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| Turning High Prices Into an Opportunity: What is Needed? |
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Institute for Agriculture and Trade Policy
Minneapolis, Minnesota
Anne Laure Constantin (IATP)
Eyes all around the world are turned toward agricultural markets. Climate change, the rising price of oil, biofuels, speculation on financial markets and income growth in emerging economies are some of the factors that have combined over the past two years to cause an unexpected rise in commodity prices.
After decades of low prices, this increase should be good news for farmers and countries that produce agricultural products. To some extent, higher prices can bring some benefits, we argue. In the short-term though, the rapid price increases are causing enormous stress for the urban and rural poor in regions dependent on food imports. Net food-importing, low-income countries are struggling to pay their food import bills, which diverts money from other needed investments.
It is time for an urgent rethink of the respective roles of markets and governments. Strong agricultural policies will be needed to make high prices work for development. World leaders must take bold steps to rebalance agricultural policies and markets in favor of marginalized, resource-poor farmers, so as to make agriculture work as an engine for sustainable development.
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