THE 1970s

Food and energy crises and a less stable development environment
the World Food Conference,
Famines in Africa
the World Conference on Agrarian Reform and Rural Development
Environmental concerns, Trade issues
Fisheries and the Law of the Sea

The early 1970s marked a turning point in the pattern that had characterized the postwar environment for development. A series of shocks introduced elements of instability to an international order under which steady economic growth, relatively predictable markets and prices and large international food stocks were taken for granted in the case of many developing countries. The new unstable environment resulted from the de facto devaluation of the US dollar; a sharp increase in the price of petroleum; and, in the area of agriculture, large grain production shortfalls and soaring prices of food, agricultural inputs and petroleum-based energy. This radical shift in the economic order brought large income gains to some countries (mainly petroleum exporters) and created export market opportunities for others but damaged the development prospects of many less developed countries.

Soaring petroleum prices had an adverse effect on most developing countries and the agricultural sector, although they brought large income gains to petroleum-exporting developing countries.

In comparison with the previous ten years, the 1970s were marked by a series of relapses in world agriculture. Global food production declined in 1972 and again in 1974, reflecting in both cases unfavourable weather conditions in major food-producing areas. In 1972, world production of cereals was reduced by 41 million tonnes, shared equally between developed and developing regions, and by 30 million tonnes in 1974. These declines resulted in a sharp depletion of stocks, especially in the traditional cereal-exporting countries: world stocks of wheat were drawn down from 50 million tonnes in 1971 to 27 million tonnes in 1973, the lowest level for 20 years. Rice was also in short supply owing to falls in production in the major rice-consuming countries of Asia. Consumer prices of food items rose in all regions of the world, causing hardship for the poor and reducing the level of nutrition, particularly of vulnerable population groups. Hardship was more severe in sub-Saharan Africa, where per caput food production had remained stagnant during the first half of the 1970s.

Although world food production recovered in 1973 (cereal ouput increased by 100 million tonnes), the recovery was insufficient to prevent the depletion of cereal stocks in the main exporting countries, especially in North America, nor could it halt the steady rise in the prices of food. World agriculture was also afflicted by the energy crisis, inflation, monetary instability, the slowing down of economic growth in the industrialized countries and a general atmosphere of uncertainty.

This global relapse of agricultural production coincided with grave food shortage situations at regional and local levels in the first half of the 1970s. A dramatic food crisis erupted in Africa following two catastrophic droughts. One was the prolonged drought in the Sahel countries (Burkina Faso, Chad, Mali, Mauritania, the Niger and Senegal), which reached its peak in 1973. In that year, net food production per caput in the Sahel countries was one third less than the average for 1961-65 and some 100 000 people died as a result of the famine, which was also instrumental in the spread of epidemic diseases, especially in the relief camps. To save lives, a massive international emergency relief operation was started in early 1973. The creation of the Permanent Interstate Committee for Drought Control in the Sahel (CILSS) was the direct consequence of this prolonged drought.

The other drought caused the Ethiopian famine which lasted from 1972 to 1974. International aid arrived too late and between 50 000 and 200 000 lives were lost in a population of 27 million. The areas worst affected were the provinces of Wollo, Tigrai and Harerghe. The people who suffered most were the Afar community of nomadic pastoralists.

The Ethiopian famine and its causes and consequences have been extensively discussed within and outside FAO but contemporary issues of The State of Food and Agriculture were surprisingly silent about it. As for its causes, several years later Amartya Sen wrote: "The Ethiopian famine took place with no abnormal reduction of food output, and consumption of food per head in the height of the famine in 1973 was fairly normal for Ethiopia as a whole. While the food output in Wollo was substantially reduced in 1973, the inability of Wollo to command food from outside was the result of the low purchasing power in that province. A remarkable feature of the Wollo famine is that food prices in general rose very little, and people were dying of starvation even when food was selling at prices not very different from pre-drought levels. The phenomenon can be understood in terms of extensive entitlement failures of various sections of the Wollo population."⁴

The early part of the decade was marked by two other events with long-lasting effects on the world economy, including agricultural production and trade. The first was the decision by the United States Government in August 1971 to suspend the fixed-gold convertibility of the US dollar, which meant a devaluation of the US dollar vis-à-vis other internationally traded currencies. For the developing countries, the currency realignments had major negative repercussions because of the vulnerability of their economies to international price fluctuations.

