the size of individual properties; theselatter considerations may have a decisive influenceon the pattern of subsequent development. Theextent and methods of treatment and utilization,industrial and other, as also the noncrop functionsof the various forest areas, must be checked.

APPRAISING THE AVAILAI3ILITY OF PRODUCTION FACTORS

The availability of land, manpower, and capitalmust now be appraised.

Land

Afforestation will involve occupying land at pre-sent not under forest. Conversely, some of theexisting forests may have to give way to arable farm-ing, pasture, and townships. In either case, sotmddecisions on the most appropriate use of a givenarea of land cannot be made except within the frame-work of an integrated land-utilization program.

The transfer of land from forestry to other usesought not to be undertaken without sound reasons;such transfer has led to regrets in countless instances.The relinquishment of land from forestry mayinvolve several losses. In the first place, the areaconcerned obviously ceases to produce wood. Second-ly, total wood production in the locality may belowered to the detriment of future supplies to thepopulation or forest-industrial development. Third-ly, and in spite of good intentions to the contrary,important noncrop functions of the forest are liableto be impaired. In addition to all this, clearing veryoften involves appreciable waste of wood that isdifficult or even impossible to avoid. Probablelosses must be weighed against the benefits of trans-fer and, if the latter is decided upon, losses mustbe minimized as much as possible.

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Needless to say, the withdrawal of land from for-estry hardly makes sense unless it is permanentlysuited to the new use. Many of the colonizationschemes of the past did not pay sufficient regardto the capacities of the soil and, now that the needfor a more equitable distribution of farmland hasbecome a pressing issue in many countries in LatinAmerica and elsewhere, there is a danger that haste,expedience, or both may lead to a repetition ofpast errors. Under certain circumstances, properlyconducted colonization can help to ease agrarianproblems. But, unless the land is right for thepurpose, an extension of cultivation will not bringrelief to rural misery but will only extend its bounds.

It is also worth bearing in mind that forestry canoften assist colonization in a very direct manner:work in forests can help to equalize the distributionof the work of settlers throughout the seasons ofthe year, and can provide them with much-neededcash income; in certain cases, controlled grazingin the forest can benefit cattle while reducing thefire hazard to the forest; and so on. These aspectsof forestry are sometimes overlooked in the clamorfor more agricultural land.

Manpower

The treatment and exploitation of the existingforests and the establishment of planta.tions in newareas demand the application of manpower of va-rious levels of skill. In underdeveloped economies,managerial and professional skills tend to be scarce,and so does skilled labor, while unskilled or semi-skilled labor tends to be abundant, although scarci-ties may occur locally or at certain seasons of theyear. Often the availability of capable manage-ment is decisive. Where this can be found, a largeproportion of the administrative and manual tasksin forestry can be broken up and distributed in amanner that permits economy of scarce or relativelyscarce skills, while also facilitating training at differ-ent levels. Such training should avoid wasteful" spreading out "; it should be confined to essen-tials, so as to build up rapidly the required man-power.

Although continuity of operations is very impor-tant in forestry, much of the manual work is nottied to a strict time schedule, so that it is possibleto use seasonal surplus labor from agriculture, un-employed labor, etc. These important possibilitiesmust be taken into account.

Capital

The characteristic scarcities of capital in under-developed economies affect forestry in conunon withall other activities. Forestry needs depend relativelylittle on foreign-exchange availabilities provided itis possible to substitute expensive equipment, whichwould have to be imported, by the use of labor,rendered more productive with the aid of suitabletools or of inexpensive small machinery.

Since public ownership occupies a very importantplace in forestry throughout the world, a large partof all forestry activity is in the hands of govern-ment departments, either central or local. Theirfinance usually follows the general budgeting pro-cedures of the country or locality concerned; occa-sionally special funds or block grants are providedto cover departmental expenses over a period of years.Forest departments in most countries have cometo be regarded as entities of a quasi-commercialnature; they are expected to show the highest pos-sible financial return that is compatible with soundoperation. However, it is unusual for a depart-ment to show surpluses in the early stages of work,even when it controls valuable forest resources, sinceconsiderable inputs are needed to bring the forestsund:er proper management. Moreover, sales of prod-uce have to be carried out in a manner more con-ducive to forest-industrial development than to depart-mental revenue.

With the development of international financedesigned to benefit the less developed countries,some governments have been able to obtain financefrom international and bilateral funds, either inconvenient loans or as grants. In this way, theyhave obtained infrastructural investments that havefacilitated, or will eventually facilitate in a fairlyimmediate manner, the development of their forests.Such investments include the building of roads andof power plants within, or in the vicinity of, forestregions. There seems to be no palpable reason whysimilar finance should be impossible for certaininvestments in forestry proper, such as afforesta-tion that may be required in order to supplement alocal forest resource, where for example the latterprovides a good basis for initiating a forest industrybut planting by government is needed to assure long-tenia supplies. In a case like this, payment of in-terest and amortization of the principal may, in fact,be easier to perform than in the more conventionalinfrastructural loan, since the assurance of funds forafforestation will create the possibility of selling

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wood to industry from the existing public forests.Credit capital plays an important part in the for-

estry of conunercial companies; such finance is

normally obtained for the sum total of their activi-ties, of which forestry is one. In a number of coun-tries, the government has made available speciallong-term credits to forest owners, communities andco-operative societies for such purposes as afforesta-tion and the drainage of forests. Usually this typeof credit is linked to certain measures of govern-ment control, and it can be a useful policy instru-ment for assisting, subsidizing and controlling non-state forestry.

DETERMINING THE PLAN AND THE MEASURES TO BE

ADOPTED

In many of the less developed countries, forestryprograrns will have to be judged to a very greatextent by their over-all effect on the balance of pay-ments and the increase of national wealth as relatedto certain objectives. For instance, a forestry pro-gram might be appraised by the extent to which,in providing the raw material basis for forest indus-tries, it will contribute to the amount of capitalavailable for such annual investment in the economyas is considered necessary in order to maintain acertain rate of economic growth. Whatever thecriteria adopted, the quality of the decisions in de-termining the forestry plan will depend to a greatextent on the knowledge and planning available forall the sectors of the economy, including the foreigntrade related to each.

No matter what the total input assigned to theforestry of the region, the distribution of this inputwill vary according to the technical condition and theeconomic significance of forest stands; and intensityof treatment may range all the way from minimumprotection against destructive agencies, notably fire,in remote areas, to the most intensive managementand silvicultural treatment in the neighborhood ofwood-using industries. Normally working plans willbe drawn up, laying down the objectives and workingprocedure for each major area and its subdivisions.

In some cases, exploitation may be carried intovirgin forest areas. In principle, the working ofthese areas is desirable, since it means mobilizingnew resources and, where a fire hazard exists, itwill facilitate control, by rendering these areas moreaccessible, creating settlements of forest workersthat can be called upon in an ernergency, and so

Oil. However, there is also some danger involved.The opening-up of these areas may distract attentionfrom the need for better utilization practices inthose already being worked; it may mean the ex-tension of undesirable practices of exploitation. Notinfrequently it may be wiser to leave alone new areasof virgin forest until organization of forestry hasprogressed to a stage when they can be handledwith relative ease.

Tecl-wically, afforestation work need not differfrom the replanting of felled areas. Financially,there is often an important difference, since the lat-ter type of planting is undertaken within a goingforestry concern, whereas the former very often isnot. In regions very poor in forest, afforestationis unlikely to alter the position radically within thenormal span of the forestry plan. Yet a great dealcan often be accomplished with relatively modestinput, for instance where wood from fast-growingplantations can supplement wood-waste from dif-ferent sources to an extent permitting the establish-ment of a local industry.

Forestry occupies a somewhat peculiar position inthe political thought of most developed countries,including those with liberal economies, in that pub-lic ownership or at least a large measure of director indirect intervention in private and other non-state enterprise has long been regarded as a necessity.In the course of time, a vast body of experiencehas been gained, under the most varied conditions,on methods of administration, organization manage-ment, and exploitation best suited to public forests,the techniques of selling their produce, the role ofthe state in forestry education and research, and soforth, as also on the scope and the limitations of

In their general aspects, the problems of planningthe development of forest industries have much incommon with the problems of planning any indus-trial sector. With these general aspects of industrialdevelopment planning and programing we shall notconcern ourselves here since they are already reason-ably well documented.

" For example, in the publications of the United Nations Di-vision of Industrial Development and those of the regional eco-nomic commissions of the United Nations. There is, however, nosatisfactory compendium as yet of specific information - tech-

numerous techniques of state intervention throughassistance and legislative control. In many cases,assistance by the state has proved more effective,and control less irksome, when exercised throughthe intermediary of co-operative and other associa-tions of forest owners.

Those concerned with forestry in the less developedcountries will be able to draw 011 this vast experiencewhen considering methods of handling public forestsand of ensuring over-all co-ordination through pub-lic intervention. One word of caution is perhapsnecessary: planning that overreaches itself, thatfails to take account of local limitations, especiallythose imposed by the size and training of the pro-fessional and administrative staff of forest depart-ments, is a travesty of planning. In the past therehave been too many instances of forest laws enact-ed whose provisions have proved inapplicable inpractice because of lack of means of enforcementand for want of popular acceptance. There havebeen concessions granted, containing admirable provi-sions for silvicultural measures to accompany ex-ploitation, which provisions have been ignored inpractice for lack of professional control. Ambitiousplanting programs h3.ve been announced in a blazeof publicity only to die a silent death as earmarkedfunds are quietly diverted to other uses.

The lesson is not that those responsible for theestablishment and execution of forestry plans oughtto lower their aims or stifle their sense of urgency.The c'sson is rather that, unless provision is madewithin the framework of the plan for the creationof trained cadres and for the guaranteed careerprospects that will ensure the forest service againstwastage, the plan is incomplete.

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We shall, instead, content ourselves with drawingattention to certain special aspects of planningfor forest industry development which stem fromthe particular characteristics of these industriesand their relationship with other sectors of theeconomy.

nical requirements, operating data, etc. - regarding the forestindustries sector. FAO has at present under preparation a bib-liography for forest industry development and hopes to publishlater on a manual for forest industry planning.

Planning for forest industrial development

TIME HORIZONS FOR PLANNING

The forester and the industrial development plan-ner inevitably differ in the emphasis they lay on thedifferent time horizons for planning. We have al-ready drawn attention to the long-teini nature ofmany forest operations, and the consequent needfor long-term projections of requirements, howeverapproximate, to provide an order of magnitude offuture demands on the forest in its capacity as a" woodshed " for forest industries. Few other sectorsof the economy have the same need to look so farahead, since very long-term considerations, forexample, to the end of the century, weigh less heavilyon current decisions. The industrial planner, cer-tainly, is concerned mainly with the current or im-minent general economic planning period, whetherit be three, five or seven years. In recent yearsthere has been a trend to the use of perspectiveplanning setting out broad outlines and provi-sional targets for up to 15 or 20 years ahead, asa background for current planning. The currentplan, in these cases, is seen as the first instalmentof the perspective plan. The perspective plan itself(as well as its second instalment, the next short-term plan) is progressively modified and adapted inaccordance with new data on needs and possibilitiesand in particular in the light of achievements ofpast plan periods.

Perspective planning has everything to recorrunendit, and it is significant that it is finding increasingfavor in both centrally planned economies and ineconomies which rest mainly on free enterprise.However, the point that needs to be made in thepresent context is that, for forest industry develop-ment, perspective planning is mandatory. This muchis evident from the characteristics of forestry as weearlier described them. To establish a pulp andpaper mill in a given location in 10 or 15 years' time,it may be necessary to intervene in the forest now,to supplement the resource, or arrange for its eventualgradual replacement by plantations, or simply toensure that the resource is still there when it is

needed. But there is another consideration whichargues for perspective planning. Some major projectsin the forest industries sector may take from fiveto seven years to realize if, as is frequently the case,feasibility studies have to start with a detailed in-ventory of the forest resource. Such projects inevi-tably spill over from one plan period to the next.What is needed, therefore, is a forward planninggroup that can look ahead beyond the immediate

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plan period; this group can ensure that resourcesare not misallocated in the short-term plan. Tomeet the general targets which have been adopted,a series of specific projects should be under study.Some, as investigatory work is completed, can beimmediately implemented; others will be discarded;others will be taken up as resources permit and theneed arises. In other words, the short-term planshould not only include certain specific projects tobe realized within the plan period; it should a.lsoinclude provision for data collection, pilot investiga-tions and project planning needed for succeedingplan periods.

GETTING AND USING RESOURCE DATA

It is clear that data pertaining to the forest re-source, the forest inventory, represent an importantcategory of inforination required in planning forestindustry development. No prospectus for invest-ment in forest industries can be prepared withoutthis information. Some of the technical aspects ofobtaining these data were touched on in the preced-ing section. The point to be stressed here is thatthis is the kind of information governments mustpossess themselves. The cost of acquiring it, thoughvery much cheaper than even a decade ago, is stillconsiderable, and there may be an inclination toleave data collection to entrepreneurs and potentialinvestors. This is a mistake. Unless governmentshave their own data they are in no position to weighthe pros and cons of various projects and pronounceon the validity of projects submitted to them. Ifconcessions or contracts are eventually involved,they are unlikely to be able to negotiate these con-cessions or contracts on equitable terms. More-over, even if privately-obtained data are turnedover to the government, the likelihood is that theinventory will have been tailored to the expected re-quirements (areas, species, dimensions) of the privateparty, and will therefore be unsuited or inadequatefor use in assessing the prospects for alternativeprojects, perhaps in other branches of forest ind.ustry.This point is particularly important at the presenttime when technology is making rapid strides; thepossibility always exists that species and dimensionspresently unconsidered may be effectively utilized inthe not distant future.

In the past a common feature of forest exploita-tion in the developing countries has been single-commodity exploitation. This has meant that much

useful timber has been left in the forest, since itwas not adapted to the purpose of the operatoror, sometimes, that timber extracted has been putto uses lower than its intrinsic qualities merited.Instances of integrated forest industry development,with integral utilization of the forest crop, havebeen rare. But governments have a profound inter-est in the fullest utilization of the forest crop, fortechnical as well as economic reasons, and will seekto influence operators in this direction when negotiat-ing concessions. This they can hardly do withoutadequate knowledge of the forest resource.

PLANNING DEMAND

The broad indications of demand trends for forestproducts which suffice for establishing forest produc-tion goals will not, of course, be adequate for plan-ning forest industry projects. Much more detailedinvestigations of present and potential markets forparticular products and grades are necessary. Inmany developing countries the starting point for anassessment of current consumption will be an exam-ination of the import statistics " since imports arethe only present source for ma.ny processed forestproducts. Demand projections, based on such para-meters as per caput income and demographic growth,can be helpful. But for considering specific in-

dustrial projects it is necessary to get down to fur-ther detail by investigating, for instance, the specificrequirements of other sectoral developments, andparticularly of major potential consumers such asof bags for cement, of boxes and crates for fruitexports, of sawnwood and wood-based sheet materi-als for housing programs, and so forth.

It was noted earlier that most of the demand forforest products consists of intersectoral demandrather than final consumption. In many develop-ing countries a substantial proportion of the totaldemand may well arise either in the public sectoritself or as a direct consequence of governmentprograms, such as railways and other utilities, hous-ing, school buildings, works departments. Govern-ments are thus well placed not only to encourageor promote the establishment of appropriate forestindustries but also to influence production standards.

The significance of this role will be appreciated

'° Here it should be observed that the forest products trade sta-tistics of most developing countries are still lacking in the detailand accuracy that could render them useful for industrial de-velopment investigations.

125

if it, is borne in mind that, in developing countries,construction, as distinct from equipment, may ac-count for 50 to 70 percent of total fixed invest-ment. Thus housing and urban facilities have alarge share wherever there is a substantial transferof population from agriculture to industry, while theimportance of public works and public utilities(roads, d.ocks, transport, water, electricity, schools,hospitals, and government buildings) is always greatin the first decades of development, declining there-after. The great importance of construction hasnot always been fully considered in developmentprograms, and the scarcity of building capacity hasoften been the principal obstacle to stepping up therate of capital formation. A common error is fail-ure to provide for the necessary output of buildingmaterials and components. 19

Not only can the government, as major consumer,decisively influence the demand for sawnwood,wood-based panels and other construction timber;by properly planning its demand it can help indus-tries to specialize in making parts and components,such as panels, windows, doors, staircases, and bear-ing elements.

Skilled labor is often a bottleneck in expandingconstruction. For this reason special attention shouldbe paid to labor-saving construction materials suchas plywood, particle board, fibreboard and wood-wool board. In the developed countries, shortageof construction labor has been a rnajor factor inincreasing the demand for wood-based panels.

It is not necessary to discuss here the standardmeasures which a country may take to encourageindustrial development; tax exemptions, tariffs, sub-sidies and the like. These are common to all in-dustries, and here we are concerned only with aspectsspecial to the forest industries. There is, however,one further point arising from the demand charac-teristics for forest products which is perhaps worthmentioning. It has already been noted that many ofthc forest products are broadly substitutive over awide range of end-uses. This applies, for example,to the three major wood-based sheet material in-

It is interesting to note that, in the U.S.S.R.. one of thetnain principles in planning the material and technical basis ofconstruction is that its development should keep ahead of theincrease in the volume of construction envisaged in the plan.To this end, a hig,her rate of growth is planned for the grossoutput of the building materials industry than for the total volumeof construction. See REPENKO, A. T. The material ard tech-nical implementation of housing pro grammes. Report on the seminaron housing surveys and progranunes with particular referenceto problems in the developing countries. Geneva, United Na-tions. 1962.

dustries. If none of these industries exists at present,and if there are sound technical and economic groundsfor preferring to develop one rather than the others,judicious import regulations can be helpful in bothtesting and priming the market.

THE IMPORTANCE OF INFRASTRUCTURE

The location of forests in relation to populationconcentrations, the transport volumes and distancesinvolved in both raw material procurement and prod-uct distribution, and the technical requirements offorest industries, all combine to make the develop-ment of this industrial sector perhaps more thanthat of any other heavily dependent on progressin creating certain basic infrastructural facilities: pow-er, water, road and rail con-ununications, and portfacilities. At first sight, this fact might seem adiscouraging one for developments in this sector.There can be no doubt that in the past it has hadan inhibiting effect. Governments and private en-trepreneurs, attracted by the idea of valorizing aparticular forest resource by establishing a majorforest industry unit, have often renounced the un-dertaking once it was realized that it would be nec-essary to create those forms of social overhead capi-tal which already exist in the industrially advancedcountries. The cost of providing these facilities,when shouldered entirely by an individual project,would add perhaps 50 percent to the cost ofinvestment.

Today the situation has radically changed. Notonly has the concept of industrialization as aconscious and organized process won full accept-ance in the developing countries; it is understoodthat successful industrial development can takeplace only if governments deliberately set aboutcreating the necessary infrastructure. The importantthing from the planning standpoint is that infra-structural investment plans should take full accountof the forest industry development possibilities theycan provide. This applies when mapping out newroads and railways, siting power stations and powerlines, or developing new or improved port and harborfacilities. Not only can judicious planning help tobring new forest industries into existence; the in-dustries they generate will often represent the firstmajor financial return on the infrastructural invest-ment undertaken. In some cases, they may providethe decisive element in determining whether to un-dertake a particular infrastructural investment or not.

126

PLANNING FOR SPECIFIC AREAS WITHIN A COUNTRY

Next, a word on the area aspects of planning.The emphasis given to area planning, and the degreeof initiative accorded to areas in both plan formula-tion and plan implementation, will vary from countryto country. The central problem will always behow to harness most effectively local energies andenthusiasms without falling into inconsistency in

airns and errors in phasing, both as between theseveral areas and as regards the relation betweencentral and local targets. In large countries, ofcourse, a considerable measure of decentralizationis inevitable if planning is to be effective.

Planning by area assumes particular importancefor forestry and forest industries. It is at this levelthat the noncrop functions of the forest can bestbe appreciated and the social implications of cus-tomary rights in the forest fully understood. More-over, from the industrial aspect, while there are cer-tain forest industries that must clearly have a nationalrange in order to prosper, there are other brancheswhich can successfully operate on a smaller scale.From the standpoint of economic development (in-cluding industrialization), there is much to be saidfor studying the forestry and forest industry develop-ment possibilities of a country not simply in termsof the country as a whole, but also in terms of definedforest-economic areas within it. These areas shouldbe defined not simply on the basis of existing orpotential forest resources, but also by taking intoaccount population concentrations, other physicalendowments, current and future claims on the land.,and so forth. This approach can be helpful inassuring a clear orientation of the aims of forestpolicy in each area. Thus certain areas will beclearly marked to become principal wood reser-voirs for major forest industries serving the wholecountry. In others, an ordered transfer of forestland to agricultural use, while retaining sufficient landunder forest to supply industries serving local needsand to assure maintenance of noncrop utilities, canbe permitted. Finally, there will be areas wherethe main emphasis will have to be placed on protec-tive forestry, with forest industries playing a subor-dinate and perhaps negligible role.

A UTA RCIIY OR ECONOMIC INTEGRATION

Some developing countries, oppressed by the pros-pect of a steeply rising import bill for forest prod-

ucts, have already resolutely undertaken programsof forestry and forest industry development, and acareful examination of these programs suggests that,in one or IWO cases, national self-sufficiency in forestproducts is the implicit, though seldom explicit,ultimate goal. The programs already established donot overlook the fact that, in some instances, cer-tain commodities produced from the indigenousforest resource will find difficulty in competing oneven terms with the products of the industriallyadvanced countries. Justification is found in the pres-sing need to save foreign exchange, in the fact thatindustrialization in any sector is unlikely to succeedwithout a measure of protection, and perhaps evenin the fact that a vigorous forestry program is re-quired in any case to assure the flow of noncroputilities of the forest. Sound as these argumentsmay be, it would be a serious mistake to supposethat they can be held to justify the goal of self-sufficiency in forest products in all instances.

Mention has been made earlier of the fact thatcurrent moves toward economic integration amongthe less industrialized countries can favor the devel-opment of certain industries by extending the marketand thus overcoming the obstacle presented by smallnational markets in branches of the industry wherescale economies are pronounced (such as newsprintand chemical pulp). This in itself is a very strongaxgum.erit in favor of the confrontation, and if neces-sary adjustment, of national plans for forest industrydevelopment on the part of countries participatinin economic integration schemes. Indeed, withoutsuch confrontation and adjustment, there is dangerthat rn.utually inconsistent plans may be pursued andthe avowed aims of economic integration frustrated.

But small national markets and economies ofscale are not the only reasons for giving specialattention to the forest industries within areas ofeconomic integration. In the less developed coun-tries, where economic integration schemes are alreadymoving forward or are at present being discussed,there is often a wide disparity in the natural forestendowment and in the suitability for growing dif-ferent types of timber. Moreover, there is oftena large measure of complementarism in the natureof the forest resource held by different countrieswithin the area., for instance, as regards short-fiberedand long-fibered material for paper making. It is

only commonsense that the,se disparities, and thiscomplementarism where it exists, should be takeninto account in any mutual agreement on thesenational development plans which will make for

127

optimum regional economic development. The ad-vantages lie partly in the programed internationaldivision of labor, partly in securing the optimumutilization of the region's forest resources. In manycases the adoption of national self-sufficiency in

forest products as the goal to be achieved will meandeliberately foregoing these advantages.

AN ORGANIZATIONAL NEED

Whatever the role that may be accorded to publicand private enterprise respectively in developing forestindustries, there is, and must always be, an indis-soluble link between the development of this sectorand the forest resource 011 which it is to be based.This argues the need for a specially close and inti-mate relationship between those authorities respon-sible for the forests (usually the forest service, adepartment of the Ministry of Agriculture) and thoseresponsible for planning and encouraging industrialdevelopment. Unless there is the closest co-ordi-nation, the danger is always present that, on theone hand, the forester may forget that his functionis to serve people, not to serve trees, while on theother the industrial developer may ignore, to thecost of the community and perhaps to his own,both the dynamics of the forest and its im.portantfunctions other than as a wood-provider.

It is a regrettable fact in most developing countries(and for that matter in several more advanced coun-tries) that as yet no effective link exists. That thishas led in many cases to reckless and wasteful useof the forest resource is widely recognized; its legacyis felt in the sig.nificant proportion of total forestryeffort which has now to be devoted to what areessentially rehabilitation measures. What is per-haps less widely understood is that this lack of effec-tive collaboration has been largely responsible forthe failure to recognize, plan and realize hundredsof perfectly sound and feasible forest industry projects.

It is idle to imagine that th.is situation can beremedied merely by establishing formal links. Ifforesters, forest utilization officers, industrial eco-nomists and development planners ase to reach amutual understanding of each other's problems andto explore creatively the development opportunitiesthat lie in the forests, working conta.cts must bemultiplied at all levels. These are the considerationswhich have led some countries, in which forest in-dustries already play or are clearly destined to playa key role, to concentrate responsibility for forestry

and forest industries in the same department orministry. This solution is not likely to be univer-sally valid; but the problem of achieving an organicand creative working relation between the two sec-tors has to be solved if a vigorous program ofindustrial development based on the forest is to berealized.

THE CHOICE

In the foregoing paragraphs we have referred tosome of the problems of planning for forest industrydevelopment which arise from the peculiarity of theforestry and forest industry sectors and their relationwith each other. The list is intended to be illustra-tive, not exhaustive. Each example quoted, however,implies a particular responsibility on the part ofgovernments if these sectors are to be effectivelydeveloped. This could hardly be true whatever thepolitical philosophy inspiring government action,whatever the type and degree of planning undertakenby governments to promote the welfare of theirpeoples.

It has been shown that the forests have a great po-tential as a source of human welfare, and that indus-trialization based on the forest can both contributeto and promote the general economic developmentprocess. Yet it must be acknowledged that themobilization of the forest resource through the estab-lishment of forest industries is not a prospect thatbrings unmixed joy to the hearts of many profes-sional foresters. They know only too well that, ifthe forest is to fulfil its role, there must be exactknowledge of the resource, the forest must be broughtunder proper management, working plans must bedevised, and extraction schemes worked out. Only

128

thus can the resource base of industry be madesecure. But these tasks require strong and effectiveforest services, and today forest services in manydeveloping countries are still extremely weak. It isawareness of the danger this situation represents,not any mistaken attaclunent to the idea of conser-vation as an end in itself, which impels many forestersto don the mantle of Cassandra.

But it would be a mistake to cherish illusions onthis point. And it is an illusion to suppose thatthere exists a choice between mobilizing the forestsnow, and leaving them intact until forest serviceshave been built -up to the point where it is safe toopen the forest gate. The teclmical and economicconditions for establishing new forest industries inthe developing countries are maturing fast. In thecourse of the coming years many new areas of forestare inevitably going to be brought into use. Thechoice is between mobilization in the public interestbased on sound planning and with adequate safe-guards and with the forest services taking an activepart and being built up in the process, and mobili-zation taking place in an uncontrolled and haphazardway, while weak forest services stand by helpless.This is the real choice.

It is in making this choice that the responsibilityof government is engaged. For this is not a ques-tion which concerns a forest department alone;it concerns ministers of agriculture, economy, in-dustry and trade; it concerns planning departmentsand development agencies; it concerns finance min-istries and budget bureaus. Only concerted actionon the part of all departments can ensure that forestindustries play their part in the attack on economicunderdevelopment, and that the immense contri-bution which forests, rightly used, can make to thedevelopment process is fully realized.

Chapter IV. THE LIVESTOCI: INDUSTRY IN LESS DEVELOPED COUNTRIES

THE ANATOMY OF HUNGER

The greater proportion of the world's population,both human and animal, n.ever gets sufficient food.The prevalence of hunger and malnutrition in theless developed countries of the world, and the im-perative need to expand food production in theseregions in the face of an accelerating growth ofpopulation, is gradually forcing itself into the world'sconsciousness. In the progress of mankind in theless developed countries hunger is always too closelyat his heels. In particular, the cortsumption ofprotective foods, notably livestock products, is ex-tremely low in the less developed countries, artdtheir scarcity, as is shown later, results in large meas-ore from the inadequate feeding of the flocks andherds which provide them.

It is for livestock products that the dispa itiesbetween the diets of the less developed countriesand the more adequate diets of the more developedregions are most marked. For example, recentestimates suggest that, whereas total food consump-tion as measured in calories in the less developedregions as a whole averages some 70 percent of theaverage for more developed regions, the correspond-ing figure for total protein is about 65 percent andfor animal protein only 20 percent. Of the mainsources of animal protein, the consumption of meatis estimated at about 20 percent of the average inthe more developed regions, of milk about 14 per-cent, and of eggs about 12 percent. For fish at70 percent the disparity appears to be much smaller,but the consumption of fish tends to be concen-trated in coastal and riverine areas.

Such broad averages can clearly be no more thanindicative; they are shown in somewhat greaterdetail in Table IV-1. Nevertheless they brin.g outthe salient facts that consumption levels in less de-veloped countries are not only low quantitatively,but (as they are based overwhelmingly on cerealsand starchy roots) are strikingly lacking in marty

Introduction

129

essential nutrients. Even the above averages under-state the disparities, for the distribution of the limit-ed supplies in less developed countries is very uneven,and hundreds of millions of people consume onlytiny quantities of livestock products.

POVERTY INHIBITS PRODUCTION

Poverty is undoubtedly the main explanation forthe low average consumption of livestock productsand in turn for the limited production in most ofthe less developed countries; it explains also theuneven distribution of supplies within these coun-tries. At low in.come levels almost the whole sumavailable for food is spent on the cheaper varieties,such as cereals and potatoes or other starchy roots,to satisfy hunger. It is only when t'nere is a sur-plus above what is required to buy these basic needsthat appreciable expenditures on livestock products

TABLE IV-1. - PER CAPUT CONSUMPTION 01 LIVESTOCKPRODUCTS BY REGIONS

SOURCE: P. V. SUKHATME. Food supplies and ¡unzan nutrition.Stanford University Press, California, U.S.A. (In the press).

' Including the liquid milk equivalent of milk products otherIban butter.

Grams per 1 ead per day

North America 850 248 55 26 66 93Oceania 574 312 31 22 62 94River Plate countries 460 318 22 10 63 101

Europe 494 111 23 38 36 88

ALL ABOVE REGIONS 573 152 30 34 44 90

Latin America(excluding RiverPlate area). 204 67 9 20 19 61

Far East 51 24 3 27 8 56

Near East 214 35 5 12 14 76Africa 96 40 4 16 11 61

ALL ABOVE REGIONS 79 30 4 24 9 58

ProteinMilk ' Meac Eggs Fish

Animal j Total

and other more expensive foods become possible.The market for such foods is thus very limited inlow income countries, and a high level of produc-tion is hardly feasible.

This basic situation may be modified in areasclimatically favorable for livestock production andwhere there is not too great a pressure of populationon the land. In these circumstances the cost oflivestock production is low and livestock productsenter more largely into the diet than is usual at theincome level of the country. This accounts, forexample, for the high level of meat consumptionin some Latin-American countries, and of milkproducts among some pastoral peoples such as theFulani of west Africa. The natural advantagesenjoyed by Argentina and Uruguay have not onlyenabled them to build up a large export trade, butalso permit a level of meat consumption which isamong the highest in the world.

POPULATION AND ECONOM C DEVELOPMENT

Although the level of livestock consumption inthe great majority of less developed countries is

un,likely to approach those normal in wealthiercountries for many years to come, two recent de-velopments have led to a considerably more rapidgrowth of effective demand. The 'first is the acceler-ating growth of population, mainly as a result ofthe better control of disease and the consequentreduction in the human death rate. In countryafter country new census returns show an appreci-ably more rapid growth of population than liadbeen previously assumed. Thus the 1961 census ofpopulation in India showed an average annualin.crease in the past decade of about 2 percent com-pared with the earlier estimate of 1.2 percent madein the second five-year plan. In Ghana, the popu-lation census of 1960 returned a population of6.69 millions compared with the previous estimateof 5 :millions.

The second factor is the intensified effort now beingmade in nearly all the less developed countries toaccelerate their economic development and raiseper caput incomes. At low income levels the elastic-ity of demand for livestock products is extremelyhigh, sometimes exceedin.g unity. As incomes risethe demand for livestock products is thus likely torise in about the same proportion. Japan providesa particularly striking and well-documented exampleof the influence of higher incomes on the demand

130

for livestock products. From 1955 to 1960 theaverage expenditure of urban households rose by35 percen.t and expenditures on food by 19 percent.During the same period, however, expenditures onmeat, milk and eggs rose by no less than 68 percent.The volume of increased consumptiort was somewhatsmaller as production and imports could not keeppace with the increase in demand and prices tendedto rise. Nevertheless, from 1955 to 1960 the con-sumption of beef and veal rose by 19 percent, ofpork by 41 percent, of eggs by 45 percent, milkproducts by 80 percent and fluid milk by over 100percent. Rapid rates of increase, however, are alsoevident in many other countries; for example Greece,Taiwan and Venezuela, to mention countries widelydistributed geographically.

