THE AGRICULTURAL ECONOMICS SOCIETY
Letter from the President - A Question of Inflation
While Brexit dominates the UK news, some stories are just too big to be crowded-out. The election of Mr Trump as US President is a case in point. Though it is becoming clear that not all the hustings rhetoric will come to pass, promises to support domestic producers and re-negotiate trade agreements do raise the worrying spectre of protectionism and beggar-thy-neighbour policies of the past. Whether Mr Trump’s ‘deliberate uncertainty’ (‘he wouldn’t really do that, would he?’) is more smoke screen than strategy, it may well strengthen his hand in international negotiations. And if these two events reflect a more primal appetite for change, there are surely lessons to be heeded as we approach elections in a number of key European countries. The old adage, two is a coincidence and three is a trend, has a disquieting ring about it. Recent events have pumped uncertainty into a world economy that is over-inflated in that regard.
One thing that has reacted measurably to all the uncertainty is the value of the Pound: Since the referendum in June 2016 it has depreciated some 15% against the dollar and 20% against the Euro. With the UK importing roughly half of its food from overseas (much of it from the EU) and with many raw materials priced in dollars, food prices in the UK will rise. But by how much ultimately depends on how far (and for how long) the Pound falls and crucially whether it is accompanied by rising food-commodity and energy prices on world markets, which could amplify the effect substantially. Recent estimates suggest that for a persistent 10% depreciation in the pound (or for a 10% rise in commodity prices) UK food inflation eventually rises by around 4.5%, other things held equal, but by some 2% allowing for product substitutions and other adjustments. But it is worth noting that this may underestimate the likely impact. Not only does it ignore the possibility of higher import costs due to post-Brexit trade arrangements (Defra (2016) https://www.gov.uk/government/publications/how-defra-has-estimated-the-potential-effect-of-import-tariffs-on-uk-food-prices) but there has been intense retail price competition that has left little in the way of margins that could absorb such a shock, particularly a persistent one. And with the Grocery Code Adjudicator scrutinising the retailers’ conduct with their suppliers, it seems inevitable that more of the cost increases coming down the line will be passed on to consumers than in the past. The New Year seems set to be as momentous as 2016.
Tim Lloyd, AES President 2016-17 (firstname.lastname@example.org)
The AES-Defra One-Day Conference will be held in Nobel House, London on Monday 6 February 2017. The topic will be on domestic alternatives to the CAP and the Minister of State responsible for agricultural policy in Defra, George Eustice MP, has been invited to make an opening address. A full programme will be posted on the AES website.
For a change in venue, the Agricultural Economics Society's 91st Annual Conference
will be held at the Royal Dublin Society in Dublin, Ireland, from Monday 24 to Wednesday 26 April 2017. The EU Commissioner for Agriculture and Rural Development, Phil Hogan, has been invited to make a presentation in a Keynote Session on European agri-environmental policy. Plenary sessions are planned on national and international implications of Brexit. Professor Peter Midmore, Aberystwyth University, will deliver the Presidential Address. Workshops are planned on wine economics, rural development and more, and a choice modelling masterclass will be available to participants. A diverse programme offers papers on topics such as agricultural trade and policy, environmental economics, supply chain analysis, food demand and policy, behavioural economics, and agricultural development. Submissions are invited, including poster and PhD presentations. Further details can be found here
Vera Eory (Vera.Eory@sruc.ac.uk)
EuroChoices and Journal of Agricultural Economics
The final EuroChoices issue of 2016 contains a special section on the Farm Accountancy Data Network (FADN), which recently passed its 50th anniversary, guest edited by Berkeley Hill. The spring 2017 issue will be a special on the Brazilian agri-food sector, documenting the drivers of the sector's rapid growth, its emergence as a global agri-food trading power and trade relationships with the European Union. Articles are needed for summer and winter issues 2017 with particular interest in publishing contributions on Brexit and the agri-food sector as more detailed evidence emerges on the implications for the UK and the EU of agri-food trade options.
