CANADA'S CONTRIBUTION TO AGRICULTURAL FOREIGN AID1 S. C.@dmn* and Frank Shehin3

Taking into account both bilateral and multilateral programs, Canada's contribution to external aid, which in 1967-68 amounted to 0.65 per cent of our national income, now compares favorably with most other donor countries and by the early 1970s is expected to reach the target of one per cent recommended by the United Nations Conference on Trade and De- velopment. Initially concentrating on the Colombo Plan countries, in recent years Canada's bilateral aid program has been broadened to include the Commonwealth Caribbean countries and the Commonwealth and French- speaking African countries. Until recently Canada's principal approach to assisting developing coiintries to increase their food supplies has been in- direct, tlirough capital projects designed to develop the general economic infrastructure, as well as through food aid. Food aid, which has been devoted mainly to meeting emergency food shortages, has been the largest single item in the Canadian aid program. Recognition of the irrgency of developing indigenous agricultural production, as an essential means o f meeting the emerging food crisis and of stimulating overall economic growth, is being reflected to an increasing degree in Canada's current aid program by a greater emphasis on carefully planned integrated agricultural program. involving both capital and technical assistance inputs.

L'APPORT DU CANADA A L'AIDE AGFUCOLE A L'ETRANGER Si I'on tienr compte des prozrammes bilatiraux et multilatiraux, la

part du Canada d I'aide d I'itranger reprisentait. en 1967-1968, 0.65 p. 100 de notre revenu national, ce qici noics compare lronorablement avec la plupart des autres pays donateurs. Vers le de'but des annies 1970, on cornpte atteindre I'objectif dun pour cent recommande' par la confirence des Nations Unies sur le commerce et le diveloppement. Le Canada a commence' dabord par concentrer son assistance sur les p a y s du Plan Colombo mais plus ricemment le propramme bilatiral &assistance du Canada s'est e'largi et embrasse les Antilles anglaises, de mtme que les pays africains du Commonwealth et I'A frique francophone. Jusqu'd ces derniers temps, I'aide canadienne destinie d aupmenter les ressources ali- mentaires des pays en voie de de'veloppement s'est manifestbe autant de facon indirecte, par des plans daminaRement visant d dbvelopper I'infra- structure iconomique Re'nhrale. que par de l'assistance alimentaire directe. L'aide alimentaire, destinie surtout d pallier les situations ur.gentes de pinurie, occupe la principale place dons le programme canadien &aide d I'itranzer. On reconnait auiourdhui qu'un des moyens essentiels de faire face d la crise alimentaire imminente et de stimuler la croissance iconomi- que zlobale est d'encourazer le plus tat possible le diveloppement de la production agricole des pays en voie de diveloppement. Cette prise de conscience se traduit de plus en plus, dans les proframmes canadiens actuels &assistance, par I'importance accrue qu'on accorde d la priparation m & h e dique de plans agricoles intigris, combinant d la fois I'aide financiare et technique.

Agriculture occupies an important economic and social position in the economic development of the less-developed countries. As UN Sources

1 Paper prepared for presentation at the Annual Mminq of the Canadian A g r i d m d h n o m i o

2 Formerly Dirmor-General. h n o m i a Branch, C.D.A.. h w a . 3 Director, Marketing and Trade Service Division. Economia Branch. C.D.A., h-.

Society. McMvter University. Hamilmn. June 24. 1968.

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have pointed out, over-all growth in the developing countries will continue for many years to be dependent, primarily, upon the success of efforts to effect a major transformation in agricultural production. Although gains have been made, the rate of agricultural output grew at less than 3 per cent per year between 1960 to 1967. In nearly all of the developing countries the agricultural sector has been unable to increase food output fast enough to equal the increase in demand for food resulting from population growth and rising incomes. The LDCs as a group, from being net exporters of over 14 million tons of cereals in the 1935-39 period, had become net importers of almost 11 million tons in the first half of the 1960's.

International Aid

The contribution that developed countries can make towards the economic development of the LDCs relates particularly to trade policy and aid policy. In this paper we have limited our comments to aid policies particularly as they apply to agriculture.

