Jennifer Clapp and Tim Wise: G20 gives up on agenda to control speculation on food
Story Transcript
PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Toronto. In the lead-up to the G-20, which will be held in a couple of days in Cannes, France, there was a lot of discussion about the need and the willingness to do something about food speculation, the way speculation in global food markets and commodity markets was creating a food bubble and affecting the needs and leading to starvation and malnutrition around the world. Well, now that the G-20 is now here, it seems to be far off the radar, if on the agenda at all. Now joining us to talk about why this is, first of all, from Waterloo, Ontario, is Jennifer Clapp. She’s at the Centre for International Governance Innovation at the University of Waterloo, and she teaches there. And Timothy A. Wise, who’s the director of the research and policy program at the Global Development and Environment Institute at Tufts University. He leads its globalization and sustainable development program. Thank you both for joining us.
TIMOTHY A. WISE, DIRECTOR, RESEARCH AND POLICY PROGRAM, GDAE: Thank you, Paul.
JAY: So, Tim, what happened? There was supposed to be all this concern about food speculation and food prices. And we know there’s, obviously, a terrible crisis in Europe, but still there’s a big food crisis, and there doesn’t seem to be much talk about it anymore. What happened?
WISE: As you said in your introduction, the G-20 was looked to to take some real leadership on addressing the food security issue. What’s come to be known as the food crisis is really a food price crisis that began in 2007 and 2008 just as the G-20 was emerging to deal with the global financial crisis as well, under the leadership of President Sarkozy of France. The G-20 carved out a very ambitious agenda, claiming that it was going to take on, address commodity price speculation, address food reserves, look at the biofuels question and the extent to which biofuels expansion was causing food price increases. And as time has gone on, over–basically over the last year, that agenda has been whittled down to almost nothing. It’s really the incredible shrinking food security agenda of the G-20. If you look at the finance ministers’ communique from earlier this month, they–the word agriculture doesn’t appear once, and the word food appears once in it, in relation to a hedging, a new hedge fund for developing countries. That’s all that’s left.
JAY: The agricultural ministers of the G-20 countries had met previously, Jennifer, and they had made some recommendations. I think maybe we should just add a little bit of context here, which is, while this is getting further and further off the G-20’s radar, during this time of increasing recession, if anything what we’re finding is all these commodities companies that either owned and/or hedge and/or speculate is actually getting worse, because they’re buying up a lot of the medium- and smaller-sized players. So we’re actually getting more concentration of ownership during this period, even if commodity prices are down a little bit. But what did the agricultural ministers recommend?
JENNIFER CLAPP, CENTRE FOR INTERNATIONAL GOVERNANCE INNOVATION: Well, the agricultural ministers met in June, and they were largely deliberating based on a document that had been presented to them by nine international organizations who had done research on the various aspects of food price volatility. And the agriculture ministers took this document, which had some good elements in it–it had some recommendations around, you know, financial regulation to reduce excessive speculation in commodity markets, it had some recommendations with respect to other kinds of ideas, such as emergency food reserves, etc. But what the ministers did in the end, the agriculture ministers, they issued a communique after they met in June, and decided that they couldn’t really make any concrete decisions with respect to curbing speculation on commodity markets, because it was an issue for the finance ministers. And as Tim already noted, when the finance ministers met a few months later, the issue of food security basically dropped off the agenda. The agriculture ministers, instead of dealing with food price speculation, instead decided to roll out a new initiative, which is something called the AMIS, the agricultural market information system, with the hopes that more transparency in agricultural commodity markets would smooth out food price volatility simply by making more information available. The problem with that particular system is that a lot of the information that’s being collected was already being collected by certain organizations, such as the International Grains Council or the FAO. And the the other problem is that, as you noted the concentration in the grain markets, it’s very difficult to ask the big commercial players–Cargill, Bunge, ADM, and Dreyfus–to give information publicly on the extent of their grain reserves. So it’s really hard to say that this kind of information system is actually going to work if there’s nothing compelling the big players who are dealing in grain to actually deliver some of this information publicly.
JAY: Tim, we’re seeing on the front pages of the newspapers the last day or two the German finance minister saying that Europe should lead the way in terms of regulation. They’re talking about advocating a kind of Tobin tax, financial transaction tax. Is any of this going to have an effect on the kind of regulations you think are needed to deal with food and food security?
