Agricultural Trade

Conditions in the world agricultural market during the 1980s significantly deteriorated after a period of steady growth in the 1970s. From 1970 to 1980 the volume of world agricultural imports increased 53 per cent, while imports were relatively stagnant during the first half of the 1980s, rising only 7 per cent in volume and actually declining in value (see Charts 4.1 and 4.2). At the same time, agricultural production continued to increase under the influence of government incentives, creating large surpluses of many agricultural products in OECD countries. ¹ Although agricultural trade picked up somewhat by the end of the 1980s, the volume of world agricultural imports increased only 18 per cent between 1980 and 1989. World food prices, which had nearly tripled between 1970 and 1980, declined by some 33 per cent between 1980 and 1987 (see Chart 4.3). Surplus production and falling prices resulted in vigorous competition for world markets among agricultural exporters, sparking numerous trade disputes. The most notable of these conflicts were between the United States and the European Community, largely over American access to the European market and competition for third markets, and between the US and Japan over American demands for a more open Japanese market. Chart 4.1 World Imports of Agricultural Products (Value) https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9781315029870/d294cfea-364d-4d7b-8fc5-d90268c1f3fc/content/fig4_1_B.tif" xmlns:xlink="https://www.w3.org/1999/xlink"/> Source: FAO, FAO Trade Yearbook, various issues. Chart 4.2 Indices of World Imports of Agricultural Products (Volume) https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9781315029870/d294cfea-364d-4d7b-8fc5-d90268c1f3fc/content/fig4_2_B.tif" xmlns:xlink="https://www.w3.org/1999/xlink"/> Source: FAO, FAO Trade Yearbook, various issues. Chart 4.3 World Agricultural Price Index (1980 = 100) https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9781315029870/d294cfea-364d-4d7b-8fc5-d90268c1f3fc/content/fig4_3_B.tif" xmlns:xlink="https://www.w3.org/1999/xlink"/> Source: IMF, International Financial Statistics: Supplement on Trade Statistics, 1988; IMF, International Financial Statistics, various issues.