The second event, which caused worldwide panic, was the sharp rise in the price of crude petroleum, decided in 1973 by the Organization of the Petroleum Exporting Countries (OPEC) in response to the devaluation of the US dollar (since petroleum prices are based on the dollar). The world export price index of crude petroleum rose from 196 in 1973 (1970 = 100) to 641 in 1974. For agriculture, this implied a sudden increase in the cost of petroleum-based inputs such as fertilizers and pesticides as well as fuel and power, which are of crucial importance for irrigation and agricultural transport, marketing and processing. Fertilizer prices tripled and even quadrupled in the course of one year and, in 1974, the world consumption of fertilizer dropped by nearly 4 million tonnes, resulting in an estimated shortfall of
1 million tonnes of plant nutrients in relation to projected demand. The UN, at its Sixth Special Session (9 April to 2 May 1974) identified 42 developing countries as being most seriously affected (MSA) by the sharp rise in the prices of essential imports (food, petroleum, fertilizers). It established a Special Fund to assist these countries in mitigating their economic hardships. FAO established the International Fertilizer Supply Scheme, which provided 73 000 tonnes of fertilizers to MSA countries in the 1974/75 crop year.

The subject of "energy and agriculture" was covered in a special chapter of The State of Food and Agriculture 1976,which concluded that the rise in prices of fuel and fertilizers was causing sharp declines in the profitability of using energy-intensive inputs, particularly in horticulture and livestock production and capture and culture fisheries. It stated that there was much room for the economic use of domestic sources of energy for agriculture, raising efficiency in the use of imported inputs, recycling of plant and animal residues and being selective in the use of farm machinery.

