June 16, 2011 – By Peter Murphy
BRASILIA (Reuters) - The G20 group of large economies will jointly monitor world supplies of key grains to help prevent speculation from driving up food prices, according to a draft statement of a ministerial meeting next week.
Farm ministers gathering in Paris on June 22-23 would also call on the group's finance ministers to control food commodity speculation by adopting stricter regulations for food derivatives markets, the statement, obtained by Reuters, said.
Global food prices rallied earlier this year on rising grain costs, renewing concern about food security and inflationary pressure, particularly in some developing countries.
Food prices have since eased but in May remained 37 percent above the previous year.
France has made stronger regulation of commodities markets, mainly agricultural, a priority of its year-long presidency of the Group of 20 leading economies.
Under the proposed statement, the G20 would share market information through a database -- the Agricultural Market Information System (AMIS) -- to be housed within the Rome-based United Nations Food and Agriculture Organization (FAO).
Non-G20 members and private-sector players would be encouraged to participate in the database on wheat, corn, soy and rice, which would later be expanded to include other foods.
"We emphasize that AMIS will enable financial actors and market regulators to be better informed of the fundamentals of physical markets. Transparency on physical markets is important for derivatives markets but the reverse is also true," the statement said.
The data would also be used to inform a proposed Rapid Response Forum that would mobilize broad political support for policies affecting agricultural production and in the response to crises in agricultural production.
"We agree that risk management of food price volatility in developed and developing countries would provide an important contribution to promote longer term agricultural development," the statement said.
G20 farm ministers would also back a UN World Food Program pilot project for emergency humanitarian food reserves, as well as World Bank efforts to boost food security in vulnerable countries during food price surges and external shocks.
At their meeting next week, they also will back the scrapping of taxes on food donations.
Other proposals would seek increased coordination and sharing of crop forecast data obtained by satellite and more analysis on the effects of using food crops for biofuel production.
(Reporting by Peter Murphy; Editing by Raymond Colitt and Dale Hudson)