A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

A price band to escape excessive volatility

4 July 2011

Once criticized for their alleged inefficiency, price bands are back in fashion. There is no doubt that the recent financial and food crises, which have demonstrated the threats linked to completely free prices in imperfect and financialized markets, as well as the hyper volatility currently observed in agricultural markets along with the political orientations of the G20 countries have played a role.

We have already mentioned the example of Burkina Faso and their “smoothed fund” set up in 20051. On 15th June, French grain and meat producers signed an agreement for the development of model contracts with price floors or “smoothing” over a given period from 1st July. Such contracts would enable, grain collectors and feed manufacturers to agree with food manufacturers and farmers on “price smoothing” for a certain period of time.

Momagri, who have been continuing to reflect on a similar logic since 2005, are pleased to see the idea of such a mechanism emerge, developing in many countries and effectively being applied to certain products. Ensuring essential visibility on prices to encourage investment and a minimum wage for farmers, “price bands” or “smoothed funds” offer a concrete and relevant response to the problem of excessive price volatility, which is currently under discussion in G20 proposals.

1 See momagri article of 06-06-11 : http://www.momagri.org/UK/points-of-view/Regulation-of-agricultural-commodity-prices-The-case-of-the-fonds-de-lissage-_926.html and momagri article of 13/07/09 : http://www.momagri.org/UK/focus-on-issues/The-Fonds-de-Lissage-for-the-Cotton-Sector-in-Burkina-Faso-A-Pertinent-Initiative-to-Fight-Price-Volatility-_525.html

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Paris, 24 April 2019