Stories written by Ali Mchumo
Ambassador Ali Mchumo is Managing Director of the Common Fund for Commodities (CFC)

Q&A: 'Biofuels Must Include the Poor'

Biofuels are being criticised for contributing to the rise in commodity prices, but their energy potential can be developed too, on condition "that the poor are part of the production chain."

MAKING HIGH COMMODITY PRICES HELP THE POOREST NATIONS

Since 2001, the prices of many commodities and other natural resources have soared, providing commodity-dependent developing countries with an opportunity to use the increased revenues to combat poverty and make real economic and social gains, writes Ambassador Ali Mchumo, Managing Director of the Common Fund for Commodities (CFC). However, the author writes in this article, for this to happen adequate policy measures need to be implemented and the international community needs to take swift action to address the challenges that commodity-dependent countries face in the intensely protectionist global environment. Also, adequate financing for small stakeholder farmers remains one of the major development obstacles. When rural financing is available, it tends to be provided to large borrowers, excluding the majority of small producers from the formal credit system. The micro-finance revolution should be expanded to reach rural communities where the need is greatest. If the international community is to meet the agreed international development commitments, including those contained in the Millennium Development Goals, it needs to reverse the current trend in Official Development Assistance (ODA) and allocate more resources to agriculture investments and commodity development.

FREE TRADE? COMMODITY PRICES RISE AS POOR FARMER INCOME FALLS

(By Ali Mchumo, John R. Kaputin, Supachai Panitchpakdi, and Kemal Dervis) - It\'s the kind of unfair situation that makes poorer nations wonder where the payoff is with free trade: demand for coffee, tea, cocoa, cotton, and sugar -- which is what many such countries have to offer the world -- has risen, prices paid in the supermarket have risen, yet the share paid to the farmers who grow these basic agricultural commodities has fallen, writes Ali Mchumo, Managing Director of the Common Fund for Commodities; John R. Kaputin, Secretary General of the ACP Group of States, Brussels ; Supachai Panitchpakdi, Secretary General of UNCTAD, Geneva ; and Kemal Dervis, Administrator at the UNDP. In this article the authors ask, where is the profit accumulating and why isn\'t globalisation \"working\" in this case to reduce poverty in poor or developing nations? Such countries are often lectured. The complexities of the \"value chain\" between crop and supermarket shelf do not work to the advantage of low-income, smallholder farmers. The process may be global, but it\'s not fair. The higher end, where food and natural textiles are \"differentiated\" -- processed in ways that appeal, packaged attractively, branded, and advertised -- is where most of the money accumulates. The original industrial revolution was fuelled by surplus income from farming. The poorer regions of today\'s world deserve the same chance Western Europe and the United States had a century and a half ago. Something is \"off\" about the prevailing situation. It must be fixed. Otherwise the looming scenario offered by a Zambian farmer-trade unionist may become a reality: \"If you will not pay us reasonable prices for our exports, we will export ourselves.\"



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