World powers weigh emergency meeting on food prices
Leading members of the Group of 20 nations are prepared to trigger an emergency meeting to tackle soaring grain prices caused by the worst US drought in more than half a century and poor crops from the Black Sea bread basket. France, the United States and G20 president Mexico will hold a conference call at the end of August to discuss whether an emergency international meeting is required, aiming to avoid a repeat of the food price spike that triggered riots in poorer countries in 2008.
Copyright Reuters, 2012
Analysts had little hope of concrete action, although there could be further calls for the United States to change its biofuel policy in response to the crisis, while Russia will be encouraged not to impose an export ban. "Beyond words, expect little from the G20 on rising food prices," said Simon Evenett, a former World Bank official who is now professor of international trade and economic development, University of St. Gallen, Switzerland, describing the G20's record on trade as "feeble".
"With a string of broken promises on protectionism, no serious enforcement, monitoring well after the horse has bolted, and a tendency to pull their punches, any G20 promises on food trade won't be taken seriously - by the G20 themselves or by anyone else." Benchmark Chicago corn climbed to an all-time high on Friday after the US Department of Agriculture cut its production estimate by 17 percent. The United States uses 40 percent of its corn crop to produce ethanol, drawing criticism for using food for fuel when hunger is widespread in some poorer countries.
"They (G20) might talk about the US ethanol mandate requirements, but I don't seem them making any massive responses at the moment. They don't have a lot of tools at their disposal," said analyst Muktadir Ur Rahman Of Capital Economics The UN's food agency stepped up pressure on the United States on Friday to change its biofuel policies, arguing the importance of growing crops for food over their use for fuel. The UN Food and Agriculture Organisation's food index jumped 6 percent in July to higher than in 2008, and the FAO warned against the kind of export bans, tariffs and buying binges that worsened the surge four years ago.
EU BIOFUELS VERSUS FOOD The European Commission has also faced extensive criticism of its biofuel policy for using land otherwise devoted to food crops. Scientists have also argued that the policy fails to achieve its environmental goals. A French agriculture ministry official said countries on the conference the call would decide whether to convene the first meeting of the Rapid Response Forum.