Analytical Note, August 2005

A Conceptual Framework to Understand Supply Management Programmes.

A supply management programme can be defined as a policy tool that controls the production and supply of a commodity in order to achieve a desirable price objective in a relevant market. The relevant market could be domestic or international.

The importance of supply management as a mechanism for addressing certain aspects of the problems of tropical cash crop commodities is justified by multiple cases of market failure, particularly structural oversupply of commodities, which market forces cannot fully correct. However, supply management schemes are neither applicable to all commodities nor panaceas to the commodities to which they can be applied.

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