Since 1950, when Canada became a founding member of the Colombo Plan, the provision of economic aid to developing countries has been accepted in Canada, as elsewhere, as a moral and political responsi- bility. Almost all of the industrialized nations are participating as donors in some form of aid program on a bilateral or multilateral basis and the recipient developing countries now number over one hundred. The over-all international volume of assistance for economic and social development in developing countries is now over $11 billion a year in contrast to $1.5 billion in 1950.

Of the aggregate international flow of financial resources made available to developing countries by donor nations, about one-third has come from the private sector and nearly two-thirds from governments. Of the private sector flow, 75 per cent consists of private foreign investment, some 18 per cent is made up of private export credits and about 6 per cent covers contributions to multilateral organizations. In addition to the recorded private flow of resources to developing countries, the private sector make a large contribution to welfare and educational services and to technical assistance as well as to other forms of economic development through private corporations and non-profit voluntary organizations, the total value of which is difficult to estimate. There are indications, how- ever, that the total flow of aid through non-governmental non-profit organizations may amount to over $1 billion per year or about 10 per cent of the total flow of resources to less-developed Countries. Since voluntary agencies have a high percentage of free or low-cost services, their expenditure figures may not adequately reflect their contributions.

Of the aggregate official government flow of resources to developing countries, about 30 per cent consists of'bilateral government loans for

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periods exceeding one year, over 60 per cent consists of bilateral grants in cash and kind, covering technical assistance and sales of commodities against local currencies, including bilateral food aid, and something less than 10 per cent consists of grants and capital subscriptions to multi- lateral agencies.

It is important here to note that, taken together, official government and private bilateral investments and loans make up well over half of the flow of resources to developing countries. It is interesting also that nearly two-thirds of these investment funds are provided by the private sector.

In addition, with the aim of accelerating economic progress, a num- ber of multilateral international and regional financing agencies' are now undertaking annual investment commitments for approved projects in developing countries on a rapidly expanding scale. The major financial backing for economic development is provided by the IBRD which makes loans to finance productive investments in its member countries. Regional banks, such as the Asian Development Bank, are playing an important role in the development of their respective areas. Increasing use is being made also of group financing through consortia. Development consortia for India and Pakistan have been organized by the World Bank and for Turkey and Greece by OECD. The objective is, of course, to raise the aggregate aid flow for the planned development of those developing countries for which consortia are formed. Use is also being made of consultative groups for co-ordinating aid for specific investment projects in the context of the development plan of the recipient countries.

The other half of the aggregate international flow of resources to developing countries is made up of grants. Grants provided by govern- ments on a bilateral basis account for 40 per cent of the aggregate funds provided to developing countries while grants provided through multi- lateral agencies make up about 9 per cent of the flow. Grants made in connection with capital projects account for about 17 per cent of the total resource flow, food aid, principally wheat, makes up about 13 per cent and technical assistance accounts for about 10 per cent.

I t is recognized that currently in view of the deteriorating food situation in LDC's and the dominance of agriculture in most of them, the percentage share of aid funds allocated to agriculture appears rather modest. It should, however, be remembered that the agricultural sector is likely to benefit directly and indirectly from economic infrastructure projects.

4 Includes the International Bank for Reconstruction and Development (I.B.R.D.) , the Internntiod Dcveloprdmt Association (I .D.A.) , the International Finance Corporation (1.P.C.). the European Development Fund ( E.D.F. ) , the Inter-American Development Bank ( I.D.B. ) , the Organization of American States (O.A.S.).

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Canada’s Aid Program

Disbursements in connection with Canada’s aid program totaled $253 million for 1967-68 as compared with $248 million in 1966-67 and $159 million in 1965-66, up from $12.4 million in 1950. Including export credits insurance (E.C.I.C.Sect. 21A), Canadian external assist- ance totaled $319 million, $309 million and $209 million, respectively, for 1967-68, 1966-67 and 1965-66. Canadian external aid has thus more than tripled over the last four years and more than quadrupled in the last decade. Canada’s contribution, which in 1967-68 amounted to 0.65 per cent of our national income, now compares favorably with most other donor countries and as announced by the Prime Minister some time ago, it is expected to reach the target of one per cent recommended by the United Nations Conference on Trade and Development in the early 1970’s.

