June 22 (Bloomberg) -- French President Nicolas Sarkozy said the world must take action to avoid another food crisis, as agriculture ministers meet in Paris.
A lack of transparency in global agricultural markets is adding to price swings and threatens future food production, Sarkozy said in a speech to Group of 20 farm ministers. World leaders risk making this “the century of hunger” unless they can agree on new rules on food supply, French Agriculture Minister Bruno Le Maire said before the meeting.
France, which holds the G-20 presidency, wants a central database on crops, limits on export bans, international market regulation, emergency stockpiles and a plan to raise global output.
“We have to act, and act together,” Sarkozy said. “The world is watching you.”
Wheat as much as doubled in the past year as Russia and Ukraine curbed exports after drought decimated crops, adding to record global food prices the World Bank says drove 44 million more people into poverty since June. Nations will spend $1.29 trillion on food imports this year, the most ever and 21 percent more than in 2010, the United Nations estimates.
France’s position on the main proposals being put to the G-20 ministers is that either all are agreed on or there is no accord, Le Maire said in an interview with Bloomberg Television on June 20.
All or Nothing
“We don’t want to dilute the action plan,” Le Maire said. “Either the G-20 members are able to find consensus on something which would help us to fight against excessive volatility and to fight against hunger in the world,” or “it would be a failure,” he said.
The choice is “international solidarity” or “egotism” if nations want to avert this becoming the “the century of hunger,” he told a meeting of 120 farmers groups in Paris last week. France is the European Union’s biggest farm producer.
The ministers will most likely balk at the proposal on trade restrictions, said Robert Carlson, international relations director at the Washington-based National Farmers Union. “That’s going to be a tough one,” Carlson said in an interview in Brussels. “Probably the last thing you get agreement on is the agreement to let somebody else control the borders of your country.”
The meeting is “a good chance to be able to focus on what needs to be done,” Jonathan Barratt, managing director at Commodity Broking Services Pty. in Sydney, told Linzie Janis on Bloomberg Television’s “First Look.”
The last time prices surged, from 2007 to 2009, more than 60 food riots occurred worldwide, according to the U.S. State Department.
The G-20 countries account for 65 percent of all farmland and 77 percent of global grain output, according to a statement on the website of the G-20 presidency.
“No one would understand that 20 agricultural ministers would gather and meet in Paris, without specific and concrete decisions on this question of agriculture, and this question of hunger in the world,” Le Maire said.
Corn futures advanced 82 percent in the past 12 months in Chicago trading, a global benchmark, rice gained 39 percent and sugar jumped 65 percent. There will be shortages in corn, wheat, soybeans, coffee and cocoa this year or next, according to Utrecht, Netherlands-based Rabobank Groep. Prices also rose after droughts and floods from Australia to Canada ruined crops last year. European farmers are now contending with their driest growing season in more than three decades.
India, which limits some food exports to manage prices and supply, may be reluctant to coordinate those measures with other countries, said Dinesh Mishra, the head of the National Cooperative Union of India, a New Delhi-based organization that includes farm groups and agricultural-development banks.
“We depend on the monsoon and other weather conditions for good crop production,” Dinesh said in an interview in Brussels. “We need to be careful in making our policies, ensuring that our domestic requirements are met.”
India was among nations which banned rice exports in 2008 as prices for the staple food for half the world reached an all-time high. Egypt also cut sales, Vietnam barred speculators from its domestic market and China imposed export taxes.
The proposal to limit export curbs and start a database, to be managed by the UN’s Food and Agriculture Organization, will be “especially sensitive,” Le Maire said last week.
“Countries want the guarantee that they can feed their population,” he said. “You’re asking countries to tie their hands, so I understand it’s difficult.”
World food output will have to rise 70 percent by 2050 as the global population climbs to 9.2 billion from an estimated 6.9 billion in 2010, the UN estimates.
Biofuels, some of which are derived from crops including corn, are not part of the main proposals to the ministers’ meeting. National policies are too far apart for agreement and the subject “isn’t ripe,” Le Maire said. Brazil uses sugarcane to produce ethanol, while the U.S. transforms corn into the fuel. U.S. Agriculture Secretary Tom Vilsack told reporters on June 20 that he would defend the use of biofuels.
France is likely to win backing for the proposed database on food stocks and production, according to the National Farmers Union’s Carlson and Pekka Pesonen, the secretary general of Brussels-based Copa-Cogeca, a European farmers group.
“It’s more of a practical issue rather than a political issue,” Pesonen said. Getting the information may be “the biggest challenge” because some countries “don’t have this information available for themselves,” he said.
Growth in agricultural output will slow to 1.7 percent a year through 2020, compared with 2.6 percent in the previous decade, the FAO and Paris-based Organization for Economic Cooperation and Development said in a report this month.
France will only sign an agreement that includes regulation of financial markets for agricultural commodities, Le Maire said. The details will be discussed by G-20 finance ministers later this year, he said.
The world needs “a new agricultural model” because “this price volatility has become insupportable,” Sarkozy told farm groups in Paris on June 16.
“It’s a political moment of the kind that doesn’t happen very often, perhaps once in a lifetime,” David Nabarro, the UN’s special representative on food security and nutrition, told a conference in Paris on June 16. “It can transform or it can fail, and much of this depends on how governments act over the next few weeks and months.”
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