Peru RTM Commodity Working Group Reports Released

The Latin America and Caribbean Regional Round Table meeting concluded recently in Lima and participants in attendance reported that the RTM had been particularly helpful in identifying potential project proposals and solutions to the various constraints related to the commodity sector development in the region.

The Managing Director, Amb. Ali Mchumo opened the RTM meeting, with welcoming remarks by Peru’s Minister of Production, Sr. Rafael Rey Rey, and it highlighted several relevant sessions that are critically important for the region’s economic strategy. Among them: issues related to agricultural development financing; organisation of commodity producers; and sustainable development and co-operation between commodity farmers and private enterprise partnerships.

As part of membership relationship building and prospecting, Amb. Mchumo also met with delegates from Bolivia, The Dominican Republic, Paraguay, and other regional representatives, who are interested in seeking membership to the Fund, to advance the development of the commodity sectors in their countries.

Lately in both Latin and Central America, the region’s economic strategy has been experiencing a shift as prices for local commodities continue to rise; and as emergent diversification schemes to accommodate the growing biofuel market begin to alter priorities in national economic planning.

Amb. Mchumo, in his opening remarks noted that one interesting factor is that the region’s economic resurgence has taken place in tandem with the increase in commodity prices. And that some analysts have inferred that the increase in commodity prices has been one of the major factors assisting the region in its economy recovery path.

“In general, the region has been one of the prime beneficiaries of the world increase in commodity prices translating its commodity dependency in economic growth and development,” he said.

However, notwithstanding all the commercial optimism over biofuels, sustainable commodity policies are still needed and should be pursued--to reverse the long-term decline in prices for many of the agricultural commodities in the region and in the Caribbean Basin. Some of these policy proposals will require a concerted approach and an elaborate commodity development strategy to identify measures and actions to resolve the ongoing commodity problematique.

Not surprisingly in Lima, one of the most engaging sessions was the biofuel and the new agenda for sustainable commodity development presentation by Dr. Jose Roberto Moreira, chairman of the National Reference Center on Biomass (CENBIO) in Brazil.

In his broad and technical analysis, Dr. Moreira stated that it would be important for developing countries to anticipate the establishment of large trade networks, as the biofuels sector expands. He also pointed out that there are significant barriers within the burgeoning national industries investing in alternatives to fossil liquid fuels.

“As a commodity, bioenergy in general has relatively good potential to be commercialised internationally, however, as the market expands, producers must readily be willing to respond to food security implications, as producers shift to bioenergy production,” Moreira said.

He called on government action for adequate public policies, including specific and long-term biomass targets and incentives, global environmental protection and clarity in energy security policies.

Prior to the Lima RTM, Amb. Ali Mchumo, said the Common Fund was seeking to take stock of the state and role of agricultural commodities in the region’s economic potential; and for CFC to reflect and to review the innovative poverty reduction measures and initiatives financed by the Fund in the area.

He added that increasingly, success with these measures depend on the willingness of governments to draw up commodity strategies that can be fully integrated within national development policies, particularly within specific policy areas and issues, such as: supply side and value chain management; financing diversification measures; competitiveness; use of resource rents; and South-South trade integration.

“For this region and others, we need a coherent approach, mobilised and co-ordinated action by the international community; as well as an innovative poverty reduction development perspective that favours commodity diversification, value-chain integration, pro-growth regional market access and global market development,” he said.

The commodity market situation in Latin and Central America has consistently chalked up positive trends and prospects, and it is high time commodity producers cashed-in on this boom to transform agricultural commodities into engines of economic growth and development. [END] Published 18 September 2007