For the world as a whole the currently expectedgrowth of population is about 2 percent annually,but the rate is likely to be much faster in the lessdeveloped than in the higher in.come countries andto be of the order of 2.5 percent, although in somecountries reaching rather over 3 percent. At thesame time currertt United Nations objectives for the" development decade " envisage that real nationalincomes in the less developed countries are raisedby some 5 percertt annually, corresponding to anaverage increase in per caput incomes of about 2 percent. This is a low rate of increase taking presentliving standards into account, though more thanmost countries have achieved in recent years. Ifboth these projections prove correct, then the totaleffective demand for livestock products in less de-veloped countries could be expected to increase bysomething like 5 percent annually, since in the lessdeveloped countries an in.crease of 1 percent in. percaput incomes usually leads to a somewhat higherpercentage increase on livestock products. At thatrate the effective demand for livestock productswould increase by nearly 50 percent by 1970 andby well over 100 percent by 1980. Even so, consump-tion per head in the less developed regions wouldhave risen by little more than 25 percent by 1980.This would still leave them with very much lessthan is considered an essential and normal diet bymillions of people in the more developed economies.

A further point of some significance here is thatnot only income elasticities for livestock products butalso price elasticities are high in the less developedcountries. This means that, if the cost of livestockproducts to consumers could be reduced by improve-ments in production and marketing, a larger increasein the volume of cortsumption would be possible

for a given rise in income. At present neither pro-duction nor marketing is as a rule very efficient,and livestock products in these countries thereforetend to be expensive. The rather high price elasticitymeans also that, if for any reason production tem-porarily ran ahead of effective demand, the excesssupplies could be absorbed by the market with aconsiderably smaller fall in prices than if the samesituation arose, for instance, with cereals. Thissituation might occur if the livestock productiontarget were exceeded, or if over-all economic growthan.d incomes fell short of the rate mentioned.

To sum up, quite apart from the great nutritionalneed for larger supplies of livestock products inmost of the less developed countries, there appearsto be justification on econ.omic groun.ds for specialefforts to raise the output of livestock productsroughly in proportion to the expected combinedrise in population an.d per caput income; that isto say, by some 5 percent annually. Failure toapproach such a target would not only mean acontinuation or even a worsertin.g of the presentunsatisfactory levels of nutrition, it might alsolead to a rise in the prices of livestock products,and to greater foreign exchan.ge difficulties ifimports were increased to counteract any such pricerise.

Increased production should be aimed primarilyat the home market where the need is greatest. Ex-port prospects for livestock products are not ingeneral favorable, and markets must be very care-fully explored before production for export is ini-tiated. Surpluses of milk products have been de-pressing world markets for some years, and prospectsfor international trade in meat have recen.tly becomeless promising. This does not, of course, rule outthe possibility of exporting livestock products fromless developed countries as a means of earnin.g foreignexchange should favorable opportunities occur.

LIVESTOCK PRODUCTION POTENTIAL

l'he rate of growth of some 5 percent annuallyivestock production suggested above is consider-

ably greater than the rate of growth during the pastdecade. Statistics of livestock production are lessreliable than statistics of basic crops, especially inthe less developed countries, but current FAO esti-mates (Table IV-2) suggest that world productionrose by about 2.5 percent annually during the 1950s.The most rapid growth, however, tends to occur in

TABLE 1V-2. - ESTIMATED AVERAGE ANNUAL RATE OF GROWTHOF LIVESTOCK PRODUCTION BY REGIONS 1948/49 - 1959/60

some of the more developed regions, notably westernEurope and Oceania. Although more rapid pro-gress has been reported recently, for example inthe Near East, it is probable that during the 1950slivestock production in many of the less developedcountries did not keep pace with the growth ofpopulation, and still less of effective demand. Thisis borne out by the frequent tendency for pricesof meat and other livestock products to rise fasterthan prices as a whole.

LIVESTOCK IN RELATION TO GENERAL AGRICULTURAL

DEVELOPMENT

While the main role of livestock husbandry inthe less developed countries lies in the provision offood, notably high quality protein, as well as draftpower an.d such raw materials as wool, hides, andskins, it can also contribute to the attainment of ahigher an.d sustained level of agricultural production.Thus improved livestock production can be of ma-terial assistance to the maintenance and progressof crop production by means of increased soil fertil-ity. The need for full integration of crops andlivestock and the fallacy of reliance upon mono-culture have been demortstrated ort marty occasionswhere systems of monoculture have led to seriousloss of soil fertility and a decline in agriculturalresources.

Livestock husbandry also makes possible the utili-zation of resources which might otherwise go towaste. Much of the earth's surface can only beutilized for the production of food for human con-sumption by grazing it with livestock. Range lan.dswhich are unsuitable for cereal an.d other cropscan be efficiently utilized by livestock. Further-more, it is only through their utilization by livestockthat crop residues, and various waste products and

Percent

North America 1.7Western Europe 3.8Oceania 2.9Latin America. 2.5Far East (excluding Mainland China) . 2.3Near East 3.1Africa 1.5

ALL ABOVE REGIONS 2.6

by-products, can be converted into human food(Shaw, 1962).'

As incomes rise in the course of economic develop-ment a frequent problem, especially in densely pop-ulated countries, is to find in.tertsified methods offarming which can raise the cash incomes of smalland medium-sized holdings and so prevent toogreat a disparity of incomes developing betweentown and country. Certain systems of livestockhusbandry or of mixed farming are well adaptedfor this purpose, based in some cases on the useof imported feedstuffs. This was the pattern whichdeveloped over much of western Europe, and itnow appears to be gradually developing in otherparts of the world, for example, in Japan. Even onfarms which depend on grains as the main sourceof income, the development of an efficient supple-mentary livestock enterprise may be essential foreconomic survival when crops are poor.

ANIMAL POPULATION PRESSURE

Man is not alone in suffering the vicious circleof poverty referred to by Wright (1961), where lowfood intake leads to reduced body weight and lowlevels of activity: low levels of activity lead to de-creased productivity, an.d thence to still greaterpoverty. The other cycle, common to both manand his animals, is that of the malnutrition whichlowers the resistance to disease, and results in in-fections and infestations which inhibit the properutilization by the body of the food intake.

Overstocking is all too common in the less devel-oped territories. For example, in India the cow is asacred animal which may not be slaughtered. Inconsequence, the human population. of India derivesonly fractional nutritional bertefit from its immensecattle and buffalo population which is estimated atsome 200 millions. Urtcontrolled expansion of do-mestic animal populations become a menace, as inparts of Africa where cattle are currency, or in India.A reduction in numbers of the unproductive andunderfed cattle populations would, with bettermanagement, lead to greater supplies of milk fora human population lacking animal protein andalso seriously un.derfed.

There has been a notable failure in many coun-tries to correlate the numbers of livestock with thecarrying capacities of land areas. Under the present

' See list of references on page 160.

132

systems of management this has resulted in the de-struction of much soil and vegetation due to overstock-ing. It is also true that in man.y parts of the world,double the present stock could be carried on existinggrazing land with better management. Such wast-age of natural resources may be complicated bysocial and religious practices entailing, for example,restrictions on slaughter, by lack of suitable market-ing facilities, an.d by commurtal tenure of grazirtglands. Quarttity rather than quality of livestock isstill the prime motive in many areas, stock numbersfrequently indicating prestige, in other words aprimitive status symbol. In such circumstances noattempt is made to cull the unproductive. Thevicious sequence of uncontrolled breeding of lowquality stock, overstocking, and starvation must bebroken if the deterioration of livestock is to bechecked. Stimulus for improved husbandry practiceand for the breeding of better animals may sometimesrequire only the provision of adequate markets forthe livestock product.

DISPARITIES IN ANIMAL PRODUCTIVITY

The text which follows is mainly concernedwith the problems of expartding and improvinglivestock production in less developed countries, inparticular with the technical problems. Not all theproblems which arise are of a technical nature.For example, in most less developed countries ineffi-cient methods of marketing result in heavy lossesof livestock and livestock products, and also un-necessarily inflate prices to consumers, thereby actingas a brake on consumption and hence, indirectly,on production. In addition, institutional and eco-nomic obstacles such as obsolete methods of landtenure, lack of production crc:lit at reasonable ratesof interest, and price instability retard the develop-ment of livestock production as they do all otherbranches of agriculture. These matters have beendiscussed at some length in recent issues of Thestate of food and agriculture.

A first point to be made is that the problem ofraising livestock production in most of the less devel-oped countries is much more a question of raising

2 See, for example: Some general problems of agriculturaldevelopment in less developed countries in the light of postwarexperience, The state of food and agriculture, 1959: Programingfor agricultural development, The state of food and agriculture,1960: Land reform and institutional change, The state of foodand agriculture. 1961.

TABLE IV-3. - APPROXIMATE NUMBERS OF LIVESTOCK PERTFIOUSAND HUMAN INHABITANTS 1959-60

the productivity of flocks artd herds and of indi-vidual animals than it is of increasing the numberof livestock. As is evident in Table IV-3, the numbersof livestock in relation to the human populations isnot greatly out of line with those in many of themore developed countries. And while no greataccuracy is to be attached to the figures in general,they are more likely to be un.der than overstated.The very uneven regional distribution of the differenttypes of livestock, also evident in Table IV-3, is dis-cussed in a later section on the problems of each ofthe main regions.

There is, however, a wide divergen.ce betweenlevels of efficiency in animal productivity in thedifferen.t regiorts of the world. In many parts ofthe tropics, for example, the yield of twenty milkcows is barely equal to that of one cow in such coun-tries as Belgium, the Netherlands, New Zealand,Switzerland, and the United Kingdom. Bad livestockand pasture management are among the main reasonsfor the very low milk and meat production of the lessdeveloped countries. Vast areas of the Far East, theNear East, Africa and Latin America are consider-

The main methods of promotin.g livestock pro-duction lie in the control of disease, in better feed-ing and in improved breeds. These three facets

of efficient husbandry are indivisible. It is illogicalto devote time and energy to the production of im-proved supplies of feedstuffs if the stock to which

133

ably overstocked with livestock of very poor quality.The output of livestock products per head of thecattle population in Europe is about ten times greaterthan it is in the Far East, seven times greater thanin Africa, and four times greater than in the NearEast and Latin America. Moreover efficiency inlivestock production, even in Europe and NorthAmerica, is still far below what would be possibleif feeding, management and breeding were improv-ed, and if disease were brought under control. Interms of the meat and milk " harvested " per animal,these differences are illustrated in Table IV-4.

TABLE IV-4. - AMOUNT " HARVESTED " PER ANIMAL IN l'HECATTLE POPULATION

The difference between the " harvests " in thefirst four areas listed above and those in other re-gions is due primarily to bad management (whichincorporates poor feeding and failure to utilize natur-al resources properly), primitive or haphazard breed-ing practices, and failure to prevent, treat, or controlthe range of diseases which obstruct production.All these play their part in the diminished potentialof the world's herds and flocks.

they are fed are unthrifty through disease or parasit-ism. Similarly, genetic improvement will be fruit-less without the ready availability of satisfactoryfeed in sufficient quan.tity. Full production there-fore depertds initially on disease control, but relatedto this is the need for a great improvement in animal

Cattle Sheep Goats Pigs

Nun bers

Western Europe ..... 270 320 40 200Eastern Europe andU.S.S.R 320 530 35 200

Oceania 1 450 13 000 10 150North America 540 170 20 330Latin America 940 620 190 370Far East (excluding

Mainland China 230 50 80 40Mainland China 60 80 70 250Near East 240 810 470 1

Africa 500 600 400 20

WORLD 300 325 110 170

Beef and veal Milk

Po mds

United States 166.7 1 335Canada 140.8 1 693Europe (excluding U.S.S.R ) 121.5 2 419Australia and New Zealand 104.3 1 107South America 71.5 210Mexico, Central American andCaribbean countries 57.5 265

Africa 37.4 192Asia 26.2 140

WORLD (excluding U.S.S.R.) 70.1 655

SOURCE: PHILLIPS, R.W. Man and his cattle. The cattleman,XLVI. 12, 1960.

Increasing the world's supply of animal protein

management, nutrition, genetics an.d breeding, re-productive and environmental physiology, and theprocessing and handling of meat and other animalproducts.

In the light of the vast and largely preventablelosses caused by disease, and the ecortomic necessityof replacing substandard health by full health, in-creased world attention both to research into animalhealth questions and to the international applica-tion of disease control measures is necessary forprogress in animal production. In the same way,further emphasis should also be placed on researchinto the other aspects of livestock management,and on the best mean.s of strengthening educationaland exten.sion services so that improved methodsof husban.dry may be widely disseminated amongproducers, especially in the less developed regions.

Filially, to enable farmers to make use of thisknowledge, an economic an.d social climate favorableto agricultural developmen.t has to be created. Suchbasic needs for better farming as adequate creditfacilities and, in many countries, improved condi-tion.s of land tenure will be required. In order toprovide the link with the growing urbart demand,more organized marketing and distribution, servicesare necessary for livestock and livestock products.These can reduce the present heavy losses in distri-bution with a saving in costs to consumers, and atthe same time increase the incentive to producersto raise their output.

The shadow of overstocking, underfeeding, theprevalence of disease, primitive or haphazard breed-ing practices, poor husbandry, detrimental foodcustoms, and poverty of achievement in livestockproduction, can be alleviated by the irtterrelatedfactors of disease control, betterment of animalnutrition, and genetic upgradin.g. These combinedfactors constitute improved management. Togetherwith improved educational and marketing services,they are discussed more fully below.

ANIMAL NUTRITION

Inadequate nutrition is one of the mo t importantreason.s for the slow growth of animal productionin developing countries in recent years. Improve-ment and expan.sion of work in the field of animalnutrition is essential, with emphasis on the n.eedfor integration of livestock production with cropsand grassland management. There is general agree-ment that the development of animal production

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is based to a large exten.t on increased productionof grass and forage and/or cereal grains and legumes,combined with the proper management of livestockand the best utilization of these feeds. There is needfor extended research into the establishment of newvarieties of pasture legumes which can survive inthe tropics and subtropics, includirtg the arid areas.

It appears that accepted standards of animalfeeding may not be fully applicable to the specialmetabolism of animals on pasture, and that graz-ing increases the nutrient requirements. Much moreinformation is required on the feed intake andnutritional requirements of grazing animals particu-larly in relation to a wide variety of environmentalconditions.

In the arid tropics, in.cluding dry forest areas,steppes, savannas and scrub forests, lack of wateris the greatest limiting factor for plant growth and,unless proper stocking and animal management aremaintained, the land may become waste. The con-trol of bush by indiscriminate burning, for example,common in most of the savanna areas of Africa,may harm th.e grazing lands and endan.ger forestareas. Ultimately, if not subjected to rational con-trol, it tends to encourage bush at the expense ofgrass and may lead to soil erosion. Late burningcarried out at long intervals (up to four years) hasbeen found to give adequate control of bush in,for example, Mali and Southern Rhodesia whenproper safeguards are applied. Again, more studiesare needed on drought-resistant grasses, the forageof which would be suitable for ruminants. Infor-mation is also required ort nitrogen metabolism inthe ruminant in order to predict the effectivenessof nonprotein nitrogen supplements un.der a varietyof conditions.

In the humid tropics and in temporarily floodedlowlands, great possibilities exist for developinganimal production. This is largely due to the highyear-round yield of tropical grasses and legumes.Permanent pastures ensure an evert and high pro-duction of forage, and also cover and protect thesoil. However, organic matter has to be added tosupport a high crop productiort, and the most directmethod of producing this is by raising animals.

While the desirable integration of animal hus-bandry and agriculture may be achieved relativelyeasily in the humid tropics, the principal impedimentto good quality animal nutrition is the poor nutri-tive value of the forage. In order to obtain thehighest possible productivity rate, further investi-gation is still required into the changes in chemical

composition of forage durin.g the growth period,and also into supplementin.g animal rations withsalt, trace elements and even concentrates.

In areas where cereal grains are used largely forhuman consumption their application as feedstuffswill be limited. With improved standards of liv-ing, however, there will be an increased demandfor a greater variety in human diet and more cerealgrains will become available to improve animalproduction. In other areas, climatic conditions maybe such that pastures can support milk and meatindustries, the by-products of which can be used tosupport pig and poultry production. Certain foodswhich are suitable for human consumption maywith justification be fed to animals when they sobalance a ration as to enhance greatly the efficacyof utilization of other nutrient substances suitableonly for animal consumption..

Much can be done in developing countries toelaborate rations for pigs and poultry by estimatingthe values for local feeds ort the basis of valuesestablished for similar feeds in the more highlydeveloped countries; in view of the paucity of dataon local feeds this procedure is in marty cases theonly feasible alternative. Refinements can follow asdata on local feeds become available (Shaw, 1962).

The complex problem of mineral deficiencies andimbalances is an importan.t aspect of livestock nu-trition which requires atten.tion in many of thedeveloping countries. The clinical symptoms, andthe subhealth and lack of productivity which fre-quently result, may be associated with a varietyof pathological con.ditions such as parasitism. Muchof the current research involves the trace mineralelements, but deficiencies of such major mineralsas calcium, phosphorus and magnesium contin.ueto inhibit animal production in man.y areas, and theresulting syndromes require close examination bothas deficiency entities and in their association withother clinical factors. In this field, as in so manyothers, the problems could be solved, at least inpart, if the lcnowledge currently available were fullyapplied.

Experimentation in livestock development has tobe planned over a long period of time. Geneticstudies must be based upon accurate assessment ofan animal's ability to produce. Consideration mustbe given to such matters as milk artd fat production;efficiency of feed utilization; work potential; adapt-ability to en.vironment; quality and yield of wool;relative amounts of meat, fat and bone; reproductiveefficiency and resistance to disease and other stresses.

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LIVESTOCK/PLANT INTERRELATIONSHIP

It is apparent that plant production and animalproductioia must be brought into closer relationship.The assessment of production potential solely onthe basis of the individual animal is no longer con-sidered rational, and there is a need for researchinto the total production per unit of land area interms both of animals and crops. In the arid irri-gated regions of the world, legumin.ous fodder cropsfor livestock feeding are being raised as part of therotation, thus returning some of the needed nutrientsto the soil. The system of fallow is gradually beingsuperseded by the raising of crops after chemicalfertilization of the lan.d, an.d the use of the sub-sequent growth as fodder or pasture. The beneficialpasturing of winter wheat and other winter grainsfor limited periods of the year during the autumnand early winter growth is more in vogue todaythan ever before. In Australia artd New Zealand,great gain.s have been made in the close associationof grain and fodder cropping with the productionof beef, mutton and wool. The heavy losses causedby periodic droughts in areas of low rainfall canbe eliminated or alleviated by abandoning the com-plete relian.ce of the livestock raiser upon pasturein favor of a combin.ation of stock raising an.d feedproduction. The trend in Australia toward thiscombination is illustrated by the following figurescompiled from the most recent available informationfor the country as a whole (Australia, 1962):

Percentage ofWheat farms wheat farms withwith sheep sheep to total

wheat farms

The increase in sheep numbers to record levelsin New Zealand since 1950 has been due in varyingdegrees to the rapid extension of pasture improve-ment, the rising carrying capacity of hill countryfarms brought about by aerial top-dressing, betterfan-n management practices and the buoyan.t marketcon.ditions for wool and meat.

In some Latin-American countries such as Uruguay,sheep an.d wool productiort generally exists in con-jun.ction with dairy farming or stock breeding forslaughter or both. The greatest concentration ofsheep per unit of area is found in farms of 100 to

31 March 1948 42,458 78.631 March 1956 41,119 82.8531 March 1960 45,217 85.35

2,500 hectares, that is, in those with the highestwool-bearing sheep/cattle ratio. In Argentina andUruguay the total n.umbers of sheep are decliningin relation to alternative livestock production. Cer-tain diseases, such as epididymitis, and deficiencycortditions are also having an adverse effect.

FODDER CONSERVATION AND GRAZING MANAGEMENT

One of the features of natural grasslands in drytropical countries and semiarid areas, or in tropicalareas with a dry season when little or no grazingis available, is the irregularity of their production.Durin.g the rainy season, which may last for lessthan four months, pastures grow quickly and pro-duce heavily, but during most of the dry seasononly dry grasses and shrubs can be eaten by grazinganimals, which approach a state of starvation asthe season advances. The rainfall variation fromon.e year to another can be very great and neitherwarrants reliance on average production figures norpermits a reasonably accurate estimate of the carryin.gcapacity of the ranges.

In such conditions, there is an acute need notonly for increasing fodder and forage supplies butalso for the con.servation of fodder to avoid periodsof starvation. Evert in the more temperate climatesof the economically more developed countries (whereseason.al shortages of grazing and fodder are usuallyless acute) hay, silage and other methods of con-servation have made an important contribution tothe high level of livestock production.

Lack of feed conservation leads to marked sea-sonal fluctuations in. the numbers and quality oflivestock offered at markets. The efficien.cy of themarketing system is thereby reduced, and the costof marketing increased. One of the means of attain-hag improved livestock production in the arid areasof the world is to ensure a more even distributionof animal feed throughout the year. This can onlybe done by adapting animal numbers to forageresources and complementing the rations duringperiods of shortage with concentrates or conservedfodder.-

Greater integration of crops and livestock is

necessary for the development of livestock productionboth in semiarid and arid nortarable areas. Thehacreased supply of organic matter and nitrogenfrom animal residues leads to higher crop yields,which in turn makes possible an increased productionof fodder crops. There is thus a complementary

136

effect which raises the productivity of both cropsand livestock.

Range management (including deferred grazing),the cultivation of fodder crops, the manufacture ofsilage, development of ley farming systems, theutilization of grain cereal crops, and the use of cropby-products and concentrates all have their partsto play in the increase of forage supply. Fencing,which makes rotational grazing possible and whichfacilitates the balance of animal numbers and carry-ing capacity of the grazing land, can greatly improvegrazing management where it is practicable. Itsfeasibility depends upon costs of in.stallation andupkeep in relation to the productivity of the land.

Although shortage of water is a notable limitingfactor to livestock production in dry areas, an in-crease in the number of watering points withoutattention to the carrying capacity of the surround-ing land can spread the worst evils of bad grazingmanagement to areas which are now protected bytheir isolation. Legislative control of communally-owned grazing grounds and water *supplies may benecessary.

IMPORTATION OF EXOTIC BREEDS OF LIVESTOCK

As one means of increasing livestock productivity,governments in man.y of the less developed coun-tries turn almost automatically to the importationof exotic breeds. The stimulus for this comes fromthe remarkable progress which many of these breedshave made in their native territories. There are,however, limitations to this procedure; the introductionof exotic breeds of livestock does not always resultin the spectacular progress which is anticipated.The managerial skills required to maintain suchdeveloped livestock are often lacking in the import-ing country, and results can be disappointing oreven disastrous.

The impact of few imported animals all thatmay be possible with limited financial provisionort the iaational stock is meager. Under the con.-dition.s which prevail in the tropics, little informationmay be available to guide the breeder in the feed-ing and management of imported stock, which mayhave been developed under the vastly differen.t con-dition.s of a temperate zone. Exotic stock sometimessuccumb to local diseases against which they haveno immunity or resistance. Nevertheless, it is unde-niable that the introduction of carefully selectedblood lines can be outstandingly successful where

all the necessary precautions are taken, as for examplein the recent spread of Friesian cattle in the UnitedArab Republic.

Where large-scale irrigation projects are in hand,an,d the full utilization of lan.d and water calls fordiversified agriculture, or where feed for animalscan be grown in satisfactory quaiatity and quality,the introduction of exotic breeds of superiorproductivity may be useful. This applies particularlywhere the income level of the population is risin.gand there is a growing demand for food of highbiological value, such as milk, eggs and meat.

A very real danger in the importation of foreignbreeding stock lies in the possible introduction ofexotic disease. Quarantine practices, both in thecountry of export and in the importing country,are not invariably such that stock can be guaran.teedfree from infectious disease, the introduction andspread of which may disrupt the livestock industryfor long periods and have an enduring detrimentaleffect on production. In these days of increasedease of transport for livestock, the intercontinentaltransference of virulen.t exotic diseases is a hazardwhich must be recognized. The possibilities forthe transfer of major epizootics into free areas arevery real, and every possible means must be utilizedto avert such catastrophes.

Artificial insemination, one of the most usefulinstruments for the improvement of livestock qual-ity, can ensure that much greater use is made ofimported livestock. However, unless properly ap-plied, this too can become a medium for the wide-spread dissemination of both undesirable geneticfactors and of disease.

USE OF INDIGENOUS BREEDS OF LIVES'rOCK

It is accepted that, when any proposals are undercon.sideration for the development of the livestockof small producers, it is unrealistic to fail to utilizeindigenous livestock. Govern.ments are well ad-vised always to give early consideration to the im-provemen.t of indigenous stock. Through generationsof neglect and failure to cull the unproductive ani-mal, some strains have become extremely inefficientproducers. Nevertheless they have retained the abil-ity to thrive within the available feed and manage-ment resources and, unlike exotic stock, they havea notable resistance to the diseases common in thearea. The less developed countries in general havenot been able to maintain in.digenous stock under

137

condition.s of management and feeding which wouldensure the fullest utilization of their geneticpotential. Pla.ns aiming at livestock improvementmust, therefore, incorporate improvement in feedresources through proper utilization, and conservationof foods available.

Through the application of modern technologythe production of feed for livestock must be increased.Extension services can perform invaluable functionsin such matters.

Selective breedin.g within indigenous strains ispracticable but, for fin.ancial and physical reasons,much of the necessary testing for weal< inheritablefactors of economic importance is beyond thecapacity of the small breeder. Stock improvementcan be achieved more satisfactorily by largeorganizations such as co-operatives or govern.-ment agencies. There is much less risk in such aprogram of gradual evolution, which is based uponthe adoption of those methods of breeding mosteffective in increasing production within the frame-work of econ.omically feasible animal husban.drypractices.

CROSSBREEDING

In the evaluation of hybrids the phenomenon ofhybrid vigor or heterosis is utilized. By cross-breeding it is possible to introduce into the genecomplement of a breed new hereditary factors whichwere n.ot there before and which may be importantin increasing the efficiency of animal production.In this way, a new character, beneficial to its economy,may be introduced. However, the introduction ofexotic breeds, either with a view to grading up tohigh levels of production or with the airn of evolvingadaptable animals of high productivity, would re-quire both sufficient feeds and a well-developedmanagement level brought about through local re-search and extension.

Crossbreeding may have specific objectives inanimal production. The expense involved, and thedifficulty of en.surin.g continuity have largely inhib-ited the spectacular achievements which were pos-sible with the brief generation interval of plants.Crossbreeding has, however, been widely used bycommercial livestock producers. In view of thehigh heritability, found in some beef breeds, ofcharacters such as high birth weights, high weight-gain, carcass yield and meat quality, beef bulls havebeen used on cornmercial dairy cattle which are not

required to produce their replacements. The prog-eny have been a commercial success and, in somecountries, a very high proportion of dairy cowsare curren.tly being inseminated with semen frombeef bulls to produce such commercial cattle forslaughter.

Crossbreeding is also of great value in achievinga combination of en.vironmen.tally desirable charac-teristics. For example, culled Merino ewes fromeastern parts of Australia are brought to the wheatbelts and crossed with Border Leicester, RomneyMarsh an.d Dorset Horn rams an.d their femaleprogen.y are subsequently crossed with Southdownrams for fat lamb production.

The gen.esis of new breeds has been achievedthrough selective crossbreeding, resulting in animalsof high productivity and adaptability to extremeclimatic environment. A notable example of thishas been the evolution of the Santa Gertrudis breedof cattle in Texas.

DISEASE SURVEY, CONTROL AND ERADICATION

The losses caused by disease in livestock all overthe world are immense. In some of the technicallyadvan.ced countries systematic survey work has beeninitiated in recent years and it is clear that the fulltoll of livestock disease, in terms of loss of productionan.d wasted labor and feed, runs into billions ofdollars artnually. At the present time, in the lessdeveloped countries it is only possible to estimateroughly the relative economic importance of specificdiseases, but it may be assumed that the total lossesare staggering. In the light of modern veterinaryskills, many of these losses are preventable. Sufficientprogress has been achieved during the last fifteen yearsin many of the less developed countries to indicatethe great possibilities in the field of disease control,for example the manner in which rinderpest hasbeen con.trolled in Thailand and is being controlledin India. In.creasin.g numbers of laboratories andbetter veterinary services have controlled epizooticssuch as that of African horse sickness in the NearEast which could barely have been challenged asrecently as a decade ago.

Improved methods of husban.dry and better meansof disease control must go hand-in-hand in a bal-anced agricultural economy. The concept of the vet-erinarian as one who is concerned exclusively withthe treatment of sick or injured animals has changedvery radically within the last two decades. His

138

primary functions are the promotion and mainte-nance of animal health. The emphasis is now onprophylaxis rather than on cure.

Of all the publicity which livestock diseases fromtime to time receive through the press, the mostdramatic is that which accrues to foot-and-mouthdisease. Nor is this surprisin.g, since it is not onlythe most infectious disease known, but is probablythe most important from the economic standpoin.t.The Western Hemisphere produces 45 percent ofthe world's meat supplies, but vast areas of SouthAmerica, for example, are chronically affected byfoot-and-mouth disease. In affected countries, thedrop in milk production and the losses due toabortion lowered meat production and wool yieldhave been estimated to cause a total annual reductionof 25 percent of livestock production. (Eichhom,1953). At the present time, there are indicationsof improved vaccines which, by conferrin.g astronger and more endurin.g degree of immunity,will, it is anticipated, bring about a great improve-ment in the prevention of foot-and-mouth disease,an.d may eventually reduce the incidence to a levelwhere complete eradication will become econ.om-ically possible.

In many of the great plagues of livestock foot-and-mouth disease, rinderpest, haemorrhagic septi-cemia, and contagious bovine pleuroprteumonia, tomention only a few early and efficient diagnosiscan lead to the application of adequate prophy-lactic measures, but in most developing areas ofthe world today the veterinary services are inade-quate, and preventable diseases often reach epi-zootic proportions before control measures can beinitiated. The shortage of veterinarian.s is causingcon.cern everywhere and steps are being taken inmany parts of the world to establish new veterinaryfaculties in universities. At the present time, theUnited Kingdom has one veterinarian to 30 squaremiles; the United States of America, one to 270square miles; east Africa, one to 5,000 square miles(FAO, 1960).

This shortage is reflected throughout the develop-ing countries of the world and, with in.creasing live-stock populations, it is also seen in the technicallyadvan.ced countries. In 1960, there were 22,000veterinarians in the United States: by 1957, it is

estimated that the requirement will be 35,000.The universal deficit in n.umbers of veterinarians

is part of the larger picture of the need for facilitiesfor a great in.crease in technical trainin.g in all aspectsof agriculture. The modern veterinarian, however,

is equally concerned with medical matters becauseof the necessity of controlling the zoonoses, diseasessuch as tuberculosis, brucellosis and rabies which arecommunicable between animal and man. The zoo-noses are a public health concern and many of them,such as brucellosis, are economically highly impor-tant. Their control in man is completely depen-dent upon their being efficiently controlled in thefirst instance in animals. Numbers of new schools,in such vital areas of livestock production. as Guate-mala, Peru and Chile, have adopted curricula de-signed to meet the challenge of these present-dayrequirements. The emphasis on basic education isa healthy indication of long-term planning for pro-gress, and, coupled with the great extension ofresearch subject-matter in animal health and theincreasing numbers of veterinarians who are adopt-ing research as a career, holds much promise forthe future.

There has been a marked growth both in the n.um-ber and size of veterinary services in the govern-ments of many of the developing countries duringthe last 10 years. This expansion of activities inthe field of animal health has required the establish-ment of new offices or the strengthening of existingones, in order to deal efficiently with veterinaryadministration., field disease control, and research.

Examples are the establishment of a livestockdisease research laboratory in Bechuanaland; thegreat extension of the research and other activitiesof the veterinary services in India; the successfuloperation of two laboratories in Thailand, one forfoot-and-mouth disease and one for other animaldiseases; and the remarkable expansion of the vet-erinary services in the Sudan.

Assistance in disease control given by the techni-cally advanced countries to the developing areasof the world, whether multilaterally through thework of the United Nations specialized agencies, theWorld Health Organization and the Food and Agri-culture Organization, or on a direct country-to-country basis, has increased greatly in recent years,but is still insufficient for the needs of theSe countries.It is also inadequate to ensure that " clean. " areasof the world are not threatened by the extensionof exotic diseases, which are spreading far beyondtheir traditional boundaries. Such assistance requires,on an increasing scale, the establishment of researchand vaccine production laboratories, the provisionof material and equipment, the means to train greaterrtumbers of technical personnel and the services ofskilled and experienced bacteriologists, virologists, and

1 39.

parasitologists. Research problems can be tackledmost effectively in the countries where they exist.Similarly, the conduct of disease surveys, based uponthe critical techrtiques of biostatistical methodology,is being seen increasingly as an urgertt necessity inthe developed as in the developing countries, inorder to ascertain the existence, the inciden.ce andthe relative economic importance of individual infec-tions and infestations of livestock. It is being recog-rtized in many quarters that the emphasis placedin past years on fundamental research may havedetracted from essential ecological and epizootio-logical studies.

