A few days before the European Commission published its views regarding the Common Agricultural Policy health check, Patrick Durand, in the editorial of the November 9 issue of the weekly SAF1 newsletter, as one of the organization’s administrators, emphasized uncertainty over the “normal” price of a ton of wheat and underscored the need for long-term regulatory tools for the agricultural markets, even in these times of high prices.
While marketing of the 2007 harvest is in full swing at unhoped-for prices, cereal producers are at a total loss as to how to proceed!
At what price should they sell their harvest? What should they produce in 2008?
Those who sold at peak prices are few and far between and those who sold too early or too late have placed blame for their decision on their collector (the cooperative or trader), who should have known better and warned them ahead of time.
But who today can cite the normal price of a ton of wheat? 100,150, 300 or 500 euros?
What will that price be in two or six months?
And what to do for the 2008 harvest?
One thing is certain: no one holds the answers to these questions. Furthermore, the vast majority of producers are not prepared to manage such uncertainty. Such high fluctuations are, therefore, not desirable as they cause too much frustration, for sellers and buyers alike. The futures market is presented as the solution, but the situation is more complicated than that. Operators are confronted with the same questions when considering unlocking their positions. Insurance is another route, but constitutes a new cost. European regulation of the markets is, therefore, essential for stabilization of trade and to ensure a steady supply to industry and thus continuous business opportunities for producers.
And why not dream of a global regulation of agricultural markets?
WOAgri identifies with these views, which are right on the mark, as it continues work on its economic model and principles for a global governance of agriculture. Through its efforts, WOAgri hopes to bring elements of a response to the questions agricultural professionals face, as expressed by the SAF, in particular with regard to establishing insurance mechanisms that would prevent risks related to their business activity since, while some risks can be insured by private organizations, others cannot… WOAgri will also provide tangible building blocks for a global regulation of agricultural markets, so as to reach beyond the stage of dreams and utopia and initiate a process of concrete proposals: as André Gide taught us, “the utopia of yesterday and today is tomorrow’s reality.”
1 Société des Agriculteurs de France, the French Farmers’ Association.