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Abstract
An adequate understanding of the dynamics that characterize the agri-food market is fundamental for the development
of really efficient economic policies, especially after the two recent hikes in the prices of food commodities. The
econometric literature provides today advanced analysis tools such as VAR models: these models are based on a system
of equations in which each variable is regressed on a set of deterministic variables, on a number of l delays related to
each covariate in the model. To test the effectiveness of this analytical tool at dealing with the issues related to agrifood
economy we applied a VAR analysis on prices of major food and energy commodities (oil and biodiesel) referred
to the period January 2005-December 2012.
Our results identified statistically significant intertemporal relationships between the price of corn, soybeans, rapeseed
and oil, and suggested the direction of these relationships; we could conclude that the price of corn and soybeans are
generated in the energy market only. Moreover, we used as variables the share of commodities used for the production
of biofuels, and we could observe that important alterations on the food market are due to the convenience in producing
ethanol and biodiesel, since the portion of the crops used for energy is in direct competition with that devoted to the
feeding. This kind of models, therefore, deal adequately with datas and issues of the agri-food system and provide an
analytical basis to develop economic policies that take into account the complexity of the global food system.