Modern feeding practices, essential though theyare, bring with them new problems of animal health.Veterinarians working with physiologists and bio-chemists are giving greater attention to the studyof nutritional disorders Improved irrigation andbetter pastures may not only create suitable environ.-mental conditions for intestinal and other parasites,but also be associated with such deficiency ailmentsas hypomagnesia. Deficiencies and imbalances ofboth major and trace elements are being investigatedon a wider scale in regions where they appear toimpede stock raising, and the complications whichensue from their co-existence with disease processessuch as those caused by internal parasitism are receiv-ing attention.

Disease in livestock is not necessarily a spectacularmatter with thousands of cattle exhibiting obvioussymptoms and lesions as in foot-and-mouth disease,or with a high death rate as in rinderpest and Africanhorse sickness. It may be so subtle and insidiousas to become accepted as a normality, examplesbeing some of the infectious irtfertilities an.d certainof the mineral deficiencies. Intern.al parasitism inlivestock, for example, is insidious an.d costly tosuch an extent that it is now gen.erally recognizedas a factor of major economic importance in live-stock production everywhere. In many areas it maybe of even greater importan.ce than the epizooticdiseases. Parasitism accounts for a vast amount ofsubhealth which is largely preventable by modernmethods of diagnosis, prophylaxis, treatment an.dcontrol. Research work is urgently required intothe life-cycles of many parasites, and an intensifica-tion is necessary of the great work in the productionof new therapeutics and improved parasiticides whichhas been a feature of recent years. Studies of thelife-cycles of protozoan an.d metazoan parasites ofanimals are aimed at the discovery of vulnerablestages in the life-cycles. There is a notable trend

in investigation of biological preparation.s which willinduce increased resistance to infestation.

Mastitis is a universally serious problem whichcauses a heavy annual loss in areas of dairy produc-tion estimated at L 10 million (U.S. $28 million)in the United KinE4dom alone. It is probable that,on any one clay, up to 5 percen.t of the milking cowsin any dairy shed will have clinically apparent mastitis.Even with the widespread use of antibiotics notalways an unmixed blessing losses in milk, " quar-ters " and even lives are still serious.

Control of insect vectors of disease, and especiallyimproved means of preventing their transport fromcountry to country, and continent to continent, bysuch media as the ubiquitous and highly suspectaircraft, is a factor of increasing importance in theinternational approach to disease control. In manycases, for example, African horse sickness, the fullextent of vector involvement is not yet known., noris the life-cycle always understood. Until researchon such matters is initiated, the control of vectorswill continue to be inadequate. In such extremesas the tsetse areas of Africa, millions of hectaresof territory will remain virtually closed to livestockproduction until cheap and effective insecticides canbe produced and applied in quantity; or until othermethods, such as biological control, can be utilizedfor the eradication of vectors, an.d hence for thecontrol of livestock disease.

Animal reproduction, including the application ofartificial insemination for the improvement of live-stock and the control of disease, poses many newproblems. In the application of new techniques inthis field, health of the donor male is of vital impor-tance, and extended research into those obscureand insidious diseases which may be transmitted byartificial insemination is essential if these techniquesare to be applied with safety. The mechanism ofsuch transmission, and the therapeutic and biologicaltreatment of infected animals, call for continuinginvestigation. Improved control over the transmis-sion of disease through the medium of semen willlead to a further lessening of embryonic mortality.The deep freezing of semen has created possibilitiesfor the improvement of livestock in certain partsof the world, and it has become a factor of consid-erable commercial value. It is most important thatemphasis should be placed on the absolute freedomof semen from infective agents, and that the selectionof bulls should depend both on genetic principlesand perhaps to the resistance of their semen to theadverse effects of deep freezing and storage. Con-

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tinued research on the care and handling of semenan.d on the sexual health control of breeding animalswill be required as artificial insemination inevitablyextends still further.

EDUCATION

Education is at least as important in solvin.g theproblem of increased supplies of animal protein asin any other field of progress in the less developedcountries. Ignorance and illiteracy not necessarilysynonymous are invisible barriers to progress inall fields. More specifically, better education is

needed among producers to improve their methodsand productivity, and among consumers to familiarizethem with the essential need for an adequate levelof protein in the diet.

In all fields the lack of educated and trained per-sonnel is a major obstacle to economic and socialprogress in the less developed countries. Economicdevelopment in these means primarily agriculturaldevelopment, which underlines the importance ofagricultural training and education. The term " agri-cultural " is used here in its widest sense, to includeboth crops and livestock, and also forestry andfisheries.

Education should be closely related to the needsof the country and to the conditions under whichthe trainee will work. In all branches of animalproduction and health, for example, FAO fellow-ships have been closely related to specific projects.They have thus helped to ensure corttinuity and toprovide the countries concerned with the technicalmeans of following programs to their planned con-clusion, and of integrating them into the agriculturaleconomy. Training centers in technical subjects areheld wherever possible in countries which are makinggood progress in that particular field and whichcan therefore provide the requisite facilities and enabletrainees to derive the maximum benefit from thedemonstrations.

The FAO/WHO Expert Panel on Veterinary Edu-cation, established in accordance with recommenda-tions made at an in.ternational meeting on the subjectheld in Lon.don in 1960, has begun a study of alldetails of veterinary education in the various re-gions of the world. The panel will produce reportsreviewing veterin.ary education in all countries, in-cluding countries in which the establishment of vet-erin.ary schools is bein.g con.sidered (FAO, 1960).In providing a stimulus for higher education in a

specialized field, and by making available the bestadvice an.d guidance on the subject, this panel pro-vides a model which may with advantage be follow-ed in other technical fields. For example, the FAOExpert Panel on Animal Husbandry Education,now being formed, is to study and advise OR educationon the feeding, breeding and management of animals;and the functions of the FAO Expert Panel on Ani-mal Nutrition include consideration of educationand training in that field.

It is no small part of the functions of such panels,which include in their membership some of theforemost authorities from all regions of the world,that advice and guidance can be given to govern-ments, universities, foundations, trusts and otherbodies with a practical interest in the subject on allaspects of the specialized education under consider-ation, including the establishment of new schoolsor the reorganization of old ones.

The establishment in less developed countries ofsuch an essential service as a veterinary departmen.tis dependent upon the provision of adequate andappropriate education of the personnel who willcomprise the professional staff. An efficient veterin-ary service is essential if animal diseases are to becontrolled or eradicated, and if a.nimals are to bekept in good health so that livestock production maydevelop economically. Veterinarians, too, shouldplay a full part in the encouragement of good live-stock husbandry because the management, housinga.n.d feeding of animals are an importan.t aspect ofpreventive medicine. This can be practiced effective-ly only by veterinarians with a full appreciationof the impact of these factors on the health andwell-being of livestock (FAO, 1962). In all countriesat whatever stage of economic development, the costof animal disease control is high: it is, however, onlya small fraction of the cost of un.controlled disease.

For the satisfactory growth of livestock productionin Latin America, for example, educational facilitiesneed to be rapidly expanded both in animal husband-ry and in animal health. Several excellent schoolsalready exist in these fields, but their numbers andthe number of trained veterinarians are small iii

relation to the vast livestock populations. Brazil,with more than 71 million cattle, 45 million pigs,and 19 million sheep, has only 2,890 veterinarians,many of whom have to serve as advisers on animalproduction, as well as on animal health.

A major obstacle to the expansion of educationis the critical shortage of teachers. It is necessaryto provide the means for " teaching the teachers to

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teach. " Some veterinary schools, for example,encourage young graduates to become teachers forsome years at their own school, in order to gainthe necessary experience. The FAO/WHO ExpertPanel on Veterinary Educa.tion has proposed thatformal courses in methods of teaching should beinaugurated for young veterinary graduates whointend to follow a career in teaching. This is ofespecial importance in veterinary schools in theless developed countries.

In modern times it is being increasingly realizedthat teaching and research form an ideal partn.er-ship, and that educational institutes are suitablelocations for the conduct of research programs.The combination of such activities under one roofdepends for its success upon a sufficiency of staff,a farsighted attitude on the part of the college author-ities, and a departure from archaic educationalmethods. It has a particular application in the fieldsof animal production and health, and the trend inmany faculties today is for a closer integration be-tween departments of research and those of teachin.g.

In order to keep them up to date with recent tech-nical advances which may have special applicationto their country or region, the provision of refreshercourses for practitioners in all fields of animal pro-duction is an.other important aspect of education.

In all less developed countries where qualifiedand experienced profession,a1 staff is scarce, it is

important to make full use of auxiliary personnelworking un.der suitable supervision. This principle,which has been recognized by the FAO/WHO panel,is applicable to numerous disciplines in many coun-tries. Lay or auxiliary personnel, for example, canbe trained for work on some aspects of disease con-trol, artificial insemination, food inspection, animalhusbandry and management, as laboratory assistantsand for certain types of regulatory work. Exteiasionwork in these and related fields can also be under-taken by such auxiliary personnel, always underappropriate supervision by qualified professionalstaff. The system is not without its dan.gers, andit should not be forgotten that auxiliaries are inten.d-ed to augment and facilitate the work of the profes-sional, and not to substitute for him. It is impor-tant, however, that for both professional and auxiliarystaff there should be the opportunity of suitablepermanent employment in a career offering prospectsof promotion an.d advancement in accordance withcapability and seniority.

These are some of the varied facets of education.In animal production, future progress depends upon.

an acceleration of the twin processes of educationand re-education. There is notable scope for bothbilateral an.d multilateral aid. Almost all forms oftechnical assistance to the un.derdeveloped countrieshave their roots in education.

MARKETING

Facilities for satisfactory marketing must alwaysbe taken into consideration where plans for livestockdevelopment are being formulated. In many of theless developed countries the main factor retardingthe growth of a productive and profitable livestockindustry is the difficulty and cost of getting livestockand meat to the consumers who wan.t it. Bothoutput an.d consumption are low because of the widemargin.s between the price to the producer in thecountry an.d that to the consumer in the city. Ifproduction is to be increased in order to meet thegrowing demand for animal protein, the need foradequate marketing services will increase still more,because a large share of any additional consumptionwill be located in towns where incomes are higherand where the growth of population is faster thanin the country as a whole. More hygiene, improvedpackaging, and more modern shops are also de-man.ded. There is also a need for much greaterin.vestment in tran.sport and processing facilities,and for the adoption of improved sales methods,if livestock raisers are to have sufficient in.centivesto expand the volume an.d improve the quality oftheir output.

Efficient marketing of livestock and livestockproducts begin.s with the planning of livestock pro-duction programs with marketing and processin.grequirements in mind. One of the factors deterringinvestment in marketing facilities in many parts ofAfrica, for example, is the short and fluctuatingperiod during which stock are offered for sale. Theprovision of water supplies and some supplementaryfeeding could do much both to extend the season ofsale and to turn out a better quality animal. On theother hand, some of the traditional producing areasare facing a consumer reaction against fat in meat.

A thorough re-examination of accepted qualitystandards is called for to reflect these new buyingpreferen.ces. Corresponding changes in productionpractices will be needed if they are to produce thekirtd of meat consumers will most readily buy.

Sin.ce livestock can usually be fed most cheaplyat some distance from consumer centers, transport

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of livestock products to these centers is a majormarketing problem, particularly in view of the perish-ability of meat an.d dairy products. In west Africaabout 1,5 million cattle, goats and sheep are trekkedannually over 1,000 kilometers, through areas in-fested with the tsetse fly, from the savanna to thecoastal cities. The establishment of better wateringand feeding facilities en route would help con.sid-erably to reduce the loss of meat and quality that isincurred.

The construction of roads and railways cannot asa rule be justified on the basis of livestock and live-stock product marketing requirements alone. How-ever, easier access to the vehicles needed can makea great difference. In western Europe and parts ofLatin America the greater availability of refrigeratedtransport is having an important influence on themarketing channel and the location of processingfacilities. Livestock may then be slaughtered inthe production area. By avoiding damage, loss ofweight and quality in the live animals, by savingfeeding and labor costs en route, and by carryingonly the more valuable parts of the carcass, transportcosts can be greatly reduced.

In Chile, for example, a convenient rail servicefrom the main producing area to the largest consum-ing center permitted the development of a refriger-ated meat marketing channel. Losses during transportwere reduced, some long-established monopoliesdisappeared and meat consumption increased be-cause of lower prices to consumers. The scope foradopting this system, however, is still limited inmany less developed countries, as the lack of a re-turn pay load and other factors raise the overheadcost. There is also a greater risk of losses from abreakdown in the refrigerating equipment, from thelack of skilled technicians to undertake maintenanceand repairs, and from difficult road and rail condition.s.

Movement of livestock by boat (as in northernAustralia, parts of east Africa and to Hong Kong)is a cheap means of transport, where feasible. Whereother means of transport are lacking and the mar-kets are able to pay high prices, fresh meat is some-times brought in by air.

An efficient means of bridging the distance be-tween producer and consumer is evert more essentialin the marketing of milk In India, for example,until recently, milking herds were kept in the townsinstead of in the surrounding areas where fodderwas cheaper, largely because of difficulties in organ.-izing regular marketing chann.els over distances ofmore than a few kilometers. The rapid increase

which can be achieved in milk output by establish-ing suitable collection and transport facilities hasbeen demonstrated recently in a project organizedby FAO and the United Nations Children's Fund(UNICEF) in northeast Africa. Milk collectingstation.s were established, and within a short periodthe quan.tity received at one collecting station set upabout 50 kilometers from a big consumer center hadincreased to 2,000 liters daily, whereas previouslypractically no milk from this area reached the city.

In some areas, access to a profitable market isonly feasible for livestock products if they can beprocessed into a form less susceptible to deteriora-tion in hot or humid climates during the long timeneeded to reach the con.sumer. For example, thedrying, smoking or salting of meat has been commonpractice in many parts of Africa and in northeastBrazil. Canning meat not only makes it mucheasier to handle, but is in line with consumptiontrends toward foods convenient to handle in thekitchen.. It also reduces the risk of transmittinganimal diseases. The establishment of improvedslaughtering establishments, including methods ofhandling by-products, generally brings increased re-turns in better quality hides and skins and ingredientsfor livestock feeds, as well as more hygienic meat.

Schemes for marketing unadulterated milk and forthe economic conversion of seasonal surpluses ofmilk into butter, ghee, or cheese, are often mosteasily put into effect by means of the establishmentof wholesaling and processing facilities and distri-bution through a limited number of organized chan-nels which can be adequately supervised. This sys-tem also makes possible the introduction. of " toned,"" an.d " reconstituted " milk to make milkprotein available at low prices. Such schemes areespecially important in tropical countries where milkproduction is limited and expensive. Toning the

CATTLE

According to official estimates, there are about1,000 million cattle and buffaloes in the world, andtheir n.umbers during the past decade have increasedby some 1.5 percen.t annually. In many countriesthe figures are very uncertain. What is certain,however, is that a very large proportion of them is

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high fat content of local cow and buffalo milk to3 percent or less by adding water and imported skimmilk powder has permitted its sale in Bombay atretail prices less than half that of whole milk, andhas proved an effective means of raising consumptionin low income groups. So-called filled milk, madeby reconstituting skim milk with edible vegetablefats and oils and added vitamins, has achieved rapidacceptance in the Philippines.

In many of the less developed areas, existing salesmethods for livestock products afford insufficien.tincentives to increase output or improve quality.Large numbers of livestock are still sold in unitswithout sufficient regard to weight, yield of meat orquality. The organization of systematic marketswhere livestock can be sold on a weight and gradebasis can make an important contribution.

Open sale by public auction provided there areenough competing buyers assures that farmersobtain the current market price and are paid incash immediately after the animal is sold. It alsocontributes indirectly through the dissemination ofmarket information. In the case of milk, it is im-portant that the producer be paid on the basis ofcleanliness and purity. Since protein content is moreimportant in tropical areas than fat content, paymenton solids-not-fat should be in.troduced when feasible.

Perhaps the main weakness in the marketing ofeggs in less developed countries is uncertainty as toquality at retail. It restricts consumption becausebuyers are diverted to more depen.dable foods, andit discourages production both because total salesopportunities are limited, and because the high wast-age risk in marketing cuts down the price payableto the producer. If refrigeration throughout mar-keting is not economically feasible, then eggs shouldbe collected and distributed very rapidly with effectiveprice premiums for performance at each stage.

completely unproductive, or has at best only a verylow level of productivity. The more productive are,as would be expected, located in the more developedregions of North America, Europe an.d Oceaniawhere the demand for both beef and milk is high.

Asia on the other hand is essentially a meat defi-cient area in spite of an estimated population ofcattle and buffaloes approaching 400 millions. Cattle

Livestock and livestock products

numbers have been increasing rapidly in recent yearsin many countries of the region, n.otably those witha rising standard of living such as Japan and Taiwan.In many countries of this region there are religiousobjections to the con.sumption of beef, and the maindevelopment is likely to be in the increased produc-tion and con.sumption of milk and milk products.

The cattle of Africa, with the notable exceptionsof those in a small number of localized areas, areof poor quality, and stocks are severely restrictedby such widespread diseases as trypanosomiasis. Theestimated cattle population is 115 million Exten-sive control of disease, parasites and vectors, andimproved husbandry, nutrition and breeding, wouldbring about an immense increase in meat productionthroughout the continent, where the human popu-lation at present is sadly deficient in animal proteins.

The consumption of beef is high in Brazil, Argen-tina and Uruguay, but in the rest of the conthaent ofSouth America the consumption is low, notwithstand-ing the over-all population of 165 million cattle. Cattlenumbers have increased over the past 10 years in somecountries, including Brazil and Venezuela, and havedeclined in others, such as Argentina an.d Uruguay.

In general, throughout the world, much more beefand veal are produced from dairy cattle and fromworking oxen and buffaloes than from the beef breeds.The average of quality, conversion rates and meatyield is, therefore, low and could be greatly improvedby the use of beef types for crossbreeding.

In most of the less developed countries the wastageinvolved in the production of meat is very consid-erable, and there is partial or complete failure toutilize a wide range of useful and valuable by-prod-ucts such as blood, bones and offal, and to convertcarcasses unfit for human consumption into meat andbone meal or carcass meal for animal feeding; theseare valuable sources of protein, minerals and vitamins.

The per caput consumption of milk and milk prod-ucts in less developed countries is extremely low, as wasshown earlier in Table IV-I. The high price of milkin relation to incomes is a major obstacle. If in 1957an average Danish citizen had spent all of one day'sdisposable income on liquid milk he would havereceived nearly 25 liters, while a United States citizencould have purchased 22 liters. In Paraguay, however,the amount would be only 2.7 liters, in India an.dCeylon only 1 liter, and in the Philippines, Burmaand the Congo, 0.8, 0.5 and 0.4 liter respectively.

Milk production in the developing countries hasbeen increasing but it does not appear to llave keptpace with population growth. In 14 countries of

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the Far East (not including Japan) milk productionis estimated to have increased by 17 percent fromprewar (1934-38) to 1955-59, but because of popula-tion growth the per caput supply declined from 42to 36 kilograms. In Africa (riot including SouthAfrica) total production also increased by about 17percent, while production per caput declined from40 to 33 kilograms. In Latin America, milk pro-duction rose by 62 percent, but the output per caputonly rose from 60 to 97 kilograms. With the excep-tion of countries such as Argentina and Uruguay withfavorable livestock conditions the level of consump-tion still remains low in the majority of countries.

The establishment of urban milk plants usuallyprovides the incentive for an improvement of milkquality and hence of livestock con.ditions in. the dairybelts surrounding the cities. The marketing systemis improved through more efficient handling anddistribution, attention to hygienic control an.d thereduction and gradual disappearan.ce of the practiceof selling adulterated raw milk. In developingcountries, however, cities are still only islands in avast rural area in which appreciable changes in tra-ditional livestock practices are slow to mature.

The most important of FAO's work in the fieldof dairying is that connected with the developmentof the UNICEF Milk Conservation Program (MCP).In this connection the functions of the two specializedagencies are complementary. The extent and con-sequences of malnutrition, which may affect morethan half of the human population of less devel-oped countries, bear particularly heavily on childrenand pregnant and nursing mothers. Malnutritionis a major cause of infant and child mortality, itretards mental and physical growth and ability, andpredisposes to disease.

The joint FAO/UNICEF milk conservationprogram is aimed directly and specifically at theimprovement of nutrition; it achieves this aim throughthe provision of processing plants which serve asdemonstration and training units to stimulate efficientdairy development in areas where the need is greatest.Special attention is given to improving the productionof milk and milk products, and to methods of reduc-ing the price of milk to consumers in countries witha low level of income, while still maintaining a rea-sonable return to producers. It is a necessary con-stituent of this program that there is adequate pro-vision for technical experts, fellowships, an.d trainingfor plant managers and other essential personnelto ensure the efficient operation of plants on a finan-cially sound basis after foreign aid is withdrawn.

SHEEP

There are approximately 900 million breedin.g sheepin the world, and at least one third of these are esti-mated to be of native types, uneconomical, poorlyfed an.d badly managed. Such low-productivity ani-mals are found precisely in the regions where thepopulation depends most upon sheep for the pro-duction of meat and milk. In many of these coun-tries the only meat consumed may be from sheepor goats. Often the flocks are maintained underdesert conditions with long dry periods of semi-starvation separated by short spells of pasturing.

Sheep are kept exclusively for meat and woolproduction in the Americas, Australia, New Zealandand most of northern Europe. On the other hand,in n.orth Africa, the Near East, southern Europe andsouthern Asiatic U.S.S.R., almost 75 million ewesare maintained primarly, for milk production. Inthese regions ewes' milk accounts for over onethird of the total milk production. In Turkey,Iraq, and Cyprus, over 50 percent of all milk produc-ed is sheep milk. There has been little systematicattempt at increasing the output of sheep milk.Until such time as pastures capable of sustainingproductive dairy cattle are brought into being, andthe necessarily slow alterations are made to theliving customs of agricultural peoples, the ewe willcontinue to be utilized for its milk production.

There is evidence of increasing consumption ofmutton and lamb in the Mediterranean countries,excluding Italy. In Afghanistan, Iraq, Iran, Jordan,Pakistan, and Saudi Arabia, where sheep supply 75percent of the meat consumed by the population,the demand is constant but is conditioned at a mod-est level by the low economic status of the popu-lation which severely restricts the consumption ofthis and other animal proteins. In these countries,carpet and coarse wool is produced but the outputshows little expansion, although the deman.d for thiscommodity is firm. Low availability of feed, aris-ing from deficient management practices, preventsrapid increases in sheep production, while the use ofmarginal lands for cropping rather than sheep graz-ing is also a limiting factor.

Australia, New Zealand, the United States of Amer-ica and other leading sheep countries possess flockswhich produce annually an average of 8 to 12 pounds(3.5 to 5.5 kilograms) of wool per sheep. The sheepof Asia, north Africa, the Near East an.d AndeanSouth America produce less than 3 pounds (1.4 ki-lograms) of wool yearly. Because of poor animal

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husbandry practices an.d ineffective disease control,these regions produce only 20 perc,ent as much meatper breeding ewe as the sheep used for meat pro-duction in the advanced countries.

The division of wide pastoral areas into small-holdings is reducing the possibilities for the large-scale grazing of sheep flocks. Another limitingfactor is the increasing shortage of experiencedshepherds which, together with a lack of wintergrazing, is reducing the efficient use of summerpastures. Improvement of the sheep industry inthe less developed countries for the foreseeablefuture must be based upon a policy of painstalcingeducation in management, husbandry and diseasecontrol, allied to improvements in systems of lan.dtenure. In these countries progress will be slowand must fundamentally be related to small modi-fications and improvements to existing methods.

GOATS

The view has often been expressed by animalproduction experts that the goat is a destructivegrazer, and sometimes the extreme view is submit-ted that goats should be extermin.ated as a seriousbrake on agricultural progress in underdevelopedcountries. The problem, however, is one whichcan be solved by proper management methods.There are many areas of the world, such as certainregions of Africa, Asia and South America, wherethe goat is a valuable source of meat and milk.Improved management should include controlledgrazin.g or tethering, selection, supplemental feedingand disease control. In countries where goat pro-duction is considered to be useful and necessary,education in improved husbandry methods is essential.

POULTRY

World production of poultry meat for 1961 (ex-cluding Mainland China) is estimated at about8.1 million tons, exceeding the previous year's byabout 10 percent. In some instances, productionhas increased so rapidly that it has outstripped de-mand, and several more developed countries havediscovered an excess of poultry meat and eggs tobe an economic embarrassment.

The poultry industry is one of the most promis-ing and progressive of livestock industries, and inmany countries it has been evolving in a highly sat-isfactory mann.er in recent years. Only a smallcapital investment and easily acquired skills are

required to raise chickens under village conditions,as they adapt better than any other stock to varia-tions of climate and geographical conditions. Eggs

an.d poultry meat provide valuable protein and othernutrients for growing human populations, and offeran important source of income for producers evenwhen these are operating on a small scale.

In many of the less developed countries and not-ably those of the Far East great progress has beenachieved in poultry nutrition and management, andthe vitally important question of prevention andcontrol of disease. Improved strains of laying andmeat-producing birds have been selected and propa-gated widely. This is discussed more fully in a latersection. Although there has been an increasingtendency toward bigger poultry units, the importanceof the small flock has not been overlooked. This hasa particular relevan.ce for less developed countries.

Where nutrition, management an.d disease controlare satisfactory, an annual production of up to 300eggs per hen can be achieved. Poultry meat n.ow-adays can be produced with less than 2 kilogramsof feed per kilogram of live weight if fast-growin.gstrains and properly balanced feedstuffs are available.Feed conversion rates around 2.5 are now commonin broiler plants. Ten years ago, 3 to 4 kilogramsof feed was required to produce 1 kilogram of live-weight chicken. Provided that feed is available andin many cases the bulk of it can be produced locallyat an economic price and that the decimatingdiseases of poultry are controlled by extensive vac-cination programs and applied hygiene, there areno significant obstacles anywhere to the establish-ment of a sound and progressive poultry industry.The world's poultry industry, however, is constant-ly threatened by man.y contagious diseases, anddeveloping countries require assistance to enablethem to produce vaccines and to conduct extensivevaccination campaigns.

PIGS

Since 1952, there has been an increase in theworld's pig population, from 294 million to approx-imately 500 million at the present time. The mostconspicuous increases have occurred in Latin Amer-ica, the Far East and Europe, while small increaseshave been recorded in Oceania. In North America,there has been a cyclical movemen.t in pig num-bers, while in Africa and the Near East numbershave remained virtually station.ary.

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In Latin America, the Far East, and other areaswhere religious objections against the con.sumptionof pork apply to only a minority of the population,the pig is nearly as promising as the chicken as apotential source of acceptable protein for humancon.sumption. Pork can be an inexpensive meat ofdietetic importance. Improving the quality andquantity of pork year after year by even a smallfraction would significantly enrich the diet and raisethe standard of living of many peoples (UnitedStates Department of Agriculture, 1962).

Pigs may also be especially useful to the smallfarmer in the developing countries for the produc-tion of meat and lard, on a subsistence scale, forfamily use and for modest marketing, much alongthe lines of village poultry raising. This does notpreclude pig farming on a large scale where feedis available and suitable management and diseasecontrol exist.

In the more advanced countries pigs have a verysatisfactory efficiency in the conversion of concen-trates for each kilogram of live-weight gain, theaverage figure being rather over 3 kilograms: this,however, is under conditions where selected pigs,high grade feed and means for disease control areavailable. In the developing countries, the ratio ofconversions is less satisfactory, being in the regionof the equivalent of 6 to 8 kilograms of concen-trates perlkilogram of live-weight gain. This is essen-tially due to the traditional custom of feeding pigsalmost exclusively on by-products and waste materials.

The best type of pig for the developing countriesdepends to a great extent upon the n.eeds of thepopulation. The extremely heavy " lard " types areto be avoided as they are wasteful; moreover themarket for cooking lard has declined in most areasand consumers discriminate against very fat meat.Such countries as the Philippines, Thailand, Viet-Nam, and the South American countries are show-ing definite trends in the selection of smaller, leanerpigs for higher meat production and lower fat.The same trends are to be seen in North Americaan.d in Europe.

BUFFALOES

From Egypt to the Philippines the buffalo is themain support of man.y thousan.ds of small farmerswho depen.d upon it primarily as a draft animal.In this wide area there is an estimated buffalo pop-ulation of 80 million. The health and efficien.cy

of the buffalo is a vital factor to the well-being ofthe human populations of these localities, notablyin the countries of southeast Asia. Because thisanimal is found principally in the less developedcountries there are notable gaps in the technicalinformation relating to it, and there is scope forinvestigation and research to increase its productivity.

The buffalo is remarkable in that it frequenalythrives on pastures where other grazing animalsbecome emaciated. The need for the preservationand improvement of buffalo stocks is emphasizedby its importance as an integral part of the life an.dwelfare of families in small agricultural communi-ties. Anything which will improve the quality ofbuffaloes, anything which will increase their workpotential or their production of meat and milk,will make a material contribution to the progressand prosperity of many countries.

The value of the buffalo as a producer of highquality milk has long been recognized, n.otably inIndia at the Aarey dairy colon.y in Bombay. Buf-falo milk is an excellent product either whole oras a constituent of " toned milk, " when it is com-bined with dried skim milk. Increased productionof buffalo milk could assist in raisin.g the livingstandards of agricultural peoples throughout thevast area involved, but practical steps must be tak-en to improve health an.d husbandry practices, toreduce the eiaormous losses from infectious diseaseand parasitism, and to increase the capacity for workand reproduction through improved management.

OTHER TYPES OF LIVESTOCK

Auchenidae

There are some 5 million aucheniclae in SouthAmerica living in the An.deari region.s ranging fromsouthern. Colombia to northern Chile, with thegreatest concentration in Peru. The species com-prise llama, alpaca, vicuña an.d guanaco. Llamasare widely used as beasts of burden, an.d both lla-mas and vicuñas provide hair, hides, meat andmilk, and constitute a significant aspect of agri-cultural production and an important source of in-come for the indigenous mountain people. Someattempts have been made to improve the qualityof these animals but, in general, these have so farbeen on a small and uiaco-ordinated scale. Researchinto means of improving their productivity andfertility and of controlling disease is related to thewider question of animal production at high alti-

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tudes, a subject of considerable importance whichis now beginning to attract attention as a matterboth of economic urgency and in relation to appliedphysiology in both human an.d veterinary medicine.

Elephants

The elephant which, in Burma, is worth U.S.$300 per foot (approximately $900 per meter) meas-ured at the shoulder a mature elephant may meas-ure 8 feet (2.5 meters) is a valuable animal specieswhich until recently has also received little or noserious veterinary attention and which, regardedsolely as a working animal, is of considerableeconomic importance.

Wild life and game

The adaptation of animals and plants to theirenvironment needs to be fully understood beforerational land-use methods can be put into operation.Different species of grazing animals exhibit varia-tions in efficiency in utilizing vegetation to produceanimal protein. Under circumstances now prevailingin east Africa, zebu cattle, for example, are generallyin much better condition than European breeds.From the research which has so far been conductedit appears that, through this form of metabolicadaptation., many wild animals maintain themselvesand even grow and improve in condition on dietswhich will not support zebu cattle.

Game animals in Africa almost invariably appearbetter nourished than European cattle in Africa,and far eclipse the thin nomadic stocks. The magnif-icent condition of zebra an.d some species of an-telope is in marked contrast even to the state ofzebu cattle which, under identical conditions of pas-ture, may be emaciated and dying.

Game would appear to offer great possibilitiesas a source of protein for human consumption, ifa system of game farming could be initiated. Thedevelopment of wild-life policies and the conductof detailed biological in.vestigation will, it is an-ticipated, tap a promising source of animal proteinfor human consumption.. Before systematic gamecropping can however, be introduced on a largescale, much more information is needed concerningthe numbers of wild game in the area under consid-eration, their grazing habits, reproduction rate, an-nual increase, losses from disease and other causes,and their migratory movements.

Ecological considerations involvin.g wild game,nomadic herds and settled farming systems raisequestions to which no satisfactory answers have yetbeen found. Just as the large herds of the Masaitribe, by overgrazin.g the land an.d in.creasing ero-sion, constitute a serious and growing threat to thewild life of the area, so the vast herds of game livein uneasy apposition to settled farmers, many ofwhom regard them as a considerable menace.