From 1950 to 1958 the Colombo Plan was Canada’s only bilateral aid program. Between 1950 and March 31, 1967, bilateral assistance provided to this area totaled $800 million of which an overwhelming proportion went to India and Pakistan. The character of our aid to these countries has been one of heavy emphasis on power infrastructure projects which often benefit agriculture as well, plus an increasing amount of grant aid food to meet emergency food shortages. Canada’s food aid program to India alone in 1966 amounted to $75 million on a grant basis.

In 1958 Canada broadened the scope of its contributions to inter- national development by undertaking a new program of assistance for the islands of the British West Indies. Initially Canada’s economic assistance was concentrated on the provision of infrastructure which would make the economy more viable. The Commonwealth Caribbean receives more assistance from Canada on a per capita basis than any other part of the world.

Canadian assistance to Africa began in 1960 with an allocation for the Commonwealth African countries, followed by the inauguration of a program for the French-speaking African countries in 1961. Throughout Africa the most immediate need was for educational and technical assist- ance and originally Canadian aid was concentrated in these areas. Re- cently, increasing emphasis has been placed on the need for capital projects, particularly for pre-investment and feasibility surveys, to enable the countries of Africa to make better use of their natural resources.

In recognition of Canada’s extensive diplomatic and commercial ties with Latin America, in 1964 $10 million was allocated from our newly- created development loan fund to Latin America for projects which would be submitted for approval through the Inter-American Development Bank.

Food aid devoted mainly to meet emergency food shortages has been the largest single item in the Canadian aid program, accounting for 40 per cent of cumulative bilateral grants. Non-food commodities including

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copper, sulphur, wood pulp, nickel and fertilizers accounted for 20 per cent. Grants in connection with the development of hydro electric power and other forms of energy made up 16 per cent. Transportation account- ed for 7 per cent and technical assistance made up 10 per cent. The remaining grants covered specific projects in agriculture and rural develop ment, education, health and social sciences, industrial plant natural resources, communications and public relations.

In addition to its bilateral program, Canada has participated actively in the work of multilateral agencies concerned with economic develop- ment, particularly those associated with the United Nations. In 1966 Canada ranked fourth among contributors to the United Nations Develop- ment Program and the International Development Association, third in contributions to the United Nations Relief and Works Agency, and second in contributions to the World Food Program.

Agricultural Aid

Economic development is a complex process involving the develop ment of physical and human resources in a country. The share of agri- culture in the total flow of financial resources to less-developed countries is therefore very difficult to determine. In addition to those forms of assistance which bear directly or indirectly the label “agriculture”, agri- cultural development is likely to benefit directly or indirectly from capital projects classified under the general economic infrastructure category, as well as from capital projects in the agricultural sector and from technical assistance in such areas as education, economic planning, trade, industry and transportation. The over-all contribution to agriculture through capital project aid and through technical assistance may be in the order of 8 per cent of the total flow of resources to developing countries.

Capital project financing in the category of agriculture, forestry and fishing averaged about 10 per cent for 1964 and 1965; the number of per- sons from less-developed countries who received financial assistance for the study of agriculture in 1965 was 10 per cent of the total persons in all fields of study receiving this type of assistance. The number of trainees in agriculture was about 14 per cent of the total trainees. In 1965, 18 per cent of the total numbers of persons engaged as operational personnel and 20 per cent of the persons engaged as advisers in technical assistance work were working in agriculture.

Until 1966 Canada’s approach to assisting developing countries to increase their food supplies has been primarily through major projects such as for the development of electric power, natural resource surveys and technical assistance particularly in education which have an important indirect effect on agricultural development and through food aid.

