World Food Policy Volume/Issue 2-2/3-1 Fall 2015/Spring 2016 | Page 157

World Food Policy

Figure 4 : Commodity Price Index—2000–2016

Source: International Monetary Fund—IMF Primary Commodity Prices

produce biofuels: ethanol from maize
and synthetic diesel from vegetable oils);
some trade policies (export reduction
in some countries aiming to reduce the
impact of prices on vulnerable groups);
the speculative money involved in
commodities markets (the amount of
speculative funds invested in agricultural
commodity futures markets increased
from $5 billion in 2000 to 175 billion in
2007).

Beside these conjectural driving
forces, some underlying structural
ones played a major long-term role:
the changing consumption patterns in
some major emerging countries (during
more than a decade, China, Brazil, and
India—40% of the world population—
experienced a strong growth which
implies the development of a middle
class which tends to adopt a different
diet including more meat and dairy
products); the decline of investment in
agriculture (agricultural investment was

largely ruined in SSA countries under
structural adjustment. Investment has
been affected by the reduction of public
spending and subsidies to the agricultural
sector); and the “urban bias” and the
so-called “archaism” of the agricultural
sector (Lipton 1977). Agriculture has
been traditionally regarded as an archaic
sector, often mistreated by Governments
of developing countries. That was the case
for the economic policies implemented in
SSA, implying low urban consumer price
and taxation of domestic agricultural
production prices detrimental to small
producers.

Have these conjectural and
structural driving forces reversed
drastically, that could then explain this
recent decline? Since 2008, some of
these forces reversed and contributed
to explain the decline, but some forces
still remain operative. The main cause
of the decline was primarily the fact that
supplies were higher than expected. In

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