A Common Fund

Press, 15 April 1978, Page 14

A Common Fund

The Commonwealth Ministerial conference on the establishment of a Common Fund being held in London is part of an effort to make some progress on the subject after the deadlock which ended talks last year. Formally, a Common Fund is being considered by the United Nations Conference on Trade and Development, but the Commonwealth, with its large number of developing nations, has been considering the subject, on which New Zealand has shown itself until recently to be lukewarm.

In principle the establishment of a Common Fund, which would help stabilise prices for commodities, providing a good return for the seller and a stable price to the consumer, is good. Some hesitation has been shown by the Government in the past more about the details than about the principle. For some commodities a Common Fund would provide buffer stocks, which could be fed on to the market in steady amounts, thereby avoiding the wild swings which occur from time to time.

Care would have to be exercised lest an unacceptable amount of waste occurred in some stocks. India has trouble storing food for months, or years, and while this has frequently been put down to inefficiency, there is some evidence that the physical problems associated with storing certain commodities inevitably end in high wastage. In a world short of food, that should be avoided New Zealand’s hesitation has. however, probably been more associated with what effects a Common Fund would have on its own exports, and possibly on its imports. Initially, no effect would be discernible on exports. The first 10 com-

modifies which would come under a Common Fund are tea, cocoa, rubber, hard fibres, sugar, vegetable oils, oilseeds, tin, bauxite, and copper. The next eight, which might be many years away from being affected, include meat. Would New Zealand’s interests be served well by allowing a Common Fund to influence the price of meat? Probably they would. A Common Fund might rule out some of the fluctuations in price that afflict primary producers. But it would not be certain in its results.

A Common Fund is not primarily intended for nations such as New Zealand. The proposal is an aspect of the movement to a new international economic order, and is part of the NorthSouth dialogue going on between the developed and developing nations. It is part of the attempt to lift the developing nations out of their poverty. New Zealand should support it, reserving the right to decide at the time w'hether any of its own commodities should be included in the scheme. In the first place New Zealand should not stand aside from the international effort to do something about the plight of some of the poorer countries. In the second place New Zealand should cooperate with other countries in the region, such as Australia, which want to see a Common Fund established. Third, New Zealand is now trading heavily with a large number of developing countries and in its own selfinterest, if for no other reason, should give considerable weight to a matter which those countries see to be of prime importance.