Box 14 AGRICULTURAL TRADE - CHANGING TRENDS AND PATTERNS Amid profound changes in the structure, direction and composition of world agricultural trade, a number of paradoxical features have emerged during the past decades. While losing relative importance in total trade, agricultural exports have remained a key element in the economies of many countries. Nevertheless, those economies that depend less on agricultural trade have generally made the largest gains in agricultural market share, while economies that are more firmly based on agriculture have not only lost market share but, in many cases, have also seen their agricultural trade balances deteriorate in the face of persistently high or even increasing economic dependence on agricultural exports as well as dependence on imports for food security. Other general tendencies have been a decline in the real international prices of agricultural products and the growing importance of value-added products compared with primary products in total agricultural trade. Declining importance of agriculture in world trade Agricultural trade has expanded significantly faster than agricultural production over the past decades, underlying the growing interdependence and integration of the world's economies. Despite its relative dynamism, however, trade in agricultural products has tended to lag behind trade in other sectors, particularly manufactures. An important factor behind this process has been the decline in agricultural prices relative to manufactures. On a global basis, agricultural exports now account for less than 10 percent of merchandise exports, compared with about 25 percent in the early 1960s (Figure A). The tendency for agricultural trade to lose importance in external trade has been common to all regions, but in the developing country regions the process was particularly pronounced in the 1960s and early 1970s. However, in Latin America and the Caribbean and in sub-Saharan Africa, agricultural exports still finance about one fifth of the total import bill. Economic dependence on agricultural exports has remained very high in many individual countries. In 1998, 12 out of 48 countries in sub-Saharan Africa depended on agriculture for half or more of their total export earnings. In Latin America and the Caribbean, 10 out of 37 countries were in the same situation (four in the Caribbean). Extreme cases, where 70 percent or more of export earnings were agriculture-based, included Belize and Paraguay in Latin America, and Burundi, C?te d'Ivoire, Ethiopia, Kenya, Guinea-Bissau, Malawi, Uganda and the Sudan in Africa. Contracting developing country share in agricultural markets The regional distribution of world total and agricultural trade has undergone significant changes. While the developing countries gained market share for total merchandise exports between the early 1960s and recent years (from about 20 to more than 25 percent of the world total), their share for total agricultural exports has declined from more than 40 to about 27 percent (Figure B). All the developing country regions, with the exception of Asia and the Pacific, progressively lost world market share for their exports. That Asia and the Pacific has actually increased its share in world agricultural exports since the mid-1970s is all the more remarkable given that this is also the region that has been most successful in diversifying its export base away from agriculture. In contrast, despite the persistently strong agricultural component of its external trade, sub-Saharan Africa's presence in world agricultural markets has tended to lose significance since the early 1970s. Latin America and the Caribbean experienced pronounced market losses after the second half of the 1980s, a period of slow growth in the volume of agricultural exports and of strong decline in export prices (Figure C). Falling real agricultural prices Throughout the 1950s and 1960s international prices of food and non-food products remained relatively stable and only lagged slightly behind those of manufactured goods. The 1970s marked a new period of greater price volatility and divergence between agricultural and manufactured goods prices, with the latter tending to rise significantly faster than the former (Figure D). As a result, the net barter terms of trade (or "real" prices) of agricultural exports deteriorated markedly (Figure E). The decline in real agricultural prices was more pronounced for the developing than for the developed countries, reflecting the commodity composition of their exports, with those of temperate products typically exported by the developed countries showing a relatively firmer behaviour than those of tropical products overall. The volumes of exports, by contrast, showed a steady upward trend throughout much of the period. Nevertheless, because of the price increase differential, the current value of agricultural exports rose on the whole much faster in the developed countries than in the developing ones. Shifting from primary to processed exports An issue of considerable importance is the extent to which the developing countries have been able to shift from exports of non-processed primary commodities towards value-added products. The different developing country regions recorded varying degrees of success on this account. In both Asia and the Pacific and Latin America and the Caribbean the share of processed products in total agricultural exports rose from around 10 percent in the early 1960s to about one third of the total in recent years. This share has risen to considerably higher levels in the more industrialized countries in these regions. Thus, in Argentina and Brazil the comparable figure is about 50 percent, while in Malaysia it is more than 70 percent. In sub-Saharan Africa, on the other hand, the share of processed products in agricultural exports has remained at about 15 percent throughout the past three decades. Behind this stagnating pattern some countries showed pronounced temporal variations. For most countries in the region, however, the general picture is one of a high and undiminished dependence on a limited range of primary product exports. In the Near East and North Africa, the high share of value-added products in the total generally reflects the strong weight of a few processed products in a relatively small agricultural export base. Processed shellfish and other sea products, as well as canned and preserved fruits and vegetables, accounted for much of the total.

The world food crisis of the early 1970s and the difficulties created by the sharp rise in the cost of petroleum prices led to the convening of the World Food Conference in November 1974 under the joint auspices of FAO and the UN.The aims
of the Conference were to secure international consensus on policies and programmes to increase food production and productivity, especially in developing countries; to improve the consumption and distribution of food; to put in place a more effective system of world food security, including an early warning system, effective stockholding policies and emergency food relief; and to bring about a more orderly system of agricultural trade and adjustment.

The 1974 World Food Conference created institutions for agricultural development and the monitoring of agricultural and food supplies.

The building and maintenance of adequate levels of food stocks at national and/or regional and international levels were a central theme of the Conference. These stocks were expected to provide food security guarantees against local, national or regional emergencies and also to cover international relief needs. The State of Food and Agriculture reflected this concern by providing regular accounts of developments in national stock policies. Thus, the perception of food security in the first half of the 1970s was still firmly supply-side oriented. Nevertheless, the World Food Conference also stressed the need for lowering the population growth rate and reducing rural unemployment and underemployment by diversifying agriculture and expanding on-farm and off-farm income-generating activities. Of its institutional initiatives (see Box 15), three remain today - the International Fund for Agricultural Development (IFAD), the Global Information and Early Warning System (GIEWS) and the Committee on World Food Security (CFS).

