In a story from the FT we read that Spanish farmers face serious problems as a result of failures in the financial system. As a result of problems in obtaining commercial credit, the farmers are forced to sell all there reserve olive oil. The knock on effect is being felt throughout the Mediterranean as large volume sales are driving down prices and if the trend continues might reach the level of refined sunflower oil. The irony is that financial system failures as in Spain, Ukraine, and Greece, have immediate effects on agriculture and in the short term lead to increased supplies. In the long term as farms stop investing production falls causing prices to rise and inflation. The biggest losers from inflation have often national financial systems.

UkrAgroConsult