HIDES AND SKINS

Hides and skins, mostly as by-products from ab-attoirs, frigorificos and meat-canning plants, arethe raw materials of the tanning industry and areimportan.t commodities in world trade. In ruralareas, and especially in the less developed countries,there is often a lack of proper slaughtering facilitiesand of capital an.d skilled labor, which contributesto the failure fully to utilize the potential for theproduction of good quality hides and skin.s. Theseproducts can make a significant contribution toeconomic an.d social development and much wastagecan be prevented through the application of im-proved modern techniques which are both simpleand in.expensive.

The supply an.d deman.d for hides and slcins de-pen.ds ou world factors outside the control of thecountry of origin. These products are not a fore-seeable harvest which can be increased or reducedaccording to demand. In.crease in supply followsincreased demand for meat, but may also be a re-sult of emergency slaughter or the effect of pro-longed droughts. Quantities available for export willbe reduced as a result of the development of a localtanning in.dustry which utilizes large quantities ofraw material and obviates the wasteful procedureof exporting raw hides and skins and reimportingthem as finished leather.

AFRICA

The African region presents special problemswhich have beert in.creased by the rapidity withwhich independence has been gained in certaincountries, and the difficulties resulting from the loss

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Damage of various kinds has a severely adverseeffect on the value of hides an.d skins which arepeculiarly susceptible to the evidences of the widerange of parasitic, bacterial and viral diseases thataffect the slcin of animals in tropical and subtropicalzon.es. Diseases and intermittent droughts ann.uallycause the deaths of vast numbers of animals in theless developed countries, and the hides are usuallythe only part of the carcass which can then be sal-vaged. Such "fallen" hides are produced in. largenumbers in countries such as India where the slaugh-ter of cows is prohibited and all cattle die fromnatural causes. Fallen hides are of inferior quality,are difficult to process and, where the animal hasdied from anthrax, may be dangerous to handlesin.ce this acute septicemic disease can be trans-mitted to man even years after the death of theanimal.

Bran.ding, wire cuts, pressure sores, knife wourtds,bruising, inefficient bleeding, various forms of adul-teration and other evidences of bad handling areall causes of reduced value and output which canbe readily remedied.

Hide improvemen.t services should be regarded asan essential part of agricultural administration, uti-lizing the services of the agriculturist and the veter-inarian to demonstrate that, with little additionaleffort, hides an.d skins of good quality can be pro-duced for which a remunerative market exists. Suc-ess depends upon the treatment of parasitic skincon.ditions and the control of other dieases, im-proved management and handling of livestock, an.dbetter methods of removing, flaying and preparingthe hides. Much progress will follow the in.troduc-tion of any of these factors and a growing and val-uable industry will follow the adoption of all ofthem to the fullest extent possible in the prevailingcircumstances, provided that proper legislation forcontrol an.d the organization of marketing facilitiesare also vigorously pursued.

of the services of many expatriate specialists. Theneed for protein of high biological value is as 'nark-ed in parts of Africa as anywhere else in the world.The requirements, however, are very great, and lackof purchasing power in the new and developingcountries preven.ts the importation of milk products,

Regional trends in animal production and health

for example, in the quantities n.eeded. Apart fromsmall areas, the milk potential is not great and thereare many major handicaps to the development ofdairying in Africa.

In Africa, the hazards of livestock farming areperhaps greater than in any other region. Some4 million square miles (10 million square kilometers)of Africa are dominated by the tsetse fly which, asa vector of protozoan parasites, effectively inhibitsthe successful raisin.g of cattle and other livestock.The problems of disease control are extreme-ly complicated, and are rendered even moredifficult by such factors as the huge distances, lackof communications, droughts, floods, areas of poorland, plethora of vectors, uncontrolled wild fauna,management malpractices, unsettled civil condi-tions an.d illiteracy. Nevertheless, much work isbeing done in controlling the major epizootics ofthe region, and significant advances are being madein the control of contagious bovine pleuropneumo-Ma, tick-borne diseases and parasitism. A notablerinderpest control program has been conducted inwest Africa under the auspices of the Commissionfor Technical Co-operation in Africa South of theSahara (CCTA), and the disease now exists only innorth Kenya and Ethiopia. The latter countrypresents particular difficulties but even there a steadyreduction of incidence is noted.

There is a growing interest in meat production,both of domestic animal origin and from systematicgame cropping, and positive action has been taken,for example in the Sudan and Camerourt, to improvethe hygiene and handling of meat and meat productsfor human. consumption.

In large areas of Africa sheep provide the princi-pal source of meat, while goats are also of impor-tance. In north Africa some progress has beenmade in pasture improvement and improved sheepraising, but in the rest of the continent with theexception. of South Africa the industry is primi-tive, management methods are inefficient and feedsupplies are deficient. Little hope can be entertainedfor a rapid improvement in the husbandry of sheepand goats in Africa. Any programs must be plannedboth on a wide scale an.d on a long-term basis.

The poultry in.dustry is highly developed inSouth Africa and is capable of rapid expansionin a number of other African countries. Poultrycan make a substantial contribution in relievingthe protein insufficiency of Africa. As in otherregions, success in poultry production dependson the control of disease and the provision of feed-

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ingstuffs from local sources. The average produc-tion per hen per year in African villages is at presentabout 40 undersized eggs, compared with 280 to300 good quality eggs in the top-producing flocksof developed countries.

NEAR EAST

Sheep are the main form of livestock in this re-gion, for meat and wool and also for milk. In thearea between Libya and Pakistan. 75 percent of themilk is produced by sheep and goats. Cow pasturesare very poor an,d cattle are selected for draft rath-er thart for milking purposes. There are over 100million sheep in the region, mostly of the fat-tailtype. In view of the dan.gers of overstocking, pro-duction increases will not be attained by increasingchis population, but rather by improving the qualityof stock. Some steps have been taken to improvethe output of meat, wool and milk. The govern-inents of Afghanistan, Cyprus, Iran, Iraq, Lebanon.,Libya, Pakistan, Syria and Turkey consider thatsheep numbers must be held constant and the qual-ity improved in order to satisfy the needs of theirpeoples. The present trend of numbers is difficultto assess due to the four years of drought in the NearEast which destroyed at least 40 percen.t of the breed-ing stock. Before the drought period, a tendencytoward stability was noted. The region continuesto be deficient in meat and milk, but progress slowbut steady can be anticipated with the improvedmethods of management and nutrition now beingapplied.

The dairy industry, based upon the consumptionof cows' milk and its products, has developed satis-factorily in Israel and, to a lesser extent, in Lebanon.Throughout the region, bilateral and multilateralprograms are assisting govern.ments in the develop-ment of modern, dairies for the major markets. Thesedairies serve as stimulants for the development ofa local industry. This has been particularly notice-able in the case of the Teheran dairy project. En-couraging progress has also been noted in Iraq,Israel, Lebanon, Syria, and the United Arab Repub-lic. One of the difficulties in the region is that muchof the liquid milk sold is produced under unhygien-ic conditions and is heavily adulterated before itreaches the consumer. Milk is a traditional food, par-ticularly in the form of yoghurt and cheese, but percaput production and consumption of milk and milkproducts is, in general, very low.

There is an urgent need for protein of high bio-logical value throughout the region, but extremeclimatic conditions an.d the lack of animal feed ren.-der dairy development particularly difficult. Theimportation of high-yield dairy stock, particularlyfor the irrigated areas, is being actively promotedby governments, and steps are being taken to improveeducational facilities for modern animal husbandrypractices. There is a new awareness of the impor-tance of dairying.

Poultry production is of particular importance inMoslem countries where pig products are not eaten,artd it can make a significant contribution to theavailable protein. Remarkable progress in egg andbroiler production has been made in Iran, Israel,Jordan, Lebanon, Syria, Pakistan and the UnitedArab Republic. The expansion has been due inno small measure to the widespread production anduse of vaccines again.st such conditions as Newcastledisease, which can wipe out a vulnerable poultrypopulation. The most urgent requirements noware for improvement and development in the feedindustry an.d in marketing systems.

Of disease problems, the control of epizooticshas been given first priority. Modem techniques forthe production of vaccines against rinderpest, an.dthe application and extension of methods of fieldcontrol, have received increasing atten.tion. in Afgharti-stan, in Pakistan an.d in the United Arab Republic.Progress in the control of foot-and-mouth diseasehas been slower, but a number of countries, notablyIran, Turkey, and the United Arab Republic, areproducing their own vaccines an.d applyin.g fieldcontrol methods, primarily to protect the growingdairy industries. A severe setback has been en-coun.tered with the appearan.ce and rapid spread ofa type of foot-and-mouth virus, SAT-1, never beforeen.countered in the region, which appears to have apredilection for sheep but is also affecting largenumbers of cattle, especially in. Israel.

The wave of African horsesickness, which sweptacross the Near East from 1959 to 1961, necessitatedthe establishment of four vaccine-producing laborato-ries and the provision of expert guidance in the com-plicated techniques involved. The disease is n.ow on thewane, although this may be only a temporary reces-sion; it appears, however, that the vaccination cam-paign.s, which were prosecuted so vigorously by thegovernments concerned, have been successful inbringing the disease urtder control. The losses ofhorses, asses and mules were exceptionally heavy insome areas and the impact has been severe on ag-

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ricultural activity, in countries where these animalsprovide the main means of draft and transport.

Much atten.tion has been given to the control ofdiseases of reproduction., which are of grave econom-ic importance especially in such countries as Pakis-tan, Syria and the United Arab Republic. Arti-ficial insemination programs have been introducedand are successful where they are operated underadequate veterinary supervision and hygienic control.

The growing appreciation of the enormous econom-ic losses caused by disease in livestock, an.d of thenecessity to establish control measures as part ofany long-term agricultural development program,has led to the establishment, under the United Na-tions Special Fund, of the Near East Animal HealthInstitute, with units in Iran, Iraq, Lebanon, Sudanand the United Arab Republic. This will be respon-sible for research, training, diagnostic work and vac-cine production in a wide range of important livestockdiseases, including equin.e encephalomyelitis, con-tagious bovine pleuropneumortia, foot-and-mouth dis-ease, African horsesickness, parasitism, diseases ofreproduction and diseases of poultry.

NOMADISM

A note may be in.serted here on nomadism, a wayof life which today persists mainly in Africa andthe Near East. Nomadic practices have their rootsin the need to fin.d means of exploiting unfavorablehabitats which are not conducive to any system ofarable cultivation. If animals in such arid areaswere maintained in an.y one place for a long period,they would consume the limited available pastureand would then die of hunger. There is no possi-bility for the harvest an.d storage of fodder, and thusno alternative to the constant movemen.t to newareas in search of pasture.

The pattern of n.omadism closely resembles thespon.tarteous migration of wild animals which followthe rains and the growing vegetation, but the no-madic pastorialism seen, for example, over large areasof Africa, can be responsible for much land dete-rioration, and for the reduction of the game popu-lation with which it is in constant competitioa. Manyareas are suffering severely from overgrazing, sincealinost invariably the number of domestic Laimalswhich can be maintained under such conditions isgrossly overestimated, an.d widespread deterioration ofhabitat is the inevitable result. Stocks are not only asource of protein but are a symbol of status the im-

portance of which outweighs economic considerations.Nomadism is a traditional form of social organi-

zation based upon a collective occupation of pasturelands. Even where this traditional nomadism isinimical to the habitat and to ration.al land-usepractices, it is difficult to introduce any measureswhich will lead to its abandonment or even curtail-ment, although many areas are now suffering fromsevere overgrazing.

In east Africa, pastoral peoples are completelydependent upon their cattle an.d live on a diet ofblood and milk. Such a liquid diet has notableadvantages in an arid country. The use of milkand blood in this marmer obviates the killing ofthe animals for food an.d greatly reduces the largeconversion. losses. The nomadic peoples, an.d theanimals which they herd, have become adapted totheir severe environment to a truly remarkable de-gree (Kay, 1961).

In the world's largest desert, the Sahara, a humanpopulation estimated at over one million lives whollyor mainly on livestock production, which providesmilk, butter, an.d cheese as well as such materialsas leather, wool and hair. Meat is seldom eaten,and the barter or sale of livestock provides the veg-etable portion of the diet. Cattle are not usuallykept by desert nomads since they have special pastureand water requirements which cannot be met. Sheepan.d goats, formerly maintained essentially for woolhair, and hides, are now kept mainly for meat andmilk. In recent years the demand for camel meathas risen with increasing incomes (Eichhorn andCockrill, 1962).

In general, it appears that nomadism is on thedecline, and settling is very slowly increasing withthe exception of a few areas. Gradually a processof evolution an.d a change in human ecology is bring-ing the nomads nearer to modern. society. Furtherprogress in this direction depends largely upon anextension of drilling water holes, and the establish-ment of perman.ent irrigation areas. The completedisappearan.ce of nomadism, however, would leavegreat land areas totally un.used since, with pres-ent means, they cannot be utilized in any otherway (UNESCO, }962).

FAR EAST

One of the outstanding features of present trendsin animal production in the region is the greatincrease of pigs and poultry. While poultry are

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acceptable n.early everywhere, this is not alwaysthe case with pigs. In the Far East, however, verylarge sectors of the population have no religiousor other objections against pigs and, with the useof improved biologics, notably hog cholera vaccine,pig keeping is developin.g very satisfactorily in mostcountries. With further encouragement, it could begreatly extended: education in nutrition and man-agement would render it more efficient an.d, in mostareas, a considerable reduction in the time requiredto reach the optimum slaughter condition could beattained with relative ease.

Newcastle disease is enzootic throughout the re-gion and, in the past, frequent epizootics have beenthe limiting factor in the development of the poul-try industry. Spectacular control has been achievedin many countries following the use of attenuatedvirus-vaccines which can be produced in quantityat low cost. Large poultry farms are now beingestablished in areas where poulny farmin.g waspreviously limited to small farmer ownership of upto 50 birds. In Singapore between 1948, when large-scale vaccination was started, an.d the presen.t time,the poultry population has increased from 500,000to nearly 6 million; the price of eggs has fallenand a notable con.tribution has been made to thelevel of nutrition of the human population. Suchremarkable increases in. poultry production followthe widespread use of improved vaccines and con-trol measures directed not only against Newcastledisease, but also against such diseases as fowl poxand pullorum. In many areas, the prevalence ofthese conditions had reduced poultry keeping to abackyard minimum Now that decimation of poul-try flocks is rare, it has been possible to build upa large-scale industry. This has been greatly aidedby the introduction of new management an.d feedingmethods. Successful efforts have been made inmany areas to reduce or elimin.ate the necessity forimporting feeding materials from abroad, and fre-quently it has been found that the poultry industryof a country can be self-sufficient in locally-prod-uced feeds. Increased supplies of poultry meatand eggs an.d an assured market have brought abouta reduction in retail prices, and these commoditiesare now making a highly important contribution toprotein requirements.

Duck production, based upon traditional husband-ry methods, is common in countries where there isdeman.d for table ducks and duck eggs. It mayoperate on a large scale, especially in paddy areaswhere the ducklings feed largely on small fish and

parasitic crustacean.s. Duck hepatitis, a virus diseasewhich causes heavy losses, requires research and theapplication of field control methods. Salmonellosisis also a periodic cause of much economic loss.

A combination of pig, together with poultry andduck, rearing, and the production of such pondfish as carp and tilapia, is practiced in a numberof countries, usually on a relatively small scale.

India and China are the only countries in thisregion in which sheep are of importance in theagricultural economy. The sheep population ofIndia is estimated at nearly 40 millions. Duringthe past five years much interest has been shown inimproving the industry, and it is confidently an-ticipated that the next decade will be one of con-tinuing development. Archaic systems of land ten-ure and lack of marketing facilities are among themajor difficulties to be overcome. Total wool re-quirements will, it is considered, be met withoutdifficulty, but for many years it will not be possibleto meet the need for mutton.

In most parts of the world, low quality roughageconstitutes an important source of energy for ru-minants. In India this may be in excess of 90 per-cent. The processing of cellulose materials withchemicals, and especially treating straw with alkali,can produce a feed which is of considerable nutritivevalue. Due to the large quantities of water required,however, this has been impracticable in most cases.

Recent research indicates that the energy valuesof feeds may be altered through processing or bythe use of certain additives which, by con.trollingmicrobial activity, control the relative productionof organic acids in the rumen.. The possibilities aresufficiently interesting to warrant further researchwith particular referertce to the improvement of thefeedin.g value of straws and similar poor qualityroughages so important in the Far East andother regions (Shaw, 1962).

The development of dairying in Asia and the FarEast varies greatly both within the countries andfrom country to country. In the region., the wholerange is covered from the small-scale peddling ofinilk of doubtful quality, to highly in.dustrializedand economically efficient dairy operations. Insome countries considerable quantities of milk areproduced, while others depend largely on imports.Throughout the region the average per caput con-sumption of milk and milk products is extremelylow, sometimes even decreasing due to the inabilityof dairy production to keep up with the populationincrease.

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Inefficient dairy farming, leadin.g to low yieldsper animal, has resulted in price levels far abovethe means of the average consumer, even in areaswhere collection and distribution are organizedand modern processing facilities exist. Imported,low-priced skim milk powder has been used as aprice-reducing remedy by several en.terprises manu-facturing reconstituted or toned milk. This hasbrought about an increased consumption of milkin a limited number of large municipalities.

A number of dairy projects in various countriesof the region have received technical an.d fin.ancialassistance from nation.al artd internation.al sources,and increasin.g emphasis is being placed on thetraining of technical personnel for the dairy industry.Japan and India have taken the lead in the dairyfield. However, a considerable number of projectshave been initiated in other countries, for example,Ceylon, Nepal, Pakistan, and the Philippines. Aninteresting bilateral project has recently been startedin Thailan.d, entailing the establishment of a dairyherd of Red Danish cattle which, together with theprovision of expert services, has been provided bythe Danish Government.

Animal health problems in the region are far-reaching in their effects on. production. In recentyears there have been en.couraging gains in thevarious campaigns against disease. Particular men-tion is made of the mann.er in which rinderpesthas been brought under control in such countriesas Thailand, of the great rinderpest campaign whichis making such satisfactory progress in India, andof the active measures which are being taken. inCambodia. The maintenance of constant vigilartceand the occasion.al carrying-out of frorttier vacci-nation are playin.g an importartt part in preventingreinfection in Thailand, Viet-Nam and other keycountries. Notable advartces have beert made incontrollin.g diseases of pigs an.d poultry with a re-sultant boost in production Improved vaccines arebrin.ging about reductions in losses from hemor-rhagic septicemia, a seasortal disease of cattle andbuffaloes, which can cause a very high death rateartd which ranks high on the list of diseases ofeconomic importance. Much work remains to bedone, and there are signs that governments areemphasizin,g animal health matters in conjunction withprojects aimed at increasing productivity. Foot-artd-mouth disease, probably the disease of greatest eco-nomic importance in the region, is receiving growin.gattention., especially in Thailand where new vaccinesare undergoing field trials at the present time.

Parasitic infestations, which cause incalculablelosses in cattle, buffaloes, sheep, pigs and poultrylosses which are largely preventable by modernteclunques and methods require much more atten-tion throughout the entire region. They cause ahigh death rate, especially in young animals, and agreat deal of subhealth; their control should be anecessary aspect of animal husbandry projects. Theexcellent irrigation schemes at present in progressin many of the underdeveloped tropical countries,and which are important in raising the living stan-dards and improving the well-bein.g of the people,are also creating ideal conditions for the spread ofparasitism both in man and his animals, and shouldbe accompanied by the necessary precautions artdprophylactic measures. Experts have expressed theview that, if this is not done, the diseases whichresult may cancel out the benefits which irrigationschemes can bring.

Many of the zoortoses, such as tuberculosis,rabies and brucellosis, which are intercommuni-cable between man and animals, are commonin the region. Much work is urgently rteeded tocontrol these diseases which, in. affecting publichealth, are also of economic importance to expand-ing agricultural programs.

LATIN AMERICA

Over most of Latin. America, dairying can be de-scribed as an infan.t industry. The average milkproduction and consumption is far below desirablelevels. Outside some of the major markets inilkis frequently heavily adulterated and han.dledunder unhygienic con.ditions. In many cities it is

possible to buy milk of good quality, but the priceputs it out of the reach of the lower income groupswho need it most. As might be expected, the de-elopment of dairyin.g has taken place principallyaround the major markets, and much therefore re-mains to be done to make dairy development na-tional in scope. Man.y of the Latin-Americart coun-tries have found it rtecessary to protect their in-dustries by placing tariff barriers on importedproducts.

Considerable progress in the poultry in.dustry hasbeen seen in many countries, particularly Brazil,Chile, Colombia, Mexico and Venezuela, but suchlimitin.g factors as lack of specialized personnel,shortage of suitable feedstuffs, and the prevalenceof decimating poultry diseases, prevent really satisfac-

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tory development in many areas where an expansionis most needed.

As regards sheep production, there are great pos-ibilities in Bolivia, Colombia, Ecuador, and Peru,although beef and poultry may more suitably meetthe requirements of the population. In general,within the region beef is preferred to mutton.. Theflourishing sheep industries of Argentina, Chile,Paraguay and Uruguay still have ample scope forimprovement in wool and meat production, andMexico is gradually makin.g progress.

In the past 15 years there has been a inarked ex-pansion of livestock production in Latin America.Shortly after the second world war, during whichseveral countries liad seriously depleted their live-stock resources, conservation policies were adoptedwhich restricted the export of livestock and theirproducts. These policies have resulted in substan-tial increases in the total livestock populationsof most countries and, in the past five years, themeat export trade has shown rapid growth. Thisgrowth in exports has been further encouraged byimproved econ.omic conditions in Europe and bya demand for certain types of meat products. Notonly have the better-known exporting countries,such as Argentina and Brazil, beert in.volved in thesedevelopmen.ts but also several much smaller coun-tries such as Costa Rica and Nicaragua, which havedeveloped valuable export markets. The CentralAmerican republics, which are recognized as beingfree from foot-and-mouth disease, can find a readysale for their meat and meat products in theUnited States, a market which bans the importationof frozen or chilled meat from the rest of LatinAmerica.

A new and more rapid phase of growth in live-stock production is rtow being initiated. With theimprovement of communications, vast areas of laudhitherto unexploited are being opened up. At thesame time more efficient production and marketingprocedures are coming in.to operation.

Animal health has steadily assumed greater im-portan.ce and will continue to do so as livestockproduction is expanded and intensified in LatinAmerica. Rapid transport an.d the more frequentinterchange of livestock on the hoof facilitate thespread of disease, while intensive productiort meth-ods increase the risk of exposure to infection, andmay reduce the resistance of the individual animal.

One of the gravest problems is foot-and-mouthdisease. This disease has been enzootic in mostof South America since the turn of the century.

The countries of the Andean chain., such as Bolivia,Chile and Peru, have been the less seriously affectedbut have suffered from frequent sporadic outbreaks.The countries lying to the n.orth of the7 Amazonbasin, from Ecuador to the Guianas, remained freeuntil the beginning of the last decade when the dis-ease invaded Venezuela, spread to Colombia andmade its appearance in the coastal region of Ecua-dor. Foot-and-mouth disease appeared in Mexicoin the late 1940s; it was successfully eradicatedafter a long and costly campaign. The whole of theCentral American an.d Caribbean area is now freefrom the disease. This fortunate situation requiresconstant vigilance on the part of the disease-freecountries, in order to preclude the entry of animalsor products which might introduce the disease.With special reference both to the protection of thecountries which are free and to the control of thedisease in the countries which are affected, the Pan-American Foot-and-Mouth Disease Center was es-tablished at Rio de Janeiro in 1951. This centerprovides advice and active assistan.ce to all the coun-tries in the Hemisphere. Recen.tly, the leadingcountries of South America have reached thecon.clusion that, in order to ensure the satisfactorydevelopment of their livestock industries an.d topermit their products to reach the best possiblemarkets, they must work toward the eradicationof foot-and-mouth disease. Groups of countrieshave met together to plan control programs

Other diseases, although not so widely discussed,are of equal significan.ce to the development oflivestock production. Both internal an.d externalparasites take tremendous toll among farm animals.In general, modern control methods are not widelyapplied, though their econ.omic potential is verygreat. Such diseases as brucellosis and tuberculosis,which have been eradicated or are comin.g undercontrol in North America an.d many countries ofEurope, are only n.ow receiving the necessary inves-tigation in Latin. America, and very little hns beendone about their control. The losses which occurin animals in the months after birth have receivednext to no attention. In fact, the field of animalhealth, apart altogether from certain major epizoot-ic diseases, offers a n.ew and promisin.g means ofattaining great production. increases. En.ormous loss-es occur as a result of disease, and a very largeproportion of these is preven.table. There is a grow-ing awareness of the importance and urgen.cy ofthis question, exemplified by the gradual improve-ment of veterinary services and the increasing n.um-

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bers of veterinary schools and laboratories over thelast decade.

Livestock production an.d animal health servicesmust be strengthened, and educational facilities mustbe further expanded. The best possible use mustbe made of the relatively few graduates currentlyavailable and, as new ones are trained, they mustbe brought into the government services. The ju-dicious employment of auxiliary personnel, for ex-ample in laboratories and clinics to assist veterin-arians, en.ables the fullest use to be made of thelatter's services. The adequate utilization of ex-tension workers in preparing farmers for effectiveoperations in animal health will also play a signif-icant part in. realizing the tremendous potential forlivestock production which still remains untappedin Latin America.

To complete this section, brief notes are added ondevelopments in the economically more developedregions.

NORTH AMERICA

Much work has been done over many years bythe range-cattle industry of the United States ofAmerica in breeding beef cattle for the unfavorableenviron.ment, and this has had a great influence inmany parts of the world in in.creasing calf crops,reducing losses from disease and drought, and ac-celeratin.g the rate of growth of young stock. Drought,cyclical downturn, and fluctuating local shortagesof cattle for slaughter brirtg about annual meatproduction variations in the United States andCanada, but output continues to show an over-allrise. The bulk of the high-grade beef comes fromsteers and heifers. Grading, which provides reliablemeat standards, is based upon conformation, finishand quality. In spite of the high production, theUnited States does n.ot by any means fulfill its ownn.eeds, an.d there is a considerable import trade withCallada, Mexico and New Zealand. As noted ear-lier, in view of the prevalence of foot-and-mouthdisease in South America, no meat or meat productsare permitted entry in.to the United States unlessthese have been properly sterilized and canned.Large n.umbers of cattle are imported from Canadaand Mexico.

The dairy in.dustry of North America is highlyefficient an.d extremely well organized. Althoughthe number of dairy farms has declined over the last

10 years, and the total n.ational dair. y herd has beenreduced by 10 percent, there has been approximatelya 9 percent in.crease in milk production because ofhigher yields per cow. The effective demand formilk and milk products, however, has not kept pacewith this production increase for a number of reasonsincluding the in.creasing use of margaiine, whichhas cut per caput butter consumption by on.e halfover the last 20 years; the high prices of milk prod-ucts, due to sanitary requiremertts; relatively highmarketing margins for fluid milk and, to some ex-tent, govern.ment price support policies; the extendeduse of high-yielding dairy cows producing milk witha lower butter-fat conten.t; and the recen.t public-ity accorded to the possible association of heartdisease and the consumption of animal fat.

Indication.s are that the surplus problem is be-coming of even greater importance than in the past.North American efforts to dispose of surpluses havea notable effect on world market conditions, and aresometimes the subject of considerable discussion.Enormous quan.tities of nonfat milk solids havebeen donated by the United States Govern.men.t foruse in various international aid schemes, includingUNICEF programs.

In both the United States of America and in Can-ada there is a strong trend toward larger poultryfarms an.d vertical integration. In the United States,about 25 percent of egg production and over 90percent of broiler production have been integratedin 1961. Production of eggs, broilers, and tur-keys has frequently been higher than the localconsumers' demand. Broiler prices in Georgia, forexample, went down to 9.5 cents per poun.d (21cents per lcilogram) of live weight in autumn 1961,whereas the cost of production was about 14 to 15cents per pound (31 to 33 cents per kilogram) in well-man.aged broiler plants. A mandatory Federal gov-ernment inspection program has recently been in-troduced in the United States as a guard againstthe sale or export of diseased poultry. This pro-gram is an extension of the meat in.spection servicewhich has now been in effect for some 50 years.

OCEANIA

Australia and New Zealand have highly developeddairy industries which form an important part ofthe agricultural economy. The exports of dairyproducts, particularly in the form of butter andcheese, make a substantial contribution to the for-

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eign exchange earnings of these two countries.In the past 10 years, milk production has in.creasedby approximately 8 percen.t in. Australia, and by14 percent in New Zealand. The weakness of in-ternational markets for dairy products and thefall in prices are thus a cause of much concern forthe industry in these countries. Even with the idealfarming condition.s of New Zealand, and an efficient-ly run industry, the butter price on. the Lon.donmarket has been unprofitable.

The poultry industry is one of the six main pri-mary industries in Australia. New Zealan.d andother areas have small but well-organized poultryindustries. Newcastle disease has not, so far, createda problem but the avian leucosis complex sometimescauses considerable losses and is becoming a majorproblem.

Australia and New Zealan.d enjoy a unique posi-tion in regard to freedom from most of the majorepizootics. With the spread of many of the emerg-ing diseases, however, that freedom is increasinglychallenged. Quarantine an.d other measures de-signed to guard against the importation of exoticdiseases of livestock are exceedingly strict but, evenso, hog cholera, for example has recently occurredwith some spread in Australia. The increasin.g easeand speed of transport has drawn attention to thefact that the livestock themselves are by no mean.sthe sole possible carriers of disease, and that relianceupon total prohibition of entry of certain speciesmay be inadvisable as well as being unduly restric-tive in instances where adequate tests and quaran-tine precautions can be applied.

WESTERN EUROPE

Milk production has irtcreased by some 28 per-cen.t in the past 10 years, due to increased efficiencyof production and also to a 9 percent increase in thenuinber of dairy cows. In contrast to the less devel-oped countries the dairy industry in western Europeis faced with a growin.g problem of surplus produc-tion, particularly in butter. Per caput con.sumptionof milk products at present prices has not kept pacewith increased milk production, and export marketsof the necessary magnitude have not been developed.In general, milk an.d milk products of good andimproving quality are available in abundance atprices within the reach of the average consumer.

Marketing of milk products has, in most cases,been subject to government control for so long

that it is difficult to judge the effect which a freemarket might have on the production and sale ofmilk products. Further increases in production areforecast, and it is doubtful if increasing consumptionwill absorb more than a small part of the growingsurplus: additional consumption may be achievedby lowering retail prices. It is hoped that greaterquantities of milk products will be made availablein the areas where the need is greatest. In the yearsahead, western European countries may be expect-ed to undertake vigorous campaign.s, both in Europeand in other regions, to increase the effective demandfor milk and milk products.

The poultry industry has been making rapid pro-gress in all European countries. Meat production,too, has shown the expected increases which followthe better treatment and control of livestock dis-ease, and improved feeding.

Disease in livestock can cause severe reduction orlimitation in output and it is encouraging to note,for example, the steady over-all decline in foot-and-mouth disease, with diminishing seasonal peaksof incidence, which has occurred during the pasteight years. This has been due in large part tobetter sanitary control, and the production and useof a quantity of vaccines of improved efficiency. Manycountries are n.ow approaching the stage when, ifthe present decline continues, the adoption of theslaughter policy as practiced, for example, in theUnited Kingdom and recognized as the ultimatestep in control and eradication of this disease, mayat last become economically feasible.

A number of salien.t advances in disease controlhave been noted, for example, the successful cam-

DYNAMICS OF DEVELOPMENT

The broad field of animal production, with allthe disciplines which it incorporates, holds an im-mense potential for development. Progress, however,will not be achieved by the universal applicationof the standard methods of the technically advancedcountries, nor will their trends necessarily arise indeveloping countries or their research be automati-cally applied there.

Progress already made in management, nutrition,breeding and husbandry cannot be regarded with

The next decade

156

paigns for the eradication of bovine tuberculosis inthe Netherlands, Switzerland and, more recently,in the United Kingdom. With the exception ofsporadic reinfections the disease is now consideredto be completely under control in these countries.Denmark, Norway and Sweden have successfullycontrolled brucellosis in cattle. Such advances,however, are somewhat offset by the serious chal-lenges of the virus epizootics. African swine fever,for which there is at present no prophylaxis, nocure and no defense other than strict quaran.tineand slaughter, appeared in Portugal and Spain in1960, and the results have been little short of dev-astating. A slaughter buffer zone was promptlyestablished by France in the frontier area whereimmediate slaughter of affected pig herds is carriedout, no attempt being made to differentiate Africanswine fever from the more common hog cholera.This measure may well have assisted in preventingAfrican swine fever from spreading beyond the en-virons of the Iberian peninsula.

