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This article was published 25/6/2011 (3383 days ago), so information in it may no longer be current.
REPRESENTATIVES of the G20 countries patted themselves on the back after they agreed at their much-touted meeting in Paris last week to share more information about global food stocks, co-operate on policy and boost agricultural output.
But food security experts say it’s questionable whether this agreement does anything to address the food price volatility that is pushing millions of people to the brink of hunger.
"If this is all that’s come out of the G20 — an agreement to get more information — it’s a non-event," Ann Berg, a consultant to the United Nations Food and Agriculture Organization, said in a Reuters report.
Nor does the agreement do much for the people on the other end of the spectrum: farmers. They are all about production, but the natural result of increased production is lower prices — which makes them increasingly reliant on government supports to carry out their business.
With world food prices pushing new records and demand for some commodities now exceeding supply, there has been growing pressure on governments to become proactive in combating the food crisis.
French President Nicolas Sarkozy went into the G20 meeting calling for regulations to curb speculators he says are increasing volatility in commodity markets. He didn’t get many takers for that idea.
Instead, the G20 decided to leave that task up to individual finance ministers. Regulation of the so-called free market is something governments are increasingly loathe to do, even when the markets are behaving so abnormally they threaten entire regions with political instability.
The Group of 20 nations, which accounts for 85 per cent of the world’s agricultural output, agreed to establish an agency called AMIS, for Agricultural Market Information System, housed at the United Nations Food and Agriculture Organization, which is essentially a database to monitor global stocks.
However, critics were quick to point out that importing nations such as China and India are unlikely to be very forthcoming about their supply needs for fear it has an effect on the price they pay. In a high-stakes game of poker, would you want to show everyone else at the table your cards?
Besides, data-collection systems around the world vary from non-existent to the highly sophisticated weather and crop surveillance methods employed in North America.
The world leaders also agreed to further analyze the effect of biofuels on food prices. What’s to study?
One of the incentives for governments to implement biofuel subsidies in the first place was to consume seemingly burdensome supplies of corn.
It would seem they have accomplished that objective. Forty per cent of the U.S. corn crop now goes into ethanol production. Corn stocks are at unprecedented lows. Food prices are at record highs.
No one at that table seemed serious about the concept of setting up a system of buffer stocks that could protect both consumers and farmers from marketplace volatility.
The Winnipeg-based Canadian Foodgrains Bank has examined the history of food buffers in the years after the Second World War.
A CFGB paper written by Saskatchewan economist and farmer Ian McCreary notes that food buffers were once a deliberate strategy used in international treaties such as the International Wheat Agreement as well as domestic policies in the United States and Europe. Many of these policies were abandoned in the 1980s.
McCreary said the result has been the creation of a different buffer keeping food prices in check — a human one. Instead of storable grain that can be moved in to meet the demand of consumers and soothe jittery markets, there is now a buffer consisting of millions of people living just above the margin of food insecurity who are pushed out of the marketplace when prices rise beyond what they can pay.
Demand is reduced, but that reduction doesn’t come from the ethanol and livestock sectors. It comes from people who go hungry.
McCreary proposes a variety of management policies that differs according to the market dynamics of key commodities.
For corn, he suggests a biofuel set-aside program to ensure biofuel production is adjusted at times when food supplies are critically tight.
For wheat, he proposes the maintenance of a multilateral reserve representing one to two per cent of global use.
And he recommends small regional reserves for rice, a commodity that is thinly traded globally.
These kinds of strategies would mean farmers might not see the market highs, but they wouldn’t suffer the market lows, either.
World leaders seemingly skirted the real issues in their discussion over world food security. But at least they started the conversation.
Let’s hope they keep talking.
Laura Rance is editor of the Manitoba Co-operator. She can be reached at 792–4382 or by email: firstname.lastname@example.org
Laura Rance is editorial director at Farm Business Communications.
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