Wheat and wheat flour have made up the bulk of Canada’s food aid program. Under the bilateral food aid program Canada has increased

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aid shipments from 1.7 million bushels in 1962-63 to 49.5 million bushels in 1966-67. Much of this increase has been due to larger shipments to India to meet the emergency situation in that country. In 1966-67 s h i p ments to India amounted to 40.7 million bushels and to Pakistan 5.9 million bushels, the remainder going to Algeria, Ceylon, Ghana, Morocco and Indonesia. Canada’s pledge to the FAO/UN World Food Program has increased from US$6.8 million for the 1963-65 period to US$27.5 million for the 1966-68 period and US$20 million for the period 1969-70. While the World Food Program consists of a wide variety of food items, Canada’s contribution for the year 1966-67 included 2.5 million bushels of wheat. Canada also contributed the equivalent of 331 thousand bushels of wheat to the United Nations Relief and Works Agency in 1966-67.

Since 1966 as a result of the urgency of the world food problems both developed donor and underdeveloped recipient countries have been giving greater recognition to the agricultural sector. Long-term agricultural development projects have received higher priorities in development plan- ning. Stress has been laid on the application of the results of agricultural research and on the promotion of fertilizer use in an effort to increase domestic food production. Particular consideration has been given to the relation of food aid and to the production inputs to economic development and the over-all flow of external resources to developing countries.

The urgency of agricultural development as a means of meeting the emerging food crisis and of stimulating over-all economic growth is re- flected in the Canadian aid program for 1967-68 which is larger and more flexible than in any previous year. In this connection, the Canadian Agricultural Mission to India represents a new dynamic approach to agricultural development. The objective of this Mission was to examine the problems of agricultural development in India from the point of view of the type of expertise and other forms of assistance which Canada can provide and in consultation with Indian officials to make positive recom- mendations with respect to projects in connection with which Canada can make a real contribution to development. Other examples of this more positive approach to agricultural foreign aid which has been developing during the past 2 or 3 years are the dairy missions to Trinidad5 and Korea which have recommended dairy development projects, taking into account the simultaneous development of land for forage production. The recent Canadian agricultural mission to Kenya is a further illustration of a more direct involvement in agricultural development as part of the Canadian program.

5 An External Aid Office Prns Release of June 14. 1968, state$ chat a dairy development loan of $450,000 h being made to Trinidad. A cod of 900 h a d of Canadian cade will be purchased unda the loan, and some ccchnial assistance and equipment will be supplied. The d c will be in addition to the 1.200 head of Canadian a d e supplied under a loan of $900,000 made in 1965-66 to develop a dairy atrle indusvy on Gown knds and reclaimed lands made idle because of curbadu in sum prowxion. The World Bank has made i $5,000,000 loan to uiisr in developing the small farm whae the Canadian a d e u e being placed.

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The Future Food Gap Many studies have been made in recent years which give some idea

of the nature and scale of the food problem which may be faced in the future. It would appear that while the detailed results of these studies dif- fer, there is little divergence in their projections.

Under the low GDP assumption in a recent F A 0 study which made projections to 1975, food production in developing countries is projected to grow by about 2.8 per cent annually during the period 1962-75, or at roughly the same rate as in 1958-63. This compares with a projected increase in demand of 3.2 per cent a year during the same period. Ac- cording to the high assumption, the increase in food production might be raised to 3.6 per cent per year in comparison with an increase in demand of 3.7 per cent a year. This would entail a significant increase in current and capital expenditures on agriculture. Although the increase in pro- duction and demand might be roughly in balance in Latin America and Africa under the high assumption, the increase in food production in the Near East, and the heavily populated Far East would continue to lag behind demand.

Under both assumptions, the F A 0 found that the gap between pro- duction and demand in developing importing countries would increase. The cereals gap of these countries would total about 30 million tons in 1975 on the high income assumption, and about 50 million tons on the low assumption, as compared with actual imports averaging 23 million tons a year in 1961-63. The total cost of the specified foods which would have to be imported by these countries if projected demand under either income assumptions were to be satisfied would total more than $8,000 million (at 1961-63 prices), as compared with actual imports of about $3,000 million in 1961-63. Cereals would remain the major food deficit under the two income assumptions, but their relative importance would decline if the higher level of income were achieved. Imports of livestock products and of fats and oils would increase sharply under the high income assumption if projected effective demand were fully met.

