INTRODUCTION

    The UNCTAD secretariat is currently implementing a project on diversification and commodity based development, financed by the United Nations development account. The project's objectives are: (i) to promote the horizontal, vertical and geographical diversification of production and trade structures; (ii) to improve governments capacities to formulate focused, effective and sequenced policies in this respect; (iii) to increase the competence of enterprises in adapting their business strategies and supplies to the Post-Uruguay Round trading framework; and (iv) to strengthen positive linkages between the commodity sector and the rest of the economy. The above referenced workshop is one of several regional and sub-regional workshops that are being organized under this project to address specific diversification and commodity-based development issues.

    More specifically, the objective of this workshop is to contribute to the diversification and development of the agricultural sector in the transition economies of Central Asia, with particular focus on food security and structured commodity finance. It will be structured around discussions and exchanges of views and experiences among participants, supported by presentations on national experiences and contributions from international experts. It is expected to contribute to capacity building for (i) assessing the potential of commodity production and foreign trade as well as their impact on food security and (ii) designing and implementing appropriate policies and measures by governments and adopting modern business practices by enterprises. The meeting is also expected to provide an opportunity for participants to establish contacts and improve their awareness of the availability of advice and assistance.

PROVISIONAL AGENDA

Working languages: English and Russian

Day 1: Market reforms, agricultural diversification and food security

Day 2: Food security and food trade

DOCUMENTS

BACKGROUND PAPER by Suresh Babu and Valerie Rhoe	65 Kb 181 Kb

SUMMARY OF DISCUSSIONS AND
RECOMMENDATIONS

The following summary has been prepared by the UNCTAD secretariat on the basis of the inputs prepared for and discussions that took place during the workshop. Its purpose is to assist participants at the workshop and the UNCTAD secretariat to identify future activities for implementation and co-operation.

The participants specified a number of critical success factor in agricultural diversification taking into account their impact on producers and exporters of commodities and, especially, on food security in the countries of the region.

I. General problems in agricultural diversification and food security

1. It was commonly agreed that in order to tackle the issues of food security and the diversification of agricultural output in Central Asia, it is necessary: to elaborate a regulatory framework of laws to promote development of the agrarian sector and boost commodity output; to settle the issues associated with soft loans to farmers, small-holders, and business people; to build combines and mini-plants, financed through State loans and foreign investment in order to process local raw materials in the regions; to pave the way for an upswing in the export potential of the agrarian sector, preferably processed goods - i.e. commodity output; to ensure State support for agricultural producers by providing seeds, fuel, lubricants and mineral fertilizers at reasonable prices which are accessible for small and medium producers.

2. The presentations made it plain that without State intervention there was no possibility of progress in agriculture almost anywhere. Developed Western countries such as the United States of America and the European Union, give agriculture very extensive State support and it is because of this support that they are self-sufficient in agricultural output. Their experience might also be useful for Central Asian countries, especially since some countries in the region are already members of the WTO and their markets are highly liberalized, i.e. unprotected, with very limited opportunities to assist the agricultural sector.

3. A discussion of problems and trends in the participating countries indicated that, very often these stem from a lack of coordination between Government actions and programs. It would therefore be very helpful to devise a system, if not to influence the processes of producing and trading agricultural output, then at least to articulate the problems and challenges clearly: for example, facilitating the transportation of goods across common borders, i.e. customs issues. As the entire civilized world is seeking to make borders transparent the region must set up a most-favoured-nation regime for inter-region foreign trade (similar to that in the European Economic Community).

4. To improve food security in the region, efforts must be made to enhance the potential of the following groups: farmers; processors of agricultural output (the food industry); consultancy firms (service); quality-control organizations; marketing sector enterprises (trading companies, the warehousing system, packaging, transport, etc.); the staff of State administrative bodies. These efforts could take the form of: teaching seminars and training; scientific research to make the case for agricultural diversification; development of private consultancies for marketing services; support for investment projects to establish and strengthen market channels.

5. There is an informational vacuum in the countries of the region as well as in the specific districts of individual countries which needs to be eliminated regarding:

(i) internationally accepted ways and means of increasing competitiveness of national agricultural production and trade, developing export marketing and securing domestic markets, both in terms in quality and quantity, and

(ii) positive experience in tackling the problems of food security and diversification of agricultural production in the developing countries and those in transition to a market economy.

II. Recommendations for follow-up

General follow-up

The participants of the workshop recommended in particular that:

- The regions/districts of individual countries should establish more close contacts with international organizations (such as UNDP, UNCTAD, FAO, OEC) dealing with issues of food security and agricultural diversification. To consider the opportunities how the inter-governmental work in the food sector could be intensified in the region with the participation of the UN organizations.