Disease preven.tion is an international responsi-bility, a fact which has been recognized by the Eu-ropean Economic Community. The increase oftrade and travel between Africa and countries east,north and west of the continent is leadin.g to an ex-tension. of African diseases beyon.d the geographicalfrontiers which have been their traditional bounda-ries. Temperate and tropical regions alike must bealert to possible invasion by such disrupting condi-tions as African horse sickness, African swine fever,lumpy skin disease, Rift Valley fever, and theSouth African and Asian types of foot-and-mouthdisease.

hopeful complacency. The vast increase in output,vital for human well-being, which could be ob-tained from the application of modern technologyto the world's animal resources, can only be achiev-ed if the machirtery of progress is adequately serv-iced. One of the greatest needs is for more trainedpersonnel. More extension services are needed tobring the findings of research to the producer. Whenfinancial provision has been made, train.ed person-nel available an.d extension services being built up,it is important that adequate transport should beprovided. In all the less developed countries means of

communication are lacking to a degree which in-capacitates technical assistance, the essen.ce of whichis mobility. Basic requirements for almost all proj-ects are mobile laboratories, observatories or dis-pensaries: many could use light aircraft and heli-copters. The financial outlay is small in relationto the return which results from the full and properuse of skilled manpower. It is strange that so manyassignments are crippled by sheer lack of the meansof taking expert knowledge to the precise locationwhere it is needed.

It is not only more economic aid which is neededfrom the more developed countries, but also moreskilled manpower. In planning their education andtraining policies, the more developed countries shouldconsider both their own expanding requiremen.tsand also those of the developing areas of the world.They will have to think in terms of their existingscientific force, expanded to meet their expectednational needs, and expan.ded again. (it has beenestimated perhaps by as much as 10 percent of thetotal force) to enable a corps of specialists to be atthe disposal of the nation.s in need of them, and tolead their development with all the urgen.cy possible.

Education, then, is one of the basic requirementsof progress: education in the advanced countrieson a scale sufficient to provide a surplus of scien-tists over national needs; even more important,education, in the less developed countries, whichwill incorporate training at all levels and which willnecessarily entail heavy demands for some yearsto come on the expatriate teacher. The fruits oftechnical assistance begin to appear only with theincrease in numbers of trained local personnel,and their assumption of responsibility in their fields.The success of technical assign.ments is based onthe ability of foreign experts to " work themselvesout of a job. "

Training at lower levels in technical subjectsshould be greatly increased in the less developedcountries, to ensure that the best possible use ismade of highly trained local experts, as well as thetemporary services of experienced foreign experts.Such experts should not have to devote their time,for example, to minor details of administrative pro-cedure which can well be handled by a competentlocal junior. The use of auxiliary staff has been afeature of animal health work in a number of Coun-tries for many years and this type of operation, inwhich lay assistants who have received the necessarytraining conduct such routin.e duties as mass vac-cinations, always under supervision by a qualified

157

profession.al veterinarian, might well be extended toother fields. It ensures that there is no misem-ployment of experts on work which can be doneby personnel with limited training. Such trainingcan be largely in-service.

The establishment of administrative and executiveunits specially adapted to the needs of individualdeveloping countries is seen as an essen.tial factorin agricultural progress. There is much to be saidfor having all agricultural disciplines under oneministry. Such departmen.ts need not necessarilymodel their operation.s on those of the advancedregions. Their aim must be to en.sure the effective-ness of all specific technical measures of improve-ment, from the co-ordination of policy matters atthe top to the extremely importan.t extensionapproach at the field level. The services of high-level specialists should be properly used to guidepolicies rather than to conduct the details of fieldprograms.

The importance of securing the participation ofpeople in plans for their own improvement is mani-fest, and such support is perha.ps more readily forth-coming in animal production than in many othersectors. Results can be achieved relatively quickly,an.d pilot an.d demonstration projects can be estab-lished which carry conviction; for example, the im-proved condition an.d early maturing of animalsin which parasites have been controlled or whichreceived balanced ration.s. Social and human fac-tors must receive adequate attention when planningand implementing development programs. A frame-work should be established which will providefor sound administration; for investigation, surveyand experimental work; for the functions of regu-lation; and for comprehen.sive education at all lev-els. On this can be built the regulatory servicesand the direct services to the farmer.

Much more is required to bring about develop-ment and to stimulate progress in the field of animalproduction than the provision of educational facil-ities and the establishment of an administrativean.d executive organization. Basically, we are deal-ing with the stock owner, a universal figure with thefrugality and prejudices bred of gen.erations of unre-mitting toil, an.d the individualism of indepen.dence,though that independen.ce may not extend to theownership of land or complete freedom from debt.

Incentives are required to increase livestock pro-duction as they are to stimulate any kind of pro-duction.. Disincentives may be necessary to checkundesirable practices.

OUTLETS

The sales process, as the link between the produc-er and the consumer, has a powerful influen.ce onthe efforts of the producer, an.d the provision of sat-isfactory local marketing facilities is essential toprogress. Extended marketing channels become nec-essary when a livestock area can produce moremeat than can be absorbed for local consumption..This may lead to the production of meat for citieswithin the country or export to foreign. markets.An incentive is thus provided for the developmentof a livestock industry designed to produce what thepublic wants in an. appropriate form an.cl. quality.

Within a single marketing channel there are oftena number of different enterprises an.d these may beexpected to compete against each other. Wherea single market, transport, and slaughter serviceexists, informal price fixing agreements may operateto the mutual disadvantage of producers and con-sumers. Such systems may be overcome by the estab-lishment of co-operative production units an.d co-operative markets. The adoption of better methods,the formation of efficient marketing procedures, andstability of prices are of direct interest to all live-stock producers, on whatever scale they may beoperating, where economic development is beingaccelerated.

An important aspect of increased meat productionlies in its handling and inspection. Much wastageoccurs in the transport of animals for slaughter dueto bruising and other injuries which may later entailthe condemnation of as much as 35 percent of thecarcass. Wastage occurs also in failure to utilizeall the valuable by-products of slaughter, for example,blood, hides and skins, bon.es, etc. Thorough vet-erinary in.spection for disease and other abnormali-ties is a necessity for all meat intended for humanconsumption..

Meat is the end-product of a complicated an.dhighly techiaical industry, and factors which increasethe productivity of the irtdustry are of vital concern.The use of food additives, such as antibiotics, aimedat quicker weight gain of livestock will undoubtedlyincrease in the coming years. Allied to this is theuse of hormones, of tranquillizers, the low-levelfeeding of parasiticides and other medicaments andeven preslaughter feeding or the injection of ten-derizers. The whole question of additives, an.d ofother means of increasing meat production throughan increase of the yield of the individual animal,will come very much to the fore in the next decade,

initially in the more advanced countries which arein a position to test their value and safety, and toutilize such techniques.

The prevention of meat spoilage through poorhandling will also receive attention. Improvementsin freezing techniques, in packaging and tran.sportingare all needed, and there can be little doubt thateventually there will be a greatly increased use ofagents such as antibiotics in all stages of production,intended to improve good hygienic practice (butnot to replace it) and to prolong the life of theproduct. The treatment of meat and other foods byionizing radiations, which suffered a serious setbacka year or so ago, is again. receiving attention andmuch research work is in progress.

IMPROVED ANIMAL HEALTFI

Livestock disease is one of the greatest single im-pediments to improved production. There is acon.tin.ued wastage of food and labor in husban.dinganimals which may never reach maximum produc-tivity, whose output is limited by reason of a heavyparasite load, which have a high morbidity rateand which, by virtue of their lack of output, arethemselves parasitic on their owners.

Modern technology and improved biological andpharmaceutical products mean that disease can bemore accurately and quickly diagnosed, and methodsof prophylaxis, treatment and control can be ap-plied, so that a substantial reduction can be madein the enormous losses sustained at present in the lessdeveloped countries. Disease impedes all the man.yfarsighted schemes for improved feeding and breed-ing, and better pastures and management, and inaywell completely nullify them. The discouragementto the small farmer when he loses a valuable animal,or when his breeding stock proves infertile, or hischildren become infected with brucellosis or tuber-culosis of bovine origin., or his draft animals are in-capacitated by foot-an.d-mouth disease just whentheir efforts are most needed, can.not be measuredin terms of money alone. The cumulative effectof such incidents, multiplied man.y hundreds oftimes, has an adverse effect -_on a nation's wholeeconomy.

Reduction of disease losses, eradication or controlof the major epizootics and improvement of live-stock health by reduced parasitism are all feasiblegiven the necessary skill aiad the appropriate mate-rials. Once these factors are realized and very

satisfactory and obvious advances can be achievedwithin a short space of time an incentive to in-creased livestock production is provided.

IMPROVED NUTRITION AND BREEDING

Better feeding practices and improved geneticstocks are aspects of sound animal husban.dry whichcall for urgent attention in all the developing coun-tries. They go hand in hand with disease controlin improving standards of livestock. If the unpro-ductive animal cannot be made productive it shouldbe culled. An.imals of low physiological fertilityor having transmissible defects of an.y nature cannotbe allowed to propagate and thus perpetuate unpro-ductivity. Improvements in pastures and advan.cesin. nutrition are of no avail if they are to be utilizedfor the benefit of the parasite animal and the com-mensals which it harbors.

The means now available for preventing lossesand for improvirtg nutrition are pointers to increasednumbers of livestock, but the developing countriesalso require greatly improved quality of animals.This can be achieved through breeding artd selectionwith the aim of increased production. Geneticexperimentation is necessarily slow, but a regionalapproach to these problems is both logical andeconomical.

Improved integration of livestock and crops, en-suring better crop rotations which result in increasedsoil fertility an.d hence more cereal an.d other foodcrops as well as cash crops, is coming increasinglyto the fore as a necessary aspect of greater produc-tion, especially in those areas with a shortage ofartificial fertilizers. Improvement in pasture manage-ment practices, rotating pastures with crops whereappropriate, and efficient stockin.g rates in rangelands, with such aids as the establishment of waterpoints, are related factors of great importance.

USE OF FOOD SURPLUSES

Constructive use is now being made of surpluses,in expanding consumption and aiding developmentin the economically less developed countries. Ration-al surplus disposal helps to satisfy the in.creasingdeman.d resulting from development, and additionalproposals are being formulated for the employmentof such stocks without prejudice to normal trade.Surplus stocks are made available both as a transi-

159

tional measure against hunger and as an incentiveto economic development.

Individual recipient governments, whose develop-ment is being promoted by this means, have to takethe responsibility for determining the precise usesto which surplus foods will be put.

The use of such food aid lies prin.cipally in coun-tries where large sections of the population. consumethe food grains which are in significant surplus.At the presen.t time these are wheat, barley, maize,and millets. However, cereals fed to livestock arean investment in the production of human food inthe form of meat, eggs and dairy products.

There are many countries, especially in Asia andAfrica, where cattle population.s are large but ofnegligible productivity because of poor feeding. Theaddition of small quantities. of feed grain.s to theirdiet could increase their output, especially if morertitrogenous local by-products such as oil cakes wereincluded. The establishment of " milk colonies "

concentration.s of milking stock in one or moreunits usually consisting of 2,000 or more animalsin a n.umber of countries, or of feed mixing plants,could provide controlled channels for the distributionof the surplus feed grains. Grain supplies can actas the initial capital in establishing co-operative feedmixing plants.

The poultry industry which, as has already beenindicated, can provide the means for a very rapidincrease of protein for human consumption., cansimilarly be stimulated. The establishment of poul-try feed mixing units could channel distribution offeed surpluses, and continue to function later withpurchases of feed stuffs, made possible by the profitsfrom increased production.

In some countries, such as those of the Near Eastand north Africa, the increasing demand for ce-reals for human consumption an.d livestock feedinghas led to the extension of grain production on landssubmargin.al for croppin.g, which formerly were usedfor grazing purposes. Crop yields are very low andthe lands are declining in fertility as a result oferosion an.d poor cultivation. It is difficult for thefarmer to change his practices, as he is dependenton the cereal crop, sparse though it may be. Pilotprojects have in.dicated that it would be possibleto build up some areas of this type as bases forsound livestock production if outside supplies ofgrains could be guaranteed to enable the farmerto return submarginal lands to grass for a longenough period. After rehabilitation it might bepossible to resume cereal cultivation in some areas

under a grassland rotation, and with higher yields.There may also be important instances in these andother regions where feed grains supplied as aidcould be used to hasten the implementation of na-tional plans for better range management an.d graz-ing control combined with fodder production. Suchgrains could be used to help maintain the livestockoff th.e range until the recovery of the vegetation,after which sometimes even twice the n.umber ofanimals might eventually be carried un.der controlledgrazing. Measures of this kind might also con-tribute in many ways to improved watershed man-agement and soil conservation (FAO, 1961).

Over large regions the supply of livestock productsis not sufficient to meet, even at present low levelsof demand, the additional requirements due to thegrowth of population. Human diets in the lessdeveloped countries are seriously deficiertt in pro-teins of high biological value. The proper use offood surpluses is thus not restricted to stop-gapor emergency conditions, where there are greatdisasters and national calamities, but should beseen rather as a stimulus to long-term productionprograms.

AUSTRALIA. BUREAU OF AGRICULTURAL ECONOMICS.

1962 Statistical handbook of the sheep and woolinditstry, 1962. Canberra.

EICHHORN, E. A. To protect Our meat supply.1953 Américas, Pan American Union, Wash-

ington, D. C., 5(5): 3-5, 42-43.EICHHORN, E. A. & COCKRILL, W. R. Progress in1962 veterirtary science. Span, 5(2). Shell

International Chemical Co. Ltd., London.FOOD AND AGRICULTURE ORGANIZATION OF THE1960 UNITED NATIONS. Report of the FAO

international meeting on veterinary edu-cation. Rome. Meeting Report AN1960/4.

FOOD AND AGRICULTURE ORGANIZATION OF THE1961 UNITED NATIONS. Development through

food: a strategy for surplus utilization.Rome.

FOOD AND AGRICULTURE ORGANIZATION OF THE1962 UNITED NATIONS. RepOrt of the first

meeting of the FAOIWHO Expert Panelon Veterinary Education. Rome.

References

160

DEMAND

Probably the greatest of all incentives for thelivestock producer is the assurance of a growingdemand for 1-tis produce. The need for animalprotein is eviden.t and, with the accelerating growthof human population, unbalan.ced diets are oftenaccepted with a despairing apathy. Demand is quiteanother thing. lt is a positive in.dication of awaken-ing consciousness that there need not be a dullacceptance of life at the bare subsistence level, ofmalnutrition or of downright starvation. This up-surge of expression is closely linked with increasesin income, which lead directly to the desire for andability to afford better standards of living. Asdevelopment gains momentum, however gradually, thedemand for more protein becomes imperative. Evena slow rise in in.come can make this trend percep-tible within the relatively short period of one decade.

The world's livestock industry is facing a decadein which en.ormous developments are possible. Themeans by which they can be attairted are feasibleand practicable. The contribution which can bemade to the well-being of mankind is incalculable.

KAY, H. D. What limits food production.? In Rus-1961 sell, E.J. & Wright, N.C., eds. Hunger: can

it be averted? London, British Associationfor the Advancement of Science, p. 49-59.

SHAW, J. C.: Problems of incieasing animal produc-1962 tion. Proceedings of the Nutrition Society,

21: 99-106.UNITED NATIONS EDUCATIONAL, SCIENTIFIC AND CUL-

1962 TURAL ORGANIZATION. The problems ofthe arid zone: Proceedings of the Parissymposium. Paris. Arid Zone Research18.

UNITED STATES DEPARTMENT OF AGRICULTURE.

1962 AGRICULTURAL RESEARCH SERVICE.

Breeding better SWine through performancetesting. Washington, D. C. ARS 22-77.

WRIGHT, N. C. The current food supply an.d present1961 trends. In Russell, E.J. & Wright, N.C., eds.

Hunger: can it be averted? London, Brit-ish Association for the Advancement ofScience, p. 1-14.

ANNEX TABLES

ANNEX TABLE 1A. - INDICES OF TOTAL FOOD PRODUCTION, BY COUNTRIES AND REGIONS

I U3

1952/53 1953/54 1954/55 1955/56 1956/57

1952153-1956157

1957/50

loo

1958/59 1939/601960/61

(Preliminary)

Indices, average

WESTERN EUROPE 93 101 100 102 103 107 110 113 120

Northwestern Europe. 95 100 102 101 103 106 107 109 121

Austria 91 102 96 103 108 112 116 110 122Belgium-Luxembourg 94 96 104 107 100 107 111 105 117Denmark 100 101 101 97 101 111 110 107 118Finland 98 105 100 97 100 109 110 112 124France 91 99 104 104 101 105 105 111 125Germany, Federal Republic 95 101 101 100 103 105 111 107 124Ireland 95 97 105 99 105 115 104 97 111Netherlands 99 99 101 103 98 106 117 118 130Norway 97 99 99 96 108 101 101 102 108Sweden 104 103 101 91 101 99 95 97 100Switzerland 101 100 103 99 97 99 108 106 112United Kingdom 96 98 99 99 108 106 102 111 117

Southern Europe 90 103 98 105 104 111 115 123 118

Greece 81 105 100 104 110 125 120 16 115Italy 92 104 96 105 104 102 117 117 111Portugal 87 106 104 102 102 105 99 101 103Spain 101 95 102 98 103 108 110 116 117Yugoslavia 70 115 90 119 105 147 120 165 152

EASTERN EUROPE AND U.S.S.R. 90 95 96 104 116 119 130 133 134

NORTII AMERICA 99 98 97 101 104 101 109 109 111

Canada 112 105 78 99 107 91 95 101 105United States 98 97 99 102 104 102 110 110 111

OCEANIA 99 99 98 103 100 98 116 114 119

Australia 98 100 99 104 99 95 120 114 120New Zealand 98 96 100 103 103 109 112 114 115

LATIN AMERICA 94 96 101 101 108 111 117 117 118

Central America 92 94 100 102 112 122 128 131 133

Cuba 100 98 94 98 111 114 116 115 127

Guatemala 98 97 99 99 107 107 110 114 116

Honduras 101 104 93 96 106 107 107 110 112

Mexico 86 91 104 105 114 129 139 143 140

Panama 90 101 98 105 105 114 119 119 115

South America 95 96 101 101 107 109 114 113 114

Argentina 99 95 100 98 107 107 112 102 95

Brazil 89 96 101 103 111 115 122 127 130

Chile 101 95 102 104 99 108 103 104 107

Colombia 97 99 97 104 103 103 107 109 112

Peru 100 101 102 102 96 99 105 112 112

Uruguay 94 109 101 99 97 90 83 80 90

Venezuela 93 97 101 103 106 111 112 112 119

ANNEX TABLE 1A. - INDICES OF TOTAL FOOl3 PRODUCTION, BY COUNTRIES AND REGIONS (concluded)

1952/53 1953/54 1954/55 1955/56 1956/57 1957/58 1958/59 1959/601960/61

(Preliminary)

NOTE: Country indices are calculated by FAO on a uniform basis. They may differ from national indices produced by the countries them-selves because of differences in concepts of production, coverage, weights, and methods of calculation. They are not yet available for 1961/62.

' Excluding Mainland China. - ' Former French zone only. - Derived by substraction of subtotal for northwest Africa from regionaltotal. - Excluding Eritrea.

164

Indices, average 1952153-1956157 = 100

FAR EAST 92 99 100 103 107 106 111 116 120

Burma 102 98 96 97 108 92 109 112 111

Ceylon 97 90 101 113 99 101 107 113 110

China: Taiwan 95 97 99 100 108 114 119 114 120Federation of Malaya 90 89 101 104 116 114 111 123 134

India 90 101 101 102 107 106 111 115 119

Indonesia 89 102 105 101 103 104 108 109 114

Japan 97 85 94 114 110 115 119 126 127<orea, Republic of 86 107 104 106 98 110 113 118 119

Pakistan 97 101 103 96 104 102 102 109 113

Philippines 94 98 99 101 107 110 115 115 119Thailand 89 108 84 105 114 91 104 109 116

NEAR EAST 93 101 9; 101 108 113 117 119 119

Iran 92 98 98 103 109 115 114 117 114Iraq 85 106 119 87 103 123 105 98 100Israel 81 92 100 104 123 127 149 164 155Syria 93 106 117 68 117 133 84 89 84Turkey 100 110 85 99 107 105 122 122 124United Arab Republic 86 93 103 106 112 116 113 117 118

AFRICA 94 98 101 100 106 103 107 107 111

Northwest Africa 91 101 107 94 108 92 105 102 107

Algeria 91 99 106 96 109 99 95 100 104Morocco '90 '100 '109 '97 '104 '80 '107 100 103Tunisia 95 110 103 80 113 99 135 111 128

South of Sahara 95 98 100 102 105 105 107 108 112

Ethiopia4 99 100 100 100 100 99 99 103 102South Africa 89 98 100 102 110 106 110 113 122

WORLD ' 94 98 99 102 107 108 114 116 119

ANNEX TABLE 1B. - INDICES OF PER CAPUT FOOD PRODUCTION, BY COUNTRIES AND REGIONS

165

1952/53 1953/54 1954/55 1955/56 1956/57 1957/58 1958/59 1959/601960/61

(Preliminary.,.. .

1, dices, average 1952/53-1956157 100

r

WESTERN EuROPE 95 102 101 101 101 105 106 109 115

Northwestern Europe 96 101 102 100 101 103 104 105 115

Austria 91 103 96 103 108 112 115 109 121Belgium-Luxembourg 95 97 104 106 99 105 109 102 113Denmark 101 102 101 96 100 109 108 104 113Finland 100 106 100 96 98 106 106 107 117France 92 100 104 103 100 102 101 106 118Germany, Federal Republic 97 102 101 99 100 101 106 101 115reland 94 96 104 99 106 117 107 100 115Netherlands 102 101 101 102 95 102 111 110 120Norway 99 100 99 96 106 98 98 98 102Sweden 105 104 101 90 100 97 93 94 97Switzerland 102 102 103 98 95 95 103 99 102United Kingdom 97 98 99 99 107 104 101 109 114

"Southern Eurone 92 104 98 104 103 109 112 118 113

Greece 83 106 100 103 108 122 116 121 109taly 93 104 96 104 103 100 115 114 107artugal 88 107 104 101 101 103 97 98 99

Spain 102 96 102 97 102 106 106 112 112Yugoslavia 73 117 91 118 102 142 114 156 142

EASTERN EUROPE AND U.S.S.R. 92 96 96 103 112 114 123 124 123

NORTH AMERICA 103 100 97 99 101 96 101 100 99

Canada 118 107 78 96 101 84 85 88 90United States 101 99 100 100 100 97 103 101 101

OCEANIA 104 102 98 101 96 92 106 101 UM

Australia 102 103 99 102 94 89 109 102 106Now Zealand 103 98 100 101 98 102 102 103 102

LATIN AMERICA 98 98 101 99 103 104 106 104 102

Central America 97 97 100 100 107 112 115 114 112

Cuba 104 100 94 96 107 107 106 103 112Guatemala 104 100 99 96 101 98 98 98 97

Honduras 107 107 93 93 100 99 97 97 95

Mexico 91 94 104 103 108 119 124 124 116

Panama 95 104 98 103 100 105 107 104 98

South America 99 98 101 99 103 102 104 101 99

Argentina 102 97 100 97 104 102 106 95 88

Brazil 93 98 102 101 106 107 112 113 113

Chile 105 97 102 101 95 102 95 94 95

Colombia 101 101 97 102 99 97 98 98 98

Peru 104 104 102 100 91 92 95 97 95

Uruguay 98 111 101 97 93 85 78 74 82

Venezuela 100 101 101 99 98 99 97 93 95

ANNEX TABLE 1B. - INDICES OF PER CAPUT FOOD PRODUCTION, BY COUNTRIES AND REGIONS (concluded)

1952/53 1953/54 1954/55 1955/56 1956/57 1957/58

Ii dices, average 1952153-1956157 100

1958/59 1959/601960/61

(Preliminary)

NOTE: See explanatory note to Annex Table IA.' Excluding Mainland China. - ' Former French zone only. - ' Derived by subtraction of subtotal for northwest Africa from

regional total.

166

FAR EAST ' 95 101 100 101 103 100 102 105 106

Burma 104 98 96 96 106 90 105 107 105

Ceylon 102 92 101 110 95 94 97 100 95

China: Taiwan 102 101 99 97 101 103 104 95 97

Federation of Malaya 96 92 101 101 110 105 99 106 112

India 93 103 101 100 103 100 103 105 106

Indonesia 92 104 106 100 99 97 99 97 99

Japan 99 86 94 113 108 111 114 119 119

Korea. Republic of 88 107 104 105 95 103 103 105 103

Pakistan 100 102 103 94 100 97 95 99 101

Philippines 98 101 99 99 102 102 103 101 102Thailand 93 110 84 103 110 86 97 99 104

NEAR EAST 97 104 98 99 103 106 107 106 103

Iran 96 101 98 101 104 107 105 106 101

Iraq 91 109 119 84 96 114 94 85 84Israel 87 96 102 101 114 113 128 137 126Syria 99 110 116 65 110 123 75 75 69Turkey 106 113 85 96 101 97 109 107 106United Arab Republic 90 96 103 103 107 109 103 105 103

AFRICA 98 100 101 98 101 97 98 96 98

Northwest Africa 95 103 107 92 103 87 97 84 86

Algeria 95 101 107 94 104 93 86 88 89

Tunisia 98 111 103 78 110 94 127 104 118Morocco 593 '103 '110 '95 '100 '76 '99 74 74

South of Sahara 99 100 100 99 101 99 99 99 100

South Africa 94 100 100 101 105 99 100 100 106

WORLD ' 97 100 99 101 103 102 106 106 107

Index of all farm products

VVood pulpNemprint

Average1934-38

ANNEX TABLE 2A. - WORLD 1 PRODUCTION OF MAJOR COMMODITIES

Average1946-52

1954/55

77 88 98 102 107 107 113 116 119 119

1953

Million cubic inetcrs

FOREST PRODUCTS

39.19.8

1954

42.410.4

1955

46.511.2

1955/56

Indices. average 1952/53-1956/57 100

1956

49.612.0

167

1956/57

1957

50.112.3

1957/58

Million metric tons

1958

50.012.1

1958/59

1959

1959/60

1960

1960/611961/62

(Preliminary)

1961

(Prelhninary)

' Exc uding Mainland China, except for forest products. - Paddy converted at 65 percent. - Beef and veal, mutton and amis,Pork.

Million metric tons

WheatBarleyOats

Maize

Rice (milled equivalent) 2

144.744.164.0

106.465.7

153.946.760.6

131.970.7

171.457.157.8

136.077.8

183.561.962.8

155.483.0

201.370.162.0

157.187.5

197.563,958.7

158.081.5

227.469.661.8

174.790.1

217.967.756.0

189.295.6

218.776.658.1

202.4100.4

209.071.053.1

197.199 6

Sugar (centrifuga0.... 24.9 32.0 37.5 38.9 40.9 44.3 18.8 " 48.6 55.5 51.4

Citrus fruit 11.1 15.1 17.7 18,2 17.9 18.1 19.7 20.1 20.1 20.6Apples.Bananas

11.58.1

13.512.8

15.014.0

13,814.4

16.314.8

9.915.9

21.316.6

13.817.7

21.218.3

15.418.1

Vegetable oils and oilseeds(oil equivalent) 10.4 12.9 14.7 15.4 16.9 16.5 17.4 16.7 18.1 18.8

Coffee 2.41 2.28 2.44 2.86 2.52 3.18 3.51 4.64 4 05 4.24Cocoa 0.74 0.76 0.82 0.83 0.90 0.77 0.92 1.00 1.23 1.15Tea 0.47 0.56 0.68 0.61 0.71 0.73 0.77 0.78 0,79 0.79VVine 20.3 18.9 22.4 23.0 22.0 18.4 23.9 24.6 24.2 21.5Tobacco 2.29 2.74 3.09 3.27 3.28 3.21 3.12 3 24 3.28 3.31

Cotton (lint) 5.99 6.81 8.04 8.18 8.06 7.66 7.90 8.49 8 80 8.60Jute 2.15 2.08 1.73 2.38 2.36 2.22 2.50 3.16 2.26 3.05VVool (greasy) 1.61 1.79 2.04 2.12 2.22 2.20 2.34 2.47 2.45 2.43Rubber (natural) 1.00 1.74 1.85 1.95 1.92 1.98 1.97 2.07 2.03 2.14

Milk (total). 221.0 259.5 289.7 298.0 308.9 320.6 328.6 335.2 310.7 314.9Meat 29.4 36.3 42.9 44.8 47.1 48.0 48.7 50.2 50.6 52.2Eggs 6.32 8.76 10.3 10.6 10.9 11.4 11.7 12.2 12.4 12.7

RoundwoodSawnwood

Plywood

1 471

270.68.3

1 553278.2

9.0

1 637302.010.9

1 670299.6

11.4

1 673294.0

11.9

1 663305.813.1

1 733306.014.9

1 732330.915.4

1 750329.915.9

Other paper and board . 38.5 40.8 45.6 48.2 49.3 50.713.156.0

14.059.9

14.463.8

55.0 58.9 62.2

Wheat and wheat flour(wheat equivalent)

BarleyOatsMaizeRice (mi I led equivalent)

Sugar (raw equivalent)

Citrus fruitApplesBananas

Vegetable olla and oilseeds(oil equivalent)

CoffeeCocoa beans

Tea

WineTobacco

Cotton (lint)JuteWool (actual weight)Rubber (natural)

Meat (fresh, chilled, andfrozen) 6

Eggs (in the shell)

Average1934-38

ANNEX TABLE 2B. - WORL.D EXPORTS OF MAJOR COMMODITIES

Average1948-52

1954 1955

' Including exports from the res of the world to the U.S.S.R., eastern Europe, and Mainland China, but excluding exports from thesecountries, except for forest produc s. - 2 Excluding United States trade with its territories. - ' Oranges and lemons only. - 2 Excludingre-exports of copra frOM the Federation of Malaya and Singapore, but including unrecorded shipments of copra from Indonesia and thePhilippines to the Federation of Malaya, Singapore and North Borneo. Excluding imports into the Federation of Malaya and Singaporefor re-export and exports from Hong Kong, but including unrecorded shipments from Indonesia to the Federation of Malaya and Singapore. -° Beef and veal, mutton and lamb, pork. - ' Logs, pulpwood, pitprops, fuelwood, poles, pilings and posts. - 1953.

1611

1956 1957 1958 1959 1960

Million metric tons

1961

(Preliminary)

15.29 24.83 22.49 24.52 31.43 29.25 27.32 29.06 32.92 41.39

1.76 3.23 5.47 5.16 7.04 6.35 6.50 6.18 4.93 6.12

0.72 1.23 1.48 0.91 1.32 1.53 1.46 1.40 1.29 2.70

9.33 4.35 5.41 4.68 5.86 7.10 8.82 10.00 11.13 12.47

9.67 4.40 4.28 4.85 5.46 5.54 4.95 4.80 5.53 5.43

9.63 10.75 11.91 13.32 13.53 14.69 14.34 13.33 15.99 16.87

1.86 1.88 2.60 2.84 2.39 2.69 2.78 3.11 3.36 2.99

0.69 0.57 0.71 0.98 0.87 1.14 0.85 1.29 1.22 1.342.48 2.35 2.95 3.10 3.09 3.40 3.56 3.72 3.93 3.88

4.20 3.60 4.55 4.67 5.09 5.25 4.95 5.25 5.59 5.35

1.64 1.93 1.78 2.07 2.34 2.23 2.19 2.55 2.59 2.650.68 0.67 0.69 0.70 0.75 0.78 0.64 0.75 0.88 0.970.36 0.41 0.50 0.43 0.50 0.48 0.52 0.50 0.49 0.51

1.93 1.61 2.25 2.58 2.46 2.74 2.75 2.38 2.60 2.380.49 0.54 0.59 0.64 0.64 0.68 0.66 0.64 0.68 0.72

2.88 2.37 2.63 2.38 2.84 3.07 2.65 2.79 3.49 3.240.79 0.85 0.90 0.99 0.88 0.81 0.95 0.89 0.83 0.800.96 1.05 1.01 1.14 1.18 1.20 1.15 1.38 1.32 1.420.98 1.67 1.86 2.02 1.94 1.96 1.97 2.27 2.00 2.18

1.15 0.95 1.11 1.18 1.32 1.43 1.48 1.57 1.56 1.61

0.25 0.24 0.34 0.35 0.36 0.38 0.39 0.43 0.42 0.39

FOREST PRODUCTS Million cubic tneters

Roundwood '18.4 21.3 26.2 26.3 27.1 26.0 28.8 33.5 36.8Sawnwood '28.7 32.1 35.7 31.7 33.9 33.3 36.2 40.8 41.2Plywood ' 0.5 0.8 1.0 0.9 1.1 1.2 1.6 1.5 1.5

Million metric tons

Wood pulp 6.0 6.9 7.6 7.8 7.8 7.7 8.5 9.7 9.7Newsprint ° 6.0 6.2 6.6 7.0 6.9 6.8 7.0 7.5 7.7Other paper and board ° 2.3 2.8 3.1 3.2 3.5 3.4 3.9 4.6 4.9

ANNEX TABLE 3A. - WESTERN EUROPE: PRODUCTION OF MAJOR COMMODTTIES

Average1934-38

Average1948-52

1954/55 1955/56

169

1956/57 1957/58 1958/59 1959/60 1960/611961/62

(Prelhninary)

' I3eef and veal, mutton and lamb. pork. - 2 Including eastern Europe. -Only pardal coverage of production of exploded anddefibrated pulp.

