where virtually all incomes were low and where agriculture accounted for the
dominant part of the national income. In these countries, there were no resources
available for the price support of agricultural exports. And the export-producing
sectors of their economies were often called upon to provide economic assistance
for programmes to raise productivity in the even poorer agricultural subsistence
sector, and for development and diversification generally.
barrier against any sudden large-scale contraction in agricultural incomes such as
occurred in the great depression of the early 1930s. The existence of independent
national policies of price and output regulation created a situation in which the
patterns of production for some of the most important commodities, such as
wheat, were completely divorced from world supply and demand relationships,
resulting in large and growing surplus stocks. These policies led to the introduction
of export subsidies or a two-price system on behalf of exporters, and of varying
forms of import regulations for importers.
new forms of trade flows, on concessional terms, from the developed to developing
countries. It was difficult to bring this concessional trade within the operative
provisions of international commodity agreements. However, a beginning was
made in evolving a new `code of international ethics' through the acceptance
of a flexible set of principles recommended by FAO in 1954 (FAO, 1954b).These
principles encouraged the constructive use of surplus supplies, mainly in low-
income, food-deficit, countries, while providing some safeguards for the interests
of commercial exporters.
policies (FAO, 1961a). These principles reflected `the highest common denomin-
ator of international understanding' attainable by the 1960s from governments
with differing, and partly conflicting, policies. This set of agreed principles did not
imply any contractual obligations, and carried no sanctions. But they nevertheless
marked an important step forward particularly as governments had been gener-
ally reluctant to accept contractual obligations that interfered with their sovereign
rights in shaping domestic policies. Thus, while domestic agricultural policies of
the developed countries had lessened their incentive, as compared with the early
1930s, to insure against violent price changes through international agreements,
their incentives to secure access to markets increased, which required commodity
agreements of a different character.
consisted primarily of tropical agricultural products and, to a lesser extent,
minerals. About three quarters of that trade was absorbed by the developed coun-
tries, mainly of North America and Western Europe, which in the early 1960s