CULTIVAR 1 - Volatilidade dos Mercados Agrícolas

25 3. The global debate for policy responses and the case of the EU The differences in opinion about the causality of price volatility naturally led to differences in the search for these policy approaches that were deemed most appropriate to solve the percei- ved problem. Several concerns were raised in the global farm policy debate, and quite diverse po- licy problems emerged from the food security/price volatility debate, from efforts to address the price interests of the rural and urban poor (mainly, although not exclusively, a developing coun- tries’ issue) to a renewed focus on the gap between existing research, innovation and productivity priorities and future market and trade challenges. In the developing world, food security concerns revealed also concerns of a different nature. High food prices, though transmitted in most developing countries with delay and imperfections, raise nonetheless the prospects of a contradiction stemming from the different interest between the urban and the rural poor. The policy instruments that could create the incentives for the better integration of the rural poor in market opportunities require the efficient transmission of higher price signals. In that res- pect, the expected continuation of higher prices is a potentially positive development for rural areas.Yet the opposite is true for the urban poor, with a completely different price level required to alleviate poverty. The type of policy tools that are necessary to address such conflicting interests could prove both costly to administer and counterproductive if the right balance between different policy targets is not achieved. Especially when, on top of such measures, the discussion for public stoc- kholding for emergency situations added another layer of uncertainty in terms of the timing of their purchase, the conditions of their storage or the cost and impact of their potential release. Although pertinent in the European Union, such reflections only indirectly impacted upon the debate on the future direction of its Common Agricultural Policy. Concerns about price volatility and food security, often used interchangeably and without clear distinction, dominated the deba- te about the framework under which the CAP had to operate in order to prove capable to adapt to future challenges and to remain relevant. Reference was sometimes made to past policies, with the attention often centred on their positive impacts (price stability, for example), with their negative effects (such as the high and volatile budgetary expenditure or price pressure on third countries) simultaneously omitted. But in the past, the then policy measures of the CAP had to respond to a different set of pri- orities, within a different EU and world setting with respect to both the level of prices and vola- tility, as well as their underlying drivers. In grains, for example, the same policy environment in terms of price and direct income support corresponds to two completely different sets of price level and volatility in grain markets, while the conditions of a significant reform (decline of price support and gradual abolition of quotas) coincided with a major upward demand trend in dairy markets. This completely different set of challenges linked to a changing worldmarket environment led to a different set of policy parameters, with the policy dilemma that these developments posed being better reflected with the decision to “green” the CAP. Unlike farm policy developments in other parts of the world, the CAP put at the forefront of its design a paradigm shift of policy ins-