- The role of regional cooperation and regional arrangement should also be discussed at such workshops. Enhancement of awareness at the countries of a region on the role at regional and international organizations and arrangements will lead to further cooperation regionally or internationally and also will mobilize the capabilities in the individual countries to the benefit of all.
- The problems of food security and agricultural diversification should be also tackled "from inside", i. e. at the grassroots level.

- It is desirable that UNCTAD would advise the Governments of the counties of the region on results of the workshop. It is equally important to disseminate in the countries relevant UNCTAD knowledge, information and experience through workshop's country participants.

- It might also be possible to develop something similar to consulting assistance drawing on mutual experience, which could take the form of seminars or Web pages on the Internet transmitting information about potential markets or suggestions about specific market strategies.

Workshops and training

It was acknowledged that workshops of such an importance to the region should be organized more frequently with participation of 10-15 countries. It is desirable that such workshops be attended not only by government officials and academia, but also managers of big agricultural producing and processing companies. It is desirable to organize in the future:

- National workshops with the similar coverage of issues (every year in turn in other countries of the region). Another, less ambitious proposal was to organize another workshop with the similar topic either in Uzbekistan, Kyrgyzstan, or Mongolia or in the individual countries' regions (e.g. Kyzyl-Orda region in Kazakhstan) with the emphasis on local problems. In future workshops the field visits (e.g. to cooperatives or farms, or to an agricultural processing plant) should be organized.

- Expert consultations or training workshop for the whole Near East Region, or North Africa only, or Arab Gulf countries only, or CIS countries.

- A similar follow-up workshop in order to see to what extent the recommendations of the workshop have been applied in the process of the transformation of national economies in the region.

Major topics of interest for possible future workshops

1. With the support of international organizations in the Central Asian region to organize workshops and training programs on general international marketing (such as "Management of foreign trade operations" and "Basics of foreign trade") to enhance foreign trade skills and to develop the know-how to seek out clients and operate in international markets; To train a specific group of private sector participants (farmers/co-operatives/managers of the agricultural households) in meeting the international food quality standards of products that they are attempting to sell in the international markets in order to enhance product competitiveness . This will further require training of the trainers at the regional levels.

2. It would be interesting and helpful if more light could be shed on State support and export subsidies. As virtually all the countries of the region (except Kyrgyzstan) are in the process of preparation to the accession to the WTO. In this context, the issues of "reasonable subsidizing" of agriculture and receiving of most favorable terms of accession are crucial for national agricultural producers. There is a need to organize a workshop for countries of the region with emphasis on agriculture vis-à-vis WTO accession (with possible topic of Trade and Food Security: "Role of the Government in achieving Food Security under World Trade Organization's rules". Continuing where this workshop left off, another one could focus on the role of State policy in this area, with specific, apt, real-life examples from one of the countries attending.

3 Workshops on agricultural and food marketing for local private businesses, consultancies and banks to shape ideas on effective structures and organizational mechanisms in the food market and stimulate investment in the marketing sector (warehousing, processing, wholesale and retail trade).

4. Other topics of interest for future workshops include: agro-processing; new trends in world market and internal policies and institutional packages to deal with them; traditional agricultural commodity sectors in the sub-region.

Studies

To proceed with UNCTAD technical study on the possibilities of the creation of the regional futures exchanges (two or three - like grains, cotton, etc.) in the sub-region. Creation of warehouse receipts (WHR) system could be considered as a primary move to this target.

It may be useful to provide funds for selected studies to look into the profitability of various enterprises that the specific countries may have comparative advantage in. The funds could range from $5,000 - 10,000 based on the need for collecting data from the field.

III. Administrative matters/organization of the workshop

With reference to administrative matters the following recommendations were taken note of: given the importance of the topics discussed duration of the workshop should have been 3-5 days rather than 2 days; representatives of Government bodies/Ministries of Agriculture, as well as of local Agricultural Departments which are on the everyday touch with problems and issues of the sector should be invited to such type of workshops/training programs; there should have been not one presentation from each country but two or three, covering, respectively, production and procurement issues of food, food security, and diversification of agricultural production; terms of reference for presentations should be more specific and more recent data/statistics should be used by consultants in their presentations; the agenda/working program should be more flexible and should be eventually modified in accordance with wishes and opinions of participants; early translation of documents to the relevant languages will help the participants to go along with the discussions in better way; all documents in both working languages should be available to participants ahead of time.