STWR - Share The World's Resources

Agriculture ministers from the G20 nations will meet in Paris this week to discuss how to combat food price volatility. The French presidency has succeeded in placing regulation of commodity markets on the agenda, but is this all that is needed to ensure global food security?

G20 agriculture ministers to confront food crisis - John Blau, Deutsche Welle

Food crises: five priorities for the G20 - Olivier De Schutter, The Guardian

G20 must go beyond market tango to tackle global hunger - CIDSE

22nd June 2011

G20 agriculture ministers to confront food crisis

21st June 2011 - John Blau, Deutsche Welle

Demand for food is outpacing supply, driving up prices and eating into reserves. Agriculture ministers from the Group of 20 nations will meet in Paris this week to discuss how to combat food shortage and soaring prices.

While the G20 nations agree the world needs more affordable food, they are divided on how to achieve this goal: whether to tame prices through regulation or increase agriculture production - or both.

Agriculture ministers meeting in Paris hope to iron out their differences amid surging demand for food and biofuels that is putting upwards pressure on farm prices expected to remain high for years to come.

Their meeting is seen as a preparation for the November summit at which G20 leaders hope to agree to concrete steps to reduce food price volatility in agricultural commodities.

Calls for tighter regulation

Agreement is expected on the launch of an agricultural market information system to share key data on global stocks and production. The initiative comes as the world economy battles a food price shock due to production shortfalls, strong demand and speculators pushing prices higher.

But France wants far more to come out of the meeting than just an agreement on a food stock database. The country has made tighter regulation of commodity markets a top priority of its G20 leadership, which ends with the November summit. French President Nicolas Sarkozy blames speculators for the food price inflation, which, among other things, has caused unrest in parts of Africa and the Middle East.

The French proposal envisions putting a lid on how much of a market an investor can buy into or imposing a minimum cash deposit for commodity derivative transactions. It also calls for greater transparency of who is making the transactions.

Even some commodities experts, like Frank Neidig at Bankhaus-Lampe in Düsseldorf, admit to a problem with speculators. Neidig notes that while crop growers prefer to lock into fixed prices and play it safe, other stakeholders like to gamble and haul in the profits. Markets, he said, are becoming increasing crowded with speculators "who are the least bit interested in real grain deliveries."

French idea

The French idea, however, has yet to win the support of the United States, the United Kingdom and several other countries that believe speculation isn't the cause for the high food prices. Many of them argue against regulation in favour of measures to increase agricultural output through investments and the use of new technologies.

Ralf Südhoff, director of the Berlin office of the United Nations World Food Program, argues that " a little bit of everything" is needed to avoid a food crisis. "We need to establish greater transparency and larger reserves," he told Deutsche Welle. "And we need to dramatically increase production in developing countries in a sustainable way and get speculators under control to calm markets and avoid price swings."

Südhoff said G20 agricultural ministers will discuss the establishment of regional reserve centers to respond to food needs in emergency cases and ways to increase food production in developing countries. But whether France, he added, can garner support for its proposal to curb speculation remains to be seen.

The clock is ticking. The United Nations' Food and Agriculture Organization projects that the world will need to produce 70 percent more food by 2050 to feed its population and that food prices already this decade will be 30 percent higher than in the previous decade.

The need for more affordable food is real. That's a fact G20 leaders will need to swallow fast.

Link to original source

Food crises: five priorities for the G20

16th June 2011 - Olivier De Schutter, The Guardian

In the fight to address global food crises, will the French presidency at the G20 summit succeed where others have failed? On the eve of the G20 agriculture summit on 22-23 June, we urgently need to adopt an ambitious action plan. G20 leaders have a decisive role to play in Paris: they must tackle the problems in the food system.

We are at an impasse. Starting from the misdiagnosis of attributing global hunger to a simple lack of food, governments have for years focused their efforts solely on increasing agricultural production by industrial methods alone, as a means to feeding their growing cities and supplying international markets. This has become a quick fix to the "failure" of national production – increasing food supply has become a substitute for a real food security policy.

The failure of these long advocated "solutions" can be seen everywhere. Price spikes occur repeatedly. Environmental degradation accelerates. Rural poverty and malnutrition persist.

Let's recognise where we have been wrong: hunger is neither the result of demographic problems nor just the result of a mismatch between supply and demand. It is primarily the result of political factors that condemn small farmers, the main victims of hunger, to poverty. These factors include insufficient access to land, water and credit; poor organisation of local markets; lack of infrastructure; and lack of bargaining power against an increasingly concentrated agro-industrial sector.

It will take courage from G20 leaders to put the global food system back on track. They will have to break the "myth" of hunger as being reducible to a technical issue or to a failure of food systems to produce sufficient volumes. The French presidency appears determined to act decisively on the issue of speculation on the agricultural commodities market. But beyond that, the G20 members remain deeply divided over agricultural policy for the 21st century. The outcome of this debate will have real consequences for all humanity.