John Davis, Chief Editor (email@example.com)
The JAE was ranked 3rd in 2015, with an impact factor of 1.545 (up from 1.278 in 2014), in the Agricultural Economics and Policy category.
Upcoming EAAE Events 2017Call for nominations of Fellow Awards 2014-2017. The EAAE is now seeking nominations for the Fellow Awards for the 2014-2017 triennial period. The EAAE Secretary-General must receive nominations (firstname.lastname@example.org) by 31 December 2016.
EAAE Triennial Congress 2017
. Preparations are well underway for the XV Congress of the European Association of Agricultural Economists that will take place in the historic city of Parma, Italy from 29 August to 1 September 2017. Those planning to submit contributed papers need to do so before 31 January 2017. Special emphasis is being given to symposia and organised panels (for which no scientific papers are required) to encourage participation of policy makers, societal stakeholders and agribusiness representatives, so there should be plenty of policy on the programme in addition to the usual broad spectrum of high quality scientific papers. The deadline for symposia and panel proposals is 15 March 2017 (1 April 2017 for posters). Search EAAE2017 for conference details. As one of the major international conference in our calendar, funding is available to assist attendance by AES members (see AES Travel Awards at www.aes.ac.uk
Tim Lloyd, AES-EAAE Liaison Officer (email@example.com)
13-17 February 2017, 11th International European Forum on System Dynamics and Innovation in Food Networks, Igls/Innsbruk, Austria.
26-27 April 2017 The evaluation of new CAP instruments: Lessons learned and the road ahead, Budapest, Hungary
EAAE information: www.eaae.org
New book: Farm-level Modeling: Techniques, Applications and Policy
Farm level models have been widely used in agricultural economic studies to understand how farmers and landowners as well as the industry respond to market and policy levers. This book, edited by S. Shrestha, A. Barnes and B. Vosough Ahmadi, provides an in-depth description of different methodologies and techniques currently used in farm level modelling. Whilst chapters give an overview of the theoretical grounding behind the models, it takes an applied approach; more specifically using cases from the application of modelling to policy reform and the subsequent impacts on rural communities and food supply. The book illustrates the methods that have been employed to inform decision-makers required to achieve multidimensional policy goals. The book is available here
Shailesh Shrestha (Shailesh.Shrestha@sruc.ac.uk)
Other AES News• The President-Elect for 2017-18 and President in 2018-19 will be Professor John Davis (Belfast).
• Congratulations to Cathal O’Donoghue, a member of the AES Executive, on his appointment as Dean of Arts, Social Sciences and Celtic Studies in the National University of Ireland, Galway. He will retire from the Executive at the AES annual conference in Dublin. There will be two vacancies to fill on the Executive at the annual conference in 2017.
• Coordinated by Richard Tranter (Reading) the Executive is discussing ways to celebrate the centenary of the founding of the AES, which takes place in 2026. Publications, oral histories and a special event in Oxford are being considered.
International Society for Economics and Social Sciences of Animal Health A reminder that the inaugural meeting of this new society will be in Inverness, Scotland on 27-28 March 2017. At least two of the members of the ISESSAH Management Committee, Keith Howe (Exeter) and Jonathan Rushton (Liverpool), are well known to agricultural economists in the UK. Details at www.isessah.com
Professor Michael Tracy 1932-2016
It is with deep regret that the AES has learned of the death of Michael Tracy. He was the Head of the Agricultural Policies Division in OECD, before taking up the post of Director of the European Council Secretariat in 1973. He was President of the AES in 1984-85 and on retirement was a visiting professor in Wye College. His Government and Agriculture in Western Europe, 1880-1988 (3rd edition 1989) is a standard reference on the history of European agricultural policies.
The print version of the Newsletter is distributed with the Journal of Agricultural Economics. The deadline for receipt of material for the next issue is 21 March 2017, to the AES Secretary please: firstname.lastname@example.org