G20 Must Act To Stabilize Food Prices. “With, the G20 industrial and developing nations should prioritize the provision of food for the poor, World Bank President Robert Zoellick says. In an opinion piece in Thursday's FT, Zoellick sets out nine action points to ensure the poor have access to food. …
French President Nicholas Sarkozy has identified food price volatility as a priority for his country as it takes the presidency of the G20 in 2011. …Zoellick called for more efforts to understand the relationship between international prices and local prices in poor countries. And he said food aid should be exempted from export bans. …” [Dow Jones/Factiva]
Reuters reports that “… ‘The answer to food price volatility is not to prosecute or block markets, but to use them better,’ Zoellick wrote in an opinion piece in Thursday's FT urging G20 leaders to put access to food at the top of its agenda. ‘By empowering the poor the G20 can take practical steps towards ensuring the availability of nutritious food,’ he wrote. …
He also called for an international code of conduct to exempt humanitarian food aid from export bans. …Other steps include improving supply transparency and long-weather forecasting, creating small humanitarian reserves in disaster-prone regions and providing alternatives to export bans and price fixing. Risk management products, such as weather insurance or a hedge on energy prices to keep transport and input costs low, should also be considered, he said.” [Reuters/Factiva]
The opinion by Zoellick published in the FT also writes that “…Increase public access to information on the quality and quantity of grain stocks. Better information reassures markets and helps calm panic-induced price spikes. Multilateral institutions could help identify ways to improve transparency.
Improve long-range weather forecasting and monitoring, especially in Africa. Accurate long-range weather forecasting is taken for granted by farmers and purchasers in the developed world; in poor countries where yields depend on rainfall, poor crop projections amplify price swings. Better weather forecasting would enable people to plan ahead, and help anticipate needs for assistance. The World Meteorological Organisation and the World Bank are already helping, but more is needed. …
Ensure effective social safety nets. It is vital that we protect the most vulnerable populations, such as pregnant and lactating women and children under two. We need to connect agriculture and nutrition, and help countries target those most in need at reasonable cost.
Give countries access to fast-disbursing support as an alternative to export bans or price fixing. To help countries avoid policies that harm their own farmers and neighbors, we need to provide reliable, fast alternatives customized to local needs. The World Bank has created a crisis response window under the International Development Association (IDA), its $49bn fund for the poorest countries, and launched a rapid-response Food Security Fund, but we could also explore credit lines or loans with repayment suspension and extension during price shocks. …
The answer to food price volatility is not to prosecute or block markets, but to use them better. By empowering the poor, the G20 can take practical steps towards ensuring the availability of nutritious food. Mr Sarkozy has shown leadership in putting this issue on the G20 agenda; the G20 must now act to put food first.” [The Financial Times/Factiva]
Food Prices Surge, Lifting Unrest Fears. “A prominent indicator of international food prices hit a record high in December, sounding a warning about looming threats to the world's poor and to global growth. The UN Food and Agriculture Organization's monthly food price index rose for the sixth consecutive month to 214.7, topping the previous peak, 213.5, reached in June 2008.
The index doesn't measure domestic retail prices, which can be affected by a wide range of factors, including government subsidies. Instead, the index tracks export prices and can still serve as a barometer of what consumers may pay. The prior record was set months after violent food riots struck several nations, an experience that is heightening concerns about potential consequences from the current rise. …” [The Wall Street Journal/Factiva]
FT notes that “…The warning from the UN body comes as inflation is becoming an increasing economic and political challenge in developing countries, including China and India, and is starting to emerge as a potential problem even in developed countries, including the UK and the eurozone.
Abdolreza Abbassian, senior economist at the FAO in Rome, said the spike was ‘alarming’, but added the situation was not yet a crisis similar to 2007-08, when food riots broke out in more than 30 poor countries, from Bangladesh to Haiti. …Abbassian painted a sombre outlook, warning that agricultural commodities prices were likely to rise further. ‘It will be foolish to assume this is the peak,’ he said. …” [The Financial Times/Factiva]
Dow Jones reports that Abbassian “… said poorer countries will at some point have to tap the international markets for foodstuffs. ‘That is the worrisome development...We consider the [current] prices quite punitive for the poorer countries.’ Abbassian said there is more likelihood that prices will rise in 2011 than fall. Any potential price correction is unlikely until the middle of the summer when the next harvests are due to begin.” [Dow Jones/Factiva]
