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Uncertainty And Price Volatility Of Agricultural Commodities
Why this workshop?
IAE de Paris-Sorbonne’s Graduate Business School,
Arts & Métiers ParisTech, and ESTP
A bit more than three years and a half ago, the momagri think tank1 asked me to build a new economic model, at world level, which could help to rethink the challenge of agricultural international exchanges more realistic.
It is not usual, for stakeholders of a sector to accept the challenge of scientific judgment. Problems have not been yet burning (riots from hunger had not taken place across the world, by then) but to anyone of sound judgment, they would be coming soon.
And so they did.
Prices for food raised to heights that newspapers quickly described as “unprecedented” and anxiety arose around the world. How would modest families make it? Even in “favored” developed countries, the issue became serious for a vast number of people. But the translation in the underdeveloped world is way more challenging to authorities or policy makers: how will hundreds of millions manage to be fed in such a way as to maintain health and survive? Inevitably, riots for survival, riots from hunger, emerged in dozens of less developed countries.
With a scientific team, I looked into the existing models which drive international decisions. We were all appalled by the insufficiencies they were displaying in view of the specificity of the agricultural sector:
> Why is there such an important volatility in prices and incomes? All these questions lead us to try to build another economic model at world level dedicated to agricultural issues, following our inspiration and based on our enthusiasm. To the contrary of what could have been expected, something came out of it and the momagri model slowly emerged, which could be a new contribution to the current issues.
> Why the existing models do not reflect that volatility?
> How could political leaders assert that the results of such or such policy would be to make the poorest less poor, while none of the large existing models is in a situation to demonstrate such results in any convincing way?
That is why we organized this international workshop on “Uncertainty and price volatility of agricultural commodities”:
> Establishing clearly what rigorous scientific investigations let emerge as serious causes for volatility; I would like to thank all participants, from so many different countries of the world, from quite a few prestigious institutions, for the quality of the discussions.
> Assessing the impact it may have on developing countries as well as on developed ones;
> Identifying what policies can be formed and/or are likely to emerge about it;
> Presenting the uniqueness of the momagri model to assess agricultural prices volatility.