values, but only with agreement of members with 85% of the voting power in the IMF, and with provision that individual countries may still opt not to establish par values.

The amended Articles abolish the official price of gold; eliminate requirements to use gold in transactions with the IMF; eliminate the Fund's authority to accept gold (unless agreed by an 85% majority vote); and provide authority for the future disposition of the IMF's remaining gold holdings (by 85% majority vote).

In addition, it was agreed in 1975 that the Fund utilize its present authority to replenish its currency holdings in order to begin promptly to dispose of onethird of its gold holdings. One-sixth, or 25 million ounces, will be sold at public auction, the profits over the official price to be used to finance a Trust Fund to provide balance-of-payments assistance to the poorest developing countries (see below). The other one-sixth will be distributed to member countries, in proportion to their quotas, at the official price.

IMF Resources

In 1975 the IMF moved in several areas to enhance its capacity to serve as the first line of official multilateral financing for its members.

In December 1975, the IMF Executive Directors issued a decision effecting a major liberalization of the IMF Compensatory Financing Facility (CFF). The CFF, first established in 1963, provides access to the Fund's resources to member countries suffering from balance of payments difficulties resulting from shortfalls in export earnings. The CFF is available to all members, but intended mainly to benefit developing countries and others relying on the export of primary products. Access provided through the CFF is in addition to that available through standard IMF drawing policy.

The new decision substantially increases maximum access to the facility in relation to quotas, relaxes restrictions on methods used to calculate export shortfalls, and establishes procedures that will allow prompt access to the facility. Such a liberalization was the main element of the U.S. proposal at the seventh special session of the UN General Assembly for a "development security facility" to help stabilize export earnings of developing countries.

In 1975 the IMF also moved toward the establishment of a temporary Trust Fund for the purpose of extending balance-of-payments assistance on concessional terms to the poorest developing countries. In addition to the

profits from the sale of 25 million ounces of the IMF's gold holdings, the Trust Fund resources might be supplemented by contributions from member countries. Α final endorsement of the Trust Fund (which had originally been proposed by the United States late in 1974) was to be given by the Interim Committee at its January 1976 meeting, and its establishment was expected to take place shortly thereafter.

The proposed quota increase, when it becomes effective, will provide a substantial augmentation both of IMF resources and member country access to its credit facilities.

Late in 1975 the Executive Directors were also considering expanding access to Fund resources through its normal credit policy. A decision on a substantial expansion of such access was to be taken at the Jamaica Interim Committee meeting. The expansion would be a temporary one, pending the implementation of the quota increase, and normal IMF terms and conditions would apply. Such an expansion had been proposed by the United States as an alternative to extension of the Oil Facility.

FOOD AND AGRICULTURE ORGANIZATION

The FAO Conference held its 18th biennial session in Rome, November 8-27, 1975. The Conference elected Dr. Edouard Saouma of Lebanon as Director General for a 6-year term of office and admitted five new states, bringing the total membership to 136. The new members are Bahamas, Cape Verde, Grenada, Papua New Guinea, and Surinam.

The Conference approved a program budget of $167 million for the 1976-77 biennium, with emphasis on increased agricultural production in developing countries. The U.S. assessment is $41,595,000 or 25% of the regular assessed budget.

World Food Security

The world food situation during 1975 was heavily influenced by shortfalls in the Soviet Union's production and that country's need to import large amounts of grains from the United States and other countries. As a result, for another year carryover stocks of grains remained very low and the issue of world food security was again uppermost in the minds of many. The United States played an important role in technical working parties to formulate an FAO-sponsored "International Undertaking on World Food Security." The Undertaking called for member governments to work together in developing national stock policies and reserves which,

in the aggregate, would provide a minimum level of security in food grains. It also called for consultations among governments in the event of serious shortfalls of food supplies. The Undertaking was approved by the FAO Council and the Conference. The United States was one of 59 governments (not including the U.S.S.R. or the P. R.C.) that agreed to the Undertaking, including suppliers of about 95% of world cereal exports.

The United States participated in the establishment of a new FAO Committee on World Food Security as a result of a resolution of the 1974 World Food ConferThe terms of reference, duties, and membership of the committee were worked out by an Ad Hoc Consulta tion on World Food Security held at FAO headquarters in May. In concert with other developed country participants, the United States endeavored to have the new committee amalgamated with the existing Committee on Commodity Problems because of a substantial overlap in their concerns, but the strong preference of the developing countries for a separate committee prevailed. The recommendations of the Ad Hoc Consultation were accepted by the FAO Council and Conference and the new Committee was established.

