The case against reintroducing price stabilisation schemes in Papua New Guinea: a study of cocoa

Abstract

This paper presents a summary of the advantages and disadvantages of commodity price stabilisation. The weight of evidence is against the reintroduction of price stabilisation schemes. If they are to be introduced, it should be left to industry organisations to operate them on a strictly self-funding basis. A preferred approach is to stabilise incomes of producers directly rather than stabilise product prices, by means that do not rely on government intervention in product markets.