Million nettle tons

VVheat

Rye

BarleyOatsMaize

31.077.499.08

16.449.73

30.326.65

10.9314.847.17

35.707.64

13.7214.588.58

37.806.69

14.7414.789.74

32.01

7.1419.0415.98

10.14

10.557.21

17.51

13.2312.18

39.076.99

17.7312.8911.04

42.667.17

20.3512.6014.27

39.637.04

22.1413.31

14.79

37.31

5.4222_59

12.8313.09

Sugar (centrifugal) 4.02 5.14 6.56 6.89 6.50 7.07 8.19 7.32 9.90 7.79

PotatoesCitrus fruitApples

69.871.997.42

76.332.108.72

80.99

2.639.50

73.11

2.548.70

84.331.84

10.30

79.022.764.26

72.352.91

13.71

72.693.287.24

79.273.20

14.04

72.153.538.10

Olive oil 0.81 0.86 0.84 0.69 0.90 1.06 0.83 1.10 1.13 1.04

VVine 14.13 13.09 15.33 16.08 15.58 11.53 16.02 16.66 16.63 13.75Tobacco 0.19 0.25 0.29 0.34 0.30 0.36 0.30 0.32 0.27 0.25

Milk (total) 77.02 76.64 91.02 89.95 91.23 95.47 95.94 96.91 101.49 102.21Meat 8.56 7.39 10.20 10.40 10.63 11.07 11.16 11.57 12 26 12.85Eggs 1.95 2.13 2.65 2.72 2.81 2.94 3.11 3.27 3.34 3.45

Index of all farm products 82 86 100

Indices,

102 103

average 1952/53-1956/57

107

100

109 113 120 118

1938Average1948-52

1954 1955 1956 1957 1958 1959 19601961

(Preliminary)

Million standards

FOREST PRODUCTS

Sawn softwood 10.24 10.04 11.16 11.65 11.25 11.18 11.15 10.89 11.79 11.80

Million cubic meters

Sawn hardwood 9.07 9.30 10.00 10.76 11.00 11.63 11.75 11.90 12.66 13.28Plywood 1.09 1.25 1.88 1.98 1.94 2.14 2.18 2.36 2.69 2.74

Million metric tons

Fibreboard (hard and in-r sulating)?,Wood pulp (cheinicapl

0.17

6.67

0.65

5.96

1.05

7.66

1.19

8.40

1.27

8.72

1.38

9.26

1.46

9.18

1.52

9.90

1.74

11.12

1.84

12.00VVood pulp (mechanical) 3.95 3.46 4.40 4.70 4.98 5.12 5.12 5.46 6.02 6.30Newsprint 2.80 2.33 2.86 3.11 3.43 3.52 3.52 3.81 4.22 4.40Other paper and board 8.29 8.85 12.11 13.18 13.67 14.72 15.18 16.29 18.26 19.20

' Oranges and lemons only. - Including eastern Europe. Prewar figures refer to 1938. - Beef and veal, mutton and lamb. pork.

170

ANNEX TABLE 3B. - WESTERN EUROPE: EXPORTS AND IMPORTS OF MAJOR COMMODITIES

Average1934-38

Average1948-52

1954 1955 1956 1957 1953 1959 19601961

(Preliminary)

Million metric tonsGROSS EXPORTS

Wheat and wheat flour(wheat equivalent) 1.44 0.75 2.27 3.36 2.26 3.05 3.81 3.70 3.27 3.00

Sugar (raw equivalent) 0.86 1.37 1.68 1.83 1.56 1.84 1.37 1.34 1.57 1.50

Citrus fruit ' 0.97 0.91 1.26 1.40 0.86 0.97 1.20 1.35 1.48 1.42

Apples 0.19 0.31 0.41 0.66 0.53 0.74 0.38 0.79 0.71 0.82

VVine 0.50 0.48 0.77 0.76 0.93 0.86 1.15 0.73 0.88 1.19

Bacon, ham, and salted

pork 0.26 0.14 0.27 0.29 0.28 0.30 0.30 0.31 0.37 0.35

Eggs (in the shell) 0.20 0.17 0.26 0.27 0.28 0.31 0.31 0.34 0.32 0.30

Wool (actual weight) 0.12 0.05 0.05 0.08 0.08 0.09 0.08 0.11 0.11 0.11

Million ctbic meters

Coniferous logs a 2.39 1.71 0.88 0.84 0.61 0.69 0.92 0.96 1.29 1.32

Broadleaved logs 0.50 0.42 0.56 0.77 0.68 0.63 059 0.80 1.04 0.99

Pulpwood 3.03 3.53 4.11 5.74 5.22 5.15 4.13 4.70 5.96 7.35Pitprops 3.16 3.00 2.44 3.00 3.03 3.12 2.62 2.10 1.05 137Sawn softwood 13.86 12.66 14.88 15.26 13.94 14.66 13.53 15.10 17.25 15.35

Plywood 0.36 0.30 0.45 0.50 0.39 0.44 0.41 0.52 0.62 0.59

Mil/ion metric tons

VVood pulpa 4.55 3.51 4.39 4.70 4.97 4.90 4.83 5.34 5.90 5.62Nevnprinta 0.92 0.87 1.02 1.12 1.30 1.29 1.34 1.36 1.56 1.64Other paper and boarda 1.20 1.49 2.21 2.41 2.44 2.67 2.59 2.94 3.44 3.63

GROSS IMPORTS

VVheat and wheat flour(wheat equivalent) 11.99 14.47 12.99 13.29 15.87 14.13 12.31 12.84 11.12 14.55

Barley 2.41 2.53 3.95 3.58 5.06 4.62 4.69 4.75 4.27 14.15Maize 8.46 4.03 4.27 4.51 5.02 4.78 6.32 7.65 8.93 9.31

Rice (milled equivalent) 1.17 0.33 0.41 0.57 0.58 0.43 0.51 0.61 0.64 0.57

Sugar (raw equivalent) 3.47 4.26 3.79 4.07 4.41 5.38 4.87 4.61 4.61 4.06Vegetable oils and oilseeds

(oil equivalent) 3.00 2.50 3.02 3.12 3.46 3.57 3.30 3.42 3.76 3.42Oranges 1.28 1.32 1.92 2.06 1.73 1.95 2.10 2.24 2.47 2.30

Coffee 0.69 0.48 0.61 0.68 0.75 0.76 0.80 0.88 0.94 0 99Cocoa beans 0.36 0.33 0.40 0.40 0.39 0.45 0.39 0.43 0.47 0 52Tea 0.26 0.23 0.28 0.26 0.27 0.31 0.30 0.27 0.26 3.29

Wine 1.68 1.39 2.00 2.40 2.13 2.53 2.67 2.23 2 51 2.32Tobacco 0.37 0.34 0.39 0.41 0.40 0.41 0.41 0.40 ...,.47 0.48

Cotton (lint) 1.76 1.40 1.58 1.42 1.51 1.72 1.43 1.44 1.70 1.57Rubber (natural) 0.36 0.59 0.69 0.78 0.73 0.76 0.74 0.65 0.68 0.73

Meat (fresh, chilled,frozen) 1.12 0.82 0.77 0.93 1.14 1.18 1.12 1.08 1.18 1.01

Canned meat 0.08 0.18 0.20 0.20 0.19 0.23 0.24 0.24 0.23 0.24Bacon, ham, and salted

pork 0.39 0.21 0.31 0.31 0.32 0.34 0.35 0.36 0.41 0.40Butter 0.57 0.39 0.32 0.40 0.44 0.45 0.46 0.47 0.48 0.47Cheese 0.23 0.27 0.28 0.28 0.30 0.31 0.33 0.34 0.34 0.36Eggs (in the shell) 0.31 0.21 0.29 0.31 0.32 0.34 0.36 0.41 0.43 0.42

ANNEX TABLE 4A. - EASTERN EUROPE ANO U.S.S.R.: PRODUCTION OF MAJOR COMMODITIES

Average1949-53

1954 1955 1956 1957 1958 1959 1960

' Bulgaria, Czechoslovakia, Eastern Germany, Hungary, Poland, Romania. - 2 Million u Ms. - ' 1953. - Excltding citrus fruit.

1961

(Preliminary)

EASTERN EUROPE

Milion metric torts

Wheat 11.8 9.6 11.9 10.7 13.2 11.8 13.8 12 9 13.7Rye 10.9 9.8 11.2 10.7 11.4 11.2 11.9 11.4 11.8Barley 4.4 4.3 5.2 4.6 5.3 4.8 5.6 6.3 5.9Oats 5.2 4.7 5.3 5.1 5.3 5.3 5.2 5 5 5.5Maize 5.8 8.9 10.7 7.4 11.5 7.9 11.3 11.1 10.5Potatoes 56.0 64.2 51.6 66.2 64.5 58.5 60.2 63.9 66.0Tomatoes 0.9 0.9 1.0 1.0 1.2 1.2 1.3 1.5Onions 0.6 0.7 0.6 0.5 0.6 0.6 0.8 0 8Apples 0.9 1.2 1.0 1.6 0.8 2.2 1.1 2.1Plums 0.6 0.6 0.8 0.6 0.6 1.1 1.3 1.2Grapes 1.7 1.5 2.3 1.4 2.1 3.0 2.3 2.0Sugar beet 20,8 23.5 24.0 19.4 25.9 27.0 23.2 33.9 30.0Sunflowerseed 0.6 0.7 0.7 0.6 0.6 0.6 0.9 0.9 0.8Tobacco 0.1 0.1 0.2 0.1 0.2 0.2 0.2 0.1Milk 20.6 22.5 23.6 24.0 25.6 27.2 27.7 20.1 28.4Eggs 9.6 10.6 11.5 12.7 13.6 14.3 15 4 17.0 18.0

U. S. S. R.

Total grain 80.9 85.6 106.8 127.6 105.0 141.2 125.9 134.4 137.3Wheat 34.5 42.4 47.3 67.4 58.1 76.6 69.1 64.3 66.3Rye '15.5 15.6 16.5 14.1 14.5 15.7 16.9 16.3 16.6Barley ' 7.8 7.8 10.3 12.9 8.5 13.0 10.1 16.0 13.3Oats 10.1 10.8 11.8 13.2 12.7 13.4 13.5 12.0 8.8Maize 5.3 3.4 14.7 12.5 7.0 16.7 12.0 18.7 24.1Millet ' 2.7 3.0 3.0 4.6 1.6 2.9 1.3 3.2 2.9Rice ' 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2

Potatoes 75.7 75.0 71.8 96.0 87.8 86.5 86.6 84.4 04.0Other vegetables 10.0 11.9 14.1 14.3 14.8 14.9 14.8 16.6 15.6Fruit' ' 2.2 ... 2.6 ... ... 3.1 3.2 3.0Grapes ' 1.0 ... ... 1.2 1.4 1.7 1.7 1.9 ...Sugar beet 21.1 19.8 31.0 32.5 39.7 54.4 43.9 57.7 50.6Oilseeds 2.5 ... ... 4.4 3.2 5.1 3.4 4.3 5.2

Sunflowerseed 2.0 1.9 3.8 3.9 2.8 4.6 3.1 4.0 4.7Tobacco ' 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 ...Milk 35.7 38.2 43.0 49.1 54.7 53.7 61.7 61.7 62.5Butter 3 0.5 0.5 0.6 0.7 0.3 0.8 0.8 0.8 0.9Meat 4.9 6.3 6.3 6.6 7.4 7.7 8.9 8.7 0.8Eggs 12.9 17.2 18.5 19.5 22.3 23.0 25.6 27.4 28.9Flax 0.2 0.2 0.4 0.5 0.4 0.4 0.4 0.4 0.1Cotton (lint) 3.5 4.2 3.9 4.3 4.2 4.3 4.6 4.3 4.5Wool 0.2 0.2 0.3 0.3 0.3 0.3 0.4 0.4 0.4

GROSS EXPORTS

ANNEX TABLE 4E. - EASTERN EUROPE AND U.S.S.R.: EXPORTS AND IMPORTS OF MAJOR COMMODTTIES

1955 19561

1957 1 1958

U.S.S.R. Eastern Europe'

1

1960 1955 1956 1 19571959

172

1958 1959 1960

Thousand metric tons

' Albania, Bulgaria, Czechoslovakia, Eastern Ciermany, Hungary, Poland, Romania. - ' Million units. - ' Thousand units.

460,674.457.3

--706.5

...7.83.4

79634.2

203.736.14.30.82.4

58.128.2

901.8

2 625.5765.3796.940.0

433.5169.0

...33.012.4

285

25.145.172.814.04.9

21.0350.543.113.542.0

244.358.867.6

230.240.9

2

091.685

110.10.1

541.470.2

5.35.1

869

4818.13

53.68.31.03.1

60.435.0

336.8

227.0872.2671.5110.7476.4171.7137.841.510.7

264

7.490.661.718.14.5

22.3352.043.217.142.1

209.755.184.079.136.2

5

1

68.28.6

111.7__

174.465.45.16.8

789

18965:8

61.24.30.26.3

49,534.6

409.1

216.7403.2087.6178.4449.6206.3179.8

60.117.8

335

9.164.894.121.17.4

23.9392.1

52.319.845.9

387.493.8

107.689.048.9

1

3

125.15.3

99.70.1

50 8.7

94.032.58.6

02294.5

641.551.2

5.30.97.85.1

27.4878.2

296.8485.1436.3143.2425.6263.2156.430.812.457

18.5172.7117.824.36.7

31.3402.654.421.653.1

287.5102.2110.194.951.8

1

1

4

159.83.1

64.81.5

112.886.531.4

21874'4

104.7660.073.6

1.62.3

11.17.9

23.8138.9

793.0405.0i.488.164.5

386.9414.8349.984.315.481

16.7120.1158.443.99.4

40.4431.860.826.348.4

306.2142.8146.3122.646.9

1

5

126.624.088.2

--465.3110.637.9

.2798186.3562.189.8

1.73.18.7

20.177.3

986.2

382.8536.2411.960.0

508.9422.3265.660.823.587

9.585.0

107.339.26.6

43.4473.865.524.446.4

341.569.8

112.4313.158.7

Wheat 2 035.8 1 452.4 5 450.8 3 878.7 6 052.0 5 638.9Rye 698.9 519.4 440.6 461.0 548.9 689.5Barley 565.0 785.4 1 214.0 278.3 121.6 325.0Oats. 75.6 164.3 223.5 131.4 41.5Maize 307.4 293.7 84.6 226210.15 154.9 123.1Fresh meat 10.8 30.9 74.4 33.4 173.6 68.0Butter 5.1 26.3 49.1 24.7 80.3 37.2Cheese 0.1 0.8 7.9 0.4 1.0 2.6Eggs a. -- -- -- -- -- --Cattle -- -- -- -- -- --Pigs' -- -- 25.0 58.0 54.7 54.5Tobacco 4.4 7.5 6.0 6.2 7.1 1.6Cotton (lint) 336.9 309.5 318.7 310.9 344.5 390.9Wool (clean basis) 14.6 12.7 13.8 17.0 16.9 17.8Flax 9.5 37.5 44.7 43.3 77.5 65.2Oilseeds 66.5 59.9 49.8 47.1 83.3 110.4Vegetable oils 24.0 55.6 47.8 52.2 82,5 91.8Sugar (raw equivalent) . 227.9 189.6 207.1 217.8 214.4 264.0

GROSS IMPORTS

Wheat 29.1 443.3 122.1 323.3 246.9 98.0Rye -- -- -- -- -- --Barley -- -- 176.4 1.0 21.8Oats -- -- -- 31.0 8.5 3.2Maize 275.8 50.2 30.3 261.5 -- 117.2Rice 487.1 637.6 370.5 500.5 689.1 501.1Meat (fresh) 231.8 189.0 94.3 116.9 83.0 47.4Butter 5.6 5.8 8.2 25.2 -- 4.0Cheese 0.4 0.3 0.3 -- 3.1 --Eggs a 231 225 224 373 110 113Cattle 146.3 187.0 136.2 121.1 142.3 158.0Pigs' 51.3 62.4 -- 58.0 54.7 54.5Citrus fruit 87.7 87.8 108.5 132.6 103.9 120.3Coffee 1.5 3.3 5.1 4.1 13.3 19.1Tea 10.2 16.0 21.0 25.7 29.8 22.6Cocoa beans 14.1 16.4 44.1 10.4 39.8 58.1Cotton (lint) 19.9 51.4 108.8 142.1 190.3 193.0Wool (clean basis) 46.5 48.5 57.3 55.2 57.8 61.5FIst -- -- -- -- -- --Jute 20.0 20.0 16.4 23.0 22.0 16.6Oilseeds 759.9 801.5 716.0 551.7 715.2 418.5Vegetable oils 195.3 96.5 45.6 73.3 71.6 59.3Rubber (natural) 35.3 140.7 145.5 258.7 242.1 190.9Sugar (raw equivalent) 996.6 347.0 671.0 394.6 334.8 1 717.3Tobacco 55.2 73.3 91.1 84.3 96.6 74.2

173

ANNEX TABI E 4C. - U.S.S.R.: PRODUCTION AND EXPORTS OF FOREST PRODUCTS

Average19413-52

1953 1954 1955 1956 1957 1958 1959 19601961

(Preliminary)

Million standardsPRODUCTION

Sawn softwood 8.80 12.08 12.55 13.75 13.93 14.92 17.10 18.92 19.28 20.25

Million cubic meters

Sawn hardwood 7.24 9.96 10.35 11.34 11.49 12.30 14.10 15.60 15.90 16.30Plywood 0.66 0.95 1.02 1.05 1.12 1.15 1.23 1.30 1.35 1.42

Million rnetric tons

Fibreboard 0.02 0.04 0.05 0.05 0.07 0.09 0.11 0.16 0.21 0.27Wood pulp (chemical) 1.08 1.56 1.68 1.74 1.85 1.96 2.09 2.19 2.28 2.38

Wood pulp (mechanical) 0.43 0.61 0.66 0.72 0.77 0.79 0.81 0.83 0.85 0.87Newsprint 0.24 0.29 0.32 0.36 0.36 0.38 0.39 0.40 0.42 0.44

Other paper and board 1.20 1.76 1.95 2.04 2.22 2.41 2.57 2.69 2.81 2.93

Mi/ion cubic metersEXPORTS

Pulpwood 0.06 -- -- 0.55 0.53 0.59 0.82 1.18 1.59 1.61

Pitprops 0.29 0.44 0.78 0.84 0.64 0.82 0.99 0.88 1.11 1.10

Sawn softwood 0.82 1.30 1.74 2.32 2.21 3.44 3.61 4.34 4.94 5.37

Plywood 0.05 0.05 0.06 0.09 0.05 0.10 0.11 0.12 0.13 0.13

FARM PRODUCTS

WheatOatsMaize

Rice (milled equivalent)

PotatoesCitrus fruit

Vegetable oils and oilseeds(oil equivalent)

Tobacco

Cotton (lint)

Milk (total)Meat 2

Eggs

Index of all farm products

FOREST PRODUCTS

Sawn softwood

Sawn hardwoodPlywood

Average1934-38

68

Average1934-38

ANNEX TABLE 5A. - NORTEI AMERICA. PRODUCTION OF MAJOR COMMODITIES

11.86

Average1948-52

93

Average1948-52

18.14

1954/55 1955/56

Million n etric tons

97

1954

18.43

Indices, average 1952153-1956157 100

101

1955

19.99

17,1.

1956/57

103

1956

19.04

1957/58

98

1957

17.20

1958/59

105

1953

17.28

1959/60

107

1959

19.14

1960/61

109

1960

Million standards

18.15

1961/62

(PrelOninary)

103

1961

(Preliminary)

17.46

Million cubic meters

' Paddy converted at 65 percent. - ' Beef and veal, mutton and lamb, pork. - Includes exploded and defibrated pulp.

26.65 44.54 35.81 39.63 42.96 36.50 49.78 41.77 50.27 40.7318.99 25.30 25.19 28.00 24.80 24.59 26.53 21.72 23.73 19.8553.20 82.36 78.24 82.58 80.22 87.11 95.38 107.41 110.55 102.64

0.62 1.25 1.89 1.65 1.46 1.27 1.32 1.58 1.61 1.58

11.94 12.76 11.41 12.14 12.98 12.87 13.94 12.81 13.74 15.253.62 6.41 7.32 7.47 7.51 6.40 7.36 7.20 6.85 7.42

1.19 2.66 2.86 3.20 3.66 3.37 4.00 3.71 4.00 4.46

0.62 1.02 1.10 1.06 1.06 0.83 0.88 0.89 0.93 1.032.81 3.11 2.98 3.21 2.90 2.39 2.51 3.17 3.11 3.11

54.44 59.40 63.03 63.64 64.67 64.45 64.15 63.65 64.19 65.468.09 10.91 12.40 13.21 13.76 13.28 12.77 13.56 13.91 14.052.42 3.94 4.09 4.09 4.16 4.13 4.16 4.24 4.08 4.04

12.08 18.10 17.80 18.68 18.77 14.79 15.07 16.74 15.58 11.790.82 3.49 4.99 6.52 6.71 6.74 7.62 8.82 8.91 9.10

Million tnehlc tons

Fibreboard (hard andinsulating) 0.64 1.21 1.50 1.67 1.72 1.63 1.71 1.56 1.81 1.87

VVood pulp (chemical) 5.20 13.68 17.02 19.16 20.62 20.25 20.27 21.54 23.66 25 00VVood pulp (mechanical) 3.44 7.23 8.32 8.87 9.20 8.98 8.70 9.36 9.55 9.55Newsprint 3.38 5.74 6.51 6.92 7.32 7.40 7.04 7.51 7.89 8.00Other paper and board 10.05 20.50 23.31 26.04 27.20 26.35 26.53 29.14 29.53 30.70

GROSS EXPORTS

Wheat and wheat flour(wheat equivalent)

BarleyMaize

Rice (milled equivalent)

Oranges

Vegetable oils and oilseeds(oil equivalent)

TobaccoCotton (lint)

ANNEX TABLE 5B. - NORTH AMERICA : EXPORTS AND IMPORTS OF mmort commournEs

Average1934-38

Million n etric torts

Average1948-52

1954 1955

1 75

1956 1957

' Excluding United States trade with its territories. - Oranges and lemons only.

1958 1959 19601961

(Preliminary)

6.08 18.39 13.16 13.54 21.23 20.16 19.07 19.53 23.17 29.840.50 1.44 2 15 2.96 3.56 2.55 4.25 3.83 3.01 2.100.80 2.31 1.96 2.78 3.02 4.52 4.57 5.59 5.61 7.350.07 0.54 0.56 0.52 0.82 0.74 0.57 0.68 0.87 0.80

0.15 0.23 0.33 0.30 0.41 0.33 0.16 0.26 0.21 0.20

0.02 0.41 0.85 0.83 1.17 1.32 1.09 1.44 1.58 1.23

0.20 0.22 0.22 0.27 0.25 0.24 0.23 0.23 0.24 0.241.29 1.04 0.94 0.56 1.03 1.57 1.04 0.83 1.73 1.45

Million a bic meters

Coniferous logs 0.33 0.60 0.71 0.72 0.54 0.60 0.79 1.00 2.28Broadleaved logs 0.23 0.25 0.22 0.26 0 24 0.27 0.24 0.34 0.31Pulpwood 5.68 4.64 4.58 4.89 4.51 3.29 2.91 3.12 3.17Sawn softwood 8.41 11.14 12.59 10.79 10.22 10.76 11.38 12.55 13.26

iviillion etric tons

Wood pulp 0.80 1.83 2.38 2.72 2.63 2.64 2.48 2.81 3.90 3.67Newsprint 2.80 4.50 5:14 5.42 5.55 5.51 527 5.47 5.71 504

GRoss imPORTS

Sugar (raw equivalent) ' 3.22 3.88 4.05 4.22 4.46 4.43 5.01 4.86 4.93 4.50Citrus fruit . 0.11 0.19 0.22 0.21 0.21 0.21 0.20 0.24 0.22 0.17Bananas 1.35 1.48 1.61 1.58 1.67 1.70 1.76 1.91 2.02 1,93Vegetable oils and oilseeds

(oil equivalent) 0.38 0.55 0.52 0.56 0.54 0.52 0.54 0.58 0.59 0.57

Coffee 0.81 1.27 1.07 1.23 1 33 1.30 1.26 1.45 1.38 1.41Cocoa 0.26 0.29 0.25 0.24 0.27 0.25 0.21 0.23 0.27 0.36Tea 0.06 0.06 0.07 0.07 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 0.07 0.06 0.03Sisal 0.14 0.18 0.17 0.18 0.16 0.16 0.15 0.16 0.12 0.13Wool (actual weight) 0.10 0.29 0.15 0.17 0.17 0.13 0.12 0.19 0.15 0.16Rubber (natural) 0.52 0.81 0.65 0.70 0.64 0.61 0.52 0.63 0.45 0.43

Index of all farm products

FORES'r PRODUCTS

Sawnwood

ANNEX TABLE 6A. - OCEANIA: PRODUCTION OE MAJOR commonrms

' Beef and yeah mutton and lamb, pork.

ANNEX TABLE 6B. - OCEANIA: EXPORTS AND IMPORTS OF MAJOR COMMODITIES

176

Indices, average 1952153-1956157 - 100

Million ct bic meters

78 90 98 103 105 102 117 118 122 123

Average1948-52

1954 1955 1956 1957 1958 1959 19601961

(Preliminary¡

Average1934-38

Average1948-52

1954 1955 1956 1957 1958 1959 19601961

(Preliminary)

Million metric tonsGROSS EXPORTS

Wheat and wheat flour(wheat equivalent) 2.80 3.09 1.96 2.51 3.54 2.53 1.40 2.65 3.57 6.38

Barley 0.07 0.26 0.63 0.36 0.63 0.64 0.32 0.88 0.38 0.95Oats 0.01 0.19 0.03 0.11 0.20 0.22 0.07 0.38 0.22 0.47

Segar (raw equivalent) 0.56 0.47 0.81 0.80 0.82 0.98 0.89 0.84 1.04 1.01

Copra and coconut oilequivMent) 0.13 0.13 0.16 0.17 0.17 0.17 0.16 0.16 0.16 0.19

Beef 0.15 0.13 0.17 0.25 0.24 0.28 0.28 0.32 0.25 0.27Mutton and Iamb 0.27 0.30 0.34 0.33 0.31 0.30 0.34 0.39 0.42 0.40Butter 0.24 0.21 0.18 0.24 0.25 0.21 0.24 0.28 0.22 0.25Cheese 0.10 0.12 0.11 0.11 0.11 0.10 0.10 0.10 0.10 0.11

Wool (actual weight) 0.49 0.66 0.62 0.71 0.72 0.80 0.73 0.87 0.85 0.88

GROSS IMPORTS

Wheat and wheat flour(wheat equivalent) 0.06 0.21 0.26 0.28 0.32 0.33 0.32 0.27 0.21 0.22

Sugar (raw equivalent) 0.09 0.11 0.12 0.12 0.11 0.12 0.13 0.11 0.13 0.15Rubber (natural) 0.01 0.04 0.05 0.06 0.05 0.04 0.05 0.04 0.04 0.02

Average1934-38

Average1918-52

1954/55 1955/56 1956/57 1957/56 1958159 1959/60 1960/611961/62

(Preliminary)

Million metric tonsFARM PRODUCTS

Wheat 4.38 5.30 4.70 5.39 3.74 2.76 6.02 5.64 7.67 6.91

Sugar (centrifugal). 0.94 1.04 1.48 1.36 1.36 1.51 1.64 1.60 1.56 1.55

Wool (greasy) 0.59 0.69 0.79 0.85 0.93 0.88 0.97 1.02 1.00 1.04

Milk (total) 10.18 10.25 10.56 11.33 11.85 11.54 11.39 11.85 11.95 11.64

Meat 1.42 1.60 1.81 1.87 1.96 1.99 2.20 2.17 2.07 2.24

4.19 4.73 4.84 4.60 4.51 4.70 4.98 5.18 5.28

FARM PRODUCTS

WheatMaize

Rice (milled equivalent)

Sugar (centrifugal)

Citrus fruitBananas

CoffeeCocoaTobacco

COtt01/ (lint)

Milk (total)MeatEggs

Average1934-38

ANNEX 'FABLE 7A, - LATIN AMERICA : PRODUCTTON OF MAJOR COMMODITIES

Average1948-52

1954/55

Million metric tons

1955/56

' Paddy converted at 65 percent. - u Beef and veal, mutton and lamb, pork.

177

1956/57 1957/58 1958/59 1959/60 1960/611961/62

(Prelimiinary)

8.62 7.97 11.69 9.50 11.03 10.15 10.58 9.41 7.79 9.2618.00 15.01 17.26 18.82 18.41 20.32 21.82 21.95 23.12 23.851.33 3.07 3.83 3.64 4.19 3.99 4.21 4.93 5.19 5.17

6.69 12.53 13.11 13.11 14.58 15.09 16.79 17.19 18.46 16.90

3.28 3.71 4.01 4.19 4.39 4.51 4.68 4.85 4.96 1.764.20 7.81 9.13 9.38 9.80 10.59 11.14 12.04 12.34 12.21

2.11 1.88 1.94 2.23 1.88 2.50 2.75 3,78 2.92 3.350.24 0.25 0.32 0.29 0.31 0.29 0.34 0.33 0.35 0.310.21 0.31 0.35 0.38 0.39 0.39 0.40 0.42 0.45 0.45

0.59 0.86 1.13 1.27 1.16 1.29 1.27 1.20 1.42 1.52

12,22 14.57 17.38 18.22 18.91 19.86 20.51 21.67 21.85 21.935.03 6.02 6.15 6.44 7.11 7.25 7.56 6.94 6.79 7.190.48 0.57 0.73 0.77 0.80 0.88 0.92 0.88 0.92 0.94

Indices, average 1952/53-1956157 = 100

Index of all farm products 73 89 100 102 107 112 118 122 120 124

Average1954

1948-52 1955 1956 1957 1958 1959 19601961

(Preliminary)

Million cubic meters

FOREST PRODUCTS

Sawnwood 10.48 12.06 12.31 12.12 10.86 11.20 10.89 11.00 11.10

Million metric tons

VVood pulp 0.22 0.31 0.29 0.34 0.38 0.43 0.50 0.54 0.58All paper and board 0.72 0.93 1.19 1.29 1.33 1.50 1.62 1.71 1.83

ANNEX TABLE 7B. - LATIN AMERICA: E, ORTS AND IMPORTS OF MAJOR COMMODITIES

' Excluding trade between the United Stites and its territories. - 2 Beer a id veal, mutton and lamb, pork.

Average1934-36

Average1918.52

1954 1955 1956 1957 1958 1959 19601961

(Preliminary)

Million metric tonsGROSS EXPORTS

Wheat and wheat flour(wheat equivalent) 3.44 2.00 3.37 4.22 3.03 2.83 2.45 2.40 2.49 1.94

Maize 6.61 1.20 2.27 0.53 1.11 0.84 1.74 2.74 3.11 1.85

Rice (milled equivalent) 0.10 0.25 0.16 0.13 0.25 0.13 0.17 0.13 0.13 0.13

Sugar (raw equivalent) 4.05 7.07 6.56 7.71 7.91 8.66 8.85 8.17 9.89 10.52

Bananas 2.04 1.92 2.32 2.37 2.37 2.63 2.79 2.94 3.11 2.99

Linseed and linseed oil(oil equivalent) 0.55 0.19 0.29 0.18 0.08 0.17 0.18 0.23 0.21 0.22

Coffee 1.40 1.61 1.35 1.57 1.70 1.57 1.56 1.87 1.85 1.82

Cocoa beans 0.21 0.18 0.22 0.22 0.21 0.20 0.19 0.17 0.23 0.18

Cotton (lint) 0.34 0.39 0.73 0.69 0.76 0.52 0.59 0.73 0.62 0.68

Wool (actual weight) 0.19 0.18 0.16 0.17 0.19 0.13 0.18 0.20 0.19 0.24

Meat (fresh, chilled and

frozen) a 0.59 0.34 0.25 0.28 0.49 0.50 0.52 0.47 0.42 0.43

Canned meat 0.12 0.12 0.10 0.10 0.10 0.14 0.13 0.11 0.08 0,10

Million et bic meters

Broadleaved logs 0.40 0.34 0.40 0.46 0.35 0.38 0.26 0.34 0.40

Sawn softwood 1.25 1.19 1.60 1.03 1.74 1.49 1.19 1.26 1 28

Million metric tonsGuoss IMPORTS

Wheat and wheat flour(wheat eouivalent) 1.67 2.80 3.34 3.74 3.27 3.21 3.31 3.82 4.08 3.31

Rice (milled equivalent) 0.39 0.37 0.30 0.22 0.22 0.32 0.40 0.34 0.26 0.27

Sugar (raw equivalent) 0.25 0.36 0.43 0.47 0.28 0.49 0.37 0.39 0.25 0.23Potatoes 0.18 0.24 0.21 0.19 0.20 0.21 0.16 0.15 0.18 0.18

Index of all farm products

FoittisT PRODUCTS

Sawnwood

Plywood

Average1948-52

1954 1955 1956

179

1957

Al/Ilion metric tons

1958 1959 1960

120

Indices, average 1952/53-1956/57 = 100

1961

(Preliminary)

Mil/ion cubic ine ers

Paddy converted at 65 percent. - Dry beans, dry peas. broad beans, chick-peas. lentils. - ' Beef and veal, mutton and lamb, pork.

