ABSTRACT
Commodities whose prices have deteriorated because of special circumstances may be chosen and others whose prices have risen may be neglected. Since 1950, however, most governments have collected information on the prices of their imports and exports, commodity by commodity. For nonstorable commodities, the instrument of control is restriction of production. In virtually every commodity agreement so far negotiated, the producing countries have argued for as high a ceiling and floor as possible. The chapter deals with New International Economic Order proposals to support the prices of primary product exports. Accompanying “the belief” has been the idea that the poor are the producers of primary products that they sell to the rich who pay for them with manufactured goods. Increases in primary product prices inevitably cause increases in the prices of manufactured goods, which the poor consume. The indexing of primary product prices to manufactured goods is therefore an inefficient way to transfer income from rich to poor.
