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Contents:

•   Volatility: why talk?
•   In the confusion of the causes of volatility
•   Mixed strategies and differentiated by region

Heavily dependent on imports and exports of agricultural products, developing countries are by far the most affected by the volatility of commodity prices. However, price volatility affects not only the South: it is a major problem for our farmers, whose revenues fluctuate with the price, and even more so from the growing liberalization of the sector. What means do we prevent price volatility? Important issue, affecting the well-known problems of food security and development.

The fundamental analysis of these markets led to conclude that high volatility "natural" agricultural markets, which would tend to strengthen in the coming years. While some measures may lead to limiting the volatility of world prices, it is more likely that the solutions are more policies to curb the transmission of this instability at the national level and reduce the impact on vulnerable populations. It is nevertheless necessary to seek to regulate financial markets, who are accused of having participated in the surge in prices.

This causality is far from being verified, however, more control will improve their transparency, precaution the more necessary that we lack information on these markets.

Such a reform must be accompanied by a reformulation of the guiding principles of the physical market, which would integrate a differentiation of treatment between countries by level of development, and give priority to national agricultural policies. Solutions to long-term volatility, these objectives should be to increase supply (increased productivity, innovation) and a reduced dependence on imports (food crop development).

•  Author: Johanne Buba , Department of Sustainable Development.

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jean-michel.roulle@strategie.gouv.fr
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