The projected levels of demand in 1975 would result, provided sup- plies were available, in an increase in per caput calorie intakes over the 1962 level of only 6 per cent under the low assumption and 11 per cent under the high assumption. Taking into account the unequal distribution of food supplies among the populations of developing countries, large numbers of people would still remain undernourished in 1975. Under the assumptions made, the problem of undernutrition could be effectively solved only by 1985, and then only if the high income assumption should be realized.

The Problems of Economic Development The making good of these food deficiencies by raising the productiv-

ity of those factors of production that are available to the agricultural

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industry is the essence of the development process. This improvement of productivity in the agricultural sector and the expansion of marketable supplies has become a key objective of the governments of the LDC's. Through this improvement agriculture can contribute to economic growth by releasing resources to other sectors of the economy. Already we must ask to what extent are these projections likely to be modified by such recent technological developments as the introduction of new Mexican wheats and improved corn hybrids, increased fertilizer use and greater availability of water for irrigation.

The problem of agriculture, however, cannot be solved in isolation outside the context of over-all development. In developing countries there can be no chance for rapid self-sustaining growth of agriculture without a rapid rise in effective demand for agricultural products. Without an increase in per capita income, which would enable effective demand to grow, there can be no substantial improvement in the level of nutrition. Expanding demand is also necessary to lessen the risk that an increase in the production of foodstuffs may be accompanied by accumulation of surpluses and falling agricultural prices. At the same time the develop- ment of the rural market can provide stimulus to production in other sectors, since, in order for incentive income to be meaningful to farmers, there must be commodities that they can buy with it.

Economic and social development in underdeveloped areas is a very complex process which must be planned to meet the particular needs of each individual country. Within economic and social progress, agricultural development is a key element. It directly affects over 75 per cent of the population of the LDC's who are engaged in agricultural production and concerns the food supplies for the bulk of the world population. Because of the predominance of agriculture in most of the LDC's, the necessity to invest in agriculture if economic development is to be achieved is now fully recognized. The radical improvement of agriculture in the LDC's is, therefore, a fundamental condition for the maintenance of a high rate of development in these countries.

The major portion of the increased effort will have to be made by the LDC's themselves. They must themselves bring about the changes in the economic structure, improve the social framework and pursue appro- priate development policies. LDC's, however, vary widely in their ability to mobilize and make good use of resources for development. Many are already making strenuous efforts to ' help themselves; five-sixths of the investment being made in the developing countries is self-financed.

In modernizing their agriculture, developing countries will for some time require substantial assistance from developed countries. This assist- ance will continue to take the form of food aid, technical assistance and capital assistance.

Two recent U.S. reports dealing with the world food problem and agricultural policy issues prepared by the President's Science Advisory

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Committee on the World Food Problema and the National Advisory Commission on Food and Fibre’, while recognizing the role of food aid to help developing countries during the process of development and to meet emergency food needs, point to the possibility that in some cases it may also discourage indigenous agricultural development. The reports stress the need to increase both technical assistance and capital assistance to enable the less-developed countries to expand domestic food production as a part of overall economic development.

What are some of the problems facing the LDC’s? In most of the underdeveloped countries, a large part of agricultural production is organized along traditional lines and is limited to meeting the immediate needs of the family household, Production is largely insensitive to changes in the market economy. The LDC’s have much more agricultural labor per head of population than the developed countries. Productivity levels are low; production per man in agriculture is only about one-fourth of what it is on the average in other sectors. In comparison with the indus- trial countries, therefore, the LDC‘s have a low per capita income, a high percentage of their labor force in agriculture, high fertility and mortality rates, a low per capita energy consumption and a high illiteracy rate.

Some of the basic impediments to agricultural expansion in LDC’s are: ( 1 ) lack of material resources and services comprising the inputs essential for growth; (2) the institutional and economic environment which deprive agricultural producers of incentives to expand output; (3) inade- quate development of organizations and institutions which reach out into the villages to disseminate technical knowledge.

There is the problem of determining the level of priority between long-run policy measures and what is necessary in terms of immediate or short-run action.

