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.
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Even at 210€ per tonne, wheat is not expensive when considering production costs

March 19, 2012



Since the beginning of last February, wheat is selling between 200 and 210€ a tonne, a level considered by many to be high.

But this supposedly favorable price evolution should not obscure the fact that production costs, especially for fertilizer and energy, are rising sharply in parallel. For 2010/2011, Arvalis estimated the full cost of a tonne of wheat at 217€, this included wages for family labor. According to some experts, this amount should be the same for the current campaign.

So even with the price of wheat at 210€ per tonne, farmers do not cover their production costs and even fewer have the ability to generate sufficient margins to invest in production to increase productivity and competitiveness. Because of very high volatility in wheat prices, farmers are also at the mercy of the slightest downturn.

Based on an evaluation of much lower and obsolete production costs, national and European policymakers are thus greatly overestimating the margins achieved by agricultural producers, but also the benefits to be expected from the CAP reform currently proposed by the European Commission.

Given the volatility of agricultural prices, which will probably continue in the coming years in a context of structural reinforcement of production costs, the competitiveness of European agriculture could be severely affected.

It is therefore essential that the future CAP has mechanisms indexed on verified cost prices and is able to cope with the hyper-volatility of agricultural prices.

It is in this sense that a project for CAP reform was developed and presented by momagri at the Agricultural Show at the end of last February, which is based on a cost estimate for wheat at 215€ per tonne, an estimate very close to that of Arvalis.

The results show that it is entirely possible to ensure sufficiently stable and remunerative prices for farmers, while significantly reducing the CAP budget.

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Paris, 26 April 2019