Background
France pushed for the first ever meeting of G20 agriculture ministers to deal with volatility in food prices. World food prices hit a record high earlier this year, sparking fears of a repeat of the food riots in 2007-2008. Britain is keen to see an increase in food productivity in the developing world to improve a global food system that leaves around 925 million people hungry. The action plan agreed on Thursday will be presented to G20 leaders at their summit in November.
Speculation
President Nicolas Sarkozy on Wednesday again banged the drum on speculative activity, which some blamed for high food prices. "A market that is not regulated is not a market, but a lottery where fortune favours the most cynical instead of rewarding work, investment and value creation," he said in a speech. But G20 agriculture ministers have essentially handed over the problem to their financial counterparts. "We strongly encourage G20 finance ministers to take the appropriate decisions for a better regulation and supervision of agricultural financial markets," says the action plan. The plan also looks forward to recommendations by a commission on securities on regulation and supervision to "address market abuses and manipulation".
Biofuels
A report in June by the World Bank, the Food and Agriculture Organisation (FAO), the International Monetary Fund and other international bodies clearly said the demand for food and feed crops for the production of biofuels was a significant factor behind price rises, but the plan avoids such direct language because the US and Brazil are big biofuel producers and watered down this section. The plan says ministers recognise the need to further analyse all factors that influence the relationship between biofuels production and food availability; the response of agriculture to price increase and volatility and sustainability of agriculture production. Activists from ActionAid and Oxfam say this is very weak.
Early warning
The agricultural market information system (Amis) will provide accurate and timely information on crop supply, demand and food stocks in an effort to curb volatility. Amis will be based at the FAO with a secretariat that will include the World Bank and other international bodies. Amis will encourage major players, including those in the private sector, to "share data, to enhance existing information systems, and promote greater shared understanding of food price developments".
Food productivity
The G20 agriculture ministers say they will give "special attention to smallholders, especially women, in particular in developing countries, and to young farmers" to improve productivity. No mention of figures, prompting criticism from campaigners that this is just rhetoric. It is generally recognised that to feed a world population expected to reach 9.1 billion in 2050, agricultural production will have to increase by 70%, more specifically by almost 100% in developing countries.
Export restrictions
The ministers agreed to remove food export restrictions or extraordinary taxes for food purchased for humanitarian purposes, and agreed not to impose them in the future. Russia's decision to restrict grain exports contributed to a jump in prices. There is a call for a successful conclusion to the Doha trade round that is supposed to benefit developing countries.
Food reserves
The action plan calls for a pilot programme for small, targeted, regional emergency humanitarian food reserves. The pilot plan will cover a limited group of countries from the world's 48 poorest countries, those classified as least developed by the UN.
Main points from the meeting of G20 agriculture ministers
Recently by multiple factors, international food prices continued to rise, bringing the price to rise, exacerbated by high inflation in many countries, especially developing countries, social conflicts and even lead to instability. “In today’s world, with the rapid growth of global population and increased consumer demand,” volatility in food prices, some of hunger in poor countries have become increasingly prominent, global memory at different levels of food safety problems. Because of this, the international community has food security issues in the areas of global governance, which is this G20 drawn the attention of the Council of Ministers of Agriculture of the important reasons.
Framework as the first meeting of the G20 Ministers of Agriculture meeting, bringing together the world’s leading economies is the most important agricultural production and trading countries, these countries account for 65% of global arable land, 77% of food production, food trade 80%. Conference finally adopted the “Action Plan” from the promotion of agricultural production, agricultural market information transparency, strengthen international coordination, to reduce the volatility of food prices on the most difficult countries, the impact of regulation of financial markets of agricultural products in five areas of the world agriculture and global food outlook safety of the plan.
In the “Action Plan”, the agriculture ministers agreed to a series of measures to promote agricultural production and improve agricultural production in order to achieve the 2050 70% of global agricultural production, of which nearly 100% increase in developing countries. Countries decided to cancel the international food aid export ordering, price fluctuations of agricultural products to protect developing countries most affected food security.
G20 Agriculture Minister also set up a summary of food production, consumption and inventory information to agree a global database. The new information system designed to improve the transparency of the food market to absorb the existing system resources, helping to reduce food price volatility. To strengthen international cooperation, the participating countries agreed to the FAO system established under the emergency response mechanism, or a member of the G20 world’s major agricultural country, agricultural production is declining dramatically there in time communication and coordination, and the introduction of a collective response.
“From the outcome of this meeting to see, G20 agriculture ministers to strengthen regulation of agricultural trade, increase market transparency and control information, and respond to fluctuations in food prices and other issues of hunger has made important progress.” Wang said, this Meeting called to natural disasters and adverse climate impacts on food supply countries need to further strengthen cooperation and coordination in addressing food security issues shows that countries to strengthen cooperation and coordination of strong will, to the international community sent a clear political signal.
“Action Plan”
Against the background of ‘a 32% rise in wholesale prices of agricultural commodities in the second half of 2010’, an ‘action plan to deal with volatility in world food prices’ was agreed at the first-ever meeting of G20 agriculture ministers. The action plan is to be presented to G20 leaders at their summit in November 2011. The communiqué from the two-day meeting recognised the need for ‘appropriately regulated and transparent agriculture financial markets’ and urged G20 finance ministers to ‘improve rules and supervision of commodity markets’, although this fell short of the ‘tough crackdown’ on speculators called for earlier by French President Nicolas Sarkozy. In addition to this exhortation to EU finance ministers, the action plan included components on:
- increasing agricultural output;
- removing export restrictions on food aid;
- strengthening international coordination;
- biofuels;
- the establishment of an early warning system, via the Agricultural Market Information System;
- food reserves;
- the creation of instruments to hedge against volatility, notably the Agricultural Price Risk Management Tool’.
A number of ministers agreed that ‘the G20 action plan constitutes a good starting-point’ and would ‘go a long way to creating a more predictable world for food producers and consumers alike’. Agricultural Commissioner Dacian Cioloş however noted that the Commission ‘would have liked [the agreement] to go a bit further’. World Bank President Robert Zoellick meanwhile described the plan as ‘modest’, saying ‘it’s just a start, but it’s progress.’ He maintained that the world was ‘in a danger zone… If you get a bad weather event, you get hammered.’ EU farmers’ organisation Copa-Cogeca welcomed the agreement, ‘especially the setting up of a mechanism to ensure transparency in the market’.
Analysis in the press noted that no specific financial commitments were made as part of the action plan.
Development NGOs however were critical of the action plan, suggesting a lack of political will to get to grips with underlying causes of high prices. The UN Special Rapporteur on the Right to Food, while welcoming the agreement, felt it was ‘insufficient’ in its treatment of biofuels, food reserves, financial regulation, and instruments for hedging against price volatility. He concluded that ‘The roots of the problem remain unaddressed in this action plan.’ This needs to be seen in the context of his earlier call in the press on 16 June 2011 for substantive action in these areas.