France said on Thursday its proposals for tighter controls on commodity trading were being well received in many G20 countries, and it issued a joint statement with Brazil on measures to curb food price volatility.
France, which takes over the presidency of the Group of 20 most important economies in November, has made fighting speculation on commodities markets one of its priorities.
Its proposals have already been backed by Germany, and on Thursday Brazil and Italy threw their weight behind Paris.
In a joint statement, Brazil and France called for the setting up of global and regional stocks, greater regulation of derivatives on agricultural markets, and the creation of financial mechanisms – including price guarantees – to protect farmers from excessive price fluctuations.
Earlier, France's Farm Minister Bruno Le Maire said he had discussed the issue during recent trips to China, the United States and India.
He said he would soon visit Moscow and London, which as Europe's financial centre and its hub for trading commodities traditionally opposes plans for more market regulation.
"I really have the feeling, after making contact with many of our G20 partners, that these proposals are received favourably," Le Maire told a press conference in Rome after meeting his Italian counterpart, Giancarlo Galan.
Le Maire said it was "not normal" that the United States, thanks to recent legislation, now had more regulated agricultural markets than Europe.
France's proposals call for increased coordination among G20 states so that countries faced with an agricultural crisis – as was the case of drought-hit Russia recently – do not act unilaterally.
They also include greater transparency of global and regional stocks and the use of the same statistical tools in all G20 countries.
A third plank aims for more organised agricultural markets, with tighter regulation of over-the-counter derivatives and greater knowledge of the different players involved, Le Maire said.
EU farm budget
He said he had also discussed his proposals at the UN Food and Agriculture Organisation, where a high-level five-day intergovernmental meeting of the Committee on Food Security is under way.
He said Paris viewed food security as "a strategic issue as important as financial speculation, nuclear proliferation and economic growth".
Besides markets' regulation, Italy's Galan reiterated that he also backed a Franco-German proposal for reforming the EU Common Agricultural policy (CAP).
"The agreement is just about total," said Galan.
The CAP budget is currently worth more than 40% of the EU's €130 billion annual budget.
Le Maire said that France, Germany and Italy reckoned that "we must at least maintain the existing CAP budget," a position he said was shared by a majority of EU states.
"But I recognise that obviously […] it will be a difficult battle," he said.
(EURACTIV with Reuters.)
Recent EU-World Bank analysis of the causes of the 2007-2008 food price crisis blames energy prices and financial speculators for the hikes, downplaying the role of biofuels and increased demand in developing countries.
But the Organisation for Economic Co-operation and Development (OECD) and the UN Food and Agriculture Organisation (FAO) warned in June that growing demand from emerging markets and biofuel production are expected to drive up farm commodity prices in the coming years.
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- World Bank:Placing the 2006/08 commodity price boom into perspective(July 2010)
- French government:Bruno Le Maire rencontre Giancarlo Galan, Ministre italien des Politiques agricoles, alimentaires et forestières(14 ctober 2010)
- Franco ?German? position?for ?a? strong ?Common ?Agricultural ?Policy ?beyond? 2013?(14 September 2010) [FR] [FR] [DE]
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