Global food markets Economics of Food Markets Lecture 2 Alan Matthews
Long term perspectives Think about in terms of simply supply- demand diagram Factors affecting demand –Population growth, income per head, changing tastes Factors affecting supply –Resources, technology
Source: FAO World Agriculture: Towards 2015/2030
Source: FAO Food Outlook
Long term perspectives Malthusian predictions not yet confirmed by historical experience Great volatility around the trend What does the future hold? –International organisations relatively sanguine –Dissenting voices, e.g. Lester Brown –Global population growth slowing down –The China syndrome? –Vanishing resources? –Technology?
Prospects for food and nutrition Tremendous progress in improving nutrition levels over last four decades But almost 800 million people still suffer from undernutrition The importance of agricultural development to address poverty and undernutrition
FAO World Agriculture Towards 2015/2030
Changing international trade patterns Agricultural exports a declining share of global merchandise trade Overall agricultural trade surplus of developing countries has virtually disappeared Least developed countries are net food importers since the mid-1980s Trends driven by both policy and market factors
FAO World Agriculture Towards 2015/2030
Policy impacts on international trade Tariffs continue to curb trade Domestic support remains high More liberalisation would mainly benefit developed countries Does globalisation disadvantage the poorest countries?
FAO World Agriculture Towards 2015/2030
Taming commodity markets Commodity markets – declining and volatile prices Price stabilisation –Buffer stocks Price raising –Export cartels Market-based mechanisms –Compensatory financing schemes –Risk management
Key messages – global food markets Positive achievements –declining food prices, fewer people hungry Issues –can this continue? –do OECD farm policies hurt the poor? –can we tame commodity markets? –Can globalisation of food markets work in favour of the poor?