Action Plan on Food Price Volatility and Agriculture

The following commentary was prepared by the Special Representative of the UN Secretary-General for Food Security and Nutrition and Coordinator of the High Level Task Force (HLTF) on Food Security

The French G20 presidency invited G20 Agriculture Ministers to meet in Paris on 23 June 2011. Ministers agreed an action plan on food price volatility and agriculture which focuses on stabilizing prices and increasing overall food supplies through sustainable investments in the production of nutritious foods. Their investments will make a comprehensive contribution to overall availability of food in the face of increasing demand, to improving people’s food and nutrition security, and to reducing hunger. They agreed to remove food export restrictions or extraordinary taxes on food purchased for non-commercial humanitarian purposes by the World Food Programme: they also agreed not to impose them in the future. This was the first ever meeting of G20 Agriculture Ministers: it builds on a number of regional ministerial processes including the sequence of meetings sponsored by the Comprehensive Africa Agriculture Development Programme and last years’ agriculture ministers’ meeting under the APEC framework in Japan.

As they discussed global challenges Ministers highlighted the vital role of Agriculture in today’s world. It deals with the production, processing and distribution of crops, livestock, fish and forest products. In many nations it determines the rate at which poverty is reduced and the potential for prosperity. It enables people in rural spaces to generate income. It enables farmers – especially smallholders – to be positive agents of change as they get better organized to participate in value production and benefit sharing. It can determine the quality of land, water, air and the sustainability of natural environments. It has a major influence on the price of energy and nutrients available in markets - and the nutritional status of children, women and men. It can determine whether people are healthy or at risk of disease. Agricultural policy choices influence rural economies, the availability and use of water and land, environmental quality, the rate of climate change, as well as people’s nutrition and health status. In most countries, agricultural operations are relevant to the whole of government and many strands of society: Ministers of Agriculture have a place in a wide range of policy processes.

At least two billion people in our world depend directly on agriculture for their livelihoods. Most of them are smallholder farming families, small-scale breeders and entrepreneurs, labourers working along food value chains, and nomadic groups. Farmer organizations, well-managed cooperatives, contract farming, franchise arrangements and agribusiness associations have a key role in ensuring that poor rural populations benefit from increased investments in agriculture and efforts to increase food production and supply so as to meet demands for nutritious food from increasing – and ever more demanding – populations. Farmers’ organizations are best able to play these roles if they have strong capabilities for management, coordination and negotiation. Ministers indicated their increasing efforts to involve associations of small-scale farmers, food producers and processors in the development and implementation of agricultural policies at the same time as they work with those who own and farm larger landholdings on environmentally sustainable intensification of agricultural production.

During the discussions yesterday Ministers were explicit about their need to balance national interests with contributions to global benefits – including food price stabilization, hunger reduction and environmental sustainability. They were joined by a number of guests including representatives of the African Union and the CEO of the New Partnership for Africa’s Development (NEPAD), the EU’s Agricultural commissioner as well as the Heads of major international Organizations. The declaration had been negotiated through meetings lasting several days over a period of six months: some elements were resolved on June 23rd - in the early morning. After discussions had been concluded that day, the Ministers agreed their declaration. It sets out a range of principles for sustainable investments in increased food production; priorities for agricultural research that contributes to a broad range of critical outcomes; mechanisms for more comprehensive data collection, accumulation and analysis for better agricultural market information – and for responding effectively to that information; safety nets serve as a back-up for individuals, communities and nations that just cannot access and/or afford the food they need; better access to humanitarian food supplies, and freeing them from export bans or extraordinary taxes both now and in future; and desirable steps to accelerate agreements on more open trade in agricultural products. They agreed to establish an Agricultural Market Information System (AMIS) which will be housed in the Food and Agriculture Organization (FAO). Later this year G20 Finance Ministers are expected to examine options for regulating of food commodity markets so they permit price discovery and any necessary hedging.

The Ministers agreed that sustainable intensification of agriculture calls for increased financial investment in smallholders and enabling them to better connect with food value chains: this means farmers’ organizations and agribusinesses (both big and small) working with governments in people-private-public partnerships that operate according to agreed principles: these include encouraging environmental sustainability, improving smallholder livelihoods, and contributing to better nutritional outcomes. It also means ensuring that farmers have access to market-based risk management systems (such as insurance against crop losses due to extreme weather or disease). Ministers were told about partnerships being developed in several African nations (for example – through investment in strategic corridors in Mozambique and Tanzania; and through a new African Agricultural Growth & Investment Task Force jointly sponsored by NEPAD, the African Union and the World Economic Forum). Ministers also noted country-led public-private partnerships catalyzed in Mexico and Indonesia, as well as Tanzania and Vietnam, by the Forum's New Vision for Agriculture initiative.

