Supply Management: Options for Commodity Income Stabilization

By Thomas Lines on May 7, 2007
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.

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IISD, 2007