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.
Henri Nallet, Former French Minister of agriculture
Personal accounts

“Will we learn from past food crises?”



by Henri Nallet,
Former French Minister of agriculture


In his previous work entitled “Will Europe retain its farmers?” Henri Nallet, a former French minister of agriculture in the Rocard government, addressed the issue of the future of European agriculture faced with the scheduled dismantling of the CAP1.

Today, new food crises beyond Europe’s borders are also looming on the horizon: food prices are soaring, agricultural markets are increasingly volatile and farmers, as well as consumers, must deal with this new environment in a context of regulatory mechanism elimination. Confronted with the situation, new issues are being raised. Can Europe link up with other nations to find solutions for the future? Must governments be the only ones to take part in the debate, or must the agricultural community also have its rightful place? These are the very issues addressed by Henri Nallet, a highly qualified agricultural expert, in his latest report, “Will we learn from past food crises?” published by the Fondation Jaurès2. We are presenting below excerpts from his analysis.

Momagri Editorial Board



The 2007/08 “food crisis” was triggered by the sudden spike in grain and rice prices, and rooted in the combination of several factors. At the time, some observers thought that such certainly dreadful situation would remain an exception and would be very unlikely to occur again. Among such observers, were the proponents of still more total liberalization of agricultural markets, for whom this “accident” did not challenge their analyses and recommendations.

It was not long before we experienced a new grain market imbalance. The drought in Russia, in Ukraine and Kazakhstan––phenomena that are bound to repeat themselves––and the fires that destroyed parts of Russia brought about a 30 percent crop decline and led authorities to implement a ban on grain exports. The market vultures sensed a windfall and, within a month, wheat prices rose by 70 percent… Farmers, who had seen very depressed prices in 2009 and 2010, will not complain, but I know some who had sold their crop futures at the May prices.

Therefore, the issue is no longer to know if market crises, such as the one we experienced in 2007/08, are forming a permanent part of the farming environment, but rather if producers, whose farms remain small-scaled such as the ones seen today in Western Europe, will still resist, and for how long, to market instability and the consequences of speculation on commodity prices.

Because, and the data that can be given by accounting services proves it, each “broom sweep”, each erratic movement, generates casualties, often in well-equipped and well-managed farms. It is an error to think, as a European Commission high-level civil servant stated, “the market eliminates the least productive farmers”. Sometimes, the best of them, while they modernize, replace equipment and face tight cash flows, must switch out the lights because a 30 or 40 percent drop in earnings is not manageable, and, by the way, not matter the level of decoupled financial support the received.

This new market crisis might not have the scope of that of 2007/08, since reserves have been replenished in the meantime and close to 200 million tons of wheat are available in silos. But the recurrence should, this time, seriously worry the world’s political leaders and first and foremost the European leaders. We are not confronted to “an accident”. Global agricultural markets have entered a durable phase of great instability that can only be aggravated by considerable liquid assets freed from other speculative sources due to the current financial crisis.

Everything is connected and agricultural markets are also caught up in the turmoil. As long as the world will not come out of the crisis it was plunged into, agricultural markets could still generate human damages in the South, as well as in the North.

[…]

And what about the rest? Market regulation, fighting speculation regarding food, North-South trade relations, world governance for farmers and the creation of large regional trade zones? All issues that, for the past three or four years, have been engaging the minds of professional executives and political leaders, who are not satisfied with the destructive disorders generated by market liberalization? Are the Europeans going to address these issues, impose their viewpoints, develop and propose solutions during the up-coming discussions? It is true that the Europeans cannot do much by themselves, since key food issues will be negotiated together with the U.S., Brazil, India and China.

President Sarkozy wants to add the issue of agricultural market regulation to the G20 agenda, and he is right to do so since it is the right arena to discuss such topic. If the G20 opens up perspectives toward genuine types of regulation for global agricultural production, the European discussions regarding the CAP reform will be deeply and beneficially altered. Will the French President gather the needed allies––including in emerging nations––to go against those who gain from the current disorder, and make a reasonable position heard on the issue?

There is no guarantee, but we are observing the advent of an era when issues of food security and the place of farming in globalization will be discussed by political leaders and the media. It might be advantageous and useful that, on such occasion, one hears and listens what Northern and Southern farmers have to say.


1 Please see momagri December 6, 2010 article «Will Europe retain its farmers? www.momagri.org/UK/points-of-view/Will-Europe-retain-its-farmers-_802.html
2 The Fondation Jean-Jaurès is the oldest and most important French political foundation. Created and chaired by Former French Prime Minister Pierre Mauroy, it stands up for social democratic values.
Page Header
Paris, 22 October 2017