17.34 21.51 25.24 29.50 31.70 30.28 31.17 34.50 34.800.25 0.67 0.84 1.05 1.24 1.40 1.75 1.82 1.93

ANNEX TABLE SA. - FAR EAST (EXCLUDING MAINLAND CHINA): PR.ODUCTION OF MAJOR COMMODITIES

Average1934-38

Average1948-52

1954/55 1955/56 1956/57 1957/58 1958/59 1959/60 1960/611961/62

(Preliminary)

Million n etric tons

WheatMillet and sorghum

12.1314.94

11.4813.33

13.4518.15

13.9515.55

13.7915.35

14.6616.95

13.11

18 0315.5117.02

16.0217.33

16.7817.60Rice (milled equivalent) 60.61 62.42 67,53 73.19 77.23 71.30 79,97 84.22 88.73 85.10

Sugar (centrifugal) 4.18 3.15 4.69 5.07 5.22 5.59 5.71 6.27 6.81 6.37Sugar (noncentrifugal) 3.67 4.04 4.48 4.47 5.08 5.13 5.82 5.41 5.18 5.57

Starchy roots 21.62 29.38 33.97 35.93 35.74 37.23 39.92 42.29 41.43 42.04Pulses u 6.78 7.20 8.31 9.42 9.25 9.88 8.79 11.45 10.13 10.59

Vegetable oils and oilseeds(oil equivalent) 3.96 4.03 5.06 4.86 5.25 5.15 5.08 4.68 5.31 5.45

Tea 0.46 0.52 0.62 0.54 0.64 0.65 0.68 0.68 0.63 0.69Tobacco 0.79 0.61 0.75 0.79 0.84 0.86 0.77 0.81 0.82 0.83

Cotton (lint) 1.22 0.89 1.30 1.21 1.25 1.30 1.23 1.07 1.35 1.19Jute 1.94 2.00 1.64 2.28 2.26 2.11 2.40 2.12 2.15 2.94Rubber (natural) 0.97 1.65 1.74 1.82 1.77 1.83 1.82 1.90 1.86 1.97

Meat 1.65 1.84 2.03 2.24 2.39 2.51 2.56 2.63 2.58 2.59Mill< (total) 23.23 25.24 27.61 27.65 28.29 27.91 28.41 28.76 29.00 29.20

Wood pulp 0.78 1.65 1.93 2.21 2.47 2.38 3.02 3.54 4.07Newsprint 0.16 0.45 0.43 0.55 0.59 0.61 0.75 0.80 0.85Other paper and board 0.90 1.77 2.08 2.53 2.84 2.90 3.70 4.42 5.20

84 87 100 103 107 106 111 115 119

ANNEX TABLE 8B. - FAR EAST (EXCLUDING MAINLAND CHINA): EXPORTS AND IMPORTS OF MAJOR corynammEs

180

' Excluding re-exports of copra from the Federation of Malay and Singapore, but including uirecorcled sl ipments of copra fromIndonesia zind the Philippines to the Federation or Malaya, Singapore, sud North Borneo. - 2 Excluding hnports into the Federationof Malaya and Singapore for re-export and exports from Hong Kong, but including unrecorded shipments from Indonesia to the Federationof Malaya and Singapore. - ' Excluding copra imported into the Federation of Malaya and Singapore for re-export.

Average1934-38

Average1943.52

1954 1955 1956 1957 1958 1959 19601981

(Preliminary)

Million metric tons

GROSS EXPORTS

Rice (milled equivalent) . 8.96 3.05 3.08 3.55 3.51 4.00 3.32 3.56 3.85 3.00

Sugar (raw equivalent) .. 3.31 1.01 1.83 1.86 2.00 1.97 1.96 1.81 2.22 2.55

Vegetable oils and oilseeds(oil equivalent)' 1.79 1.32 1.31 1.60 1.64 1.51 1.29 1.25 1.43 1.52

Tea 0.36 0.39 0.47 0.40 0.47 0.44 0.49 0.45 0.45 0.46

Cotton (lint) 0.65 0.27 0.19 0.28 0.24 0.18 0.18 0.13 0.14 0.15

Jute 0.79 0.84 0.89 0.99 0.87 0.81 0.94 0.89 0.82 0.80

Rubber (natural)" 0.95 1.61 1.76 1.92 1.82 1.83 1.83 2.12 1.85 2.04

Million cubic meters

Broadleaved logs 0.76 2.20 2.50 2.92 3.27 3.82 5.35 6.10 6.60

Sawn hardwood 0.56 0.89 1.08 1.09 1.06 1.10 1.13 1.44 1.65

Plywood 0.02 0.17 0.24 0.30 0.36 0.49 0.71 0.49 0.50

Million netric tons

GROSS IMPORTS

Wheat and wheat flour(wheat equivalent) .... 1.01 4.89 3.95 4.44 5.63 7.84 7.81 8.32 10.18 8.76

Rice (milled equivalent) .. 6.16 3.11 3.38 3.11 4.03 4.05 3.85 3.17 3.88 3.25

Barley 0.05 0.69 0.82 0.61 1.20 1.12 1.07 0.50 0.02 0.02Maize 0.21 0.20 0.24 0.44 0.49 0.68 0.82 1.15 1.65 2.12

Sugar (raw equivalent) 1.72 1.17 2.56 2.30 2.07 1.82 2.08 1.91 2.08 2.23Vegetable oils and oilseeds

(oil equivalent) 0.38 0.27 0.43 0.55 0.54 0.60 0.55 0.62 0.65 0.65

Cotton (lint) 0.89 0.52 0.74 0.66 0.86 0.89 0.75 0.90 1.15 1.25

jute 0.04 0.27 0.25 0.29 0.23 0.18 0.14 0.12 0.21 0.16

Index of all farm products

ANNEX TAI3LE 9A. - NEAR EAST: PRODUCTION OF MAJOR COMMODITIES

Indices, average 1952/53-1956/57 100

71 83 97 101 108 113 117 120 121 118

' Paddy converted at 65 percent. - ' Wheat, barley, oa s, maize, millet, sorghum, rice (milled equivalent), rye, mixed grain. - Dry beans,dry peas, broad beans, chick-peas, lentils. - a Beef and veal, mutton and lamb, pork.

ANNEX TABLE 9B. - NEAR EAST: EXPORTS AND IMPORTS OF MAJOR COMMODITIES

181

' Wheat and wheat flour, barley, maize, oats, sorghums, millet. rice (milled). - Oranges and lemons only.

Average1934-38

Average1948-52

1954 1955 1956 1957 1958 1959 19601961

(Preliminary)

Mil/ion i Jerrie tonsGROSS EXPORTS

VVheat and wheat flour(wheat equivalent) 0.24 0.27 1.27 0.33 0.42 0.44 0.27 0.44 0.08 0.05

Barley 0.38 0.46 1.03 0.46 0.78 0.53 0.58 0.26 0.02 0.08Rico (milled equivalent) 0.15 0.27 0.13 0.25 0.25 0.32 0.40 0.08 0.33 0.25

Total grains ' 0.93 1.10 2.59 1.11 1.54 1.40 1.33 0.91 0.65 0,50

Citrus fruit' 0.30 0.20 0.36 0.30 0.35 0.37 0.39 0.46 0.51 0.37Tobacco 0.04 0.07 0.07 0.06 0.07 0.09 0.06 0.07 0.06 0.09Cotton (lint) 0.47 0.47 0.52 0.57 0.51 0.55 0.54 0.76 0.71 0.65

GROSS IMPORTS

VVheat and wheat flour(wheat equivalent) 0.28 1.42 0.85 1.30 2.19 2.48 2.26 2.85 3.82 3.39

Total grains 0.47 1.77 1.09 1.82 2.76 3.16 2.96 3.85 4,92 4.34

Sugar (raw equivalent) 0.35 0.55 0.74 0.86 0.94 0.93 1.05 1.13 1.09 1.18

Million et bic meters

Sawn softwood 0.38 0.71 0.63 0.55 0.58 0.64 0.73 0.77 0.67

Average1934-38

Average1948-52

1954/55 1955/56 1956/57 1957/58 1958/59 1959/60 1960/61 1961/62(Prelhninary)

Million n etric tons

VVheat

BarleyRice (milted equivalent)

9.504.241.09

10.954.671.33

13.565.871.50

14.085.401.35

15.216.181.65

17.827.451.81

16.546.391.41

16.215.921.72

16.385.931.76

15.715.841.49

Total grains 2 19.07 22.06 26.63 27.56 29.43 33.86 31.02 30.47 30.94 29.16

Sugar (centrifugal)Pulses'

0.220.70

0.420.79

0.590.84

0.690.84

0.710.83

0.780.91

0.870.81

1.030.92

1.210.87

0.930.76

Citrus fruitDatesBananas

0.790.870.05

0.850.850.07

1.111.060.09

1.251.010.10

1.181.110.11

1.321.110.11

1.501.100.14

1.461.100.12

1.461.110.12

1.401.110.13

Vegetable oils and oilseeds(oil equivalent) 0.32 0.41 0.57 0.50 0.61 0.53 0.63 0.61 0.63 0.64

Tobacco 0.09 0.12 0.13 0.15 0.15 0.16 0.14 0.16 0.17 0.17Cotton (lint) 0.56 0.66 0.74 0.76 0.81 0,80 0.95 0.99 0.97 0.94

Milk (total) 9.70 10.41 10.62 11.62 11.68 1202, 13.12 13.31 13.12 13.15Meat 0.65 0.85 1.06 1.17 1.28 1.30 1.22 1.28 1.36 1.37

FARM PRODUCTS

WheatBarleyMaize

Millet and sorghumRice (milled equivalent).

Sugar (centrffugap

Starchy rootsPulses 2

Citrus fruitBananas

Groundnuts (oil equiva-lent)

Vegetable oils and oilseeds(oil equivalent)

Coffee

CocoaWine

Cotton (Lint)Sisal

Milk (total)Meat

Average1934-38

ANNEX TABLE 10A. - AFRICA : PRODUCTION OF MAJOR COMMODITIES

Average1948-52

1954/55 1955/56 1956/57 1957/59

Million n etric tons

1958/59 1959/60 1960/611961/62

(Preliminary)

182

' Paddy converted at 65 percent. - a Dry beans, dry peas, broad beans chick-peas, lentils. - ' Bee(' and veal, mutton and amb, pork.

2.66 3.15 4.33 3.82 4.31 3.71 3.87 3.68 4.02 2 57

2.60 3.19 4.04 2.93 3.69 2.18 3.23 2.63 2.91 1 31

4.62 7.14 8.53 8.75 9.34 8.76 9.33 9.41 10 39 11.03

9.31 10.65 11.44 11.47 11.82 12.23 12.03 12.33 12.64 12 76

1.11 1.55 1.71 1.78 1.74 1.89 1.39 1.85 1.97 2.01

0.95 1.36 1.64 1.83 1.97 2.15 2.23 2.34 2.04 2.52

35.40 46 07 51.57 52.35 53.79 52.42 53.14 54.32 53.94 43.94

1.02 1.48 1.64 1.55 1.53 1.37 1.45 1.51 1.48 1.43

0.38 0.78 1.00 1.08 1.19 1.26 1.29 1.32 1.49 1.31

0.30 0.64 0.79 0.91 0.84 0.93 0.89 0.92 0.90 0.91

0.56 0.72 0.82 0.96 0.99 1.15 1.04 1.00 1.17 1.14

1.73 2.19 2.50 2.51 2.76 2.77 2.85 2.69 2.94 276

0.14 0.28 0.39 0.51 0.51 0.53 0.61 0.67 0.77 0.74

0.49 0.50 0.49 0.52 0.58 0.45 0.57 0.66 0.86 0.822.14 1.72 2.51 2.07 2.53 2.15 2.04 2.62 2.28 2 22

0.14 0.22 0.26 0.26 0.28 0.31 0.31 0.31 0.33 0.26

0.16 0.23 0.29 0.30 0.31 0.33 0.35 0.37 0.38 0.37

6.82 827 8.65 8.72 9.12 9.17 9.32 9.51 9.58 9 71

1.52 1.89 2.05 2.00 2.09 2.09 2.15 2.15 2.17 2.18

Index of all farm products

FOREST PRODUCTS

Sawnwood

71 83 97

Indices,

101

average 1952153-1956157

108 113

- 100

117 120 121 118

Average1948-52

1.31

1954 1955 1956 1957 1958

1.96

cubic tneters

1959

1.94

1960

1.95

1961

(Prelhninary)--

2001.77 1.73 1.89

1141/ions

1.88

' Including coarse ground flour.

ANNEX TABLE 10B. - AFRICA: EXPORTS AND IMPORTS OF MAJOR COMMODITIES

Average1934-38

Average1948-52

1954

Million neiric tons

1955

183

1956 1957 1958 1959 19601961

(Preliminary)

(wheat equivalent) 0.61 0.33 0.53 0,62 0.36 0.29 0.38 0.27 0.35 0.17Barley . 0.21 0.55 0.64 0.46 0.48 0.10 0.25 0.25 0.16 0.04Maize 0.66 0.36 0.79 1.02 1.31 1.39 1.56 0.83 0.87 1.50

Sugar (raw equivalent) 0.68 0.71 1.00 1.04 1.08 1.15 1.18 1.11 0.97 0.93()ranges 0.15 0.39 0.53 0.65 0.56 0.76 0.69 0.73 0.86 0.68Bananas 0.14 0.22 0.34 0.37 0.35 0.40 0.39 0.37 0.38 0.42

Groundnuts and groundnutoil (oil equivalent) 0.34 0.32 0.50 0.46 0.59 0.55 0.67 0.63 0.57 0.66

Palm kernels and palm

kernel oil (oil equivalent) 0.30 0.34 0.38 0.36 0.38 0.35 0.39 0.38 0.36 0.35Palm oil 0.24 0.33 0.39 0.37 0.38 0.35 0.37 0.39 0.39 0.36

Coffee 0.13 0.28 0.34 0.44 0.52 0.53 0.54 0.59 0.63 0.67Cocoa beans 0.46 0.48 0.47 0.48 0.52 0.57 0.44 0.56 0.64 0.78

Wine 1.40 1.13 1.59 1.90 1.53 1.90 1.52 1.63 1.74 1.26Tobacco 0.03 0.06 0.09 0.08 0.09 0.08 0.08 0.09 0.11 0.12

1

Cotton (lint) 0.13 0.19 0.24 0.24 0.26 0.24 0.27 0,29 0.27 0.28Sisal 0.16 0.22 0.27 0.29 0.30 0.32 0.34 0,36 0.37 0.36

Million c &lc meters

Broadleaved logs 1.19 1.88 2.37 2.40 2.82 2.86 3.74 4.35 4.90

Million n etric tonsGROSS IMPORTS

Wheat and wheat flour(wheat equivalent) 0.28 0.75 0.75 0.78 0.98 0.93 0.78 1.64 1.74 1.92

Rice (milled equivalent) 0.39 0.18 0.24 0.36 0.35 0.46 0.38 0.53 0.50 0.56

Sugar (raw equivalent) 0.41 0.55 0.86 0.94 0.95 1.00 1.01 1.08 1.12 1.07

GROSS EXPORTS

Wheat and wheat flour

ANNEX TABLE 11. - TOTAL CATCH (LIVE, WEIGHT) OF FISH CRUSTACEANS ANO IVIOLLUS(,(S IN SELECTEE) COUNTRIES

184

1938 1913 1935 1956 1957 1958 1959 1960

1961

(Prelim-inary)

Average1955-59

ThousanaThousand nretric tons % metric

tons

WORLD TOTAL 20500.0 19 090.0 28 310.0 29 830.0 30 810.0 32 130.0 35 600.0 37 730.0 40 500 100.0 31 336 0

4. 1959 catch : 1 000 000 tonsand more (57.5) (18 027.0)

1 Japan 3 562.0 2 431.4 4 912.8 4762.6 5 399.0 5 505.0 5 884.6 6 192.5 6 710.5 16.9 5 292.8

2 China (mainland) ... ... 2 518.0 2 640.0 3 120.0 4 060.0 5 020.0 ... 11.1 3 471.6

3 United States 2260.1 2416.6 2790.4 2989.4 2759.8 2708.7 2890.8 2814.5 2874.4 9.0 2827.8

4 U.S.S.R 1 523.0 1 485.0 2 495.0 2 616.0 2 531.0 2 621.0 2 756.0 3 051.0 8.3 2 603.8

5 Peru ... 47.7 213.3 297.3 483.1 930.2 2 152.4 3 531.4 5 243.1 2.6 815.3

6 Norway 1 152.5 1 504.0 1 813.4 2201.3 1 754.8 1 438.8 1 663.9 1 598.9 1 509.4 5.6 1 774.4

7 Canada 836.8 1 052.9 965.0 1 105.5 997.1 1 007.6 1 054,4 928.6 ... 3.3 1 025.9

B. 1959 catch : 500 000 tonsand more but less thanI 000 000 torts ;20.6) (6 438.4)

8 United Kingdom 1 198.1 1 206.1 1 100.4 1 050.4 1 014.7 999.0 988.9 923.8 3.3 1 030.7

9 Spain (incl. Ceuta and Melilla) 423.5 547.2 770.3 761.6 777.2 844.9 842,8 935.3 2.6 799,3

10 India ... ... 839.0 1 012.3 1 233.0 1 064.6 823.2 1 161.4 961.0 3.2 994.3

11 Germany, Fed. Rep. 776.5 408.7 814.8 800.6 791.7 743.1 768.0 674.0 2.5 783.6

12 Denmark and Faeroe Islands 160.1 318.2 530.9 579.3 638.9 704.8 760.9 690.6 2.1 643.0

13 South Atrita and South VVestAtrita 66.7 185.9 607.1 536.9 580.6 649.9 749.4 898.8 1009.7 2.0 624.8

14 Indonesia 472.0 ... 669.8 713.9 727.6 685.0 700.3 753.7 733.9 2.2 699.2

15 Iceland 327.2 478.1 180.3 517.3 502.7 530.4 640.8 592.8 ... 1.7 544.3

16 France (incL Algeria) 530.3 467.5 522.7 537.9 514.5 519.7 578.3 596.3 567.7 1.7 534.6

C. 1959 catch: 100 000 tonsand more but less than500 000 tons 06.1) (5 038.1)

17 Philippines 80.9 195.1 385.2 416.0 407.5 447.3 457.5 465.5 475.7 1.3 422.7

18 Portugal 247.2 292.1 424.7 472.2 470.3 455.5 427.8 475.1 1.4 450.1

19 Korea, South 838.3 285.2 262.2 346.0 408 1 395.1 382.1 342.5 412.4 1.1 358.7

20 Netherlands 256.2 294.1 319.5 298.1 300.8 313.8 319.6 314.7 346.0 1.0 310.4

21 Korea, North 925.2 ... 312.0 291.5 ... ... ... ... 1.0 300.7

22 Pakistan ... ... 270.9 277.0 282.8 283.7 290.1 304.5 319.1 0.9 280.9

23 Chile 32.2 64.6 214.3 188.3 213.1 225.8 272.5 339.7 429.8 0.7 222.9

24 Sweden 129.2 193.9 219.5 197.4 222.1 238.0 268.0 254.3 262.7 0.7 229.8

25 Angola 26.2 113.2 290.4 420.5 395.5 278.2 267.4 252.0 241.5 1.1 330.4

26 China (Taiwan) 89.5 83.5 180.3 193.2 208.0 229.7 246.3 259.1 312.4 0.7 211.5

27 Brazil 103.3 144.8 190.3 203.0 216.2 212.2 244.3 257.1 ... 0.7 216.5

28 kaly 181.2 156.6 218.0 219.6 210.3 209.3 213.3 211.7 237.9 0.7 214.1

29 Thailand 161.0 161.0 213.0 217.9 234.5 196.3 204.7 220.9 ... 0.7 213.3

30 Mexico 17.1 ... 105.8 144.8 117.5 164.0 190.6 ... ... 0.5 144.5

31 Poland 12.5 47.1 126.9 139.3 138.8 145.1 162.2 183.9 185.5 0.5 142.5

32 Viec-Nam, South 180.0 ... 120.0 130.0 135.0 143.0 153.5 240.0 0.4 136.6

33 Congo (Léopoldville) 0.9 17.5 86.1 96.2 122.4 136.6 153.4 ... ... 0.4 118.9

34 Cannbodia ... ... 150.0 150.0 ... ... ... ... ... 0.5 150.035 Federadon of Malaya ... 139.0 136.8 138.5 138.3 139.5 145.9 167.1 178.4 0.4 139.8

36 Morocco 43.7 68.6 94.3 108.2 145.1 161.7 144.4 154.1 ... 0.4 130.7

37 Germany, Eastern 68.6 74.9 96.5 93.2 105.6 ... 0.3 87.838 Burrna ... ... ... 100.0 100.0 ... ... 0.3 100.039 Muscat and Ornan ... ... ... 0.3 100.0

ANNEX TABLE 11. - TOTAL CATCH (LIVE WEIGHT) OF FISH, CRUSTACEANS AND MOLLUSKS IN SELECTED COUNTRIES (CW/C/I/dCd)

Countries arranged in order of 1959 catch. - These countries do not publish regularly annual fish catch statistics.

1115

1955-59

Thousand metric toas Thousandmetric

tonsD. 1959 catch: 50 000 tons

and more, but less than100 000 tons (2.2) (694.9)

40 Turkey 76.0 ... 111.5 139.5 116.7 101.3 96.7 0.4 113.141 Argentina 55.3 71.2 79.0 75.4 81.6 80.6 88.6 100.9 0.3 81.042 Unitmd Arab Republic 38.1 42.8 63.4 70.3 75.2 80.0 85.6 88.5 .,. 0.2 74.943 Venezuela 21.7 92.3 69.6 61.3 83.7 78.3 83.3 92.0 0.2 75.244 Greece 25.0 33.6 60.0 65.0 75.0 80.0 82,0 ... ... 0.2 72.445 Finland 44.4 46.1 63.3 60.2 64.5 61.5 67.4 66.0 67.2 0.2 63.446 Hong Kong ... 34.3 57.5 57.2 67.2 69.5 67.0 62.3 63.0 0.2 63,747 Tanganyika 16.0 22.0 52.4 55.0 55.0 55.0 60.0 60.0 60.7 0.2 55.518 Australia 33.5 38.9 52,5 49.9 55,3 54.3 58.8 62.2 60.0 0.2 54.249 Belgium 42.8 71.1 80.0 69.1 62,9 64.3 57.5 63.7 61.4 0.2 66.850 Uganda ... 11.0 34.9 45.7 51.3 52.8 55.6 61.4 61.2 0.2 48.1

E 1959 catch: less than 50 000tons (1.4) (445.7)

51 Ceylon ... 24.0 31.3 40.3 38.5 40.7 48.3 51.1 61.8 0.1 39.852 New Zealand 27.0 35.7 39.2 38.4 39.0 39.3 41.4 ... 0.1 42.253 Ireland 12.8 25.8 23.6 30.5 36.6 37.5 38.6 42.8 ... 0.1 33.454 Ecuador 1.8 3.4 15.0 21.8 26.4 31.1 35.9 43.2 60.2 0.1 26.055 Ethiopia ... 6.2 11.0 13.5 27.9 34.7 19.1 17.2 11.8

56 Greenland 4.7 21.0 25.8 27.4 31.5 33.5 34.6 35.2 ... 0.1 30.657 Yugoslavia 16.8 21.2 22.6 28.4 30.7 31.4 29.4 30.9 37.3 0.1 28.558 Cuba 10.0 8.3 12.8 15.6 22.0 21.9 28.2 31.2 31.1 0.1 20.159 Aden ... 20.0 34.8 21.8 22,6 21.5 24.4 22.3 47.4 0.1 25.060 Kenya ... ... 30.1 32.6 25.5 22.0 22.6 28.2 ... 0.1 26.6

61 Colombia 10.0 15.0 18.0 21.2 30.1 25.0 21.1 29.7 0.1 23.1

62 Ryukyu islands 12,0 7.7 13.6 13.7 15.8 16.5 21.0 15.2 16.1 0.1 16,1

63 Sudan 8.8 11.4 13.6 13.5 9.9 19.2 16.2 16.5 17.3 14.0

64 Tunisia 9.6 12.2 10.8 11.9 14.0 15.2 ... ... 13.065 Israel 1.7 2.5 10.7 10.3 11.6 12.6 13.2 13.8 14,9 11.7

66 Singapore 1.5 2.3 6.2 9.6 13.8 12.3 11.5 9.2 9.7 10.767 Ruanda-Urundi ... 2.3 5.6 5.4 9.7 11.5 11.0 9.2 ... 8.668 St Pierre and Miquelon 1.9 2.2 6.8 9.3 7.9 8.3 9.4 10.3 13.6 8.369 Uruguay 3.6 3.5 4.9 5.4 6.9 6.4 4.1 5.2 4.7 5.570 Mauridus 2.0 1.6 1.7 1.7 1.7 1.6 1.3 1.4 1.5 1.671 Malta and Gozo 1.1 1.5 0.8 0.8 1.0 1.1 1.1 1.2 1.3 1.0

F. 1959catch: less than50000tons (2.2) (691.9)

120 countries not specified 2.2 691.9

1938 1948 1955 1956 1957 1958 1959 1960 1961 Average

Whe

atR

ice

Bar

ley

Oat

s

Mai

ze

Gra

in s

orgh

um

But

ter

Che

ese

.D

ried

milk

Soy

bean

s

Lins

eed

Lins

eed

oil

Cot

tons

eed

oil

Cot

ton

I i n

ters

.

Cot

ton,

upl

and

Woo

l

Tob

acco

Oth

er c

omm

oditi

es

AN

NE

X T

AB

LE 1

2. -

UN

ITE

D S

TA

TE

S C

OM

MO

DIT

Y C

RE

DIT

CO

RP

OR

AT

ION

: QU

AN

TIT

Y A

ND

VA

LUE

OE

INV

ES

TE

ME

NT

1954

24 2

08 58 622

589

20 5

681

029

165

164

298

101

382

31 469

279

1 67

4 55

281

1955

28 1

56 763

2 04

4

1 05

222

255

2 92

7

149

176

101

876

201 37

170

318

1 81

7 70 366

1956

29 0

731

322

1 98

7

1 22

229

192

2 88

7

34 130

81 270

41 26 5

141

2 83

9 54 402

Qua

ntity

(30

Apr

il)

1957

Tho

usan

d m

etric

tons

24 4

53 804

1 77

4

650

34 8

01

2 04

0 16 87 65

1 22

8

351 20

2 05

6 24

1958

1959

1960

24 1

74 732

2 69

8

732

37 2

11

8 29

5 45 74 70

1 74

6 59

973

451

427

33 9

37 535

3 24

2

1 37

639

206

13 4

98 20 59

3 25

5

279

27

1 62

8

414

35 5

12 455

3 38

3

646

45 2

91

14 9

64 27 4

108

1 59

8 18 14

1 17

9

317

1961

37 8

83 240

2 18

4

598

45 0

1218

784 40 11

7

69 6

565

280

1962

34 2

09 34

1 34

4

557

43 5

8719

070 14

4 38

217

2 56

5

1 20

3

211

TO

TA

L

Cha

nge

from

pre

viou

s ye

ar

1954

2 15

5 6 34 32

1 29

6 GO

245

146

109 10 56 13 185 58

1 26

881

270

165

6 18

9

+ 9

7

1955

2 63

3 98 107 58

1 43

716

7

212

156 38 70 25 14 64 67

1 43

910

3

406

167

7 26

1

+ 1

7

1956

2 79

523

2

92 60

1 92

612

8 44

111 30 20

5 9 2

31

2 26

8 82 535

263

8 63

3 19

1957

2 41

110

7 87 32

2 23

910

5 21 73 24 95 42 5

1 58

0 35

609

301

7 81

6 9

Val

ue (

30 A

pril)

1958

2:10

210

4

114 32

2 41

439

3 60 62 26

131 7

642

590

274

7 25

1 7

1959

Mill

ion

dolla

rs

3 10

5 81 155 57

2 48

670

6 264 20 247

31

7

1 26

0

594

154

8 93

3

Per

cent

age

+ 2

3

1960

3 25

3 65

113 27

2 78

683

3 35 3 34

114 2 4

947

441

176

8 83

3

1961

2

3 38

9(2

772

)27

(26)

100

(85)

24(2

1)

3 09

1(2

688

)1

048

(797

)

54(5

3)

37(3

5)6

(6)

CO

431

(410

)

1

1962

2 45

9 5 52 21

1 95

281

0

191 32 80

214 1

894

393

(393

)32

1

147

(141

)15

2

8 74

8(7

428

)7

184

3S

OU

RC

E:

Uni

ted

Stat

es D

epar

tmen

t of

Agr

icul

turc

, Com

mod

ity C

redi

t Cor

pora

tion,

Rep

ort o

f fin

anci

al c

ondi

rons

and

ope

ratio

ns, 3

0A

pril

1955

-30

Apr

il 19

62.

'St

ocks

ple

dged

for

out

stan

ding

loan

s an

d st

ocks

in p

rice

sup

port

inve

ntor

y. -

' Fig

ures

in b

rack

ets,

rev

ised

in a

ccor

danc

e w

ith th

e ch

ange

in a

ccou

ntin

g po

licy

adop

ted

by th

e C

CC

as o

f30

June

196

1, a

re f

or c

ompa

riso

n w

ith 1

962.

