Brussels, 10/04/2008 (Agence Europe) - On Wednesday 9 April, the movement for a world agriculture organisation, momagri, presented its theories and its economic model to the press and to MEPs to demonstrate that free trade will not stabilise prices but, on the contrary, will amplify price instability. There is nothing surprising in this, when one considers that the founding members of the movement are French and fervent supporters of the common agricultural policy (CAP). The chairman of momagri is Pierre Pagesse, who is also Chairman of the Board of Directors of Limagrain (seed business).
According to Bertrand Munier, momagri Chief Economist, simulations based on the assumption of complete market free trade in 2008 show that large-scale crops and grains will see price volatility rise sharply, while cattle prices will collapse. Also, unregulated free trade, by increasing the participation of financial speculators, will further intensify price volatility. This was demonstrated by a new groundbreaking indicator that links the percentages of financial speculators to the increasing volatility of agricultural prices. “One can no longer claim that increased free trade paired with a sustained demand would ensure that prices remain stable at profitable levels”, the movement explains in a press release.
By simulating the impact of the Falconer proposal to the WTO (Falconer being the chairman of the WTO committee on agricultural talks) the model demonstrates that increasing price volatility was very close to the scenario of complete free trade.
As a result, a multilateral decision to reduce customs duties, national incentives and export subsidies would not benefit the poorest countries and would, in fact, have the opposite effect, says Pierre Pagesse in a press release. The momagri chairman goes on to call for the establishment of a “world agriculture organisation” to ensure free markets through appropriate regulations at the international level. For further information, see: http://www.momagri.org . (L.C.)