World food prices that rose 37% in a year, driving 44 million more people into poverty, are a “plague” that needs action from world leaders now, said French President Nicolas Sarkozy during the two-day Group of 20 agriculture ministers in Paris.
The G20 summit in Paris is discussing food security and proposals for regulating the global agricultural markets. France, which holds the G-20 presidency, wants a central database on crops, limits on export bans, international market regulation, emergency stockpiles and a plan to raise global output.
“A market that is not regulated is not a market, it’s a lottery in which fortune smiles on the most cynical, instead of rewarding hard work, investment and the creation of value” underlined Sarkozy.
However French Agriculture minister Bruno Le Maire admits that the proposals to limit export curbs and start a database are “especially sensitive”.
Wheat price has doubled in the past year as Russia and Ukraine curbed exports after drought decimated crops, adding to record global food prices the World Bank says put 44 million more people into poverty since June. Nations will spend 1.29 trillion USD on food imports this year, the most ever and 21% more than in 2010, according to UN estimates.
“Volatility is a plague on farmers and consumers,” Sarkozy said. “It also imperils agricultural productivity in the future. Which farmer can make large investments when he risks losing a third of his revenue the next year?”
A lack of transparency in global physical agricultural markets is adding to price swings, which in turn threaten the global economic recovery and future food output, Sarkozy said.
“The surge in commodity prices today threatens the global recovery” Sarkozy added. “It can plunge entire populations into famine and poverty” and called for renewed spending on agriculture to boost production.
World leaders risk making this “the century of hunger” unless they can agree on new rules on food supply, Le Maire said before the meeting.
France’s position on the main proposals being put to the G-20 ministers is that either all are agreed on or there is no accord, Le Maire said in an interview with Bloomberg Television on June 20. Brazil backs the proposal to create a shared database on food stocks and crop forecasts, said Wagner Rossi, the Brazilian agriculture minister.
“We don’t want to dilute the action plan,” Le Maire said. “Either the G-20 members are able to find consensus on something which would help us to fight against excessive volatility and to fight against hunger in the world,” or “it would be a failure,” he said.
The last time prices surged, from 2007 to 2009, more than 60 food riots occurred worldwide, according to the U.S. State Department.
The G-20 countries account for 65% of all farmland and 77% of global grain output, according to a statement on the website of the G-20 presidency.
Growth in agricultural output will slow to 1.7% a year through 2020, compared with 2.6% in the previous decade, the UN’ Food and Agriculture Organization and Paris-based Organization for Economic Cooperation and Development said in a report.
France will only sign an agreement that includes regulation of financial markets for agricultural commodities, Le Maire said. The details will be discussed by G-20 finance ministers later this year, he said.