Commodity policy: price stabilization versus financing

Herrmann, Roland; Burger, Kees; Smit, H.P.; Daniel, Philip; Spraos, John

doi:10.1017/cbo9780511599262.011

Cited by 11 publications

(12 citation statements)

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“…This case has been advanced more forcefully since the demise of aggregate intervention policies such as the International Commodity Agreements (ICAs) (Gilbert, 1996) and the failure of large-scale international financing schemes such as the International Monetary Fund's Compensatory Finance Fund and the European Union's STABEX programme. These schemes are outside the remit of the current paper but a full discussion of both can be found in Herrmann et al (1993).…”

Section: Introductionmentioning

confidence: 99%

“…Trying to deal with this volatility has been at the centre of commodity policy since the 1930s (see Herrmann et al, 1993) where the main emphasis was on supply control and thus reducing price instability. However, currently, policies based on market solutions to the problem solely of price instability are being sought as the general macroeconomic stance shifts away from intervention and more specifically that of supply control.…”

Section: Introductionmentioning

confidence: 99%

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Commodity futures markets in LDCs: a review and prospects

Morgan¹

2001

prog dev studies

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractRecent moves by the World Bank to devise market-based approaches for dealing with commodity price risk provides a fresh impetus for research in the area of commodity futures markets as a policy option. Since the collapse of the International Commodity Agreements, there has been little progress in finding a solution to the perennial problem of price risk arising from price volatility. This paper aims to provide a background to the more general issue of development and growth in less developed countries (LDCs) by examining past and current policy attempts to reduce the effects of price volatility in primary commodity markets.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Commodity futures markets in LDCs: a review and prospects

Morgan¹

2001

prog dev studies

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“…Of the 172 CF transfers, 55.5 per cent were counter-cyclical and 44.5 per cent pro-cyclical. Thus, (Herrmann et al, 1993;Hewitt, 1993) have highlighted the unsteady nature of Stabex and CF transfers vis-a Á-vis the export earnings cycle. Given the close relationship between primary product export earnings and government revenues (Chambas, 1996), it is rather consistent to note the unsteady feature of Stabex and CF transfers vis-a Á-vis the government revenues cycle.…”

Section: Are Stabex and Cf Transfers Counter-cyclical?mentioning

confidence: 99%

“…2 If the effects of Stabex and CF on the instability of export earnings have been widely documented (Finger and Derosa 1980;Herrmann, 1982;Herrmann et al, 1993;Hewitt, 1983;Lim 1987;1991) (an exception is Hewitt, 1983). In periods of boom, either directly through export taxation or, indirectly, through increases in other government revenues (Bevan et al 1990), governments bene®t from additional revenues; the reverse is true during periods of decreasing export earnings.…”

Section: Introductionmentioning

confidence: 99%

Stabex versus IMF compensatory financing: impact on fiscal policy

Brun¹,

Chambas²,

Laporte³

2001

J of Intl Development

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The supply of external financing to developing countries generally tends to increase in periods when export earnings are booming and thus, in periods of increasing government revenues. Conversely, Stabex and IMF Compensatory Financing transfers are primarily designed to take place in response to a fall in export earnings, and thus, in periods when government revenues are decreasing. However, these transfers occur in an unsteady way with respect to the cycle of government revenues. When occurring in periods of decreasing government revenues, only Stabex transfers are used to finance additional primary expenditures (i.e. expenditures other than interest on public debt). This effect contrasts with the effects usually reported for other instruments of external financing. In periods of increasing government revenues, Stabex and Compensatory Financing transfers have no impact on fiscal deficit. Copyright © 2001 John Wiley & Sons, Ltd.

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“…The ICA stabilized the international price (Akiyama and Verangis, 1990), raised prices when quotas were in effect (Akiyama and Verangis, 1990;Herrman, Burger and Smit, 1990;Palm and Volgelvang, 1991;Bates, 1997), but may have had a net negative effect on prices measured over both quota and non-quotas periods (Akiyama and Verangis, 1990) because the ICA induced increases in coffee stocks during quota periods that were released onto the market in non-quota periods. Further, when ICA quotas were in force, they systematically reduced producer prices in coffee exporting countries relative to what they would have been without quotas as governments tried to avoid the need to accumulate still greater stocks (Bohman & Jarvis, 1996).…”

mentioning

confidence: 99%

The Rise and Decline of Rent-Seeking Activity in the Brazilian Coffee Sector: Lessons from the Imposition and Removal of Coffee Export Quotas

Jarvis

2004

SSRN Journal

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Summary:Brazil, the world's largest coffee exporter, encouraged efforts in the 1960s to form the International Coffee Agreement (ICA), which restricted total coffee exports via country export quotas. The quotas led to significant domestic quota rents in producing countries. This paper analyzes the effects of rent seeking in Brazil. The Brazilian Institute of Coffee (IBC), which was responsible for coffee policy, was the focus of rent seeking. The paper models the policy instruments used by the IBC, shows how rent seeking affected policy, industry efficiency and the distribution of rents, explains the causes and effects of IBC reforms in the late 1980s, and draws lessons from the experience.

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Commodity policy: price stabilization versus financing

Cited by 11 publications

References 0 publications

Commodity futures markets in LDCs: a review and prospects

Commodity futures markets in LDCs: a review and prospects

Stabex versus IMF compensatory financing: impact on fiscal policy

The Rise and Decline of Rent-Seeking Activity in the Brazilian Coffee Sector: Lessons from the Imposition and Removal of Coffee Export Quotas

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