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Commodity Agreements (Common Fund)

Volume 940: debated on Wednesday 30 November 1977

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asked the Minister of Overseas Development what is her policy toward the proposal of the UNCTAD Secretariat that a large Common Fund should be set up to assist an integrated programme of commodity agreements.

I have been asked to reply.The Government are committed to the principle of a Common Fund to assist in commodity price stabilisation by acting as a key instrument in attaining the agreed objectives of the UNCTAD integrated programme for commodities. But, together with most other developed countries, we continue to see considerable difficulties in the proposals for a ․6 billion fund put forward by the UNCTAD Secretariat. In particular, it would be premature to commit a large and arbitrary sum to be used primarily for the financing of buffer stocks, before producers and consumers concerned have assessed how many new international buffer stocks will be feasible or appropriate, and what their financial requirements would be. We also have serious doubts about the financial viability of a fund with a capital structure of the kind proposed. We and the other developed countries have, therefore, tabled an alternative proposal at the resumed UN Negotiating Conference which is now in progress. This is for a fund based on a pattern of mutual assistance between individual commodity agreements (ICAs) with financial back-up facilities guaranteed by Governments; in return for an obligation to deposit a specified proportion of their available resources with the fund, participating ICAs would have a right to guaranteed credits over and above the sum deposited.