Farmers had a miserable time in 2008 and early 2009
Scarce credit owing to banking crisis
Reduced demand owing to recession
Fall in trade with product backed up on domestic markets
Collapse in commodity prices in 2nd half 2008
High input prices especially for fuel, fertiliser and feed
Global Recovery 2009-2010
World emerging from deepest recession in 60 years
Recovery led by Asia
Massive intervention by govts. to stimulate economic activity
Trade and commodity prices are recovering
Trade is picking up especially with Asia
Commodity prices are recovering
Food and agriculture was more resilient to the recession than other sectors
-10
0
10
20
30
40
50
60
Wheat Coarse grains
Oilseeds Sugar Pigmeat Poultry SMP
%
OECD Non-OECD World
Export growth from 2006-08 average to 2018
Developing countries driving growth in farm exports
Impact on farmers
Oil prices rising faster than food prices
Low inflation & interest rates
Large govt. fiscal imbalances
Stable food and agric. markets
Demand for vegetable oil
0 5 10 15 20 25 30 35
2006-08
2018
2006-08
2018
2006-08
2018
Million tonnes
non-biofuel use
biofuel useIndo
nesi
aU
SAEU
Source: OECD
Meat consumption increases are mainly in developing countries
0
50000
100000
150000
200000
250000
300000
350000
20
06-
20
08
20
18
20
06-
20
08
20
18
20
06-
20
08
20
18
tho
usa
nd
ton
ne
s Sheep
Poultry
Pork
Beef
OECD non-OECD WORLD
Source: OECD
Policy needs
Correct fiscal imbalances Increase investment in agriculture Incentives to mitigate and adapt to
climate change Strengthen banking regulations to reduce
excessive risk takingStrengthen competition policy especially in
retail distribution sector Include risk management instruments in
farm programs
The world economy is growing again – along with trade - but growth is slow and uncertain
Farm commodity markets are strengthening
However, credit to remain tight; weather patterns irregular
Overall the future looks better for farmers – until of course the next economic recession due around 2020
Conclusions
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