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.
APCA
  Editorial  
 

2014 : annus horribilis ?



Thierry Pouch, APCA



Slow trade, the widespread fall in agricultural prices, unsteady farm incomes (in free-fall particularly in France), not to mention the geopolitical tension around the Russian embargo and permanent climate risks ... no, 2014 was not a good year. This was the view reluctantly presented by Thierry Pouch in an editorial late December (extract here1), a reminder that many future challenges remain, given the volatile and unpredictable nature of the international context.

The appalling events that brought in 2015 in France, to remain forever in our minds, will no doubt give rise to new international power relations. As for international trade and economics, even though there is as yet no definitive trend, today, the only thing we can be certain of is uncertainty.

Above all, more than ever, price volatility, uncontrolled speculation, the proliferation of bilateral agreements and growing differences in the agricultural policies implemented by the world economic powers, necessitate the creation of a global Food Security Council modelled on the United Nations Security Council. Thierry Pouch concludes: is a new global crisis necessary before superpowers – principally China and the United States – decide to sit around the table and define a new global agreement?


momagri Editorial Board



The year 2014 is over and the news on the economic front is not good. It is regrettable that we have ended the year by writing an economic editorial with such a negative tone, but the facts remain and they seem to be staying. World trade, agricultural prices, growth in the euro zone, the Russian embargo... so much tension that we tend to forget history.

2014 ended on a negative note whatever the domain.

In terms of economic growth, there is a contrast between the US economy which picked up at around 4% per year, and the Euro zone which seems mired by sluggish growth, some of its members in outright recession. Fear of deflation has resumed with greater intensity. We all know the immediate consequences. Without growth, some States will be unable to amass sufficient revenue to stop the decline in their public finances. The Juncker Commission’s pragmatism enabled economies like France and Italy to escape financial penalties for excessive deficit, but meetings are to be held in March 2015.

The problem with the euro zone is that its members seem to pool their economic shortfalls, confirming previous analyses on Germany’s attitude, asked for several years, to no avail, to stimulate their domestic demand. Consequently unemployment rates peaked (France 11%, Spain 25%, Italy 14%), with the exception of Germany (5%).

Bad news never travels alone, the slowdown in emerging economies, Latin America first and China next then causes a decline in world trade. This only increased in 2012 and 2013 by 3%, against 7% for the period 2002-2007, i.e., before the 2008 crisis. Some observers see the result of hidden protectionism.

The risk of deflation in Europe and protectionism bring back bad memories. For agriculture, the year that has just ended is characterized by almost universal falling prices. Markets are down for crops, fruit, vegetables and meat. For pork, prices fell sharply under the double impetus of poor weather during the summer and the Russian embargo which still affects producers despite a rebound observed on exports to Asia and the United States. The current price for pork is around 1€.

The current situation is fraught with danger, especially for the euro zone, which, whatever one might say, is still not out of the woods. The contrast is striking with the post-war period, where for the major advanced economies there was the growth of full employment; a little historical fact for the end of 2014. Not out of nostalgia, but as a discreet celebration of the 70th anniversary of the agreements signed in July 1944 in Bretton Woods (small town in the United States, P. Mendes France was the French representative) which established international institutions (International Monetary Fund and what would become the World Bank), whose mission was precisely to promote growth, international trade, monetary stability and employment in order to end the Great Depression of the 1930s and the war. At the time, this major global turmoil did not stop great leaders from coming together and finding a way out, opening the way to a long period of prosperity.

Is a new global crisis necessary before superpowers – principally China and the United – decide to sit around the table and define a new global agreement? Sad to say, but as a historian Harold James, professor at Princeton University said recently, the world today has not yet entered its most dangerous zone in order to drive a movement towards such an agreement between superpowers. Instability is indeed an abundant commodity.

Happy New Year nonetheless.


1 The entire article is available from
http://www.chambres-agriculture.fr/fileadmin/user_upload/thematiques/Economie/LetEco1412.pdf


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Paris, 10 December 2018