Agricultural Commodity Prices: Perspectives and Policies

World prices of wheat, coarse grains, rice and oilseed crops nearly doubled between 2005 and 2007 and continued to rise into 2008, although some of them later started to fall back. The price increases have been a significant factor driving up the price of food to consumers and the cost of feed for cereal-based livestock producers. They have drawn heightened attention to problems of food security and hunger, especially for poorer food consumers in developing countries. A major question is whether these price increases reflect a fundamental change in global food markets and an end to the long-term downward trend in falling real prices of agricultural commodities. Understanding the causes of the recent price increases in the context of long-term trends is vital in order to identify the appropriate policy responses by governments. This article, based on the latest "OECD-FAO Agricultural Outlook, 2008-2017", focuses on the factors behind the price increases, the medium-term perspectives, and the appropriate policy responses. Rising food prices is an issue of a truly global nature. A calm, objective response is needed now from individual governments and from international organisations in order to ensure an effective and a coherent global response, and to avoid making a difficult situation worse. Copyright (c) 2008 OECD. Journal compilation (c) The Agricultural Ecomomics Society and the European Association of Agricultural Economists 2008.