Jul 28, 1987
UNCTAD-VII: COMMODITY STABILISATION PACTS WORK, AND HELP.
GENEVA, JULY 24 (IFDA/CHAKRAVARTHI RAGHAVAN) – The international commodity agreements on cocoa and natural rubber might not have been able to achieve all their objectives, but without them the producers would have been worse off, the representatives of the two organisations told UNCTAD-VII Friday. The Executive Director of the International Cocoa Organisation (ICCO), Dr. Kobena Erbynn, and the Executive Director of the International natural Rubber Organisation (INRO), Mr. Pang Soeparto, were among those who spoke in the Plenary when it resumed its general debate. Other commodity organisations whose executive heads also spoke were: International Wheat Council, International Tropical Timber Organisation (ITTO), the International Sugar Organisation (ISO), and the International Jute organisation (IJO). Erbynn said ICCO estimates showed that between 1981/82 and 1983/84, cocoa producing countries as a whole might have benefited to the tune of 1.000 to 1.200 million dollars through increased earnings based on higher market prices than would have prevailed in the absence of ICCO’s buffer stock operations, which had cost around 170 million dollars. The new agreement, he added, would be financially self-sufficient for acquiring its current maximum buffer stock capacity of 250.000 tonnes. Erbynn said the success of a commodity agreement was "very much a matter of credibility", and noted that ICCO membership now accounted for 90 percent of world exports and 60 percent of imports. But the agreement would be strengthened if U.S., the largest consumer, and Malaysia the "most rapidly-expanding producer" also participate. He appealed to these two countries to do so. Harbans Singh, Executive Director of the IJO, welcomed the imminent prospect of the common fund becoming effective, but noted that modalities for making it operational would still take time. The IJO, a commodity agreement for "other measures" (developmental measures), he said, was handicapped for lack of resources, and had been unable to find just two million dollars needed for agricultural R and projects. Singh said though the IJO could not undertake any price stabilisation functions, the jute situation and competition with synthetics was regularly discussed every six months. There had also been discussion on the issue of buffer stocking at a special session of the council, and later at an informal working party, but no agreed decisions could be reached. Those concerned with jute – traders, industrialists and farmers – had expectations that being a specialised commodity organisation, IJO would be involved in price and supply stabilisation, and the expectations roused by setting up of the IJO could not be ignored, Singh said. Whether IJO was to play a role in promoting price and supply stabilisation was not the issue. But the "ticklish problem" of price and supply stabilisation should receive the attention of both exporters and importers and "some pragmatic way" found to mitigate the harmful effects of frequent and violent fluctuations in prices and supplies of jute, he added. Dr. Freezailah Bin Che Yeom, Executive Director of the ITTO also welcomed the early prospect of the common fund coming into operation with the news of the Soviet decision to join the fund. The ITTO looked forward to taking full advantage of the fund’s second account operations, he added. He praised UNCTAD’s role in negotiating ITTO, taking the ecological dimensions into account, and said if ITTO could bring about a pragmatic balance between utilisation of tropical forests and their conservation, it would have helped instil "our common green conscience" – as the Norwegian Prime Minister put it in relation to the WCED report for sustainable development. The ISO Executive Director, Alfredo Ricart, said that the sugar exporters would have to find ways of stabilising prices, other than simply waiting for the next boom, to bail them out. The sugar economy had undergone considerable structural change as a result of the last boom in 1974/75, and the next boom – caused by a crop failure of an important producer and dwindling stocks – would unleash "the next, and possibly, the last round of structural change", he warned. After touching 4.1 U.S. cents/lb. in 1986, the average price this year was 6.9 cents/lb., but even the most efficient producers could not profit at these levels. The ISO was now only an administrative agreement. In 1985 and 1986, informal talks had taken place to institute a simplified mechanism, using quotas based on market shares, to equate supply and demand. These talks had now lost momentum, but he hoped it could be regained once the ISO was able to solve its current preoccupations on the budget. A new international sugar agreement, he said, would have the task of increasing revenues during low price periods but preventing prices raching a level that would encourage alternatives. Such an agreement was perfectly feasible, provided all exporters believed in its necessity and worked constructively to make sure it succeeded. Gerald I. Trant, the Executive Director of the World Food Council said that whatever its final results UNCTAD-VII should reconfirm the commitment of its member nations "to the improvement of human condition as the central objective of development, and specifically, to a package of essential and feasible cooperative action to turn back the tide of growing hunger and malnutrition". Earlier, Trant said the indicators of the crisis in the world economy and north-south relations "tell us little about the silent crisis of growing human suffering – the waste of life and loss of opportunity for human developed caused by sharply increasing poverty, hunger and malnutrition". Policies and programmes should finally put improvement of human condition front and centre in economic development. "It is regrettable that the ‘human face’ has become almost an afterthought in the process of economic adjustment".