African countries are demanding the right to form cartels, like the oil producers' group OPEC, to push up the price of coffee, cocoa and other agricultural commodities, as part of any deal in fragile World Trade Organisation talks.
With less than three weeks until the end-of-June deadline set by WTO Director-General Pascal Lamy for sketching the outline of an agreement, the African Group has tabled a proposal that would let its members band together to support the prices of commodity exports that are critical to their economies.
"There is increasingly a view among commodity experts and policymakers in commodity-dependent exporting countries that for commodities like coffee and cocoa, where the distortion of prices is the result of oversupply of a structural nature in the international markets, appropriate action may have to be taken by the producing countries themselves, by entering into arrangements for management of supplies, through control of overproduction and/or imposition of restrictions on exports," they say in a paper submitted to the WTO.
The price of some commodities, especially metals such as copper and nickel, has risen sharply in recent years as China gobbles up resources at an unprecedented rate, but the value of many raw materials has been in long-term decline.
Some of the world's poorest countries are heavily dependent on exports of a single commodity. Coffee accounts for 60 per cent of Ethiopia's export earnings and 80 per cent of Uganda's, for example and campaigners argue that coffee processors, many of them giant multinational firms, are able to exploit their market power to keep prices low. For example, a pound of coffee cost about $1.50 in 1980 but is worth just 90 cents today.
"Despite recent increases, coffee prices are little more than half what they were in 1980. Unless agricultural farm prices increase significantly and the volatility is taken out of commodity markets, millions of small-scale producers will be driven from their land and into poverty,' said Tim Rice, trade policy officer at Action Aid.
Guardian Newspapers Limited 2006