Project formulation in agriculture in the LDC’s is more complex than in other economic sectors. Some of the difficulties arise from the very large number of operators involved and hence the greater number of independent decisions that will have to converge towards the proposed objectives. Whereas for a factory or for infrastructure works involving even very large investments, the number of independent operators is lim- ited, in agriculture even a relatively small investment will generally involve thousands of independent farmers and therefore the problem of directing activities along specific lines becomes very complex indeed.

The low levels of education and income in agriculture militate against the introduction of new patterns of production and against investment. Trained manpower is one of the bottlenecks to the economic development of agriculture. The importance of human resources in agricultural devel-

13 n e World F w d Problem. A Repon of the President’s Science Advisory Gmmirm. May 1967.

7 Food and Fibre for the Future. Repon of the Nntional’Advisom Commission on Food and Fibre, Vol. I.

July 1967.

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opmcnt raises the question of how shall such resources be allocated among programs for advanced training of personnel capable of carrying on re- search, of training of administrative personnel of directing the operating programs and training of the large numbers of personnel who are needed to carry out the local operations and extension in rural areas and villages. The results of agricultural research in one country cannot automatically be transferred to another. Agricultural extension programs show little return unless research has produced and tested innovations which will increase productivity and profitability at the farm level.

Change in Aid Policies

During recent years there has been a gradual change in the form of of assistance supplied to less-developed countries. The United States still accounts for nearly 60 per cent of the financial resources made available to developing countries. The level of U.S. government assistance has re- mained relatively constant in recent years but a progressive shift from grants to loans has begun. The expansion in funds provided to assist economic development has come largely through increased participation through bilateral programs by a number of smaller donor countries. There has, therefore, been a relative decline in contributions to multilateral agencies. Within the bilateral aid programs there has been a marked increase in loans as compared with “grants and grant-like-contributions”. Within this category, “pure” grants, which include technical assistance, have actually increased but “grant-like-contributions”, i.e. transactions where the payment or commitment to pay has been in the currency of the recipient country, have decreased. The decline in this type of transaction, which has been related mainly to sales of agricultral products by the United States, reflects a change in U.S. policy resulting in part from a decline in U.S. stocks of agricultural surplus commodities. Recent changes in policy require that in the future more U.S. food aid move on the basis of “soft” loans having repayment periods up to 50 years and low rates of interest.

The terms of Canadian aid have always been relatively favorable. In the beginning almost all Canadian aid was in the form of grants. When the level of aid was expanded it was decided that in addition to a continu- ation of a substantial part of aid contributions in the form of grants, loans be made available on terms based on those offered by the International Development Association. These terms are no interest, ten years grace and repayment over a further period of forty years. Another type of loan carries interest at three per cent, with seven years grace and thirty years maturity.

Another form of credit assistance which continues to be provided by Canada is that made available on a commercial basis under the terms of Canada’s Export Credits Insurance Act. Because the terms under the

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ECIC are more favorable than could be extended directly by Canadian exporters, this form of loan qualifies as economic development assistance.

Like most other donor countries, Canada has maintained a policy of insisting that its aid be given in the form of Canadian goods and services. The typing of aid funds to procurement in Canada can be justi- fied on the basis of economic grounds such as balance of payments but it has been indicated officially that Canada would be willing to change this policy in concert with other donor countries.

There has also been a shift from capital project assistance to a non- project or a program form of aid. While the project approach to aid has provided certain assurances for the effective use of funds according to agreed priorities, there is also a need for an over-all development strategy which must be based on the total resources available, regardless as to whether they originate abroad or in the less-developed country itself.

Increased emphasis on technical assistance has resulted from an acceptance of the fact that the real solution to food deficiencies in under- developed regions must come from increased domestic production. This conclusion has been reflected in the current emphasis by the U.S. Govern- ment on “self-help” as a prerequisite for economic assistance and in a marked increase in aid provided in the form of technical assistance, both bilateral and through multilateral agencies.

