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.
Point of view

The Jouyet report advocates the regulation of agricultural markets

by momagri Editorial Board

“Agricultural markets are structurally volatile and must be better regulated”… Such is the conclusion of the report released on September 22 under the title “Preventing and Managing Agricultural Market Instability”1 co-authored by Jean-Pierre Jouyet2, Christian de Boissieu3 and Serge Guillon4. All three are members of the think tank Demain l’Agriculture that was launched in February 2010 by French Minister of Agriculture Bruno Le Maire to rethink agriculture in the current context of repeated crises and the onset of new global economic and societal challenges. The report focuses more specifically on economic and financial issues related to agricultural markets.

The three experts come to the same clear and precise conclusion: In a general environment of unstable currencies, of permanent economic factors of tension (supply/demand imbalances, soaring prices of other commodities such as oil) as well as increased market financialization, the structural volatility of agricultural prices grew further, thus directly impacting global economic and social balances.

Confronted with this situation, the authors advocate the implementation of three key measures:

    - Better access to information transparency for both physical markets (stock levels for instance) and financial markets (over-the-counter markets);

    - “Anti-crisis” regulation (preventing and managing crisis through the creation of alert mechanisms, etc…) that would be different from any “purely economic” market regulation (acting on supply, prices, etc…); and

    - Global governance system specific to agricultural markets, in the framework of the G-20 Summit and complementary to the Bretton Woods Institutions.
While “Preventing and Managing Agricultural Market Instability” is only a progress report, we can nevertheless regard it as a document that marks a departure from the doctrine that prevailed until now.

By showing that agricultural price volatility is structural and mostly due to the very performance of agricultural markets and uncontrolled financialization, the report outlines the perils of unfettered trade regulation.

By doing so, the document questions the justification for the talks initiated well before the recent economic and food crises–– whether they deal with the planned CAP reform or the WTO Doha Round talks––since they are based on the same outdated premise: “Agricultural prices would tend to rise permanently and trade liberalization would consequently improve agricultural market operations by curbing price volatility.” Yet, as shown in the report, such an assumption is clearly challenged.

The facts are therefore put forward. The hard part remains to be done: Defining the practical details to implement new regulation for international agricultural markets, both at the economic and political levels.

We are observing a convergence of viewpoints on this issue––as evidenced by France and Germany’s common position on the need to reorganize the CAP5 and make it the cement for a renewed Europe. Unfortunately, time is running out. The situation is critical and the up-coming G-20 summits in South Korea and France must not only deal with this fundamental issue, but also lead to concrete recommendations.

1 http://agriculture.gouv.fr/IMG/pdf/Nouveau_rapport_etape_Jouyet_Boissieu_Guillon.pdf
2 Former secretary of state in charge of European Affairs and current Chairman of the Autorité des marchés financiers––an independent body to improve the efficiency of France’s financial regulatory system and give it greater visibility.
3 President of the French Prime Minister’s Conseil d’analyse économique and of the Conseil stratégique de l’agriculture et de l’agro-industrie durables.
4 General Comptroller for Economy and Finance at the French Ministry of the Economy and Finance
5 Please see momagri’s article “The new CAP: France and Germany getting closer to map out a common position”.
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Paris, 16 June 2019