The best known tool for commodity price stabilization, especially in developing countries, is supply management (SM). Management of both domestic and international commodity supplies by governments has a history dating back to the agricultural price crisis of the 1930s. It has been a mechanism in the defence of poorer countries' interests on numerous world markets. What is less widely considered is SM's basis in market mechanisms, as a tool in the hands of powerful players in the market. This paper explains SM, highlights some historical success and failures, and makes recommendations for its future implementation.
