June 21 (Bloomberg) -- Agriculture ministers from the Group of 20 nations should tackle food price volatility by getting rid of biofuel subsidies and boosting efforts to increase food reserves when they meet this week, Oxfam said.
The ministers, who are holding talks in Paris June 22-23, said last week they would improve crop production, increase market transparency, help manage food prices, strengthen international policy and improve derivatives markets, in an effort to decrease price volatility. Oxfam, an international charity which released two reports on the food crisis today, said in an e-mailed statement the ministers “did not go far enough.”
Subsidies for biofuels including ethanol made from sugar and corn, and biodiesel made from soybeans should be eliminated, Oxfam said. Production and usage targets for biofuels should be adjusted when commodity supplies used to make food are low, Katia Maia, Oxfam’s Grow campaign head, said in the statement released today.
“A recent interagency report to the G-20 on food price volatility made it crystal clear that biofuels were part of the problem,” Maia said in the statement. “The G-20 must urgently remove biofuels subsidies and mandates that are increasing price volatility. The G-20 must also have immediate contingency plans to adjust their biofuels targets when food supplies are endangered.”
The United Nations Food Price Index last month neared a record set in February. The World Bank estimates that 44 million more people fell below the poverty line in the last half of 2010 due to high prices. According to the United Nations’ World Food Programme around 1 billion people, or one in seven, around the world are hungry.
French Agriculture Minister Bruno Le Maire said on June 17 there will be no agreement at the meeting on biofuels, which is a “very sensitive subject.”
Agriculture ministers who released a preliminary report last week aren’t doing enough to end food shortages, Oxfam said in the statement, adding that global grain stocks are dangerously low.
One way to deal with renewed price volatility would be to bolster food reserves, said Thierry Kesteloot, co-author of an Oxfam report called Preparing for Thin Cows. Living on a Spike is the name of the second report released today, which was written by Oxfam and the Institute of Development Studies, a global charity. It looks at the how people have been affected by rising food prices during the past few years.
“The prevailing view that food reserves in themselves don’t work is unsophisticated and short-sighted," Kesteloot said. ‘‘We’ve already seen the huge human cost of countries not having food reserves."
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