The domestic support of and protectionist policies toward agriculture in major Organization for Economic Cooperation and Development (OECD) countries has been partly responsible for surplus commodity production and sagging international commodity prices in recent years. Between 1980 and 1987, the International Monetary Fund (IMF) food commodities price index fell by one third in the nominal terms and by almost one half in real terms. Although originally undertaken largely for domestic reasons, these policies have lead to trade restrains and export subsidies that have reduces prices and aggravated instability in international commodity markets. Attempts to reform policies in OECD countries via General Agreement in Tariffs and Trade (GATT) negotiations or other means have led to only modest changes in world commodity production and trade patterns.
Iowa State University
Rausser, Gordon C.; Rose, Marjorie B.; and Irwin, Douglas A., "World Commodity Prices: The Role of External Debt and Industrial Country Policies" (1992). GATT Research Papers. 38.