IGNOU : M.COM : IBO 1 : UNIT 12 : Q - 1. Briefly describe the role of UNCTAD in finding solutions to commodity problem.

 

Ans. UNCTAD AND COMMODITIES

One of the main tasks of the UNCTAD was to find a solution to the commodity problems. As has already been noted, the UN had transferred the task of international commodity agreements to UNCTAD. It has an important committee to study problems of commodities of interest to developing countries and suggest various ways of ameliorating adverse effects of the prevailing commodity trade.

The UNCTAD has done substantial work in studying the problems of commodities. In UNCTAD IV (Nairobi) the developing countries made commodity problem the centrepiece of negotiations with the developed world, and fought hard for two things: an Integrated Programme of Commodities (IPC) and the establishment of a Common Fund for financing buffer stock.

Resolution 93(IV) required the Secretary General of UNCTAD: (a) to convene preparatory meetings leading to international negotiation for International Commodity Agreements on eighteen commodities or commodity groups with an injunction that these should complete their work as soon as possible but not later than 1978; and (h) then to arrange a Commodity Negotiating Conference which should be concluded by the end of 1978.

The UNCTAD's Integrated Commodities programme is expected to be comprehensive. As an UNCTAD document puts it: "Fundamental to the proposed new approach is the setting of far wider objectives for international commodity arrangements, including improvement of marketing systems, diversification (horizontal and vertical), expanded access to markets, measures to counter inflation, in addition to the traditional objectives of stable and remunerative prices". It is also considered a major sustained and comprehensive attack on commodity problems.

Under the Resolution of UNCTAD, twenty eight months were allowed to the governments to negotiate successfully agreements on eighteen commodities with pricing provisions, agreed supply management measures, compensatory financing, stocking, access, etc. But negotiating international commodity agreements turned out to be as difficult as before.

·         UNCTAD Secretariat had argued that there were seven commodities - cocoa, coffee, olive oil, natural rubber, sugar, tin and wheat.

·         Since 1976 only one agreement with price provision has been negotiated for natural rubber.

·         The renegotiation of the cocoa agreement was very difficult. When it was finally agreed by the US, a major consumer, and Ivory Coast, a major producer, refused to join it.

1.       When the Sixth International Tin Agreement was signed the US, the important consumer, stayed out.

2.       The European Economic Community refused to join the sugar agreement.

3.       In tea, the exporting countries were not agreeing to quotas.

4.       Preparatory work on copper did not result in a successful commodity agreement.

5.       The major producers of bauxite and phosphate did not want any agreement.

Thus a part of the integrated programme of commodities did not succeed.