As food prices skyrocket, "feeble" G20 considers talking about it

Earlier this week, the Financial Times reported that G20 countries were considering how and when it should step in some sort of co-ordinated way to deal with rapidly rising prices of corn and soybean, two fundamental crops central to the diet of much of the world’s population.

Citiing unnamed G20 officials, the Times indicated that the G20  was ready to convince an emergency forum after the U.S. Department of Agriculture slashed its latest corn crop estimates last Friday. The Times did not mention Canada specifically but, of course, as one of the leading G20 economies and as one of the world’s largest food producers, Canada would be keenly interested and, presumably, involved in these discussions.

As it turns out, though, a source within Agriculture Canada says that the Times story was not quite as advertised and there is no meeting planned “at this time” for the Rapid Response Forum, the group set up last year by G20 countries to, well, rapidly response to abnormal international market conditions. You can read what it does or is supposed to do here, in a report about the RRF’s first meeting on April 11 of this year in Mexico City.

The creation of the RRF follows the creation last fall, in September in Rome, of the Agricultural Market Information System or AMIS. Canada’s representative at this meeting and for AMIS meetings is Marco Valicenti, the Rome-based trade commissioner for Agriculture and Agri-Food Canada.

The AMIS secretariat was concerned enough about the Financial Times‘ report that it issued the following e-mail (an e-mail that it took me two days to track down from a source that I cannot identify as they were not authorized to release this)

From: AMIS-Secretariat
Subject: False information in the Finanical Times

Dear Colleagues,

A recent article by the Financial Times suggests that a meeting of the AMIS Rapid Response Forum is imminent. This is not the case and we are sorry for the confusion this publication has caused. Please rest assured that the AMIS Secretariat is carefully observing current market developments and will keep you informed of any future developments.

With kind regards,

Abdolreza Abbassian
Secretary, AMIS

That said, there were several reports that RRF will hold a conference call later this month to determine if an emergency meeting needs to be convened.

The creation of AMIS, incidentally, followed on the heels of a meeting that Ritz attended in Paris of G20 Agriculture ministers held in Paris in June 2011. At that meeting, the ministers issued an “Action Plan on Food Price Volatility and Agriculture”. It contained a number of good ideas though there’s been criticism (including from me) that G20 leaders meeting in Cannes last fall and in Los Cabos, Mexico this year haven’t really picked up on a lot of ideas their agricultural ministers were recommending.

And while it’s heartening to see agricultural ministers and their officials at least talking in what looks to be a serious way about this issue, hopes are not exactly high that the G20, through these new fora, will actually do anything.

“Beyond words, expect little from the G20 on rising food prices,” Simon Evenett, a former World Bank official who is now professor of international trade and economic development at University of St. Gallen, Switzerland, told Reuters this week. He also described 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.”

Meanwhile at G20 forums and in forums like the RFF and AMIS, Canada will continue to push for free trade as one antidote to volatile food prices and it will push those countries who have banned certain Canadian products — beef, for example — to lift those bans. Here’s the statement from Agriculture Minister Gerry Ritz provided to me this week in the wake of the FT story and last week’s crop report:

“The single best way to help consumers get access to the food that they need is through free and unfettered trade.

“As the world population grows and consumers look for more nutritious food, countries must embrace trade based on sound science.

“Our government has been aggressive in expanding trade opportunities for our farmers.

“We are investing in cutting edge science and biotechnology to help farmers deal with difficult weather or disease and to provide an abundance of quality foodstuffs to families around the world.

“Canada’s farmers and food processors are well positioned to help alleviate the pressures that growing demand is placing on the food supply.

“Our Government is doing its part by helping farmers continue to produce safe, high quality food through investments in research, marketing and trade.

“All countries need to work with their respective farmers on ways to increase supplies of food as well.

“Our Government will continue to support consumers by breaking down trade barriers around the world and by supporting our food supply chain here at home. “