At the initiation of France, the Group of 20 agricultural ministers held a summit in Paris on June 22-23 to discuss ways to ensure food security and tame volatility in food prices. Global food prices have soared to a record high this year, raising concerns of new round of social unrest like that which spread through many regions of the world in 2008.
Between 2006 to 2008, average global prices for food staples soared, with rice jumping 217 percent, wheat 136 percent, corn 125 percent and soybeans 107 percent.
Some experts argued that global population growth was to blame, while others pointed to dietary changes brought about by growing prosperity in developing countries, including an increase in the consumption of meat (7 kg of grain are required to raise 1 kg of beef) and processed foods.
Still others blamed the increasing diversion of food crops to make biofuels or trade liberalization, which opened up developing countries to food imports from generously subsidized Western producers, negatively impacting local production. Whatever the cause, the result was mass unrest, with protests and riots breaking out in 30 countries in Asia, Africa and Latin America.
On day two of the summit, the G-20 agricultural ministers presented a 24-page action plan to curb rising food prices that will be submitted to the G-20 leadership at their November summit. The plan seeks to address a number of issues thought to be related to high food prices and shortages, including speculation; food productivity in developing countries; biofuel production and export restrictions. It also calls for an early warning system for crop supply, demand and food stocks, and the establishment of a targeted emergency humanitarian food reserve system.
Although French agricultural minister Bruno Le Maire characterized the action plan as a “tour de force” that would conquer world hunger, critics — including leading relief organization Oxfam International- say it doesn’t go far enough in many areas.
While French President Nicholas Sarkozy blasted speculative activities at the meeting, saying “A market that is not regulated is not a market, but a lottery where fortune favors the most cynical instead of rewarding work, investment and value creation,” the action plan only “strongly encouraged G-20 finance ministers to take the appropriate decision for a better regulation and supervision of agricultural financial markets.”
Regarding food productivity, the agricultural ministers declared that the G-20 would give “special attention to smallholders, especially women, in particular in developing countries, and to young farmers” to improve productivity, but the action plan failed to list any concrete targets.
The action plan’s statement on biofuels also fell short in the eyes of critics. Although a June report released by major international bodies including the International Monetary Fund, the World Bank and the Food and Agricultural Organization said that biofuel production played a significant role in the rise of food prices, and biofuel critics wanted the G-20 to recommend that countries scrap subsidies and limit biofuel production to avoid impacting food prices, the G-20 — which includes major biofuel producers such as Canada, the United States, Brazil and France — merely called for further analysis on all factors that influence the relationship between biofuel production and food availability.
Concerning food export restrictions, the June World Bank-IMF-FAO report had stated that “export restrictions by major food exporters had strong destabilizing effects on international markets” and recommended that they be implemented only as a last resort under a limited time frame. In its action plan, however, the G-20 only agreed to remove food export restrictions or extraordinary taxes for food bought for humanitarian purposes by the U.N. World Food Program.
In a move widely applauded, the action plan calls for the establishment of an early warning system based at the FAO that will release information on national agricultural production and food stocks worldwide to help countries analyze supply and demand and take action to avert food crises.
On the issue of food reserves, the action plan advocates the establishment of a pilot program for small regional emergency humanitarian food reserves that would cover a group of countries selected from the world’s 48 poorest countries.
While the G-20 agricultural ministers were quick to label the meeting a success, the European Union and nongovernmental organizations expressed disappointment, with Oxfam saying, “The G-20’s sticking plaster approach falls well short of the major surgery that is needed to tackle the global food crisis.” Such criticism has its valid points, but the very fact that such a meeting took place for the first time is a significant step forward in the right direction.
The G-20 should focus its future efforts on addressing the root causes of food shortages and price volatility rather than treating the symptoms. Major biofuel-producing nations should heed the report linking the biofuel boom with spikes in food prices and shift away from the use of food crops such as corn in biofuel production. And while measures to stockpile grain in developing countries so that future shortages can be remedied in a timely manner are important and should be implemented, it will be even more critical for the G-20 to pursue policies that will increase food production in these countries.
G-20 nations should follow up on the action plan’s pledge to give “special attention” to small-scale farmers in developing countries, and strive to reduce or eliminate their own domestic farm subsidies and agricultural import quotas and tariffs.