Another significant development is the use of food as development capital. While food aid has been used for many years to meet emergencies, the introduction of a multilateral food aid program to assist in economic development is new. Although Canada was one of the countries that took an active part in organizing the World Food Program, our multilateral food aid program constitutes less than 10 per cent of our total food aid program.

The three pledges to the World Food Program made by Canada covering the period 1963-70 total $US 54.4 million in commodities and cash. The cash portion makes up 25 per cent of the pledge and covers costs of administration and transportation. The commodity basket in- cludes wheat, wheat flour, o a t , pulses (beans and peas), skim milk powder, whole milk powder, cheese, butter, butteroil, exaporated milk, egg powder, dried and canned fish. Some 48 countries have received Canadian foodstuffs through the WFP.

This food is provided by the WFP as grants and is used as capital to finance labor intensive projects such as road building, rural public works, minor irrigation, afforestation, and community development. Other forms of activity aided by food grants include resettlement, improved livestock feeding, and social development, e.g. special feeding programs for school children and college students.

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A further important development relating to food aid is the incor- poration of a Food Aid Convention in the 1967 International Grains Arrangement. Under this Convention, 165 million bushels of wheat equi- valent are to be made available to needy countries. Canada will contribute about 11 per cent of the total program.

The proper role of any international economic assistance program - bilateral or multilateral - is to facilitate development. This objective in effect is the first criterion in determining the kind and volume of aid that should be provided.

There is no simple or quick solution to the problems facing the LDC's. It is relatively easy to list what should be done and to indicate the magnitude of the task. It is, however, more difficult to determine priorities, manner of implementation, and the nature of the follow up. Similarly it is difficult to determine the suitability of the form and volume of aid from donor countries to recipient countries. Then there is the question who should determine the criteria by which to judge the suitability of the aid. A good example of this is the recent development of food aid. Food aid requirements have to be appraised in the context of a whole range of alternative policies available to the recipient country. For the recipient country, the economic advantage of receiving a part of its total aid in food will depend on whether part or all of the food aid is additional to or in place of other aid, including its impact on development and on commercial imports. Food aid must be handled with care so as not to provide discentives for domestic production in the recipient country, nor to interfere with regular commercial world trade.

There is a growing demand that donor countries and agencies should accept recipient country criteria for the appropriateness of particular types of aid. At the same time, it is recognized that the effectiveness of aid programs will depend upon the ability of recipient countries to identify the obstacles to economic growth, to determine reasonable objectives and strategies, and to mobilize resources. It is also accepted that for inter- national assistance to agriculture in the LDC's to be fully effective requires co-ordination of different types and of various sources of aid - bilateral and multilateral - governmental and non-governmental.

It would appear that Canada's contribution to agricultural foreign aid will continue to be through both bilateral and multilateral channels. Although the larger portion of Canadian aid is given bilaterally, much of it is determined through multilateral consultation. There is the consortia, the consultative procedure and the use of intergovernmental regional banks as executing agencies for Canadian aid projects. In addition, the major donors including Canada, consult and appraise aid programs at the Development Assistance Committee of the OECD.

There is an increasing emphasis in the Canadian program on directly assisting LDC's in expanding their agriculture. There has been some shift

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from mainly food aid to capital and technical assistance in the agricultural sector. Canada’s approach to aid has shifted from a passive program, to one in which an effort is made by Canadian technical missions to deter- mine where and how Canada can best aid the agricultural sector.

To facilitate planning Canada’s aid program has been put on a non- lapsing basis. This frees the aid program from the restricting influence of a 12-month cycle.

Canada’s aid program now reaches into all continents and covers many more countries than did the original Colombo Plan. The question that needs to be answered is whether Canada can bilaterally maintain an effective aid program spread over all the major continents. Political ex- pediency may have a higher priority .than economic expediency.

Selectivity by country should be accompanied by selectivity by sector. In many instances, the Canadian contribution can be more effective if it is concentrated not only on a sector, but on a part of the industry and perhaps within a given region.

It becomes obvious that no one nation can conduct by itself a global aid program. Consultation and co-ordination in connection with both bilateral and multilateral programs are essential if economic aid is to be applied and implemented effectively and efficiently.