Price volatility is as concerning as constant high commodity pricing, according to a European Commission response to a new report on global agricultural development in the next decade.
The new Agricultural Outlook 2012-2021 report was issued jointly by the Organization for Economic Cooperation and Development (OECD) and the Food and Agriculture Organisation of the United Nations (FAO).
â€œWhile international agricultural commodity markets appear to have entered calmer conditions after record peaks last year, food commodity prices are anticipated to remain on a higher plateau over the next decade,â€ the report states.
High prices would be underpinned by firm demand coupled with a slowing growth in global production, said the OECD.
However, in a statement the Commission added: â€œPrice volatility continues to be a real concern for the farming sector as a whole and is still receiving considerable attention in the international policy arena, in particular regarding the situation of developing countries.â€
Price volatility, rather than constantly high prices, was as much of a concern, a spokesman for the Commission said, although it acknowledged prices would remain generally high.
â€œPrice volatility continues to be a real concern for the farming sector as a whole and is still receiving considerable attention in the international policy arena, in particular regarding the situation of developing countries.â€
However, the Commission supported the other findings of the report, that â€œrising food demand will be met by increased productivity, with developing countries becoming the main source of growthâ€.
The joint OECD/FAO report claims agricultural output will slow to an average of 1.7% a year over the next 10 years, down from more than 2% in recent decades. â€œHigher input costs, increasing resource constraints, growing environmental pressures and the impact of climate change will all serve to dampen supply response,â€ it states.
â€œIncreased productivity, green growth and more open markets will be essential if the food and nutrition requirements of future generations are to be met,â€ said OECD secretary general Angel Gurria. â€œGovernments should renounce trade distorting practices and create an enabling environment for a thriving and sustained agriculture underpinned by improved productivity.â€
The report also calls for government to encourage better agronomic practices and encourage research and innovation, sentiments the Commission echoed.