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.