Markets

Abstract

Markets are important for agriculture and for the supply and processing industries in the entire food sector. Efficient markets are necessary to reduce transaction costs, avoid bottlenecks, optimize specialization in value chains, ensure effective competition, etc. At the same time, markets develop and change continuously. The importance of international trade markets is increasing, but the trend is much stronger for industrial goods than it is for agricultural products. The agricultural and food markets are characterized by some specific conditions compared to other markets. One characteristic is that prices generally and in the slightly longer term rise at a slower rate than inflation, i.e., there is a real price fall. Studies also find an increasing price spread (from farm-to-fork) and a decline in farmers’ terms of trade and in real food retail prices.