Prospects for the development of the global agricultural sector in 2016 cannot be considered separately.
The interdependence between it and other segments of economic activity is complex and subject to wide divergence of interpretation, but nevertheless it exists. So what does this mean in terms of 2016?
The global economy
If you write in the first few weeks of the year, it is clear that again next year will be difficult for the world economy. While this may seem like something of a repeat of the news of any year since 2008, unfortunately, it seems to be true.
Currently, the economies of the United States and the United Kingdom are growing moderately healthy, but their economic recovery remains volatile. Consumer spending in both countries is extremely subtle and unpredictable.
The once-unstoppable Chinese economy is slowing, although growth still remains at a level that almost any other country would consider an unattainable ideal! It seems likely that the demand for some agricultural products in China will continue to increase, which is good for their domestic producers and those countries from which they import things like tractors and agricultural machinery as well as produce.
Unfortunately, from now on the picture looks increasingly bleak.
Australia and the eurozone appear to have relatively anemic growth prospects next year. In addition, Greece continues to be huge, despite the fact that European financiers are not currently worried about the “headlines”.
Many economies in South America and Africa seem to be in dire straits, and even the one-time, energy-rich Russian economy appears to be threatening a spiral that is almost out of control.
In the first weeks of 2016, there were also several moderate panic situations in various stock markets, and although they have not yet rolled over the precipice in a mass sale of panic, several times approached this. Once again there is some evidence that capital is starting to move back into things like gold and other safe havens.
In terms of political impact on the world economy, the situation in the Middle East is far from encouraging, although it is safe to say that the world has become largely accustomed to this over the past 70 years. If the situation there does not threaten oil supplies, terrible tragedies may not have a direct impact on the world economy.
A more immediate concern for markets and economists is the escalation and escalation of tensions between Russia and NATO along its vast border with Europe. The economic instability in Russia and the lack of predictability associated with political decision-making are conceived by many investors.
The situation with mass migration to Western Europe is also proving to be an economic problem.
The exact figures are unknown. The European Union itself estimates that in 2015, about 1.8 million people migrated to Europe.
Even conservative estimates of the number of those who have entered Europe since 2012 and who will enter by the end of 2017 give quite staggering figures. Given the uneven distribution of migrants in relatively few of the more industrialized and wealthy EU countries, the immediate short-term impact of the associated costs and potential of social disruptions with economic effects may cause some.
It seems reasonable to predict that at least some of this will affect the agricultural sector and have a detrimental effect on producers trying to attract investment capital. However, this negative impact may be more than offset by the constant global demand for affordable food due to population growth.
Agriculture is perhaps one of the relatively few sectors that has good enough performance in 2016, even when times elsewhere are difficult.