The largest economies in the world agreed Thursday to a series of measures to stabilize world food prices after years of sudden fluctuations caused global instability, especially in poorer countries.
French Agriculture Minister Bruno Le Maire said the G-20 summit of agriculture ministers had agreed to calm the world market by establishing a transparent system to track global supplies, set up emergency food reserves, engage in more research into new wheat strains and create a rapid response mechanism to deal with drought in producer countries.
“It is a tour de force for the international community that lets you still believe in the power of solidarity and working together to address the big questions facing the planet, like the future of world agriculture,” Le Maire told journalists.
The accord was a rare case of international agreement in the area of food and agriculture, where countries have long been at loggerheads because of divergent interests.
International farm groups have also called for more regulation in the market, but that has been resisted by more free market-oriented governments like Britain and Australia.
The gravity of the situation, however, was driven home when rising energy prices prompted a spike in food prices in 2008 that sparked riots in almost two dozen nations over three continents.
Last week, David Nabarro, the U.N. special representative on food security and nutrition, said that a repeat of 2008 is very likely and shortages of food, water and power are bound to create social anxiety and political instability in the future.
A recent U.N. study also predicted that prices will be 20 percent higher for cereals and up to 30 percent higher for meat in the coming decade compared to the past ten years.
With the global population expected to increase from 6.9 billion to 9 billion by 2050, the problem of feeding the world put food security at the top of G-20 summit’s agenda.
“We all recognize the necessity of putting in place on the market of agricultural products new rules and regulations,” Le Maire said, reflecting the new consensus that food prices had to be protected, especially from financial speculation in commodity markets.
Several dozen French farmers dressed as livestock and ears of corn demonstrated near the Paris bourse on Wednesday, protesting the role of financial markets in the food crisis.
World Bank President Robert Zoellick appeared at the ministers’ side during the news conference to express his support for the new measures and the seriousness of price swings.
“We are not going to be able to stop food prices from going up and down, but we can smooth out the swings and we can protect the poor whether they are small farmers or consumers,” he said.
One of the key aspects of the new accord is the Agricultural Market Information System that would stave off panic food speculation by making instantly available to all countries the state of world food stocks, production and consumption, Zoellick explained.
“What we saw when prices started to surge in 2008 was that the lack of information on stocks and availability can lead to panic in markets and panic is what leads to price hikes,” said Zoellick. “Uncertainty leads to volatility.”
The new “action plan on food price volatility and agriculture” also called for the institution of emergency food reserves to offset humanitarian crises.
Banks and international agencies were also urged to draw up risk management plans for developing countries financial tools to offset price fluctuations.
“Financial engineering has been associated with the ‘dark side.’ This initiative helps bring it into the light,” said Zoellick. “These tools that are widely and commonly used in developed countries, we can now make them available to farmers in developing countries.”
The plan also called for ending export bans by producer nations, such as when Russia banned grain exports following forest fires, causing a spike in wheat prices.
Le Maire emphasized that the plan sets down concrete and ambitious proposals that will be put in place immediately.
“The plan takes place as of today,” he said.
