With a rising trend, the same difficulty arose. But since this did not impair the
finances of the buffer stock authority, but rather strengthened them, it did not
prevent the authority from resuming operations subsequently, once agreement
was secured on the revision of the operating range of prices.
of stability of prices. The Havana Charter laid down specific conditions for such
agreements, which were designed to protect consumer interests and prevent the
imposition of too rigid a pattern of production. Their effectiveness depended to
a large degree on the comprehensiveness of the agreement, including: the extent
to which it brought under control all important sources of export; the availability
of substitutes; and the importance of international trade of the commodity in
relation to world production and consumption. Moreover, to be effective, such
agreements required the regulation of output by individual producers and not
only of exports by the countries as a whole. Failure to secure worldwide particip-
ation in a quota arrangement on the part of exporting countries was less serious
insofar as importing countries were brought in as participants and undertook
to discriminate against non-participating exporters. At the same time, however,
the very features likely to strengthen the effectiveness of such agreements as an
instrument for raising or upholding export earnings in the short run were also
those likely to endanger long-term prospects by sheltering high-cost producers
and generating centrifugal forces that might eventually lead to the collapse of the
whole agreement. Great care had therefore to be taken to set quotas realistically
so as to allow for sufficient flexibility and to encourage efficiency and desirable
structural adjustments in the primary exporting countries as well as expanding
markets in importing countries.
financing
mental discussions of commodity questions was considered to be the generalized
way in which they were approached without sufficient regard to the basic differ-
ences between different groups of commodities. Different categories of products
had different types of problems.
economies) both originated in, and were absorbed by, the developed countries
of North America, Western Europe, Oceania and Japan. The bulk of this trade
consisted of temperate-zone agricultural products, mainly foodstuffs. The pattern
of trade of this group of commodities was largely influenced by the domestic agri-
cultural stabilization and support policies of virtually all the importing countries
and of the United States, the largest exporter. The funds required for agricultural
support were drawn from the non-agricultural sectors of the countries concerned.