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Dear Duncan, To your question. Do, we agree with Peter that the first thing we should do is cease funding any programmes that lead to increased production of commodities? I understand Peter's question as meaning that we need to analyse what the effect of embarking on a particular course may lead to. A good example at the moment is Vanilla. In the last 3 years everyman and his NGO that comes into my office asks me how to grow vanilla. They have seen the price rising from $300 - 500 per kg and want some of the action. Donors are pouring funds into the vanilla option. It takes two years to get a first crop of vanilla and quality is very important. As you will know, Vanilla was priced at $50 / kg in 2000 and it mainly came from Madagascar, a very poor country. After two cyclones, a coup and some difficult political reforms, Madagascar is going to come back. At that time everyone else will be having their first or second harvests and as the Madagascan supply comes back on stream prices will fall to $30 - >50 / kg. This will horrify the uninformed. The bad news however, is that many more poor farmers will contribute to another oversupplied market. The poor in Madagascar will become even more poor. So, I think this is a good example of how lack of analysis and lack of regional co-ordination can unwittingly destroy a market rather than build a sustainable, competitive system for a limited number of countries to exploit and build reasonable incomes. Is this not the same story for coffee, and many other commodities that have been developed in too many places too quickly to supply ever more unregulated markets. Perhaps, this is why Peter's SM argument is so compelling, it is straight to the heart of the matter. The development agencies and the Washington Consensus have worked, some with good intentions, some with special interest groups, knowingly or unknowingly to dismantle the regulations within international markets, they have promoted liberalisation policies that were export focused and have succeeded in providing large companies and millions of rich people with cheap goods produced by many more millions of poor people. The Bank and UNCTAD are now considering insurance and compensation schemes based on gains through futures market. The proceeds, however that is calculated ?? will be used to support diversification schemes and ....oversupply other markets. Apparently there is consensus on this approach. Great. Shaun Ferris Foodnet co-ordinator IITA-ESARC email: <address removed> Web www.cgiar.org/foodnet Fax 000256-41-220217 Tel. 000256-41-223445/221009 Mobile (0)77-221163 Roaming mobile 075-787813 ____________________________________
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