Extracts: UN Food & Agriculture Organisation – The State of Agricultural Commodities 2004
“During the 1980s and 1990s, many developing countries dismantled the state marketing boards that had previously exerted monopoly control over domestic trade and prices for agricultural commodities. Farmers were no longer compelled to sell at prices set far below the value of their produce on world markets. Cocoa farmers in Ghana, for example, received only 6 percent of the export price of cocoa in the early 1980s. Now they get more than 40 percent. Elimination of what amounted to confiscatory taxation on agriculture has restored incentives for farmers to increase investment and production.”
“In many cases, however, the abolition of marketing boards has left an institutional vacuum.”
“Poor market infrastructure and information channels leave them vulnerable to price volatility and exploitation by trading companies that have often stepped in to replace the state monopoly with a private one.”

Quote: Jacques Diouf – Director General; UN Food and Agriculture Organisation – “Another development in agricultural commodity markets has been the increasing concentration of market power in the hands of a few transnational corporations. Just three companies now control almost half the coffee roasting in the world, for example, and the 30 largest supermarket chains control almost one third of grocery sales worldwide. Such transnational enterprises have helped some smallholders integrate into the global market and have helped in the transfer of modern production and distribution technology. However, it is a matter of concern that market concentration has left others with little market power: FAO’s Panel of Eminent Experts on Ethics in Food and agriculture warned four years ago that “there are serious power imbalances arising from the concentration of economic power in the hands of a few”.”

Historical factors such as access to capital, privilege and the necessary assets and equipment required to harvest, process and market agricultural produces have resulted in structural problems, which are challenging to overcome. Small agricultural concerns also have no direct access to independent logistic service providers, to transport and/or process their produce to market, and they are therefore forced to trade on unequal terms, and lose all bargaining leverage.

WCE has developed agricommex.com to provide agricultural industries with a Web-based trading solution, which assists all traders in addressing these issues, and to obtain a fair, market-related price for all agricommex Traders, irrespective of size and influence. WCE provides access to many international Traders, and will continue to actively expand this network of buyers and sellers, who are familiar with this trading mechanism.