Paris: G20 agriculture ministers considered French proposals to tighten regulation of commodity markets and set up emergency reserves as they gathered on Wednesday for a first-ever summit that aims to tackle rising food prices.
Paris has made tougher commodity trading rules a priority of its 2011 presidency of the Group of 20 leading economies. President Nicolas Sarkozy has blamed speculators for food price inflation.
But it faces opposition to stringent market rules from Britain and Brazil, as well as reluctance from the likes of China and India to share farm data.
A draft communique obtained by Reuters last week showed the agriculture ministers could end up with a watered-down deal limiting decisions to agricultural issues, mainly data or food supplies, not financial markets.
“I prefer to take responsibility for a failure rather than a half-hearted agreement or an agreement for appearance’s sake,” French agriculture minister Bruno Le Maire told French radio Europe 1, as he made a final push to get an action plan.
He warned that a failure to adopt concrete measures to tame surging staple food prices before the summit concludes on Thursday could give way to more riots.
Surging demand for food and fuel will maintain inflationary pressure on commodities this decade, international bodies warned last week.
Benchmark international wheat prices are up about 50% in the past 12 months alone, while corn prices have doubled.
“The (G20) goal has been set by the president to prevent the 21st century from becoming the century of hunger,” Le Maire told French daily Le Parisien on Wednesday.
While all G20 nations have agreed that steps must be taken to tackle surging food prices, they are split over whether prices should be tamed by regulation or by increased agricultural production.
“Argentina will emphasize the importance of stimulating production growth rather than controlling it, in contrast to the French proposal to regulate financial markets linked to raw materials,” Argentine agricultural minister Julian Dominguez said on Tuesday.
Britain, Europe’s financial markets hub, has also said it saw little value in more regulation, but the Russian agriculture ministry told Reuters that Moscow was “ready to give full support to the elaboration of a mechanism of financial regulation and control of the agricultural markets”. A source close to the French negotiations said on Tuesday that Le Maire was in back-to-back telephone calls to G20 peers to clinch a deal that would include proposals to improve data transparency and set up humanitarian food stocks.
“This is tough. Until the end there is no certainty of an agreement,” said the source about a deal that would be a boon for Sarkozy who is seeking to impress on the world stage ahead of what is expected to be a tough re-election battle in 2012.
Any G20 deal is likely to disappoint aid charities and agriculture organisations that have been lobbying for sweeping action.
Members of French agriculture union the Confederation Paysanne brought sheep to occupy the entrance hall of exchange operator NYSE Euronext’s Paris offices in a brief protest on Wednesday.
“They’re thinking about regulating speculation, but they need to ban, not regulate, the companies behind it,” said Gerard Durand, head of livestock issues at the union.
The draft G20 communique mainly covered purely agricultural issues such as the launch of a database on national agriculture supplies, a joint research programme on wheat and a rapid response forum between G20 states in case of a food crisis.
G20 ministers would also agree to set up food aid reserves and remove export restrictions for humanitarian supplies.
But there may be resistance even on these points as Beijing is reluctant to share information it sees as strategic. China also considers, as does India, that giving exhaustive and timely data on stocks would be difficult for practical reasons.