A/HRC/10/5
page 12
their jurisdiction. Given the likelihood of increased volatility of food prices, particularly due to
climate change, States parties to the FAC could most effectively comply with this obligation by
financing insurance schemes - related, ideally, both to weather-related events and to other
shocks, internal or external.
22. The provision of assistance to LDCs and NFIDCs in order to allow them to improve their
agricultural productivity and infrastructure has been insufficient over the last two decades. As a
result of falling commodity prices making agriculture less profitable in developing countries and
of increasing competition from social sectors such as health or education, both the proportion of
official development assistance dedicated to agriculture and the proportion of national budgets
going to agriculture have declined significantly since the early 1980s.33 In sub-Saharan Africa,
bilateral agricultural aid fell by 60 per cent from US$ 1.3 billion to only US$ 524 million
between 1990 and 2001.34 While commitments have been made in various forums to reverse this
trend, it remains to be seen whether there will be sufficient political will to implement these
resolutions. It would be unacceptable for increased and more predictable provisions of food aid
to divert attention from the need to rebuild agriculture and enhance food security through the
improvement of local capacities to produce.
23. The Marrakesh Decision provides that appropriate provision should be made for
differential treatment of LDCs and NFIDCs in any agreement on agricultural export credits. The
most recent WTO draft texts underscore the ongoing nature of this commitment, which is
particularly important in light of the recent extreme international food price volatility. Those
texts also provide for substantially extended credit periods for commercial transactions involving
LDCs and NFIDCs.35 However, as explained in the following paragraph, the IMF has only
recently made any credit available to cope with high prices without a high level of policy
conditionality.
24. The Marrakesh Decision provides in paragraph 5 for the possibility for NFIDCs
experiencing balance-of-payment difficulties to draw on existing facilities, or such facilities as
may be established to address such difficulties. The main facility which has been considered to
satisfy this requirement is the IMF Compensatory Financing Facility (CFF), initially established
in 1963. The CFF was expanded in 1981 to cover excess cereal import costs, following requests
from the World Food Council and FAO, and in view of the high volatility of food prices in the
1970s. However, this facility has been of little use to NFIDCs. Access to CFF is restricted to
countries experiencing temporary balance-of-payments difficulties linked to factors largely
beyond the control of the authorities, such as a rise in cereal import costs. This is a condition
33
The World Bank, World Development Report 2008 - Agriculture for
Development, 19 October 2007, p. 7.
34
FAO-IFAD-WFP, Reducing Poverty and Hunger: The critical role of financing for food,
agriculture and rural development, paper prepared for the Monterrey Financing for
Development Conference, 18-22 March 2002.
35
See TN/AG/W/4/Rev.4 (6 December 2008), annex J (proposal to replace the current
article 10.2 of the Agreement on Agriculture).