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

OECD indicates that price volatility on international agricultural markets is tied to economic context

22 June 2009



The fifteenth edition of the “Agricultural Outlook” jointly published on June 17 by the OECD1 and the FAO2predicts that agricultural commodity prices should remain stable during the next ten years, despite the significant impact of the economic downturn. Some crops, such as grains, should increase by 10 to 20 percent in real terms (corrected for inflation) over the average recorded during the period 1997-2006. The price rise is likely to reach 30 percent for vegetable oils.

Three factors are mentioned to drive this medium-term price development: the prospect of an economic recovery, the growth of food demand from developing countries and the opening of emerging biofuel markets.

However, the report believes that outbreaks of extreme price volatility––such as the 2008 price hikes––cannot be ruled out. But such price volatility is not necessarily denounced, since the report considers it depends more on situational than structural factors. In fact, the authors argue that agricultural price volatility is contingent upon oil and energy costs as well as the escalation of unstable weather conditions.

This analysis leads the OECD report to become fixed in an exogenous perception of volatility that is currently overly questioned by experts. The workshop organized by momagri on June 4 and 5, confirmed a rising consensus among economists to recognize that the volatility of agricultural commodity prices was first and foremost tied to endogenous causes 3.

Because of such viewpoint, the latest OECD report, which wants to appear optimistic, is based on very questionable foundations… Indeed, it omits the main factors for destabilized agricultural markets: price hyper-volatility and the aggravating role of unfettered trade liberalization, as underlined by a now increasing number of experts, among whom David Dawe, FAO Senior Economist. One should therefore take the OECD conclusions with utmost reservations, since they distort reality and do not give a reliable decision framework.

1 Organization for Economic Cooperation and Development
2 United Nations’ Food and Agriculture Organization
3 Please see June 8, 2009 momagri’s article “We need a revolution in our understanding of how agricultural markets operate” http://www.momagri.org/UK/Points-of-view/We-need-a-revolution-in-our-understanding-of-how-agricultural-markets-operate-_509.html

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Paris, 26 April 2019