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First-ever G20 farm summit to sign deal aimed at stabilising food prices

Video by Jade BARKER

Text by News Wires

Latest update : 2011-06-23

The first-ever G20 farm summit concludes in Paris Thursday, following talks on regulation in the industry. Leaders are set to pass a farm data plan to stabilise food prices, which hit a record high in 2010.

REUTERS - A first-ever gathering of G20 farm ministers is set to seal on Thursday plans for a global database to help curb volatility in food commodities, while leaving divisive regulatory issues for finance ministers.

Talks so far have achieved consensus around most of the proposals tabled by the French G20 presidency, sources close to the negotiations told Reuters on Wednesday.

Two officials leaving after a ministerial dinner opposite the Presidential Elysee Palace on Wednesday said there had been progress but still no overall deal yet.

France is keen to crown agreement on areas like data transparency and policy coordination with firm proposals for regulating commodity derivatives, but partners like Britain remain opposed to stringent controls on financial markets.

“A market that is not regulated is not a market but a lottery where fortune favours the most cynical instead of rewarding work, investment and value creation,” French President Nicolas Sarkozy told G20 farm ministers at the start of their two-day gathering in Paris.

“Reinvestment, transparency, coordination, regulation: these are the key words of the action plan you have developed with (French farm minister) Bruno Le Maire. I hope that you will be able to approve it tomorrow.”

Britain played down the role of speculation in market upheavals, putting the focus on raising farm production and passing on the sticky issue of regulation to the finance ministers of the Group of 20 leading economies.

“The underlying reason for price volatility is the tightness between supply and demand,” British Agriculture Secretary Caroline Spelman told Reuters Insider television.

“The main way you help stabilize prices is to produce more food ... and by being more transparent about it so people know where food is being produced and where it is being stocked to make better decisions.”

Farm ministers negotiated late into the night on Wednesday, with G20 sources saying talks focused on regulation, with one adding that the conditions in which humanitarian food stocks would be implemented were also being reviewed.

“We are still talking about how much emergency stocks would be needed, how they would be managed and who will pay for them,” the source said, asking not to be identified.

World food prices hit a record high earlier this year, reviving memories of soaring prices in 2007-2008 that sparked riots in developing countries, and giving fresh urgency to debate about how to improve a global food system that leaves some 925 million people hungry.

The final communique at the G20 farm meeting was expected to be roughly similar to a draft obtained by Reuters last week, backing proposals to look into emergency food reserves, to limit export bans by exempting humanitarian aid, and to join forces in wheat research to support sustainable growth in food supply.

Date created : 2011-06-23