Bloomberg News

Brazil, China Back French Plan to Tackle Food-Price ‘Plague’

June 23, 2011

(Adds G-20 proposals in third paragraph.)

June 23 (Bloomberg) -- China, India and Brazil were among Group of 20 countries that backed new rules for global agriculture at a meeting in Paris today, France said.

Farm ministers from the U.S., the U.K., Australia and Argentina hadn’t stated their positions on the plan yet, French agriculture ministry spokesman Bertrand Sirven said in a briefing at a meeting of G-20 agriculture ministers in Paris.

France, the current G-20 president, has proposed a central database on crops, limits on export bans, international market regulation, emergency stockpiles and a plan to raise global output. Food price swings are a “plague” on farmers and consumers that cause poverty and hunger, French President Nicolas Sarkozy said yesterday.

Sarkozy called on G-20 farm ministers to act in unity, saying “the world can wait no longer” after the surging cost of food “plunged 44 million people into poverty.” World food prices tracked by the United Nations’ Food and Agriculture Organization have risen 37 percent in a year.

Agriculture ministers from Mexico, Japan, South Korea, Canada, as well as the European Union also agreed to the proposals, according to Sirven.

Proposals

French Agriculture Minister Bruno Le Maire said before the meeting he wouldn’t sign a deal that didn’t agree on the five main points. The proposals to limit export curbs and start a database would be “especially sensitive,” Le Maire said.

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 put 44 million more people into poverty since June last year. 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.

“Volatility is a plague on farmers and consumers,” Sarkozy said in a speech to the ministers yesterday. Surging commodity prices “can plunge entire populations into famine and poverty,” he said.

A lack of transparency in agricultural markets is exacerbating price swings, threatening economic recovery and food production, Sarkozy said. World leaders risked making this “the century of hunger” unless they could agree to new rules on food supply, Le Maire said before the meeting.

Price Surge

“A market that is not regulated is not a market, it’s a lottery in which fortune smiles on the most cynical, instead of rewarding hard work, investment and the creation of value,” Sarkozy said yesterday.

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 G-20 presidency website.

Corn futures advanced 77 percent in the past 12 months in Chicago trading, a global benchmark, rice gained 39 percent and sugar jumped 64 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.

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.

--With assistance from Tony Dreibus in Paris. Editors: Sharon Lindores, John Deane

To contact the reporters on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net;

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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