French President Nicolas Sarkozy on Wednesday urged the world's top economies to ensure food security by eliminating speculative price spikes as high costs are again hitting consumers and fuelling unrest. "By addressing the volatility of agricultural markets, in assuring food security for the world for today and tomorrow, we will rebalance the structure of capitalism," Sarkozy told agriculture ministers from G20 nations as they began their first-ever meeting.
The Group of 20 top nations pledged to contain agricultural commodity volatility in the wake of the 2007-2008 surge in food prices that triggered riots in some countries, which was widely blamed on speculation. The issue has gained urgency with a fresh spike in prices at the beginning of this year seen as helping fuel the Arab Spring revolts. At their formal talks on Thursday the ministers will seek to overcome divisions to adopt an action plan to stifle speculation and improve market transparency.
"In adopting this plan you will change not only the lives of a billion farmers but the course of capitalism itself so capitalism once again contributes to the development and well-being of people," said the French president. Last week, French officials said there were still major divisions on key issues, but Brazilian Agriculture Minister Wagner Rossi said Wednesday that an agreement was close.
"I think we are very close to a consensus," Rossi told journalists. France has made limiting speculation and reining in markets a centrepiece of its G20 presidency and said it will accept no fudges on key issues. France would like to see limits on the participation of purely financial actors in the agricultural commodity markets and that traders be required to hold at least a portion of what they trade. Countries such as the United States, Britain, Australia and Brazil however are concerned that such limits could crimp futures and derivatives markets, which are increasingly vital to farmers and processors.
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