The End of the Wheat Problem? The Functioning and Evolution of the World Wheat Market, 1939-2010

Abstract

The outlook for the world wheat economy immediately before the Second World War was not very encouraging. Trade and prices had plummeted during the 1930s and many interventionist measures had been undertaken worldwide in order to deal with the so called “wheat problem”. However, the world wheat trade in 2010 was almost ten times greater than it was in the postwar years and the signs of market disintegration had disappeared. This paper analyses the reasons behind the extraordinary expansion of the world wheat trade between 1939 and 2010, explores the main changes in the distribution of wheat exchanges and offers an informed explanation of those transformations. The discussion focuses on supply and demand variables, including institutional variables such as national agricultural policies, international agreements and the changing international context.