News
21.12.2009
European Commission urged to address grain price volatility
THE European Commission is to be asked to intervene in cereal markets.
EU farmers' group Copa-Cogeca yesterday said the 54% drop in wheat prices alone in the last year was drastic and having a big impact on cereal farmers' incomes.
Copa-Cogeca cereals working group chairman Paul Temple said ways were needed to be found of protecting farmers against price volatility that largely has its roots in growers increasing plantings at a time when global demand for grain has slumped because of the economic slowdown.
Mr Temple said exports of grain out of the EU were down. He also cited significant increases in production costs, although these have fallen because of the drop in the price of fertiliser. Problems accessing credit were also highlighted.
Mr Temple said it was ironic that farmers were having to rely on production failures to provide them with an economic return for grain production - a situation that put them in an untenable situation.
Mr Temple said with the expectation of a 5% drop in EU crop plantings next year it was likely that cereal prices would rise again and potentially have a "catastrophic impact" on feed prices for the livestock sector. Increases in cereal prices would also hit consumers.
Mr Temple added: "The extreme price volatility on the cereals market poses a major problem for EU grain producers and threatens the competitivity of the EU livestock sector.
"The functioning of the food chain must consequently be improved, and provide an economic return.
"Global reserves relative to consumption are still low and a fall in production increases the EU's exposure to any kind of weather event or natural disaster.
"With predictions from the Food and Agricultural Organization of the United Nations that world food production needs to be doubled by 2050 in order to meet growing demand, it is vital to maintain cereals production across the EU through investment in facilities, research and development and people."
HARVEST WOE: Cereal producers have seen the price of wheat drop 54% in the last year
HARVEST WOE: Cereal producers have seen the price of wheat drop 54% in the last year
Aberdeen Press and Journal
