Georgofili World

Newsletter of the Georgofili Academy

The collapse in commodity prices

It may be the fact that China has bought less, that harvests in some countries were plentiful, or for some other complex reasons. In any case, the result is that the world prices of many commodities, including wheat, have dropped to very low levels.
Of course, aflatoxin-infected wheat costs even less and hence the reason a commodity that cannot be used by law has arrived in an Italian port. 
Yet the underlying problem of this condition of the European agricultural market is in the common agricultural policy, an unfortunate choice by the EU legislature backed by the consensus of many, too many politicians. For a long time, the EC and the USA sent massive quantities of foodstuffs or the seeds to produce them to such non-aligned states as Syria, Egypt, Algeria, Tunisia, Sudan, Somalia, Eritrea, Chad, etc. In many questionable, perhaps even despicable respects, they tolerated the presence of dictators like Gaddafi and Saddam Hussein.
Those who believed these were humanitarian actions or were carried out to allow exporting the huge surpluses accumulated because of the agricultural policies of the planet’s two most powerful food and economic entities were mistaken. They were foreign policy actions to maintain the previously-mentioned states within the Western sphere of influence in order to contain Soviet expansionism, which had its wings clipped when it came to food products, given the permanent agricultural production crises in Russia and Ukraine.
When the Soviet Union collapsed, the EC and the USA decided to change policy also because Europe no longer had any interest in protecting the stabilizing element of power represented by farmers. As I said at a meeting organized by an association of farmers, the “Berlin wall” did not fall on the “communists”, but rather on the European farmers. 
We now almost regret the fall of the savage dictators that caused an infinitely smaller number of dead compared to today in their respective countries. We must acknowledge that the new CAP, which has cut off direct and indirect food aid to poor countries, is a political mistake and in particular a violation of TFEU art. 39.
Those who believed that an increase in the world demand for food would be inevitable due to increased populations, so there would be no need for support in order to guarantee European farmers a reasonable income, made a double mistake. The anticipated rise in prices did not occur because the greater demand could not be met due to the poverty of the potential applicants, and the way in which this rise in the demand for food took place. Today this demand has translated into a huge flow of immigrants towards a “rich” Europe that has endorsed the various Milan charters yet does not understand that this peaceful invasion – inevitable, but not in its current uncontrolled form – can only be controlled by reviving the previous policy of agricultural production and food aid incentives – and more – in those countries where poverty prevails.