On Our Plate: Strategies for Managing The Booms and Busts

Posted by on May 22nd, 2017 | 0 Comments »

Adriana Banderas raises poultry as part of a World Bank supported producer’s alliance in Colombia. Farmer co-operatives help small-scale producers manage risk through business training and access to larger markets. Photo: © Charlotte Kesl / World Bank

Long-term global trends point to a growing demand for food and agriculture products due to an increasing population and an expanding middle class.

The ups and downs of the global economy, along with the particular boom and bust cycles, impact farmers and other agriculture value chain (AVC) participants such as seed, fertilizer, crop protection and machinery suppliers, agricultural financial services, buyers, processors and retailers.

Understanding the drivers of these cycles and helping agricultural value chain participants prepare for volatility — while building stronger, more competitive operations — is a strategy to manage through the inevitable storms and ensure long term business success.

Farmers around the world are impacted differently by the agricultural business cycle. How they respond to downturns — particularly when it comes to building resilience against future shocks — typically depends on their level of education, training, access to finance, information and technology, and supportive public policies that enable them to compete and take advantage of market opportunity.

Since 1900, real agricultural commodity prices have fallen, while world population growth more than quadrupled to 7 billion in 2015. The average price reduction trend has been one percent per year over that time. But shorter term boom and bust cycles are apparent within this long-term trend.                                  Source: 2016 GAP Report, page 7.

The 2016 Global Agricultural Productivity Report® (GAP Report®): Sustainability in an Uncertain Season analyses the current agricultural business cycle, how it is impacting farmers in different parts of the world, and identifies risk management strategies, innovations and policies that help ensure the productivity and economic viability of their operations during a down agricultural business cycle.

Resource-poor farmers and people living in rural areas are particularly vulnerable to hunger, malnutrition and poverty when prices for food staples such as wheat, maize and rice rise and fall. See the 2014 GAP Report® for more. Photo credit: IFAD

Below are articles and stories demonstrating how farmers and others in the agricultural value chain are mitigating risk and improving their resilience in light of multiple challenges, including climate change, extreme weather events,  and low commodity prices.

Acceptance of climate-smart technologies
India Food Security Portal, IFPRI, March 14, 2017

Op-Ed: Crop insurance critical to farmers
Jim Obermiller, farmer, Omaha World-Herald, May 1, 2017

USDA makes $8.85 million available in risk management education funding applications
Ohio’s Country Journal, May 12, 2017

Supporting farmers in Peru recover from El Niño floods and landslides
ReliefWeb.com, May 18, 2017

Supply Chain Risk – Managing the weakest link
Robert Mbonu, This Day (Nigeria), May 19, 2017

 

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