Objectives of commodity agreements

  • To reduce price fluctuations of the primary products they are involved in.
  • To raise and stabilize export earnings of the producers.
  • To provide buffer stock facilities to member countries in order to regulate supply. e.g. they aim to help member states establish storage facilities and provide funds for buying surplus produce.
  • To stabilize consumer price for the importing countries.
  • To promote cooperation between the importing and exporting countries.
  • To increase the bargaining power of the producers of the. commodity in negotiating for higher price of the product.
  • To assist member states overcome the B.O,P problems that arise from export price fluctuations e.g. provision of short-term financial compensation schemes.
  • To improve the TOT of the producing countries through bargaining for better exchange conditions and higher price.
  • To eliminate competitions between members of the , organization.
  • To regulate the supply of the commodity to the market through, restrictions in order to avoid surpluses in the market.