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By B Bhattacharyya, distinguished professor & director, Institute of Integrated Learning in Management (IILM), New Delhi
This paper describes how state trading enterprises (STEs) operate, how they set prices and their role in price stability. An attempt has been made to evaluate the actual and potential role of STEs in developing countries and to highlight the critical role of STEs in livelihood security, rural development and poverty reduction.
STEs became important after the Uruguay Round which brought agriculture into the fold of the WTO. The two major concerns about STEs are issues relating to transparency, and concerns about their market-distorting effects. The paper presents the case for and against STEs and concludes that the policy space on state intervention on exports must remain with the governments of developing countries. Click here to read the full paper in PDF format.
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