ANNEX TABLE 13A. - FOOD SUPPLIES AVAILABLE FOR HUMAN CONSUMPTION IN SELECTED COUNTRIES

187

Country Period CerealsStarchyroots

SugarPulses

and nutsVege-tables

Meat Eggs Fish 'Milk'

FatsFat Protein

Ki ogranzs per cap t per yearWESTERN EUROPE

Austria 1948/49-1950/51 130 108 23 3 61 30 4 2 5 6 151954/55-1956/57 118 96 31 2 63 47 8 3 7 8 18

1960/61 108 88 36 3 69 57 12 4 7 8 18

Belgium-L uxembouri, 1948/49-1950/51

1954/55-1956/57106

100148

150

28

28

4

4

60

65

47

53

12

1477

4

45

6

21

221960/61 91 148 33 4 68 58 15 8 5 7 21

Denmark 1948/49-1950/51 104 141 36 7 72 62 9 18 8 10 181954/55-1956/57 90 131 48 5 62 63 8 14 8 8 26

1960/61 78 127 42 6 70 65 10 16 9 9 28

Finland 1949/50-1950/51 122 119 31 2 18 29 s 12 12 12 151954/55-1956/57 118 109 38 2 19 32 8 11 13 13 18

1959/60 113 92 40 2 21 32 6 11 12 12 19

France 1948/49-1950/51 122 133 23 6 140 56 10 6 4 5 141954/55-1956/57 111 130 26 6 132 69 10 6 5 6 17

1959/60 105 109 31 6 132 73 11 6 6 7 18

Germany, Federal Republic 1948/49-1950/51 114 210 24 4 51 29 5 8 4 6 161954/55-1956/57 96 157 28 4 45 48 10 7 6 7 25

1960/61 83 131 29 3 48 57 13 7 6 7 25

G reece 1948/49-1950/51 154 34 9 12 66 11 3 6 3 3 151954-56 158 39 10 14 99 17 4 7 4 4 171960 163 36 13 14 118 23 6 8 5 5 18

Ireland 1948/49-1950151 134 190 35 2 59 53 12 3 7 9 18

1954-56 128 155 42 2 61 55 16 4 8 10 201960 111 144 47 3 62 62 14 5 9 11 21

Italy 1948/49-1950/51 150 38 12 9 81 15 6 4 3 3 10

1954/55-1956/57 145 48 16 9 96 20 8 5 4 4 14

1960/61 142 52 21 9 138 27 9 5 4 4 17

Netherlands 1948/49-1950/51 98 159 36 4 68 28 5 6 7 9 23

1954/35-1956/57 90 96 39 4 66 43 10 5 7 9 24

1960/61 83 101 42 4 61 49 12 4 8 9 26

Norway 1948/49-1950/51 116 128 24 3 28 33 7 25 11 10 23

1954/55-1956/57 95 105 39 4 34 37 8 20 12 9 26

1960/61 81 105 39 4 34 38 e 19 12 9 24

Portugal 1948-50 120 108 12 10 107 16 3 16 1 1 14

1954-56 125 113 15 8 110 17 3 18 1 i 16

1960 116 98 18 8 104 19 4 19 1 1 15

Spain 1952/53-1953/54 123 104 10 15 102 14 5 10 2 2 16

1954/55-1956/57 117 113 13 16 102 14 5 10 2 3 16

1960/61 116 118 17 14 124 19 6 14 2 3 19

Sweden 1948/49-1950/51 88 120 44 3 25 49 11 16 11 10 20

1954/55-1956/57 76 102 42 3 25 50 11 18 10 9 21

1960/61 70 87 41 3 29 49 12 18 10 9 22

Switzerland 1918/49-1950/51 117 89 38 6 73 44 9 2 11 11 15

1954/55-1956/57 101 74 40 7 75 51 10 3 10 10 17

1960/61 93 73 41 7 69 58 10 3 10 9 20

United Kingdom 1948/49-1950/51 106 115 39 5 61 50 13 12 7 7 21

1954/55-1956/57 88 98 47 6 58 68 13 10 7 7 22

1960/61 81 95 48 6 63 73 15 10 7 7 22

Yugoslavia 1952-53 190 64 8 8 32 20 2 1 3 3 8

1954-56 186 60 10 10 39 23 2 1 3 4 9

1960 186 70 15 10 56 30 3 1 4 5 13

ANNEX TABLE 13A. - FOOD SUPPLIES AVAILABLE FOR HUMAN CONSUMPTION IN SELECTED COUNTRIES (continued)

188

Country Period CerealsStarchy

rootsSugar

Pulses

and nutsVege-tables

Meat Eggs Fish 'Milk

Fat ProteinFats

Kilograms per cap t per year

NORTH AMERICA

Canada 1948/49-1950/51 75 75 46 7 70 70 15 6 8 9 20

1954/55.1956/57 74 68 44 5 72 81 16 6 8 9 20

1960161 70 ... 44 5 75 79 16 8 8 9 19

United States 1948-50 77 52 41 8 105 82 22 5 9 8 20

1954-56 69 49 41 7 98 92 21 5 9 9 21

1960 66 47 41 7 97 95 19 5 8 9 21

LATIN AMERICA

Argentina 1948 126 88 35 2 40 116 7 2 5 5 16

1954-56 105 83 34 3 49 108 7 2 5 5 18

1959 120 67 31 3 44 91 7 2 4 3 16

Brazil 1948-50 86 112 25 24 7 26 2 2 1 1 71954-56 103 117 32 26 19 26 3 2 2 2 8

1957 106 118 31 27 21 29 3 3 2 2 8

Chile 1948 134 80 25 6 54 38 2 7 2 2 6

195456 137 76 31 8 67 31 4 9 3 3 71957 129 92 37 8 77 31 4 10 3 3 7

Colombia 1956-58 61 84 51 9 13 41 3 1 2 2 6

Ecuador 1954-56 78 78 25 12 23 11 4 3 3 3 4

1957-59 74 90 22 13 30 15 5 4 3 3 4

Mexico 1954-56 128 10 33 19 24 20 4 2 2 2 101957-59 124 8 33 21 24 24 6 2 3 3 9

Paraguay 1957-59 84 229 15 15 36 48 1 3 2 4

Peru 1952 103 169 20 9 50 20 3 2 1 1 6

1959 87 151 26 9 78 18 1 5 1 1 8

Surinam 1959 98 15 23 7 12 10 3 11 1 1 9

Uruguay 1948-50 99 51 33 3 22 115 7 1 6 s 14

1954-56 99 61 33 2 37 109 7 1 6 6 17

Venezuela 1952-53 82 89 33 15 10 19 4 6 3 3 6

1954-56 81 78 32 13 10 20 5 6 3 3 71959 82 92 37 16 16 25 4 8 4 4 9

FAR EAST

Ceylon 1952-53 118 35 16 32 42 3 2 5 1 1 41954-56 125 34 17 34 42 3 1 5 1 1 41960 138 22 19 29 42 3 1 7 1 1 4

China: Taiwan 1948-50 138 74 9 3 6 62 11 2 6 - - 21954-56 148 68 9 3 9 58 17 2 10 - 3

1960 160 68 9 '11 61 16 2 11 - 5

ndia 1949/50-1950/51 112 8 12 21 16 1 - 1 2 ' 2 ' 31954/55.1956/57 126 11 14 24 16 1 - 1 3 2 ' 3

1960/61 140 11 14 24 ... 2 - 1 " 3 2 ' 4

upan 1948-50 157 62 4 u 7 61 2 1 13 - 1

1954-56 151 63 12 u16 68 4 3 20 - 3

1960 150 68 15 '18 87 6 5 23 1 1 4

3akistan 1949/50.1950/51 160 ... 12 8 18 4 - 1 ' 2 ' 2 ' 3

1954/55-1956/57 150 14 8 18 4 - 2 ' 3 2 5 41959/60 165 6 15 6 18 4 - 2 2 2 ' 3

'hilippines 1952.53 124 48 ... 3 30 11 2 11 - - 31956 116 47 10 4 32 9 3 14 - - 3

1960 125 46 10 6 30 14 3 15 - - 4

ANNEX TABLE 13A. - FOOD SUPPLIES AVAILABLE FOR HUMAN CONSUMPTION IN SELECTED COUNTRIES (concluded)

Country Period CerealsStarchy

rootsSugar

1811

Pulses

and nucaVege-tables

Meat Eggs FishMilk.

Fats

' Estimated edible weight. - Milk and milk products excluding butter expressed in terms of fat and protein. - ' Including soy-bean curd in terms of soybean. - Including milk for making butter. - Excluding butter. - Including " miso " and " shoyu " (soybeanPreparations) in terms of soybean.

NEAR EAST

Kilograms per cap t per year

Israel 1950/51 133 45 19 8 103 15 19 16 4 151954/55-1956/57 140 47 25 o 116 21 15 8 5 5 16

1959/60 120 39 29 6 115 32 18 7 4 5 17

Syria 1957 162 10 11 11 59 12 1 1 4 6

Turkey 1948/49-1950/51 186 18 6 10 56 14 2 3 7

1954/55-1956/57 201 29 10 13 76 14 2 2 2 3 8

1959/60 196 38 8 15 81 13 2 3 4 8

United Arab Republic 1948/49-1950/51 174 11 13 12 46 10 1 3 4 2 4

1954/55-1956/57 188 9 13 10 66 13 1 5 0 3 2 4

1958/59 185 8 12 10 77 13 1 5 2 2 '5AFRICA

Libya 1959 115 17 28 7 80 10 2 2 2 8

Cyrenaica 1957 115 6 33 4 20 8 2 1 5 4 5

1958 109 8 33 4 17 8 2 1 6 5 5

Mauritius 1955-56 131 17 39 11 28 6 6 1 1 9

1960 129 15 40 10 24 6 2 6 1 2 13

Rhodesia and Nyasaland, Federation of:Southern Rhodesia 1951-53 184 12 13 14 26 30 2 2

1953 201 10 12 16 26 29 2 2

South Africa 1948-50 156 16 39 3 34 42 3 6 3 3 5

1954-56 149 14 37 4 38 43 3 8 3 3 6

1959/60 140 21 39 4 35 43 3 11 3 3 5

OCEANIA

Australia 1948/49-1950/51 97 50 53 5 66 110 12 4 6 6 15

1954/55-1956/57 93 46 52 4 61 112 10 4 7 6 16

1959/60 88 53 50 5 60 114 10 5 7 7 16

New Zealand 1948-50 90 52 50 3 79 103 13 7 11 9 16

1954-56 86 52 43 3 73 105 14 7 11 10 19

1960 87 57 42 4 70 110 17 7 11 11 20

Fat Protein

ANNEX 'CABLE 13B. - CALORIE AND PROTEIN CONTENT OF NATIONAL AVERAGE FOOD SUPPLIES IN SELECTED COUNTRIES

Country Period Calories

Per caput per day

WESTERN EUROPE

1948/49-1950/51 2 670 77

1954/55-1956/57 2 900 85

1960/61 3 010 88

1948/49-1950/51 2 8901954/55-1956/57 2 970

1960/61 2 910

1948/49-1950/51 3 2401954/55-1956/57 3 360

1960/61 3 330

1943/49-1950/51 2 9801954/55-1956/57 3 160

1959/60 3 090

1948/49-1950/51 2 8001954/55-1956/57 2 890

1959/60 2 990

1948/49-1950/51 2 7301954/55-1956/57 2 990

1960/61 2 950

1948/49-1950/51 2 4901954-56 2 7201960 2 930

1948-50 3 4301954-56 3 5401960 3 570

1948/49-1950/51 2 3501954/55-1956/57 2 550

1960/61 2 740

1948/49-1950/51 2 9301954/55-1956/57 2 940

1960/61 2 980

1948/49-1950/51 3 1001954/55-1956/57 3 160

1960/61 2 980

1948-50 2 3201954-56 2 4501960 2 420

1952/53-1953/54 2 4901954/55-1956/57 2 520

1960/61 2 720

1948/49-1950/51 3 1101954/55-1956/57 2 980

1960/61 2 920

1948/49-1950/51 3 1701954/55-1956/57 3 130

1960/61 3 190

1948149-1950/51 3-1301954/55-1956/57 3 260

1960/61 3 270

1952-53 2 6901954-56 2 7801960 3 070

190

Total protein (grams) Animal protein (grams)

30

42

47

38

44

48

60

5257

52

55

52

40

47

53

32

43

48

17

23

28

47

54

59

19

23

28

39

43

47

53

50

48

21

23

27

18

20

22

52

53

53

51

52

51

45

50

52

2022

26

Austria

Belgium-Luxembourg

Denmark

Finland

France

Germany, Fed, Rep

Greece

Ireland

Italy

Netherlands

Norway

Portugal

Spain

Sweden

Switzerland

United Kingdom

Yugoslavia

84

88

88

105

91

93

96

98

93

92

95

99

79

79

80

76

87

95

96

9996

70

74

80

82

80

80

99

89

82

677070

7071

75

87

8481

96

93

89

90

86

87

87

89

96

ANNEX TABLE 13B. - CALORIE AND PROTEIN CONTENT OE NAT IONAL AVERAGE FOOD SUPPLIES IN SELECTED COUNTRIES (continued)

Canada

United States

LATIN AMERICA

Argentina

Brazi I

Chile

Colombia

Ecuador

hlexico

Paraguay

Peru

Surinam

Uruguay

Venezuela

FAR EAST

Ceylon

China l Taiwan

India

japan

Pakistan

Phflippines

Country Period

191

Calories Total protein (grams) Animal protein (grams)

Per capo per dayNORTFI AMERICA

3 1103 1503 100

3 1803 1503 120

3 2403 0702 950

2 1802 5802 650

2 3702 5402 570

2 200

2 1702 230

2 3802 440

2 500

2 0702 060

1 810

2 9002 960

2 0302 0102 300

1 9902 0702 150

1 9802 2102 390

1 630

1 840

1 990

1 9002 1002 240

2 0101 9902 080

1 7901 7701 950

1948/49-1950/51

1954/55-1956/571960/61

1948-50

1954-56

1960

1948

1954-56

1959

1948-50

1954-561957

1948

1954-56

1957

1956-58

1951-56

1957-59

1954-56

1957-59::

1957-59

1952

1959

1959

1948-50

1954-56

1952-53

1954-56

1959

1952-53

1954-56

1960

1948-50

1954-56

1960

1949/50-1950/51

1954/55-1956/57

1960/61

1948-50

1954-56

1960

1949/50-1950/51

1954/55-1956/571959/60

1952/53

1956

1960

57

63

62

61

66

65

66

58

48

15

18

19

23

2626

23

13

18

17

20

26

10

13

14

61

62

19

21

27

6

8

9

8

13

14

5

6

6

9

15

18

7

11

13

15

93

97

94

91

94

92

110

97

91

55

65

67

73

77

77

48

52

56

64

68

68

58

52

41

95

96

53

54

64

41

44

47

43

53

57

44

49

53

49

63

68

48

46

48

44

44

49

ANNEX TABLE 13B. - CALORIE AND PROTEIN CONTENT OF NATIONAL AVERAGE FOOD SUPPLIES IN SELECTED COUNTRIES (concluded)

192

NEAR EAST

Per cam' per day

Israel 1950/51 2 680 88 34

1954/55-1956/57 2 870 88 31

1959/60 2 770 83 34

Syria 1957 2 330 78 17

Turkey 1948/49-1950/51 2 510 81 15

1954/55-1956/57 2 780 88 14

1959/60 2 830 91 16

United Arab Republic 1948/49-1950/51 2 370 70 12

1954/55-1956/57 2 570 75 13

1958/59 2 520 73 12

AFRICA

Libya 1959 2 180 53 10

Cyrenaica 1957 2 110 55 16

1958 2 090 55 18

Mauritius 1955-56 2 290 47 10

1960 2 350 45 11

Rhodesia and Nyasaland, Fed of:Southern Rhodesia 1951-53 2 450 75 16

1953 2 630 81 16

South Africa 1948-50 2 640 73 27

1954-56 2 590 74 31

1959/60 2 570 74 32

OCEANIA

Australia 1948/49-1950/51 3 220 97 66

1954/55-1956/57 3 230 91 59

1959/60 3 260 93 61

New Zealand 1948-50 3 360 100 67

1954-56 3 400 103 701960 3 490 110 75

Country Period Calories Total protein (grams) Animal protein (grams)

ANNEX TABLE 14A. - REGIONAL AND WORLD 1 INDICES OF VOLUME AND VALUE OF AGRICULTURAL IMPORTS, BY commoDrn GROUPS

193

Average1934-38

Average1948-52

1953 1954 1955 1956 1957 1958 1959 19601961

(Prelim-inary)

Indices, average 1952-53 - 00Import volume

WESTERN EUROPE

Food and feed 112 96 103 103 112 127 127 129 138 141 141Beverages and tobacco 110 90 104 112 120 122 131 132 132 145 149Raw materials 116 96 106 107 108 113 123 106 112 117 115411 agricultural products 113 95 104 106 112 122 126 123 129 134 135

NORTH AMERICA

rood and feed 89 92 99 94 96 99 109 125 124 122 1253everages and tobacco 67 99 102 86 95 103 101 98 111 108 114taw materials 94 110 92 77 87 82 74 65 84 66 66klb agricultural products 81 100 99 86 93 96 96 97 107 101 104

_ATIN AMERICA

:ood and feed 58 I 88 102 102. 104 99 117 123 118 118 993everages and tobacco 82 1 111 105 110 103 102 116 120 83 100 106taw materials 32 ! 94 95 130 120 114 124 119 112 129 132kll agricultural products 57 I 91 102 106 106 101 118 122 114 118 103

'AR EAST2

'ood and feed 99 82 98 95 98 114 126 124 119 139 1303everages and tobacco 91 91 97 103 119 137 132 121 127 141 179taw mat=irials 121 75 102 103 101 129 133 117 144 177 197\II agricultural products 106 80 99 98 99 120 128 122 127 151 153

NEAR EAST

'ood and feed 44 89 98 90 118 150 165 169 204 231 2133everages and tobacco 69 100 104 102 117 108 118 119 129 122 125taw materials 34 80 104 143 106 107 127 143 164 161 183111 agricultural products

kERICA

ood and feed

50

72

91

85

100

104

96

108

117

121

137 151

134 143

155

135

183

167

199

180

189

188

3everages and tobacco 61 87 103 108 114 132 119 115 112 123 126

taw materials 33 88 110 139 139 136 155 151 141 179 198

MI agricultural products 66 85 104 110 120 133 137 130 150 164 171

3CEANIA

'tied and feed 58 89 96 106 114 124 131 138 127 127 132

3everages and tobacco 72 96 107 115 120 115 125 125 12.5 131 131

1,aw materials 68 116 111 153 157 136 133 154 138 137 91

411 agricultural products 66 95 104 122 128 123 129 138 129 131 120

WORLD'

Food and feed 100 92 102 100 108 120 126 129 135 141 138

3everages and tobacco 87 94 103 100 109 113 117 116 121 126 132

law materials 110 96 103 102 103 110 115 101 112 118 120

'dl agricultural products 100 94 102 101 107 116 121 118 126 132 132

ANNEX TABLE 14A. - REGIONAL, AND WORLD INDICES OF VOLUME AND VALUE OF AGRICULTURAL IMPORTSBY COMMODITY GROUPS (concluded)

' Excluding U.S.S.R., eastern Europe, and Mainland China. - 2 Excluding Mainland China.

194

Average1934-38

Average1948-52

1953 1954 1955 1956 1957 1958 1959 1960

1961

(Prelim -inary)

Indices, average 1952-53 = 100

Import value

WESTERN EUROPE

5ood and feed 44 98 99 95 104 121 122 114 121 124 121

Beverages and tobacco 40 82 105 134 130 125 138 144 128 135 133Raw materials 38 99 98 96 100 99 110 82 81 93 87411 agricultural products 42 96 100 102 107 115 121 109 110 117 113

NORTH AMERICA

"ood and feed 34 n 101 95 92 96 107 126 129 123 121

Beverages and tobacco 13 79 103 110 99 101 97 86 84 78 76Raw materials 34 111 79 62 86 78 69 51 72 64 54411 agricultural products 25 91 96 93 94 94 93 89 94 88 84

LATIN AMERICA

Food and feed 18 87 100 94 93 83 99 99 95 92 77Beverages and tobacco 20 83 108 140 105 95 112 118 85 78 77Raw materials 17 99 84 111 122 106 112 98 97 123 111All agricultural products 18 88 99 100 97 87 102 101 94 94 81

FAR EAST '

Food and feed 23 79 96 83 80 91 107 98 92 104 101Beverages and tobacco 37 78 97 104 115 111 105 107 110 104 124Raw materials 38 84 91 95 96 115 117 92 102 135 150All agricultural products 28 81 95 87 86 99 110 96 96 114 117

NEAR EAST

Food and -feed 15 89 92 71 88 110 130 116 133 146 140Beverages and tobacco 23 99 103 129 149 117 133 124 127 121 109Raw materials 10 83 98 139 106 102 125 121 135 156 160All agricultural products 16 91 94 88 102 111 130 118 132 141 134

AFRICA

Food and feed 22 84 101 100 106 118 123 114 131 139 142Beverages and tobacco 22 81 105 115 112 119 115 120 100 102 96Raw materials 13 95 94 111 141 123 136 104 108 152 147

All agricultural products 22 84 101 104 109 118 122 115 122 131 132

OCEANIA

Food and feed 20 90 95 98 102 111 121 120 109 107 111Beverages and tobacco 31 97 105 139 148 118 131 135 128 112 109Raw materials 24 130 94 118 149 128 116 117 112 129 69All agricultural products ...... 26 103 99 120 133 118 124 125 117 114 99

WOR_LD1

Food and feed 35 92 99 92 97 109 116 111 116 119 116Beverages and tobacco 26 81 104 122 115 113 117 115 106 105 103Raw materials 36 99 93 90 97 98 103 78 84 95 91All agricultural products 34 92 98 98 101 107 113 103 105 110 107

ANNEX TABLE 14B. - REGIONAL AND WORLD INDICES OF VOLUME AND VALUE OF AGRICULTURAL EXPORTS, BY COMMODITY GROUPS

E

E

E

E

195

Average1934-38

Average1948-52

1953 1954 1955 1956 1957 1958 1959 1960

1961

(Prelim-inary)

ixport volume

vVESTERN EUROPE

c,od and feed 90 79 104 119

Indices,

130

average 1952-53

124 142

-- 100

142 146 160 171leverages and tobacco 79 71 107 107 113 129 132 159 114 130 159kaw materials 183 86 109 103 128 149 138 134 175 159 171MI agricultural products 95 79 105 117 128 126 141 143 145 158 170

N(ORTH AMERICA

'ood and feed 33 94 93 77 90 125 119 121 135 146 163leverages and tobacco 93 100 111 100 120 111 110 105 104 110 111taw materials 158 131 83 130 79 139 211 138 113 222 187\11 agricultural products 61 102 92 89 90 126 136 123 128 158 164

-ATM AmERICA

'ood and feed 128 108 112 116 118 127 137 146 140 154 149leverages and tobacco 87 98 104 85 97 105 98 97 113 114 111taw materials 108 90 120 124 118 126 94 111 134 116 1341/411 agricultural products 105 100 109 103 108 117 111 117 126 128 129

-7AR EAST 2

'ood and feed 249 96 98 105 122 123 128 113 119 134 138leverages and tobacco 109 92 105 116 99 123 122 128 118 119 134taw materials 113 95 1C0 96 111 102 98 98 107 96 1031/411 agricultural products 159 95 100 102 113 113 112 108 113 113 120

"TEAR EAST

'ood and feed 85 81 111 140 101 124 127 127 106 131 115

leverages and tobacco 53 95 108 103 96 99 140 95 102 92 121

taw matcrials 87 87 116 95 107 96 102 99 142 131 119

kli agricultural products.. 83 86 114 108 104 104 113 106 128 126 118

51/4FRICA

'ood and feed 84 90 105 122 122 128 126 142 133 125 132

leverages and tobacco 74 92 103 109 126 133 141 128 146 160 166

taw materials 69 87 101 105 111 116 112 116 131 125 129

\ II agricultural products 76 90 103 113 121 128 130 130 138 141 146

)CEANIA

'ood and feed 86 95 106 95 106 115 108 98 121 116 146

leverages and tobacco 127 86 113 104 115 130 148 141 162 214 256

taw materials 72 99 100 92 105 106 118 108 128 125 129

k II agricultural products 79 97 103 94 105 110 113 103 125 121 138

WORLD i

rood and leed 97 93 102 102 111 124 127 128 134 143 154

leverages and tobacco 86 95 104 97 107 116 115 112 121 126 130

law materials 106 98 103 105 106 114 120 110 124 130 130

1/411 agricultural products 97 95 103 102 109 119 122 119 128 136 142

ANNEX TABLE 14B. - REGIONAL ANO WORLD1 INDICES OF VOLUME AND VALUE OF AGRICULTURAL EXPORTS,BY COMMODI TY GROUPS (concluded)

Average1934-38

Average1948-52

1953

Indices, average 1952-53 100

gxport value

WESTERN EUROPE

1954

196

1955 1956

Excluding the U.S.S.R., eastern Europe and Mainland China. - Excluding Mainland China.

1957 1958 1959 19601961

(Prelim-inary)

Food and feed 38 82 101 111 118 118 135 128 131 146 149Beverages and tobacco 51 83 104 102 117 123 140 162 122 137 178Raw materials 59 92 110 100 119 137 141 105 130 128 133All agricultural products 41 85 102 109 118 120 136 130 130 144 151

NORTH AMERICA

Food and feed 15 98 91 72 80 109 105 103 110 117 135Beverages and tobacco 45 87 114 104 123 113 122 120 120 130 134Raw materials 47 128 76 118 74 113 161 100 72 145 130All agricultural products 24 102 90 84 82 110 117 104 103 124 134

LATIN AMERICA

Food and feed 37 112 108 105 106 109 130 125 119 128 121Beverages and tobacco 14 75 105 110 97 102 93 84 80 81 75Raw materials 34 98 112. 119 109 109 84 84 89 88 99All agricultural products 26 92 108 110 102 106 105 98 95 99 95

FAR EAST 2

Food and feed 59 93 102 96 95 96 102 93 97 101 102Beverages and tobacco 46 98 108 149 129 139 135 141 128 127 119Raw materials 40 109 84 79 121 104 99 85 114 115 98All agricultural products 47 102 94 96 114 107 106 97 111 112 103

NEAR EAST

Food and feed 33 80 103 123 89 118 118 111 98 113 96Beverages and tobacco 30 93 113 121 120 130 191 129 120 93 108Raw materials 29 104 99 95 100 96 106 90 105 112 99All agricultural products 30 97 101 105 100 105 118 99 105 111 99

AFRICA

Food and feed 28 85 103 115 110 119 118 123 116 111 116Beverages and tobacco 20 84 102 133 124 118 126 141 131 131 121Raw materials 20 90 92 89 93 97 95 83 93 99 95All agricultural products 2.3 86 100 116 112 114 116 121 117 116 112

OCEANIA

Food and feed 38 91 108 94 102 107 102 96 125 115 136Beverages and tobacco 40 81 112 139 124 115 131 164 162 177 184Raw materials 22 97 107 92 94 96 122 79 91 94 95All agricultural products 29 95 107 93 97 101 113 87 107 104 114

WORLD

Food and feed 32 94 100 96 99 110 117 112 116 123 129Beverages and tobacco 24 81 106 119 111 113 113 112 103 104 102Raw materials 34 105 95 96 102 103 112 87 98 110 103All agricultural products 31 94 100 101 103 109 114 105 108 115 116

All

agri

cultu

ral p

rodu

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Food

and

fee

dC

erea

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e oi

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Dai

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Whe

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App

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Cop

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Palm

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Palm

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Cat

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per

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Mut

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Can

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195

2-53

- 1

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102.

797

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1.5

98.5

93.0

101.

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101.

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102.

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1.4

98.6

95.5

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87.6

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0.2

139.

811

6.1

96.8

106.

111

3.1

112

110

3.9

92.9

86.9

85.9

81.7

77.6

75.4

76.6

25.8

93.2

105.

464

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.977

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1.7

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2.2

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5.1

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3.5

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7.7

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5.5

120.

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0.3

101.

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3.1

38.3

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4.0

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97.4

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95.1

95.4

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66.3

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8.4

78.6

98.6

101.

311

2.8

103.

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0.6

97.5

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6.8

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1.6

140.

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6.4

30.6

95.0

100.

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5.0

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0.6

97.2

99.9

99.9

100.

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2.8

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6.0

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2.9

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4.8

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4.9

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5.2

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5.7

260.

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2.1

226.

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0.6

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1.6

207.

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240.

627

4.5

280.

232

7.2

316.

826

5.1

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45.4

176.

625

2.1

170.

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5.4

219.

114

4.3

191.

417

2.6

149.

614

2.5

139.

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7.7

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317

3.8

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9.9

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8.8

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3.1

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2.0

136.

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1.6

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9.4

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4.5

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4.4

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3.3

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8.5

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4.4

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7.4

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1.4

517.

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3.9

83.9

317.

441

3.4

348.

333

3.2

394.

225

8.9

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6.7

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2.9

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7.8

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3.8

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8.4

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5.9

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6.5

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3.3

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6.7

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8.4

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3.6

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4.9

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4.5

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9.2

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5.4

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5.9

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8.6

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7.4

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372.

835

6.7

401.

936

3.1

1961

1934

-38

1947

1948

1949

1950

1951

I19

5215

5319

54j

1955

1956

1957

J19

5819

5919

60(P

relim

-in

ary)

94.2

91.7

93.7

87.5

84.7

85.3

81.4

89.0

89.4

91.3

87.4

87.4

85.8

83.6

79.4

76.3

75.2

74.0

72.7

71.6

71.7

86.8

90.8

90.4

90.1

97.7

92.6

86.1

101.

910

1.2

100.

610

4.3

105.

810

9.1

106.

595

.496

.790

.880

.691

.990

.484

.610

4.6

97.7

98.0

98.8

86.8

83.5

79.0

95.5

91.0

94.7

78.7

78.2

85.9

79.5

34.0

88.0

98.8

89.4

92.7

116.

737

.010

5.2

116.

510

0.8

89.8

101.

733

.010

6.9

124.

110

0.2

84.6

92.0

29.2

101.

412

7.1

106.

395

.112

3.2

41.5

70.2

82.6

86.6

81.1

93.9

43.5

95.9

115.

110

8.5

83.7

92.9

28.0

72.5

75.4

72.3

88.8

98.6

33.5

69.6

86.0

82.5

100.

815

7.3

Pota

toes

Oils

eed

cake

and

mea

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Coc

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Lin

seed

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seed

oil

Cot

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grea

sy)

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(nat

ural

)

182.

311

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886

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3

261.

263

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7

AN

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63.3

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01

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1

217.

1

650.

530

6.9

244.

472

3.6

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0

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370

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1 20

0.5

241.

11

114.

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8.7

561.

2

856.

432

7.6

299.

31

027.

841

4.4

580.

546

1.4

1 11

2.3

206.

11

118.

5

797.

630

1.1

291.

81

164.

134

2.2

47.9

46.2

62.2

58.2

959.

255

8.0

986.

216

4.8

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6.7

837.

724

3.6

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41

527.

566

2.8

U.S

. $ p

er m

etri

c to

53.9

59.6

57.6

51.7

74.1

75.5

72.6

71.9

1 07

5.0

711.

21

043.

118

0.8

1 12

6.3

1 10

4.4

688.

294

7.6

171.

41

163.

8

166.

817

0.4

390.

339

7.5

1 16

9.9

327.

642

3.5

2 58

9.8

1 09

0.1

1 00

2.5

250.

237

4.6

141

3.1

670.

9

114

1.3

1 40

1.0

660.

51

070.

2!

9

1 32

7.3

1968

5.'

147.

31

228.

1,

1 22

4.7

46.9

59.7

73.3

67.7

107

5.7

818.

01

413.

614

3.0

1 26

7.4

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458

0.8

1 25

5.0

155.

41

227.

6

918.

2i

749.

684

4.6

738.

81

208.

51

194.

221

6.1

i17

4.3

1 29

2.3

1 29

0.9

123.

913

0.4

250.

7i

212.

1

680.

559

3.1

195.

217

7.6

139.

917

3.5

133.

131

085.

051

9.3

661.

8

129.

011

2.7

130.

314

3.5

231.

1i

166.

920

5.4

313.

3

771.

5!

828.

280

4.9

739.

917

5.9

118

5.1

189.

418

4.0

204.

7i

176.

715

7.3

158.

91

593.

41

1 54

9.2

1 35

7.3

1 37

9.6

484.

01

450.

170

1.8

634.

0

52.2

59.7

57.6

61.2

61.8

54.7

67.7

67.8

1961

1934

-38

1947

1948

1949

1950

1951

1952

1953

1954

1955

1956

1957

1958

1959

1960

(Pre

lim-

inar

y)

721.

759

3.5

1 21

4.4

178.

71

294.

9

128.

924

6.8

630.

422

3.7

213.

31

166.

074

5.1

53.4

66.4

680.

748

3.0

1 07

2.3

200.

71

280.

7

124.

524

8.4

635.

126

6.1

197.

91

140.

553

9.9

1 02

1.7

563.

01

228.

316

9.8

1 34

2.3

115.

524

5.8

741.

720

9.5

141.

21

600.

360

3.5

31.8

23.6

180.

014

8.9

370.

631

8.3

TIPOGRAFIA SQUARCI - ROMA

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 specialstudies of problems of longer-term interest. Special chapters in earlier issueshave 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 some institutional factors affecting agriculture

Food and agricultural developments in Africa south of the Sahara

The growth of forest industries and their impact 011 the world's forests

Agricultural incomes and levels of livir in countries at different stages ofeconomic development

Some general problems of agricultural development in less developed countriesin the light of postwar experience

Programing fcr agricultural development

Land reform and institutional change

Agricultural extension, education and research in Africa, Asia and Latin America

Editorial Sudamericana, S.A., Alsina 500, Buenos Aires.R. W. Barclay, 90 Queen Street, Melbourne, C. 1., Victoria.Wilhelm Frick Buchhandlung, Graben 27, Vienna 1.Agence et Messageries de la Presse, 14-22 rue du Persil, Brussels.Librería y Editorial " Juventud," Plaza Murillo 519, La Paz.(Wholesale) Orient Longmans Private Ltd., 17 Chittaranjan Avenue, Calcutta 13, IndiaQueen's Printer, Ottawa.M. D. Gunasena and Co. Ltd., 217 Norris Road, Colombo 11.

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Street, Athens.Guatemala Sociedad Económico Financiera, Edificio Briz, Despacho 207, 6a Av. 14-33, Zona 1, Guatemala.Haiti Max Bouchereau, Librairie " A la Caravan°, " B. P. 111B, Port-au-Prince.Hong Kong Swindon Book Co., 26 Nathan Road, Kowloon.

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and Crown Edinburgh 2; 35 Smalibrook Ringway, Birmingham 5; 50 Fairfax Street Bristol 1; 39 KingColonies Street, Manchester 2; 109 St. Mary Street, Cardiff; 80 Chichester Street, Belfast.

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FAO publications are priced in U.S. dollars and pounds sterling. Payment to FAO sales agents maybe made in local currencies.

: $2,00 or 10s.

8.62,E/115600

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