G20 ministers meet to tackle surging food prices

Reuters News
Posted: Jun 22, 2011 12:44 PM
G20 ministers meet to tackle surging food prices

By Marie Maitre and Sybille de La Hamaide

PARIS (Reuters) - G20 farm ministers meet in Paris on Wednesday to review steps to curb food price volatility amid doubts France will win unanimous backing for a cornerstone proposal to tighten regulation for commodity markets.

Paris has made tougher commodity trading rules a priority of its 2011 presidency of the Group of 20 leading economies as President Nicolas Sarkozy has blamed speculators for food price inflation that fed unrest in North Africa and the Middle East.

While all G20 nations have agreed that steps must be taken to tackle surging prices of staple foods, they are split over whether prices should be tamed by regulation or by increased agricultural production and productivity.

"Argentina will emphasize the importance of stimulating production growth rather than controlling it, in contrast to the French proposal to regulate financial markets linked to raw materials," Argentine Agricultural Minister Julian Dominguez said on Tuesday.

Britain, Europe's financial markets hub, has also said it saw little value in more regulation, but the Russian agriculture ministry told Reuters Moscow was "ready to give full support to the elaboration of a mechanism of financial regulation and control of the agricultural markets."

A source close to the French negotiations said on Tuesday that France's Agriculture Minister Bruno Le Maire was making back-to-back telephone calls to G20 peers to clinch a deal that also includes proposals to improve market transparency and global policy coordination and set up humanitarian food stocks.

"This is tough. Until the end there is no certainty of an agreement," said the source, about a deal that would be a boon for President Nicolas Sarkozy who is seeking to impress on the world stage ahead of what is expected to be a tough re-election battle in 2012.

"I hope we will have an agreement. Bruno Le Maire is doing everything he can to get one," the source added.

(Additional reporting by Helen Popper in Buenos Aires and Aleksandras Budrys in Moscow; editing by Keiron Henderson)