UK Environment Secretary Caroline Spelman, who is visiting Brazil, agreed with Brazilian Agriculture Minister Wagner Rossi that both countries would work together on practical measures to tackle volatility in food markets, and said it was important to find a way to end export bans – which move price volatility problems elsewhere in the world without increasing sustainable production.
Containing 19 percent of the world’s arable land, Brazil is one of the world’s agricultural powerhouses and plays a crucial role in global food security. As the world’s largest producer of poultry, coffee, oranges and sugar and one of the top three producers of beef, tobacco, cocoa and corn, it also contains 33 percent of the world’s rainforest, one-fifth of its fresh water and around one-third of its biodiversity.
“The most important impacts of price volatility are on poorer consumers, particularly those in developing countries, and in economies, which are significant net importers of food,” Spelman and Rossi said. “Price volatility also increases uncertainty to producers, when it translates to income volatility.
“We jointly agree that global commodities markets should be open, transparent and efficient,” they added. “We believe that improved information exchange and collaboration will significantly improve the international community’s capacity to deal with, and help in some cases to avert, future price spikes.”
It is important to improve the efficiency and transparency of global commodity markets to regulators, market participants and the public and to ensure that financial instruments are fully available to producers and consumers to enable them to manage the risks of price volatility, they said.
“Brazil and the United Kingdom recognize that increasing production in a sustainable way is the only consistent solution, in the long term, to reduce agricultural prices,” they continued. Thus, both countries emphasize the importance of broadening international technical cooperation in order to help poor countries accelerate their agricultural development.”
Spelman called for an end to food export bans earlier this year, with increased transparency around global food stocks to reduce unnecessary uncertainty and volatility in food markets.
“Food price volatility hits the poorest the hardest,” she said. “If food markets work better, then people all over the world benefit. Less volatile food commodity prices will mean fewer price spikes, less food price inflation and can help to avoid the sorts of riots we’ve seen over food prices in many parts of the world in recent years.”
The French Presidency of the G20 has labeled combating commodity price volatility, including volatility in agricultural commodity prices, as one of its priorities. In June, G20 Agriculture Ministers plan to meet to propose solutions to strengthening food security and enhancing food production and supply. Commodity price volatility is expected to feature on the agenda for the G20 Summit in November.