A/HRC/13/33 advantages,33 since organizations or cooperatives can significantly reduce the transaction costs which commodity buyers associate with small-scale farming. Such organizations also enhance the capacity of farmers to obtain lower prices when they buy inputs, and higher prices when they seek to sell their produce. They can spread the risks across their membership; provide services and organize training sessions for their members; provide infrastructure services to members, such as storage or transformation facilities; and disseminate price and other marketing information. The strengthening of such associations is recommended by various international bodies and experts, including ILO and the International Assessment on Agricultural Sciences and Technologies for Development (IAASTD).34 Cooperatives that function according to democratic principles, that work for their members and in which costs and benefits are distributed equitably can be extremely beneficial to their members. States should go beyond recognizing the right of farmers to organize. They could establish an appropriate legal framework, that encourages the formation of cooperatives by smallholders, for instance by favouring access to loans for infrastructure investment. They could also build economic incentives, for instance preferential treatment of cooperatives in public procurement schemes, or tax incentives for the cooperatives themselves or for those buying from cooperatives. Cooperatives wishing to enter the global supply chain could benefit from capacity-building in order to improve their managerial capacity and ability to meet the increasingly complex norms and requirements of buyers and public authorities active on regional and global food markets. 32. States could also establish or support marketing boards, equipped to buy certain volumes of staple crops at remunerative prices, in order to put pressure on private traders to improve on their own offers. These boards should be set up with the participation of farmers’ organizations. Such boards could help farmers market their products, or comply with standards imposed by the large commodity buyers or retailers. They could, for instance, provide for a transparent and reliable certification system. In the past, such marketing boards have sometimes used their monopsony power to artificially reduce prices received by farmers in order to ensure cheap food for urban consumers, or to earn foreign currency from food exports in order to fund industrialization policies; sometimes cheap food served the interests of the domestic food processing industries.35 In effect, farmers were taxed, and the urban population subsidized – a situation made even worse by the high prices of inputs, the result of tariffs on imported inputs and of an artificially depressed currency exchange rate.36 In that context, marketing boards in fact prevented farmers from retaining control over the prices they received for their produce, leading to the emergence of parallel farmers’ markets and, sometimes, to bribery of marketing board officials. Great 33 34 35 36 12 Bank, World Development Report 2008, p. 88. See World Food Programme, World Hunger Series, Hunger and Markets (London, Earthscan, 2009), p. 133; International Food Policy Research Institute (IFPRI), “Responding to the Global Food Crisis: Three Perspectives”, 2008. On the role of collective action institutions in improving market access for the rural poor, see H. Markelova and others, “Collective action for smallholder market access”, Food Policy, vol. 34, No. 1 (February 2009), p. 1. See ILO recommendation No. 193 (2002) concerning Promotion of Cooperatives; International Assessment on Agricultural Sciences and Technologies for Development (IAASTD), Agriculture at a Crossroads: Global Summary for Decision Makers (2009), key finding 12, p. 6; para. 12 (b) (ii) of resolution 17/1 and para. 19 (p. 41) of the Chairperson’s summary, report on the seventeenth session of the Commission for Sustainable Development, E/2009/29-E/CN.17/2009/19. See Robert Bates, Markets and States in Tropical Africa: the Political Basis of Agricultural Policies (Berkeley, University of California Press, 2005), ch. 1. Alberto Valdés and Ammar Siamwalla, Foreign Trade Regime, Exchange Rate Policy, and the Structure of Incentives, in John Mellor and Raisuddin Ahmed (eds.), Agricultural Price Policy for Developing Countries, (IFPRI, Johns Hopkins University Press, 1989), p. 110. GE.09-17776