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.
A look at the news

Russian grain market in dire straits

February 11, 2013

“Russia is a riddle, wrapped in mystery, inside an enigma” Winston Churchill liked to say. Most certainly, mystery shrouds the Russian cereal market, insofar as the signals sent to international markets have been unpredictable over recent years. Early February, Russia announced plans to raise tariffs on grain imports until 1st August 2013.

Already late January, Russia cut its forecast for grain exports for the 2012-13 campaign to 14 million (Mt), against the estimated 15.5 Mt. The rude winter of 2012 and the summer drought resulted in a lower production estimate of around 71 Mt against 94.2 Mt in 2011. The country’s stocks stood at 25.3 Mt on 1st January 2013 - 30% lower than last year.

The decision to raise import duties on cereals, as well as massive sales of grain drawn from its emergency fund since autumn, is aimed at stabilizing grain prices currently at US $100 per tonne higher than the global level.

Russia got its stakeholders on international markets used to more drastic measures, such as the decree for a grain export embargo in 2010 following an unprecedented drought. So, how should this Russian cyclothymic disorder be understood? Above all, though the weather was an aggravating factor, it would be wrong - even dangerous - to consider the fluctuations in Russian and international grain markets solely due to this.

For several decades, markets have become financialized and complex. Today, these markets are structurally tainted by price hyper-volatility and excessive speculation, exacerbated by the adverse effects of natural disasters. Furthermore, this situation makes it impossible to predict future prices. So, to protect themselves from this hyper-volatility, countries adopt certain measures, some of which may be destabilizing and inadequate, partly because they lack visibility. These issues not only concern Russia, but also Argentina and the consequences of the 2009 drought on the beef market or the consequences on the rice market after the tsunami and earthquake in Japan in 2011.

Russia, like others, must cease using stop-and-go policies, as the intrinsic complexity and volatility of agricultural markets demands more flexible measures on a political and fiscal level, controlled by a global governance of food and agriculture.

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Paris, 18 December 2018