The political dimension of agricultural markets information :
views from within China
The Institute for Sustainable Development and International Relations (IDDRI)
In a context where globalization has led to the opening of borders and reinforced price volatility, where there is less understanding of financialized markets, information has become a formidable economic weapon. As Alain Juillet, president of CDSE (Directors’ Club for Corperate Security) explains, “in today's competitive world, if you do not have good information, you are eliminated by those who have.”
Within such a context, the search for information and transparent and reliable statistics on agricultural markets is an objective pursued by international institutions through the consolidation of global governance and the adoption of appropriate tools. Accordingly, during the G20 Agriculture in 2011, following the agricultural price crisis of 2008, AMIS, an information system on agricultural markets was set up to increase transparency on production, consumption and stocks.
However, more effort is still required especially from countries like China with regards the collection, analysis and transmission of agricultural data. Marie-Hélène Schwoob in a Working Paper for IDDRI (extract here2), discusses the importance of the transparency of these statistics. She raises the question of the Chinese agricultural statistical system, its flaws, its actors and desired developments.
But going further into the reflection on stronger global agricultural governance, it is also essential to develop specific evaluation and monitoring tools in order to assess the effectiveness of policies in the fight against food insecurity at the local, but also international level, as well as their impact on economic efficiency, nationally and globally.
This is the main purpose of the Momagri Agency.
momagri Editorial Board
INTRODUCTION: INFORMATION, A CRITICAL ELEMENT FOR FOOD SECURITY
Worldwide food security: a global stake at hand
Seven years after the food price crisis of 2007- 2008, agricultural and food security issues are still to be addressed, both in developing and in developed countries. The question of how to provide food, at a decent price, to 9 billion people by 2050, is a matter of intense debates. Although food security was already placed high on the global agenda at the beginning of the 2000s,1 the dramatic rise in global food prices in 2007-2008 and the crisis it triggered stimulated an unprecedented wave of international responses trying to address the issue.
After the crisis, international organisations redoubled their efforts to push national governments to put agriculture back on their political agenda. Institutional innovations emerged as well, as an attempt to build stronger international organisations, better equipped to propose solutions to tackle worldwide food insecurity.
Along with the issue of supply, the food price crisis put on the table another fundamental challenge: the one of food price volatility. Even after the crisis, global food prices remained high and volatile and price spikes kept on occurring (FAO et al., 2011).
In 2011, the G20 summit in Paris focused on this particular issue. Discussions led to the agreement of the G20 Agriculture Ministers on an “Action Plan on Food Price Volatility and Agriculture”, which officially launched the Agricultural Market Information System (AMIS). The rationale of this system lies in the fact that the lack of availability of reliable and up-to-date information on crop supply, demand, stocks and export induce hasty and uncoordinated policy responses that exacerbate a situation (AMIS, 2011) caused by other factors. The AMIS, by improving the transparency of information linked to food markets (crop supply, demand, stocks and exports), aims to reduce the incidence and magnitude of panic-driven price surges.
The idea that transparency is a desirable goal to achieve on international markets is neither new,nor unique to agricultural markets. There has long been a broad consensus among economists that transparency enhances the efficiency of markets—whereas, on the opposite, asymmetry of information only benefits a few players. The first global efforts to improve international cooperation on food markets information started as early as the beginning of the 20th century: in June 1905, just a few years after the wheat crises of the 1880s and 1890s, the International Institute of Agriculture was created as an attempt to tackle the new challenges brought by the globalisation of food trade. The aim of the Institute, at that time, was to “collect, study, and publish as promptly as possible statistical, technical, or economic information concerning farming […], the commerce in agricultural products, and the prices prevailing in the various markets” (Convention of the IIA, 1905, Art. 4). At the beginning of the 1930s, the mission to collect and disseminate statistical information on the food security situation of a range of countries was took over by the Health Division of the League of the Nations (Shaw, 2007: 6). The task is now carried out mostly by the Food and Agriculture Organization of the United Nations (FAO), which develops methods and standards for food and agriculture statistics, provides technical assistance services and disseminates data.
In spite of international organisations’ efforts, progress still needs to be achieved. Today, as the depletion of natural resources, the increase in global food demand and the globalisation of trade keep on making the challenge of food security more daunting, the improvement of the efficiency of world agricultural markets has become even more crucial. For international organisations and a growing number of countries, transparency has become a necessary step to improve both global governance (Holzner and Holzner, 2006: 343) and access to global public goods (Eigen and Eigen-Zucchi, 2003). AMIS has great potential for the improvement of the transparency of world agricultural markets.
However, obstacles remain that prevent the system from reaching its full potential. Among the obstacles is the strong reluctance of a number of countries to fully engage in the initiative. The lack of reliable data on Chinese agricultural markets, in particular, jeopardises the system, as the country’s agricultural output is the largest in the world and as the sheer size of the population and rising income make the food demand grow rapidly—two reasons for which China also holds the largest grain reserves worldwide. Nevertheless, the growing challenges that the Chinese agricultural policy currently faces makes the improvement of its agriculture statistical system a desirable goal even at the national level.
1 Schwoob, M.-H. (2015). The political dimension of agricultural markets information: views from within China, Working Papers N°07/15, IDDRI, Paris, France, 26 p.
2 The entire Working Paper is available from lien