The topic for this session indicates that we are dealing with the matter of "issues in setting effective target prices". From examining the titles of the various papers .to be presented, one would get the impression that the cost-of-production is important in setting target prices. This raises several questions that I would like to address. First, "Is cost-of-production a good basis for setting target prices?"; secondly, "If it is considered appropriate that they be used to set target prices, then what costs should be covered by target prices?"; and finally, "How should these production costs be estimated?".