In the longer-run the elasticities rise and with them the critical share required for the successful operation of a producer only agreement, but this should not rule out modestly aimed agreements for a limited number of years. I 40 101 80 275 218 1933 424 Australia Dec. Table 9 shows the extent to which rubber prices actually did fluctuate during these years. The situation is different amongst native producers in British Malaya and Ceylon, since they are very dependant in these areas upon an income from rubber sales. This period coin-cided with the trough of a severe depression, and prices f e l l from 20.
This problem became centred parti— cularly in Brazil as the world's largest producer and because of the unique character of her coffee which suffered a declining demand in favour of the better quality ,mild , coffees. Industrialization is viewed as a natural outcome of development instead of being an objective pursued at the expense of the economy's efficiency. See page58 of this Thesis. This result is because the typical multilateral contract does not involve output restraints and thus does not check the development of more efficient low-cost producers. During the great depression, United States production of automobiles dropped from 5,300,000 in 1929 to 1,300,000 in 1932. This has been particularly so in the history of wheat and sugar, where the chief consuming countries have for national defense and political reasons attempted to preserve a considerable measure of economic autarchy. The disarray in commodity markets following on the policy induced output and stock increase together with the anti-inflationary macro-economic policies of the early eighties had two effects.
This is also called soft comoddities. The economies of many developing nations are tied to primary products and a majority of their exports go to advanced nations. But identifying when a trend is changing is difficult, very difficult. Exposure to international price trends, especially for primary commodities: - Long-term price declines for many primary commodities - Price instability for primary commodities 5. Some countries overly dependent on 1, or few, exported products. This factor enhances the long run inelasticity of the supply situationa There is a wide range in production costs, the better quality teas emanating from the high altitude plantations where growth is slow and costs comparatively high. Such support is readily forthcoming in those primary producing countries which are particularly dependent upon an export trade in a few staple commodities.
The need to boost competitiveness in both their export goods and among import substituting goods is clear; these countries have lost market shares in the tropical competing crops and, overall, they have moved from being net exporters of agricultural commodities 30 years ago to being in balance or even net importers today. It should also be borne in mind that much of the growth in world demand for agricultural commodities is expected to come from these countries in the future and that it is important that they capture a reasonable share of this market not leaving it all to the developed country exporters. The Dutch Government was already partici-pating in Sugar and Tea Control Schemes. Raw rubber comes from the coagulation of rubber granules, contained in the latex of various plants. Plantations began to produce on a 2 large scale by 1910. J The consumer is of course primarily concerned with low For a discussion of possible government measures see: Johnson, D.
Because each style has its own formatting nuances that evolve over time and not all information is available for every reference entry or article, Encyclopedia. Daring these years, producers were, however, continually clamour-ing for Government intervention and control. What is worrying, however, from a development point of view is that there has been more growth in the agricultural imports of the developing countries than in their exports of agricultural products. In 1957-59, per capita rubber consumption i n the United States averaged 8 pounds, in Britain 514 pounds per capital, and in Italy only 1. This agreement undertake to restrict the export or production by a certain percentage of the basic quota decided by the Central Committee or Council.
The history of Brazilian Control Schemes reveals the manner in which one country may often be obliged to shoulder the burden of what is really a world wide problem. Yield instability had such a marked effect on world prices, that the state government instituted a stabilizing scheme as early as 1905. Such purchases and sales are designed to hold prices within a target range. Rubber quotas, were commonly as low as 45 to 60 per cent of the basis year, and tin quotas were even restricted as low as 35 per cent of the standard quota. This group was comprised of the smaller and less efficient, badly financed, and economically weak companies largely the inevitable legacy of ,boom» conditions3 they formed that part of an industry which must always languish when boom conditions come to an end.
Critics argue that the potential benefits of economic growth for the poor are undermined or even offset entirely by sharp increases in inequality that accompany growth. About 99 per cent of a l l plantation Knorr, K. Empirically, if not in theory, the following would seem to be among the primary conditions to be met if an international commodity conference is to materialize into an agreement: 1 Inelastic demand. Inelasticity of their demand and supply, coupled with the dynamic effects of technological advance, business cycles and wars, lead to two principal difficulties, which are excessive instability of prices and a tendency towards the development and persistence of surplus productive capacity. This aspect of the problem has hitherto been neglected so we shall turn to a brief consideration of the problems of native production before summarizing this case study. By considering subsequently, the record of success of such agreements in the past and by reviewing some of the current thinking and suggested plans for tackling these problems, i t may be possible in conclusion to indicate the most significant conflicts which have yet to be resolved and the form in which i t is believed that such international economic co-operation might best contribute to this problem.
However, the date of retrieval is often important. London: Institute of Economic Affairs. The time lag between planting and the maturation of trees renders prices a rather inadequate guide for investment in additional 7 Ibid. In the short run there is a slight response in consumption levels, to price changes since the cost of the raw product is roughly 50 per cent of the retail price. The viewpoints of various critics are also discussed in order to indicate the complexity of the issues involved and the divergencies of opinion which characterise this problem. The economic l i f e span of the tree is not definitely known but is probably about f i f t y years. This is in contrast to coffee which Is s t i l l a luxury food in most European countries.
The European Estates, on the other hand, continue to maintain output even in face of a fall ing demand, due to their relatively high proportion of fixed costs. They shifted from import substitution to export-led growth this has been accompanied by a trade surplus and pollution problems 1. Also, global trade could be taken in the context that there are no barriers to trade, thus there is global 'free' trade between countries. The severity of export quotas imposed under the tin agreement from December 1957 through September 1960 appears to have had a long-term effect on productive capacity; when export restrictions on tin were relaxed, output failed to revive in step with a strong recovery in consumption, and, accordingly, this commodity provides a classic example of the irreversible supply curve. For an agreement to keep prices within a target range has a lot to do with how ambitious the agreement is. Worsening terms of trade have been used to justify the refusal of many developing nations to participate in trade liberalization negotiations.