G20 agricultural ministers meet to tackle food prices

Updated On: Jun 22, 2011

Agricultural ministers from the G20 group of leading nations are meeting in Paris to tackle high food prices. They are expected to endorse an "Action Plan on food price volatility and agriculture", which will be submitted to leaders at the top G20 summit later this year.

Report and Analysis: High food prices top G20 meeting [BBC News, 22 June 2011]

On the table are proposals to create a database of global food production and tighten regulation in commodity markets. At the two-day meeting on Wednesday and Thursday, ministers will also discuss market transparency, global policy coordination, and the lifting of export restrictions on
humanitarian food aid.

Biofuels are another hot issue. Activists are urging the G20 to cut down production of biofuels as they divert food crops like corn.

Many fear that the world may soon face another food crisis. Surging food prices have already sparked riots and uprisings around the world this year, in Tunisia, Egypt and other Middle East and North African countries.

But while all G20 nations have agreed that steps must be taken to tackle surging prices of staple foods, they are split on the way forward. France is backing tighter regulation in financial markets to manage food prices, but countries like Argentina think agricultural production should simply be increased instead.

Observers warn there is no certainty of an agreement.

Report: G20 ministers meet to tackle surging food prices [Reuters, 21 June 2011]

Singapore Minister of State for National Development and Manpower Tan Chuan-Jin is attending the Paris summit, along with a delegation from the Ministry of National Development and the Agri-Food & Veterinary Authority of Singapore.

France invited Singapore to attend the meeting as a representative of the Global Governance Group, which is made up of 28 countries, including Singapore. The aim is to forge closer ties between the G20 and non-member countries.

Report: Tan Chuan-Jin to attend G20 meeting [Channel NewsAsia, 21 June 2011]

In a move timed to coincide with the G20 meeting, the World Bank has also announced a new programme to protect poor farmers in the developing world from food price volatility.

Under a deal with JPMorgan, companies in developing countries can buy special insurance in the derivatives market, covering areas like wheat, sugar, cocoa, milk, cattle, corn, soybeans, and rice.

The new World Bank-backed instrument will provide up to US$4 billion to help farmers in cases where prices rise or fall sharply.

The use of financial insurance, or hedging, is commonly practiced by developed countries in agricultural commodity markets. But few developing countries currently do this.

Report: World Bank debuts tool to fight food price swings [AFP, 21 June 2011]

While the plan is tailored for larger groups like farming co-operatives and food processing firms, World Bank President Robert Zoellick said there was scope for individual small farmers to work through intermediaries to access the funding.

"This tool shows what sensible financial engineering can do: make lives better for the poor."

Zoellick added that the world has seen a period of "extraordinary volatility in food prices, which poses a real danger of irreparable harm to the most vulnerable nations”. He called food prices "the single greatest threat" facing developing countries.

Commenting on the G20 meeting, Zoellick also urged the G20 "to step up now" to help the world's poorest and to adopt measures that would exempt humanitarian food aid purchases by international agencies from food export bans.

Report: World Bank unveils hedging tool to aid poor farmers [Reuters, 21 June 2011]

Report and Analysis: World Bank in push for food price hedging [Financial Times, 21 June 2011]

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