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

When IMF experts question market efficiency

September 22, 2014

“Regulate to avoid crises”, an astonishing recommendation when one learns that it comes directly from IMF experts. Is the invisible hand no longer generating revenue?

Indeed, a recent “working paper” – a category which belongs to the IMF’s “grey literature”, that is to say unofficial – raises “disturbing questions” about the financial crisis and the reforms needed, especially in terms of regulation1.

Indeed, the complexity and instability of contemporary markets no longer allows for rigid frameworks, and challenges models previously founded as absolute values. Market failures are real and have been particularly harmful for several decades. The growing financialization of markets including agricultural markets, in a context of deregulation, was thus accompanied by the unbridled development of speculation in these markets, the amplifying effect of which on volatility is real and problematic.

These failures are all the more tangible in that they are ultimately the only certainties on which we can build our understanding of the markets. These “unknown unknowns”, to use the words of two IMF experts, are chaotic shocks, be they – exogenous or endogenous – on the state of the economic, social and political system, for which it is impossible to predict the end. Markets, particularly agricultural markets have thus become complex anticipatory markets for which the “psychology” of their actors has now become one of the main factors behind the volatility of agricultural prices.

The demonstrations and arguments for this “working paper”, though not reflective of the IMF’s official position, ultimately reflect the increasingly acute realization that the free play of market forces is not the ultimate antidote to crises and price hyper-volatility and this has proven to be particularly true for agricultural markets.

Faced with this situation, reforms are essential but must be pursued in a context of constant change, structural instability and high volatility, with, as the two experts remind us, improved transparency and access to quality information. An observation that Momagri can only welcome.

1 http://www.imf.org/external/pubs/ft/wp/2014/wp1446.pdf
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Paris, 15 December 2018