“Agriculture cannot respond to market signals”

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momagri, movement for a world agricultural organization, is a think tank chaired by Pierre Pagesse, President
of Limagrain. 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.

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		Point of view
	“Agriculture cannot respond to market signals” Olivier de Schutter, United Nations Special Rapporteur on the Right to Food

While current international events are focusing on recent runaway food prices worldwide, Olivier de Schutter, the United Nations Special Rapporteur on the Right to Food, recently granted an interview to the European information website Euractiv in which he points out that “Agriculture cannot respond to market signals.”

In this comprehensive exchange dated January 13, 2011, Olivier de Schutter therefore states it is crucial to regulate agricultural markets to fight price volatility, while emphasizing that, for many years, the CAP has been an extremely effective tool to regulate European agricultural prices. We do recommend this interview that can be read in its entirety1 on the Euractiv website2.

Momagri Editorial Board

Do you think it is mandatory to regulate markets?

Yes, because agricultural products entail a very different rationale from other economic sectors. The elasticity of supply as well as demand is relatively inadequate. The ability of producers to react to prices is also relatively inadequate. In addition, agriculture cannot easily respond to market signals.

Market regulation and developing supply management systems would restore farmers’ confidence regarding selling prices, and would protect poor consumers against harsh price hikes.

[…]

What role can Europe play in fighting food price volatility?

Even though the Common Agricultural Policy (CAP) had unintended consequences for developing countries in the past, it provided one major virtue: Price stability. The supply management system provided by the CAP can serve as a model for the future. For instance, a CAP for Western Africa that would be managed by the UMOA (Western African Monetary Union) or the CDAO (Western African Economic Community) could be, in my opinion, a very important step.

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