The G-20 will have to ensure there is free trade, without which prices will not come under control.
It is a pity that it took the G-20 — which accounts for 65 per cent of farmland in the world and 77 per cent of foodgrain production — so long to address the issue of surging food prices. Despite the long-standing nature of the problem, it was only two weeks ago that G-20 farm ministers agreed to set limits on export bans and create a crop database in a bid to tackle rising food prices. The agreement included a call for international market regulation, higher farm production and the development of a proposal for emergency food reserves. There can be no denying the G-20's complacency in addressing an issue as important as this. In February, an index of prices of 55 food commodities climbed to a record 238 (base period 2002-04) and it took the G-20 this long to wake up. Around the same time, the World Bank President, Mr Robert Zoellick, said that the elevated food prices had pushed 44 million people into poverty since June 2010, and that another 10 million could be added to the list if the index rose another 10 per cent. The World Bank has estimated that nations will spend $1.29 trillion on food imports this year, the highest ever, and 21 per cent more than last year. The Food and Agriculture Organisation, on its part, has been expressing concern over surging food prices since June 2010.
It is against this backdrop that the G-20 decision to examine any ban on exports becomes crucial. It should walk the talk. The actions of member-countries in the recent past have not been particularly inspiring. The first thing that Russia, a key group member, did to tackle the situation arising out of the worst drought it had faced in five decades was to ban wheat exports. Before that, India had played a prominent role in rice prices running up to $1,000 a tonne after it banned rice exports. Not only were the poorer sections in Africa affected but Indian paddy growers were also deprived of the gains from global prices. China, another key member, is also guilty of adopting such policies on foodgrains. Despite being pulled up by the World Trade Organisation over such export curbs, China refuses to budge. Likewise, India is yet to consider even lifting the ban on export of wheat and rice.
That said, the G-20 move to address surging food prices is in itself a positive development, as is its resolve to set up a crop database. It will have to ensure there is free trade, without which prices will not come under control. Policies have also to be formulated to encourage farmers to produce more and earn more.
Source: http://www.thehindubusinessline.com
It is a pity that it took the G-20 — which accounts for 65 per cent of farmland in the world and 77 per cent of foodgrain production — so long to address the issue of surging food prices. Despite the long-standing nature of the problem, it was only two weeks ago that G-20 farm ministers agreed to set limits on export bans and create a crop database in a bid to tackle rising food prices. The agreement included a call for international market regulation, higher farm production and the development of a proposal for emergency food reserves. There can be no denying the G-20's complacency in addressing an issue as important as this. In February, an index of prices of 55 food commodities climbed to a record 238 (base period 2002-04) and it took the G-20 this long to wake up. Around the same time, the World Bank President, Mr Robert Zoellick, said that the elevated food prices had pushed 44 million people into poverty since June 2010, and that another 10 million could be added to the list if the index rose another 10 per cent. The World Bank has estimated that nations will spend $1.29 trillion on food imports this year, the highest ever, and 21 per cent more than last year. The Food and Agriculture Organisation, on its part, has been expressing concern over surging food prices since June 2010.
It is against this backdrop that the G-20 decision to examine any ban on exports becomes crucial. It should walk the talk. The actions of member-countries in the recent past have not been particularly inspiring. The first thing that Russia, a key group member, did to tackle the situation arising out of the worst drought it had faced in five decades was to ban wheat exports. Before that, India had played a prominent role in rice prices running up to $1,000 a tonne after it banned rice exports. Not only were the poorer sections in Africa affected but Indian paddy growers were also deprived of the gains from global prices. China, another key member, is also guilty of adopting such policies on foodgrains. Despite being pulled up by the World Trade Organisation over such export curbs, China refuses to budge. Likewise, India is yet to consider even lifting the ban on export of wheat and rice.
That said, the G-20 move to address surging food prices is in itself a positive development, as is its resolve to set up a crop database. It will have to ensure there is free trade, without which prices will not come under control. Policies have also to be formulated to encourage farmers to produce more and earn more.
Source: http://www.thehindubusinessline.com
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