Working arrangements were also established during the course of the year, with U.S. support, for the Global Information and Early Warning System on Food and Agriculture that was envisaged by the World Food Conference.

In general, U.S. delegations to meetings of FAO bodies stressed that real world food security depends on increased production of food crops in developing countries, particularly those in which food shortages have been a chronic condition. This view was generally accepted and so expressed in official reports.

FAO and a New International Economic Order

Resolutions adopted by the UN General Assembly at its sixth special session in April 1974 on a "New International Economic Order" have had repercussions in meetings of FAO committees and governing bodies since then. The FAO Secretariat prepared a document on longer-term trends and policies for the FAO in the light of recommendations of the World Food Conference and the "Declaration and Program of Action on the Establishment of a New International Economic Order." This paper was used as a basis for discussions by the Council and Conference in November 1975. The Secretariat observed that these UN actions might be considered the most authoritative expressions of government views regarding development objectives, priorities, and policies in this area, and suggested that the Conference adopt them as guides for FAO policies and

programs. The Mexican delegation led a number of developing country delegations in support of this proposal.

Although it agreed in general on the food and agricultural portion of the resolutions adopted at the seventh special session of the UN General Assembly, the United States, in concert with other developed countries, expressed serious reservations on the use of the so-called "New International Economic Order" as a basis. for FAO policies and programs. The resolution finally adopted by the Conference on this subject was one which the United States could accept, since it expressed agreement with a new international economic order as an objective to be worked toward rather than as an already agreed program. It provided that the Conference affirm its belief "that the FAO should play a fundamental role in the UN system for implementation of a new international economic order in the field of food and agriculture," and requested a review of the relationship between the prices of agricultural and industrial products and how to achieve greater price stability and access to markets for agricultural exports from developing countries.

Agribusiness and Private Investment for Food and
Agricultural Development

One of FAO's major activities, supported by the United States, is the facilitation of the flow of investments, both public and private, into food and agricultural projects and enterprises in developing countries. At the FAO Conference in November 1975, the United States participated in a wide-ranging debate on this subject and supported a resolution proposing more FAO aid for food processing industries in the developing countries. The United States stressed the view that private investment and enterprise in the food industry could build on agricultural production-- thus making more food available where produced and increasing employment opportunities in rural areas. The United States also supported a resolution that focused on expanded research needs--not only on crop production but also on marketing and processing for crops grown in the developing countries.

World Fertilizer Situation

Following the acute fertilizer shortage and constantly rising prices which led to the establishment in July 1974 of the FAO International Fertilizer Supply Scheme (IFS), world fertilizer prices started to level off during the last quarter of 1974 and showed clear signs of a downward trend at the beginning of 1975. The decline continued for most fertilizers until the end of August, when the price was lower than that

prevailing at the beginning of 1974. The new situation, with a relatively cheap and abundant supply of fertilizer, would under normal conditions have made it easier for developing countries to cover their import requirements. However, many developing countries still faced serious problems in meeting their needs owing to the sharp deterioration in their balance of payments positions.

By the end of October 1975, IFS had been instrumental in organizing fertilizer shipments to Africa, Asia, and Latin America worth roughly $63 million at prevailing market value and transport rates. The United States elected to deal with the fertilizer problem on a bilateral basis rather than through the IFS in order to make the most efficient use of its resources. Working parallel to the IFS, the United States supplied on concessional terms approximately $65 million worth of fertilizer to 13 countries in South Asia, Equatorial Africa, and Latin America.

The second session of the FAO Commission on Fertilizers, which the United States attended in June 1975, reviewed the changing market situation and the outlook for supply, demand, and prices. The Commission sought ways of mobilizing additional financial assistance for production and expanding the use of chemical and organic fertilizers in developing countries, and it recommended continuation of the IFS for one more year.

A general fertilizer information system and fertilizer trade for the benefit of developing countries are being promoted jointly by FAO, the International Fertilizer Development Center, and the Tennessee Valley Authority.

Agricultural Research

FAO's increasing role in strengthening national agricultural research in developing countries involved the organization's Research Development Center in more than 300 projects in 80 countries during 1975. In coordinating support for agricultural research at the international, regional, and national levels, the Center cooperated in organizing consultant missions to a few small developing countries and an Expert Consultation on Agricultural Research in Latin America, held in Panama. The United States provided experts for such missions and consultations upon request.

FAO also continued to supply the secretariat for the Technical Advisory Committee of the Consultative Group on International Agricultural Research (CGIAR), an international body of donors sponsored by FAO, IBRD, and UNDP. The United States, as an active member of CGIAR, participated with 26 other donor nations, banks,