Global Trade Mailing List Archive

["Peter Robbins" <<address removed>>]

Dear subscribers,
                           I am surprised that so very little attention has 
been paid in opening texts in this consultation to the most obvious link 
between poverty and agriculture in developing countries - namely the collapse 
in price of most agricultural commodities exported by these countries. The only 
rational strategy for tackling this problem is to re-establish international 
mechanisms to deal with oversupply. Consideration for this proposal is given in 
UNCTAD's new paper - Development in Africa: Trade performance and commodity 
dependence - , in texts from the Third World Network, in works by Alfred 
Maizels, in last year's UNCTAD Eminent Persons report, in the non-paper 
submitted last year by WTO Ambassadors, led by Kenya, to the Committee on Trade 
and Development, in the Cancun draft declaration and in my own recent book - 
Stolen Fruit: The tropical commodities disaster.

There would be considerable technical difficulties in re-establishing supply 
management systems for the range of affected commodities but none that could 
not be overcome given sufficient political will. Relatively small cuts in 
exports linked to cuts in production could increase prices very considerably 
once supplies were adjusted to meet demand. There are many ways of improving 
the effectiveness of past International Commodity Agreements.

The main objection to this strategy is likely to be political. Significant 
rises in the price of these products would impact negatively on the import 
bills of consuming countries. On the other hand inadequate farm income can be 
linked to pressure to increase narcotic drug production, increasing emigration, 
political and economic instability and a shrinking market for goods and 
services from developed countries - all of which are of significant concern to 
the main consuming countries of tropical agricultural products.

Although moves to reduce import restrictions into consuming markets should be 
applauded, very few out of the 200 or so commodities exported by developing 
countries will be affected - cotton, rice, sugar, some vegetable oils and very 
few others.

Past and present strategies pursued to support farmers in developing countries 
include assistance to achieve higher yields, cutting costs, horizontal 
diversification, increasing market efficiency, promotion of niche marketing and 
organic products, fair trade, risk management and sales promotion. These 
strategies have either contributed to the problem of oversupply or have 
assisted only a tiny minority of farmers. In any event, they have made no 
impact on the absolute prices of the bulk of these products.

Clearly, there are sound economic grounds for believing that countries which 
are dependent on agriculture will continue to fall behind their industrial 
counterparts - Prebisch hypothesis, etc. but the reintroduction of supply 
management would provide the necessary, albeit temporary, boost in income 
needed for vertical diversification - especially into agricultural processing. 
Supply management would also offer farmers the dignity of working for a living 
rather than depending on sterile and insufficient aid programmes.

Please contact me for more details and with any counter-suggestions especially 
any that could offer anything like the same benefits as supply management.

Regards - Peter Robbins - <address removed>