The disproportionate emphasis on industrialization resulting from the policy of import substitution, and the consequential migration of rural people to urban centres, brought to the surface the need for greater attention to rural development.

A number of studies carried out by the International Labour Organisation (ILO) stressed that economic growth alone was not enough to ensure balanced and sustained development. The distribution of wealth and political power also had to be taken into account. In this respect, access to land and the reform of tenancy laws were given special attention. The United Nations Second Development Decade (1970-1980) also underlined the need for treating rural development as an integral part of the development strategy in combating poverty and narrowing the income gap between rural and urban families. The Second Development Decade had further stressed the importance of establishing national employment objectives and the need to absorb an increasing proportion of the national working population in modern types of non-agricultural activity. The State of Food and Agriculture 1973 conducted a survey of employment in agriculture covering the period from 1950 to 1970, with projections for 1980, 1990 and 2000. The survey revealed that, in the developed countries as a group, the share of agriculture in the total economically active population declined from 38 percent in 1950 to 21 percent in 1970 and was projected to drop to 5 or 6 percent by 2000 (a fairly accurate projection). The corresponding ratios for the developing countries as a group were 79, 66 and 43 percent, respectively (currently it is around 55 percent and so the flow of labour out of agriculture has been slower than expected).

An earlier contribution of The State of Food and Agriculture to the development debate was a special chapter in 1972, entitled Education and training for development. This provided a bird's-eye view of rural education in the developing regions and outlined the strategy for human resources planning, the process of priority setting in rural education and training and the identification of special areas of concern such as the training of trainers, extension workers, capacity building for the young, teaching aids and communication media.

The deepening appreciation of these and other social issues concerning rural development resulted in the 1979 World Conference on Agrarian Reform and Rural Development (WCARRD), which was a landmark in the search for ways of alleviating rural poverty. WCARRD, which was sponsored by FAO, adopted a Declaration of Principles known as the "Peasants' Charter", involving 17 major areas and a Programme of Action that included national programmes of action in developing countries and international policies for agrarian reform and rural development. The latter covered the monitoring of agrarian reform and rural development; the analysis and dissemination of knowledge; the provision of technical assistance; and support for the mobilization of resources.

Growing concern for the environment was aroused by the publication of The limits to growth by the Club of Rome in 1971. The publication raised alarm about the deterioration in the status of the world resources in relation to population growth and mounting economic waste. The collapse of the Peruvian anchoveta fisheries in the early 1970s was a reminder of the fragility of what had been perceived to be a virtually inexhaustible resource.

The question of environmental deterioration and means of combating it was the subject of the United Nations Conference on the Human Environment, held in Stockholm from 5 to 16 June 1972. The Conference approved the Stockholm Declaration and a Plan of Action including 109 resolutions on the environmental aspects of all sectors of the economy, 51 of which related to natural resources management. The majority of the resolutions were specifically addressed to FAO and covered such diverse areas as rural development, environmental planning, soil management and fertility, pest control, recycling of agricultural waste, genetic resources, monitoring of forests and aquatic resources and the management of fisheries. The Stockholm Conference expedited the establishment of the United Nations Environment Programme (UNEP) in Nairobi in 1973. Yet its far-reaching recommendations were probably in advance of contemporary public thinking. It was to take another decade or more for the accumulation of evidence of profound environmental deterioration on a global scale - forest destruction, ozone depletion, increased greenhouse gases in the atmosphere, marine pollution, etc. - to raise public support for the initial remedial steps to be taken.

