Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries

As world prices for many agricultural products rise and stabilize and are passed through to producers, domestic production levels in developing country Members, including the least-developed and net food-importing countries, would be expected to increase.

The Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed Net Food-Importing Developing Country Members acknowledges the possibility that net food-importing developing country Members, and least-developed countries, could experience higher prices and more difficult terms for imports of basic foodstuffs. This could create short-term problems for them in financing normal levels of commercial imports.

The Decision provides for appropriate mechanisms to rectify this possible situation including potential access to the resources of international financial institutions. It also establishes periodic review by the Ministerial Conference of the provision of the Decision.

Recognition of Interests

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The Decision establishes appropriate mechanisms to ensure that the reform does not adversely affect the availability of food aid at a level which is sufficient to continue to provide assistance in meeting especially the food needs of least-developed and net food-importing developing country Members.

It states that:

4. a periodical review of the level of food aid established by the Committee on Food Aid under the Food Aid Convention will be held, and negotiations will be initiated in the appropriate forum to establish a level of food aid commitments sufficient to meet the legitimate needs of developing country Members during the reform programme; and

5. guidelines will be adopted that ensure that an increasing proportion of basic foodstuffs is provided to least-developed and net food-importing developing country Members in the form of a grant, or on appropriate concessional terms in line with Article IV of the Food Aid Convention.

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Ministers agree to ensure that any agreement relating to agricultural export credits makes appropriate provision for differential treatment in favour of least-developed and net food-importing developing country Members.

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Members experiencing short-term difficulties in financing normal levels of commercial imports may be eligible to draw on the resources of international financial institutions under existing facilities, or such facilities as may be established, in the context of adjustment programmes, in order to address such financing difficulties. This refers mainly to loans from the International Monetary Fund and the World Bank.

Technical Assistance

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Full consideration will be given in the context of Members' aid programmes to requests for the provision of technical and financial assistance to least-developed and net food-importing developing country Members to improve their agricultural productivity and infrastructure.