World Food Board Proposal

MAC/WFY

Page-33

0230_553559_08_cha04

International Commodity Clearing House

· purchase, subject to certain provisions, of stocks of commodities in surplus

supply;

· negotiate sales in inconvertible currencies in order to assist in maintaining the

flow of trade during periods of exchange disequilibrium, such payments being
guaranteed by the buying countries against losses from exchange depreciation;

· sales at special prices to countries in need, under strictly defined conditions

of use, for example, for relief purposes, special nutritional programmes, or
development projects;

· hold stocks acquired in periods of surplus as a reserve to protect the interests

of consumers in periods of shortage;

· negotiate bilateral or multilateral trading agreements or exchanges of commod-

ities on a barter basis;

· co-ordinate the negotiation and administration of international commodity

arrangements, pending further decisions on intergovernmental machinery for
these purposes; and

· organize consultations between governments and other institutions in respect

of commodity policies and arrangements, and the uses of land and other
national resources, in order to meet the changing structures of world demand
and supply.

The ICCH would start with a revolving fund, contributed by member coun-

tries in proportion to national income, with each country contributing in its own
currency. Additional contributions could be called upon for specific transactions,
which would be earmarked for use in the contributing countries to buy commod-
ities that were declared to be in surplus.

The ICCH's authorized capital fund would be provided by national quotas based

on the national incomes of the member countries and payable in the currencies
of the supplying countries. Two methods could be used to dispose of surpluses.
Under one method, the purchasing country could buy from the exporting
country through the ICCH with soft currency at the full market price. The
exporting country would then use the soft currency to buy products in the
purchasing country or, alternatively, the money would be held in the credit of
the selling country until world economic conditions improved enough to convert
it into hard currency. Under the other method, the purchasing country would buy
in hard currency at less than the market value. These cut-price sales would be made
only under special circumstances to countries in need and for strictly defined uses,
such as relief, nutrition-improvement programmes, or feeding workers employed
on development projects. Such arrangements were considered to be of a temporary
nature to help countries during the period of economic distress pending wider
economic expansion and improvement in world trade. But there were also to
be longer-term functions of the ICCH. To prevent extreme price declines, the
organization could buy and store certain commodities when world market prices
fell below an agreed level and sold in periods of rising prices to protect against
extreme increases. The ICCH might also negotiate and administer international
commodity agreements, pending the establishment of the proposed ITO, which,
as noted above, was never ratified.

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Useful links	World Food Board Proposal MAC/WFY Page-33 0230_553559_08_cha04 International Commodity Clearing House 33 · purchase, subject to certain provisions, of stocks of commodities in surplus supply; · negotiate sales in inconvertible currencies in order to assist in maintaining the flow of trade during periods of exchange disequilibrium, such payments being guaranteed by the buying countries against losses from exchange depreciation; · sales at special prices to countries in need, under strictly defined conditions of use, for example, for relief purposes, special nutritional programmes, or development projects; · hold stocks acquired in periods of surplus as a reserve to protect the interests of consumers in periods of shortage; · negotiate bilateral or multilateral trading agreements or exchanges of commod- ities on a barter basis; · co-ordinate the negotiation and administration of international commodity arrangements, pending further decisions on intergovernmental machinery for these purposes; and · organize consultations between governments and other institutions in respect of commodity policies and arrangements, and the uses of land and other national resources, in order to meet the changing structures of world demand and supply. The ICCH would start with a revolving fund, contributed by member coun- tries in proportion to national income, with each country contributing in its own currency. Additional contributions could be called upon for specific transactions, which would be earmarked for use in the contributing countries to buy commod- ities that were declared to be in surplus. The ICCH's authorized capital fund would be provided by national quotas based on the national incomes of the member countries and payable in the currencies of the supplying countries. Two methods could be used to dispose of surpluses. Under one method, the purchasing country could buy from the exporting country through the ICCH with soft currency at the full market price. The exporting country would then use the soft currency to buy products in the purchasing country or, alternatively, the money would be held in the credit of the selling country until world economic conditions improved enough to convert it into hard currency. Under the other method, the purchasing country would buy in hard currency at less than the market value. These cut-price sales would be made only under special circumstances to countries in need and for strictly defined uses, such as relief, nutrition-improvement programmes, or feeding workers employed on development projects. Such arrangements were considered to be of a temporary nature to help countries during the period of economic distress pending wider economic expansion and improvement in world trade. But there were also to be longer-term functions of the ICCH. To prevent extreme price declines, the organization could buy and store certain commodities when world market prices fell below an agreed level and sold in periods of rising prices to protect against extreme increases. The ICCH might also negotiate and administer international commodity agreements, pending the establishment of the proposed ITO, which, as noted above, was never ratified. back to top Next page
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