Concern for the environment had been high on FAO's agenda since its establishment. In a special chapter in 1971, The State of Food and Agriculture reviewed the effects of water pollution on living aquatic resources and fisheries. It identified the major characteristics of water pollution and traced its biological and ecological effects on fisheries. The chapter drew attention to the regional differences in aquatic pollution and proposed criteria and systems for monitoring this phenomenon as well as proposing legal and institutional measures required to reduce water pollution as part of the larger effort in pursuit of sustainable development.

As follow-up to the 1972 Stockholm Conference, The State of Food and Agriculture1977 included a special chapter on the state of natural resources and the human environment. The assessment covered soil, water, grazing land and forage resources, forests, wildlife, fisheries and genetic resources. It provided an analysis of the impact of agricultural intensification on the environment and the legislative aspects of avoiding natural resource degradation and environmental pollution. It attributed the major causes of pollution in the developed countries to the high level of industrialization and reliance on energy-intensive agricultural systems. On the other hand, the major environmental problem in the developing countries was not pollution but the degradation and depletion of natural resources. The chapter proposed a better and more coherent method of data collection; multidisciplinary research in assessing the impact on the productivity of natural resources of the application of different land use planning; adaptation of local knowledge for raising the efficiency of natural resource use; and developing the appropriate institutional and legal systems in the management of natural resources.

The pervading concern about the possible imbalance between the natural resource base and the demands placed on it from
a rising rate of population growth underlay the United Nations World Population Conference, held in August 1974 in Bucharest.

The Conference adopted the World Population Plan of Action, which paid special attention to the importance of increasing food production and productivity so that food could be made available at reasonable prices for the developing countries. FAO's contribution to the Bucharest Conference was contained in a special chapter (Population, food supply and agricultural development) in The State of Food and Agriculture1974. The chapter took stock of the trends in population growth and food supply for the period 1952-1972, noting possibilities for increasing food production. It stressed the dimension and causes of hunger and malnutrition and the factors affecting the long-term demand for food.

The third United Nations Conference on the Law of the Sea (UNCLOS III) took place in Geneva from 17 March to 9 May 1975 but ended without any definite agreement on the major issue of exploitation rights over the sea and seabed.Nevertheless, an increasing number of coastal states were extending their jurisdiction over fisheries beyond the 12 nautical mile limit, which had broadly prevailed for the previous 300 years. In 1979, the adoption of Exclusive Economic Zones (EEZs) by the FAO Conference added a new dimension to FAO's work in fisheries. As a result of the new legal regime of the oceans, fishery resources of coastal states were brought under their direct national jurisdiction in the form of EEZs.

Marine fisheries in the new era of national jurisdiction was covered in a special chapter in The State of Food and Agriculture 1980. The chapter reviewed the opportunities and challenges to coastal fisheries arising from the international community's acceptance of the EEZ-based jurisdiction. It explained the consequences of the changes in the Law of the Sea on fish catch of the coastal states, the effects of open access, problems of adjustment for coastal states, repercussions on countries with large distant-water fleets, the effects of EEZs on international trade in fish and the management of coastal fisheries under this new system.

The 1970s witnessed a vast expansion in international trade, spurred by the rise in the price of petroleum and the radical redistribution of national wealth that this entailed. Agricultural trade also increased, although the benefits were not shared by all countries. The less developed exporters of mainly tropical agricultural commodities suffered from severe declines in their income terms of trade as price inflation of their industrial imports and higher energy bills more than offset increases in the value of their mainly agricultural exports.

The Tokyo Round of multilateral trade negotiations (MTNs) under the General Agreement on Tariffs and Trade (GATT) was launched in 1973. Attempts to extend interventions in domestic agricultural markets into international trade through a series of international commodity agreements covering grains, oilseeds, dairy products and meat failed to materialize, and the Round, which concluded with only a modest agreement on agriculture, marked a turning point in the extent of government involvement in international agricultural markets - a trend that was to continue in the turbulent decade that followed.