Five priorities may give this G20 summit a vital role in improving long-term global food security. As the UN special rapporteur on the right to food, I call upon G20 leaders to endorse the following priorities, and act upon them:

1. Regulate the markets for agricultural products and make them more transparent. The impact of financial speculation on food prices is now widely recognised, and this needs to be subject to control without delay. The US legislated on derivatives nearly a year ago. The G20 could encourage other major economies to follow the same path.

2. Encourage the development of regional storage facilities. As we face growing instability in production due to climate change, it is urgent to strengthen systems of storage at the regional level. Currently, in developing countries, 30% of crops – 40% of fruits and vegetables – are lost because of lack of adequate storage facilities. We may in fact move beyond storage facilities to the establishment of food reserves, not just to allow the humanitarian agencies to respond to emergencies, but also to reduce price volatility across seasons. Provided they are managed in a transparent and participatory way, food reserves could smooth prices between periods of good harvests and shortages, characterised by rising prices. The G20 should encourage international institutions and other agencies to support regional storage facilities.

3. Support the provision of public goods. To enhance the productivity of small farmers in developing countries, it is necessary to accelerate the provision of public goods such as agricultural extension services or construction of roads linking farmers to urban consumers. It is also crucial to help small producers organise themselves into co-operatives and unions to strengthen their positions in food chains, and to collaborate with governments in designing programmes that benefit them.

4. Support the capacity of all countries to feed themselves by strategies based on the right to food. Since the early 1990s, the food bills of the least developed countries have increased five- or six-fold due to lack of investment in the production of food crops. The continued promotion of export agriculture has made these countries highly vulnerable to exchange rate volatility and price spikes in international markets. This trend can be reversed by implementing long-term national strategies to restore efficient subsistence agriculture. Where they are adopted in a participatory way, and include mechanisms to monitor the commitments of governments, such national strategies can improve accountability of governments. The experience of some Latin American countries shows that such strategies focusing on the right to food may improve food security in a sustainable manner. The G20 should reiterate this message and recognise the importance of institutional frameworks and adequate governance in any strategy for food security.

5. Strengthen global food security governance. The Committee on World Food Security has been reformed in the wake of the 2007-08 food crisis to strengthen co-operation and co-ordination between states and international agencies. CFS is now the only forum linking governments, international institutions and civil society in improving food security policies. The G20 should affirm its support for this important step towards better co-ordination of efforts at international level. It is no longer acceptable that policies on trade or international investment, for example, contradict rural development programmes in the field that are aimed at helping poor farmers.

Hunger is not a natural disaster – it's a political problem. And that is precisely why this scandal can and must be stopped. Today France, with its G20 partners, has a unique opportunity to contribute decisively to this end, and I am confident it will do so.

Link to original source

G20 must go beyond market tango to tackle global hunger

16th June 2011 - CIDSE

Measures to reduce price volatility in agricultural markets is one of the issues G20 Agricultural Ministers will discuss when they meet on Wednesday 22 and Thursday 23 of June in Paris. As food price volatility persists, with prices now fluctuating around a level twice as high as the average level in the period of 1990 – 2006, the issue can no longer be ignored. This increasingly frequent volatility is a result of a complex web of factors with dire consequences for the world’s poorest consumers who spend 50 – 70% of their income on food.  The international alliance of Catholic development agencies CIDSE welcomes the fact that curbing of price volatility is high on the G20 agenda, while warning that poverty in general, and access to food in particular, are structural issues that must be addressed in order to reduce the number of hungry people in the world.

In an open letter to G20 Ministers CIDSE says that in order to achieve global food security the G20 is right to aim at preventing excessive speculation and regulating commodity markets as well as addressing the issue of food reserves. However, the alliance argues that regulating markets is but one piece of the puzzle and that the G20 should also support measures to strengthen local small holder production whilst supporting the harmonisation of the various global food security initiatives towards a multilateral food governance within the UN.

“Food security cannot be addressed through markets alone; it is not because of a lack of production that nearly 1bn people go hungry. Sufficient food is produced globally, but tremendous quantities go to waste after production, during processing, transport or on supermarket shelves,” said CIDSE’s food expert Gisele Henriques, who will be attending the G20 meeting in Paris.

“Hunger is a consequence of poverty, not just a matter of supply, and as such it needs to be addressed. The term volatility suggests peaks and dips, but prices have increased substantially over the years. Even if food prices stabilise it is expected they will not go below the 2007 levels and will continue to increase in the next decades. These increases can be life threatening if you spend most of your income on food; not to mention the impact on national security.”

As agriculture is the mainstay of 75% of the developing world’s poor, CIDSE believes food policies should strengthen local production by small holder farmers, who account for 75% of the hungry in the world. It is extremely worrying that aid to the agricultural sector has decreased from 18% of Official Development Assistance (ODA) in 1979 to less than 4% currently. This trend must be reversed in favour of agricultural policies which support modes of production that develop and promote food and livelihood systems with greater environmental, economic and social resilience in face of climate change and future economic and food price crises.

Read the open letter to G20 Agricultural Ministers

Link to original source