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Commodities boom: Poor left out

May 09 2007 11:10

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Brasilia - A commodity boom this decade has failed to reduce poverty in many developing countries as many producers are left out of the market, international commodity experts said on Tuesday.

In most commodity-dependent developing countries, particularly in Africa, economic growth has fallen far short of expectations, said Ali Mchumo, managing director of the Common Fund for Commodities (CFC), an international aid group.

"Few African countries are positioned to achieve the Millennium Development Goals (of cutting poverty in half) by 2015," Mchumo told a commodities conference in the capital Brasilia.

In several commodity-dependent countries, per capita income fell between 2002 and 2006, according to the CFC.

"Poor farmers are still unable to exercise control over their destinies," Supachai Panitchpakdi, secretary general of the UN Conference on Trade and Development (Unctad), said in a televised message.

An increased concentration of production and distribution, has resulted in fewer farmers being paid less, experts said.

"Supermarkets and commodity traders have increased their share of the pie," said Kamal Malhotra, head of the UNDP poverty group, adding, "If anything, poverty is on the rise."

An Indonesian farmer a decade ago received 19.2% of a $3 cup of coffee sold in an industrialised country, said Malhotra. Today, that farmer receives only 7% of the final consumer price.

Some countries are doing too little to diversify and add value to their commodity exports. Others face subsidies and trade barriers by rich nations, UNDP and Unctad officials said.

Even in Brazil, one of the world's most competitive agricultural producers, many farmers lost money in recent years, Agriculture Minister Reinhold Stephanes told the conference.

"We are transferring wealth to the rich nations," he said. "The best way they can help us, is to pay a fair price for our products."

Brazil's proposal to export biofuel technology could be an opportunity for some countries to diversify their energy matrix and production base, several delegates said.

"Biofuel is not a panacea but for countries with sufficient land, it's an interesting alternative," said Lakshmi Puri, head of international trade with the United Nations Conference on Development and Trade.

Event organizers hope to raise public awareness as well as financing for aid projects in commodity-dependent countries.

The CFC was in talks to secure donations from the European Union as well as from the Bill Gates Foundation, said Mchumo.

 
 
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