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Emergency Food Price Meeting Op Ed

29.08.2012

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The G20 must give the green light to an emergency meeting to tackle rising food prices, resulting from the US drought, before they spiral out of control and push more people into hunger.  This meeting will signal that political leaders are taking successive food price crises seriously.  It will also be the first test for the new Rapid Response Forum that was created last year by the G20 to coordinate the global response to rising food prices.

The Rapid Response Forum is part of The Agricultural Market Information System (AMIS). As the most tangible decision taken by the G20 to address food price volatility, AMIS aims to fix the lack of accurate information on food supply. Accurate data about global food stocks is crucial to prevent hoarding, market manipulation, and irrational price hikes and volatility and inform governments to develop longer term policy responses.  

However there is a question mark over whether this latest crisis has come too soon for these new institutions.  Worryingly AMIS has yet to issue a single public report on the state of the world food stocks and flows. This means, instead of making decisions based upon the best possible 'food intelligence', political leaders remain dangerously in the dark, working from a patch-work of data and best guesses. While those in the know, such as the food trading houses that control huge volumes of trade and grain stocks are not forthcoming with the information readily at their disposal.

Of course, these institutions are only be as good as the leaders who oversee them and here lies the root of the problem. The political momentum generated in the heat of the 2008 food crisis ebbed away as food prices moved off the front pages.  The G8 have taken the pedal off public investment in developing country agriculture, making few new commitments this year, and have ignored the advice of the world’s food organisations to scrap biofuels programmes that turn food into fuel – a key driver of the 2008 price crisis which pushed as many as 100 million people into poverty.

As a result of this political foot dragging little has been done to address the inherent fragility in the global food system. People in developing countries are today spending up to 75 per cent of their household budget on food, compared the average of 15 per cent in the United States. In countries such as Yemen, which imports as much as ninety percent of their wheat from abroad and where ten million people already do not have enough to eat, higher wheat prices are threatening the food security of millions. The high value of the dollar, combined with sharp rises in the price of oil in recent weeks, will also add to their import bills putting pressure on their ability to ensure food supplies or provide public services.

Urgent action is required to prevent this situation from becoming a global crisis, and to capitalise on some promising signs that it can be averted.

The world rice crop is reported to be relatively healthy and global stocks appear plentiful. Unlike in 2008, we have yet to see any of the key exporters like Russia and India put in place export bans which can create panic, and oil prices have also not reached the peaks of four years ago.

There is no room for complacency.  Even if we sidestep a full blown crisis this time round the odds are we will hit against another in the not too distant future as the climate change takes hold and we experience more frequent and severe extreme weather events, such as the drought which triggered this year’s crisis.

The G20 must insist on better regulation and more transparency in commodity markets to avoid speculative bubbles, end the biofuels mandates which convert food into fuel, increase investment in smallholder agriculture, scale up food reserves and tackle greenhouse gas emissions.

An alarm bell has been ringing for world leaders to repair our broken food system. Are they listening? 



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