Some Ministers stressed the importance of grounding policies on food security within the framework of the Right to Food. Several recognized that better supplies of food are necessary – but not sufficient – to ensure food security. In their declaration Ministers are explicit about the need for safety nets to improve access to food by countries, communities and households at times when they are unaffordable because food prices rise, supply lines break or purchasing capacity is greatly diminished. The text on exempting humanitarian food supplies from export bans represents an advance on what has been written in the declaration of the 2009 World Summit on Food Security. This proposal could be taken forward by all WTO members at their Ministerial meeting later this year. Ministers agreed to ensure that national food-based safety nets can work at times when food prices rise sharply and governments cannot access the food required for these safety nets at an affordable price. They asked WFP to devise and then test an emergency humanitarian food reserve system and asked to more predictable long-term financing for the organization so that it can undertake advance purchases and set up pre-positioning arrangements for humanitarian food supplies. WFP has developed a five point action plan to take forward the letter and spirit of this declaration.

Several Ministers pointed out that the best agricultural development strategies are those which empower women and are sensitive to people’s nutritional needs – they should address the drivers of under-nutrition especially in pregnancy and early childhood. This “nutrition-sensitive” approach to agriculture will help the increasing number of countries that are prioritizing efforts to scale up nutritional outcomes well before the 2015 target year for the Millennium Development Goals. The commitment – in the Ministers’ declaration - to nutrition-sensitive agriculture should encourage similar engagement in Nutrition by Ministers of Agriculture throughout the world and will contribute to the acceleration of nutritional improvement.

Ministers recognized the absolute importance of open and well-functioning trade in agricultural goods and called for rapid completion of the Doha Development Agenda: in private conversation some suggested that least developed countries would better benefit from their products having tariff-free and quota-free access to other markets. They were also reminded about the need to facilitate in-country and regional trade.

The Ministerial Declaration calls for stronger international and regional networks for combined attention to public health, animal health and plant health. They also encourage international organizations – especially the Food and Agriculture Organization, the World Health Organization and the World Organization for Animal Health – to take a lead on this issue.

Ministers acknowledged that strong global governance is an indispensable element for achieving food and nutrition security, and called for greater policy coherence, recognizing the critical role played by International and Regional Organizations. There was repeated recognition of the important role being played now, and in the future, by the Committee on Food Security (CFS), and of the contributions made by the three Rome-based UN agencies (FAO, WFP and IFAD) and by the UN system’s High Level Task Force on Food Security (HLTF). The HLTF brings together 22 different UN system bodies, International Financial Institutions, the OECD and the World Trade Organization. Members of the HLTF contributed to this G20 meeting through the production of at least seven reports: FAO and OECD coordinated a total of 10 International Organizations (IOs) that contributed to the document on Food Price Volatility that served as a basis for discussions among the Agriculture Ministers’ deputies. The IOs would like to support the implementation of this action plan – with its comprehensive approach to food and nutrition security. It is in line with the HLTF’s strategy – the Updated Comprehensive Framework of Action. HLTF members can also contribute to links between the G20 and the wider membership of the UN – for example, in the context of the Committee on World Food Security, the UN General Assembly (GA) and the Economic and Social Council (ECOSOC). This is particularly relevant as the G20 work is at the interface between food, land, water, energy, environment, climate change, health and nutrition. Lastly, the HLTF is committed to ensuring the overall accountability of a coordinated and synergized UN system: this may be helpful in the light of the broad ranging requests made of the system by the G20.

So, in conclusion, we congratulate the French Presidency and members of the G20 on this important declaration, on the political commitment being made to food and nutrition security and for their collective efforts to reduce hunger, enhance social protection and safety nets, improve food and nutrition security, and make agriculture a positive force for shaping the world of the future. We look forward to working on these issues in 2011 and beyond – not only with the G20 (in this year’s Development Working Group and other processes on the road to Cannes in November, and then in Mexico next year), but also with all the members of the United Nations as well as their regional and global political bodies (including the Committee on World Food Security).