Crop price falls expected to continue

Australia's farmers could soon face more difficulties, as it is predicted that recent falls in the price of crops are unlikely to stop any time soon.

The latest Agricultural Outlook from the OECD and FAO explained how demand will remain constant and is expected to grow at a slower rate than has been seen in recent years.

Price falls are predicted to continue for at least another two years before eventually stabilising at levels seen before 2008. However, they will still be below recent peaks.

OECD Secretary-General Angel Gurria said the agricultural sector is now more settled than it has been, which was mainly spurred on by "a period of unusually high prices".

"This has been helped by governments showing restraint in the use of trade measures. But we cannot be complacent," Mr Gurria commented.

"We must do more - on trade, on productivity and to tackle poverty. Governments should provide social protection for the most vulnerable, and develop tools to help farmers manage risks and invest in agricultural productivity."

FAO Director-General Jose Graziano da Silva agreed, saying farmers had adjusted well to the high prices they had been faced with and increased production as necessary.

Prices related to cereals are forecast to decline in the near future, which could give farmers the incentive they need to make sure they have crop insurance in place.

Meanwhile, sugar prices are expected to recover following the significant weakening seen in late 2013, mainly due to strong global demand.

As for oilseeds, the report points to a growing global share of cropland, although this is expected to be at a slower rate than has been witnessed over recent years.

This is primarily expected to be the result of increasing demand for vegetable oils, which has pushed up prices.