Declining Agricultural Commodity Prices: Productivity Gain or Immiserising Growth?

Abstract

The international community accepts that a secular decline has occurred in the terms of trade of most commodities produced by developing countries, a trend that is confirmed in this study. Yet is has been more or less indifferent to the fate of commodity producers in these countries, particularly since the collapse of international commodity agreements (such as the International Coffee Agreement and the International Cocoa Agreement, given out special interest in agricultural commodities). Attempts have been made, albeit not very successfully, to reduce the degree of commodity price fluctuations. But the problem of a secular decline in commodity prices has not been tackled in earnest.