The Common Fund for Commodities (the Common Fund) was the outcome of the North-South dialogue. It was created to promote economic co-operation and understanding among the developed and the developing countries, based on the principle of equity and sovereign equality in the field of commodities, as an essential condition for the establishment of a new international economic order aimed at promoting economic and social development, particularly in developing countries.

The Common Fund was launched in 1989 as an international financial institution to be a key instrument in attaining the agreed objectives of Resolution 93 (IV) on the Integrated Programme for Commodities adopted at the Fourth Session of the United Nations Conference on Trade and Development (UNCTAD). In line with its market-oriented approach, the Fund concentrates on commodity development projects financed from its resources (voluntary contributions, capital subscriptions by member countries transferred to the Second Account and interest earned). Through co-operation with other development institutions, the private sector and civil society, the Fund endeavours to achieve overall efficiency and impact in commodity development.

In the period since 1989, the Common Fund has developed specific approaches to fulfill its mandate in relation to the use of the Second Account resources. In addition since 1995, US$36 million were made available from the First Account Net Earnings for commodity market development actions. By the beginning of May 2003, 121 regular plus 54 smaller Fast Track projects for a total cost of about US$366.6 million were approved. Common Fund projects, which may be financed in the form of grants or concessional loans, are counterpart and co-financed, with Common Fund-financing on average about half of the total cost of projects.

Second Account projects, a unique vehicle in financial assistance for commodity development measures, concern themselves with improving the structural conditions in markets and enhancing the long-term competitiveness and prospects of commodities. Examples of such measures are: research and development leading to transfer of technology and know-how; productivity/quality improvements; marketing initiatives; finding new end-uses; integrated disease/pest management and environmental management; vertical diversification; and commodity market development activities which assist Developing Countries, and in particular Least Developed Countries (LDCs), to function effectively in a liberalised global economy, including physical market development, enhancement of market infrastructure, facilitation of private sector initiatives and commodity price risk management.

Projects, typically for the Common Fund, are not country- but commodity-oriented. This means that the problems facing a commodity are addressed from a more general point of view. The solutions elaborated are of relevance to producers in a number of countries. The focus of the Common Fund is on sustainable development and the identification of the essential issues and problems surrounding a commodity, replicable or applicable in many countries, as articulated by a designated International Commodity (ICB). At present, 24 ICBs, covering more than 60 different commodities, that may submit projects, have been designated by the Common Fund (see list below).

In December 2002, the Governing Council of the Common Fund approved the second Five-Year Action Plan, from 2003 to 2007, which provides the direction of the Fund's work. Among other points, the Plan stresses the need to focus mainly on LDCs and the poorer strata of the population, and the chain management approach to projects.

COMPOSITION

109 members: Afghanistan, Algeria, Angola, Argentina, Austria, Bangladesh, Belgium, Benin, Bhutan, Botswana, Brazil, Bulgaria, Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Chad, China, Colombia, Comoros, Costa Rica, Democratic Republic of the Congo, Republic of the Congo, Côte d'Ivoire, Cuba, Denmark, Djibouti, Ecuador, Egypt, Equatorial Guinea, Ethiopia, Finland, Gabon, The Gambia, Germany, Ghana, Greece, Guatemala, Guinea, Guinea-Bissau, Haiti, Honduras, India, Indonesia, Iraq, Ireland, Italy, Jamaica, Japan, Kenya, Democratic People's Republic of Korea, Republic of Korea, Kuwait, Lao P.D.R., Lesotho, Luxembourg, Madagascar, Malawi, Malaysia, Maldives, Mali, Mauritania, Mexico, Morocco, Mozambique, Myanmar, Nepal, Netherlands, Nicaragua, Niger, Nigeria, Norway, Pakistan, Papua New Guinea, Peru, Philippines, Portugal, Russian Federation, Rwanda, Samoa, São Tomé and Príncipe, Saudi Arabia, Senegal, Serbia and Montenegro, Sierra Leone, Singapore, Somalia, Spain, Sri Lanka, Sudan, Swaziland, Sweden, Syrian Arab Republic, Tanzania, Thailand, Togo, Trinidad and Tobago, Tunisia, Uganda, United Arab Emirates, United Kingdom, Venezuela, Republic of Yemen, Zambia, Zimbabwe, European Community (EC), Common Market for Eastern and Southern Africa (COMESA), African Union (AU).

STRUCTURE

The Common Fund's governing bodies are the Governing Council, comprising Governors representing 106 Member States, the EC, COMESA, and the AU. The Executive Board, with 28 Executive Directors representing their constituencies, directs the conduct of the operations of the Common Fund. The Managing Director is the Chairman of the Executive Board and the chief executive officer of the Common Fund in charge of all ordinary business, and leads the staff. A Consultative Committee of 13 experts appointed ad personam advises on project-related technical and operational matters.

GENERAL PUBLICATIONS

Annual Report; Newsletter (three times per year); Manual for the Preparation of Projects; Press Releases; Proceedings of Seminars and Workshops;a series of Technical Papers.

Designated International Commodity Bodies (ICBs)

The International Cotton Advisory Committee (ICAC); The International Cocoa Organization (ICCO); The International Coffee Organization (ICO); The International Copper Study Group (ICSG); The International Jute Study Group (IJSG); The International Lead and Zinc Study Group (ILZSG); The International Nickel Study Group (INSG); The International Olive Oil Council (IOOC); The International Rubber Study Group (IRSG); The International Sugar Organization (ISO); The International Tropical Timber Organization (ITTO); The International Grains Council (IGC).