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

Towards declining agricultural revenues in 2012?

June 4, 2012


In the European Union––the world’s second largest agricultural producer in terms of value––average farm revenues could see a decline in 2012, for the first time since 2009.

The reasons: A gradual and anticipated drop in grain prices in the later part of 2012, and a global increase in production costs, especially regarding fertilizers and energy.

Prices for wheat traded in Paris declined by an average of 11 percent, and the clouded outlook for the year’s end in the Euro zone has resulted in lower quotes on most European exchanges. Areas sown with corn in the northern hemisphere and good climate conditions in the U.S. might suggest a record crop. When you consider that a 30 million-ton surplus was enough to cause plummeting prices in 2008, we may fear the worst. At the same time, production costs have been significantly rising since the start of the year, both in terms of input prices and energy costs. In the U.K., farmers faced an energy price hike of more than eight percent for the sole month of March 2012, as compared to March 2011.

A number of reasons can explain this worrisome situation.

    - The sharp income reduction for a professional occupation as sensitive as farming is a problem, all the more so since agriculture is a key component of European agro-food performance and food security.
    - The current situation––characterized by a “scissors effect” (rising costs and lowered prices)––might prove to be devastating for many farmers. How can they continue investing to ensure farming productivity without income?
    - The new period of hyper-volatility of low revenues comes in addition to a long series of deficit performances starting in the early 2000s, and shows the structural nature of the situation, and thus the inability of agricultural markets to self-regulate and allow farmers to make a decent living from their work without an effective public policy.
    - The successive reforms of the Common Agricultural Policy (CAP) since the mid 1990s resulted in an increased exposure to global price hyper-volatility for European farmers.
    - The latest reform proposal put forward by Dacian Ciolos, the E.U. Commissioner for Agriculture, does not make far-reaching changes to this neoliberal direction.
As key players in European food security and agro-food competitiveness, European farmers should not be considered as the adjustment and balancing variable for increasingly unstable agricultural markets, when vanishing regulatory mechanisms sow the seeds of speculation. It was in that vein that the world large agricultural powers––following the example of the U.S., Brazil or China––implemented and strengthened effective safety nets for farmers’ revenues. It is therefore crucial that the European Union does not lean against the wind in the current CAP reform.
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Paris, 24 April 2019