The EU is the first trader in agricultural products of the world, both in terms of exports and imports. Agricultural trade helps to answer possible food production shortages due to climatic or other reasons. Ultimately, it contributes to the prosperity of farmers, industries and consumers. In recent years, global agriculture markets faced an increased volatility, directly impacting stakeholders of the food chain. Price volatility makes planning for farmers and buyers the world over extremely difficult and may result in political unrest, like in the recent food prices peak in 2007-2008.
The dynamic development of agricultural markets requires permanent monitoring and prospective analysis. Economic models have become indispensable tools in preparing and negotiating policy decisions like trade multi- or bilateral negotiations. The JRC also contributes to an annual exercise of medium-term outlook with the prospects for agricultural markets and income for the next decade. Furthermore, the development of the food supply chain in Europe is investigated, in general concerning the bio-economy or for certain high value added niche products.
Agricultural markets outlook for the EU
The market outlook consists of prospects for EU agricultural markets and income at medium term (10 years) elaborated on the basis of specific assumptions regarding macroeconomic conditions, policy environment, weather conditions and international market developments.
International Trade Negotiations
EU agriculture is interrelated through trade with agriculture in the rest of the world: associated and neighbouring countries, main competitors, developing countries, etc. Changes in the EU trade policy, in particular following multilateral or bilateral trade negotiations, have an impact on EU agriculture which needs to be assessed.
Price volatility in the food supply chain threatens the long term competitiveness of agriculture. Therefore it is important to understand it and to identify the drivers and factors causing markets volatility.
Specific high value-added and quality food supply chains
Beside commodity trade, markets for higher value added agricultural and food products are developing in the EU, such as those covered by EU quality labels (organic production, geographical indications, products of mountain farming) and others (non-GM products, etc.).
In addition to the traditional agri-food sectors, biotechnologies imply that more economical activities are interlinked and dependent from natural resources, under the new concept of 'Bio-Economy', the importance of which needs to be better monitored.