A sharp fall in world prices this year for wheat, coarse grains and oilseeds, as production recovers from drought-reduced levels in north America and Australia, has been forecast by the Organisation for Economic Cooperation and Development (OECD) in its Agricultural Outlook for 2003-2008.

The group of leading industrial western countries predicts that most agricultural product prices are expected to rise over the medium term, but says that “this should be moderated by increasing crop and livestock supplies.”

Following an in-depth analysis of the 2002 US Farm Act, the OECD report argues that the measure will impose higher costs on domestic taxpayers and will also increase commodity support, “leading to downward pressure on world prices.”