The Tropical Commodities Disaster
Many countries in the South have been encouraged to grow coffee, sugar, cotton and other crops, but small farmers get only a tiny share of the final price of these commodities in the North. As prices collapse, the terms of trade between North and South have widened. This investigation, by one of the leading authorities on commodity trading, analyzes the current trading arrangements and their disastrous effect on foreign exchange earnings, tax revenues and economic growth in developing countries. Possible solutions are being proffered–from exploitation of niche markets to more radical notions like fair trade–but Peter Robbins shows how they all fail to measure up to the scale of the disaster facing the Third World. He argues that developing countries must bring supply and demand into a better balance that will secure far higher and more stable prices than today.