On Sun, 2006-12-03 at 13:16 +0300, ashok _ wrote: > Wheat - is a subsidized crop in europe - in sub-saharan africa it is grown > in very small quantities - and there is very little dietary consumption of > it. Removing
africa is certainly not the only region affected negatively by european and US subsidies, and i agree that many african crops are _not_ affected by these subsidies. i believe one of the important crops where african producers were severely affected was cotton [1]. > There is no reason (apart from historic ) that coffee, cocoa or tea are > traded as commodity/monetary products. > If such speculation on futures were to stop, most probably farmers producing > the coffee would be able > to get a better price..., since the price is no longer being "controlled" by > speculators. in fact, price fluctuations are a result of "speculators" with different future pricing expectations using market mechanisms to estimate future demand and supply. for every "speculator" who makes a profit, because his price estimate was correct, there must be other "speculators" who lose, because their price estimate was wrong. far from existing for "historical" reasons, or having been started off by "speculators", commodity markets in agricultural produce originated in producers trying to protect themselves from swings in prices due to fluctuations in demand and supply - agriculture being vulnerable to seasonal fluctuations. commodities trading originated in 19th century chicago, and allows farmers to lock in contracts for prices in narrow price bands. price speculation exists, as with any market, but smoothes out fluctuations that would be much more frequent without market trading. the problem is not the trading itself; as with many aspects of free markets, the problem is a _lack_ of sufficient free trade. in this case, the fact that the small african cocoa producers do not have direct access to trade contracts in the commodities markets, leaving them exposed to price fluctuations while middlement profit. but this is an area that technology (mobile phone access to markets) is changing. -rishab 1. http://www.oxfam.org.uk/what_we_do/issues/trade/bp30_cotton.htm
