23 June 2011

Agriculture ministers from the world’s 20 largest economies have today settled on a deal they believe will curb volatility in food prices. However, the deal has attracted criticism for falling drastically short of France's ambitious plans to regulate agricultural commodity speculation. The ministers ultimately agreed to boost transparency with a new database and remove export barriers for food aid.image expired

However, many officials and NGOs (non-governmental organisations) have expressed disappointment that ministers did not agree to more regulation. Addressing the ministers at the Élysée Palace on Wednesday, Mr Sarkosy proclaimed, "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."

French ministers, who were presiding over meeting, were optimistic at the outset of the agriculture talks, the first of their kind. President Sarkozy expressed his hopes in advance of the talks, "By addressing the volatility of agricultural markets, in assuring food security for the world for today and tomorrow, we will rebalance the structure of capitalism."

However, despite the best efforts of France and its allies in the G20, countries including the United States, Britain, Australia and Brazil proved too reluctant to set limits on the participation of purely financial actors in the commodity markets. In the run up to the talks, Brazilian Agriculture Minister Wagner Rossi said Brazil "will oppose any measures which impede the market, for example anything that would amount to price controls."

The 20 agricultural ministers did reach a consensus yesterday on an early warning system, intended to rein in volatile food prices. The agricultural market information system (Amis) will provide information on crop supply, demand and food stocks to curb volatility.US Agriculture Secretary Tom Vilsack offered assurance that "If fully supported and utilised [Amis] will mitigate volatility.”

Vilsack, satisfied by the outcome of the meeting, said in a statement, "The consensus reached today by the G20 agricultural ministers marks an historic union of resolve in combating the pressing challenges of hunger and food price volatility confronting our world with greater regularity."

Pledge to control price volatility

The Group of 20 top nations pledged to control agricultural commodity volatility in the wake of a surge in food prices, widely blamed on speculation, which triggered riots over 2007 and 2008. Further price increases earlier this year were identified as helping trigger the ‘Arab Spring’ revolts, which increased interest in the issue.

Yesterday, farm groups from 66 countries in Africa, the Americas, Asia and Europe released a joint declaration, stressing that trade policy must not be allowed to dictate domestic agricultural policies or ignore non-trade concerns, such as food safety and animal welfare. Policies which the groups feel fell by the wayside at in the commitments undertaken in the Uruguay Round of talks.

NGOs criticise G20’s ‘sticking plaster’ solutions

While some have welcomed the outcome of this week’s meetings, there has been widespread speculation that the agreements do not go far enough. Adriano Campolina, country director of Action Aid Brazil, said, "In 2009, the G20 showed it can arrange massive bailouts for bankers, but now it's demonstrating it has no will to stop the looming food crisis that will hit the poor the hardest. ActionAid will continue mobilizing to hold President Sarkozy to his promises on global food security by the November G20 summit despite the agriculture ministers' failure."

Oxfam policy advisor Jean-Cyril Dagorn, lamented what he sees as a failure to get to the root of the problems causing price volatility, “Fixing the global food system and ending the food price crisis requires major surgery yet the G20 produced little more than a sticking plaster. Agriculture Ministers agreed to address some of the impacts of high and volatile prices but failed to introduce the measures needed to prevent prices spiralling out of control in the first place."