WISE: Well, I think there are a number of measures the G-20 countries could take or the G-20 as a body could take that could make a huge difference. That’s why I think there was enthusiasm, at the beginning, at least, that the G-20 was making food security such a high priority. They’re certainly–I mean, the G-20 countries are the main drivers of demand for biofuels, for example. If there is one emerging consensus in the food security debate, in what is a complicated food security debate about what drives price increases, how much is speculation, how much is underlying demand, the underlying demand piece, I would argue there’s a near consensus that rising biofuels expansion is one of the main drivers of–underlying drivers of the rise in prices, the rise in land use for biofuels. That is driven significantly by government mandates–in the US for corn ethanol, in Europe by other mandates. And so those are government policies, and those are actions that the G-20 or individual countries within the G-20, like the US on corn, like the European Union on a variety of oilseeds, could take that would make a difference in this, in the real world, in damping down price increases. But it–all indications are that they’re backing off from any significant action, and that’s true of speculation as well. There seems very little appetite at this point for–in the G-20 for taking on a more significant regulation of commodity markets. It’s being punted to meetings next year in Mexico.
JAY: Right. I mean, as we see these austerity measures kicking in in Greece and Spain and other countries in Europe, and even in the United States, the likelihood everyone’s–thinks of some kind of form of recession, global recession, is very high. But in spite of that, given the concentration of ownership and, I guess, the role of speculation, we could actually see higher food prices in spite of recession. So if that’s true, then this lack of leadership by the G-20, how is this going to affect other organizations, international bodies that are supposed to be grappling with this problem?
CLAPP: It’s a really important question, because there is a body, the UN Committee on World Food Security, that is charged with coordinating and addressing food insecurity in the world. Its main objective is to try and coordinate policies across different countries to address hunger. And what’s interesting about this body is that it was reformed in 2009 to really become the foremost coordinating body, just before the G-20 decided to take up food security itself. Now, the CFS, this committee on food security, met a couple of weeks ago in Rome, and it was interesting that here it was, meeting a few weeks before the G-20 meeting, and it was very clear that the agenda of the CFS was largely being determined by what the G-20 had decided or not decided to do with respect to food security. And so, despite the fact that this body is charged with trying to address food insecurity around the world, it found itself in the round table on food price volatility basically repeating everything that was in the G-20 action plan, which, as Tim already mentioned, wasn’t very much. There wasn’t very much on biofuels. There wasn’t very much on dealing with speculation. Reserves were relegated to a small pilot project. All of these particular aspects of food price volatility were basically repeating what the G-20 had said, including its agricultural market information system. So, really, these other bodies haven’t really been able to go beyond what the G-20 hasn’t been willing to do, and that’s a real problem if–as you said, if we’re facing recession in future alongside continued higher food prices, this is a really dangerous mix for the world’s poorest people, who spend a large proportion of their income on food. And if the UN body charged with eradicating hunger isn’t able to do anything about it because the G-20 has stifled the agenda, that’s a real problem.
JAY: So, Tim, what should people do? These international bodies seem more or less paralyzed on this issue. What should people be demanding of their politicians? What they should be doing themselves [sic]?
WISE: Well, I think the–I mean, I think Jennifer points to the perfect example of the agency that has been recognized even by the agriculture ministers of the G-20 as the leading body, the body that should be leading and coordinating the effort to improve food security in the world. The–if the G-20 isn’t going to lead, the least it can do is get out of the way and follow and not derail promising agendas that are coming from other agencies. And there are a lot of promising agendas that are being developed in these other agencies, and not only in other agencies. I think one of the striking things, looking at the–surveying the scene out there as we’re now four years into this current spate of food price volatility and food price increases, a lot of countries aren’t waiting for the international bodies to lead. They’re coming together, they’re experimenting with food reserves. /sijAn/ has an interesting project with rice reserves. They’re not waiting for permission to do that. Those are promising projects. They’re the kind of projects that the G-20 at the least should not stifle, and in fact should try to learn from.
JAY: I guess that is where the solutions are going to lie, in regional solutions, local solutions. And I guess when people hit the streets, whether it’s in New York or New Delhi, this is probably going to have to form one of their demands. Thank you both for joining us.
CLAPP: Thank you.
WISE: Thank you, Paul.
JAY: And thank you for joining us on The Real News Network.
End of Transcript
DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.
Republish our articles for free, online or in print, under a Creative Commons license.
