1. Niagara Falls, October 2009 WORLD AGRICULTURAL SITUATION Niagara Falls, October 2009

2. Farmers had a miserable time in 2008 and early 2009  Scarce credit owing to banking crisis  Reduced demand owing to recession  Fall in trade with product backed up on domestic markets  Collapse in commodity prices in 2 nd half 2008  High input prices especially for fuel, fertiliser and feed

3. Global Recovery 2009-2010  World emerging from deepest recession in 60 years  Recovery led by Asia  Massive intervention by govts. to stimulate economic activity

4. Economic Growth-advanced economies

5. Economic Growth–developing countries

6. Real GDP Growth (%) – World & Advanced countries Source: IMF

7. Recovery in the BRIC Countries

8. Trade and commodity prices are recovering  Trade is picking up especially with Asia  Commodity prices are recovering  Food and agriculture was more resilient to the recession than other sectors

9. Trade volume & Commodity prices (% changes)

10. Export growth from 2006-08 average to 2018 Developing countries driving growth in farm exports

11. Exchange rate movements (Index 2000=100) Major currenciesEmerging and developing economies

12. Commodity Price Developments

13. Commodity and Petroleum Prices

14. Impact on farmers  Oil prices rising faster than food prices  Low inflation & interest rates  Large govt. fiscal imbalances  Stable food and agric. markets

15. Inflation & Interest Rates

16. Government Fiscal Balances (% GDP) Source: IMF

17. Major Food Crops - prices Source: IMF

18. Major Food Crops - stocks 2) Corn, soybeans wheat, rice. Source: IMF

19. Major Food Crops - demand Source: IMF

20. Major Food Crops - biofuel Source: IMF

21. Demand for vegetable oil Source: OECD

22. Meat & Dairy prices Source: OECD

23. Meat consumption increases are mainly in developing countries Source: OECD

24. Policy needs  Correct fiscal imbalances  Increase investment in agriculture  Incentives to mitigate and adapt to climate change  Strengthen banking regulations to reduce excessive risk taking  Strengthen competition policy especially in retail distribution sector  Include risk management instruments in farm programs

25.  The world economy is growing again – along with trade - but growth is slow and uncertain  Farm commodity markets are strengthening  However, credit to remain tight; weather patterns irregular  Overall the future looks better for farmers – until of course the next economic recession due around 2020 Conclusions

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