UN Food Summit Strikes Compromise Over Food Export Control

“Negotiators at a UN food summit in Rome struck a compromise Wednesday night over the control of food exports, marking an effective agreement on all contentious issues for a declaration to be released at the summit's closing on the following day.

The negotiators at the three-day summit, sponsored by the UN Food and Agriculture Organization (FAO), agreed on the second day to adopt wording that, without a direct reference to export controls, stresses the importance for governments to reduce measures that could harm stability in world food supply, said sources close to the conference. …

The latest agreement followed a compromise the negotiators struck earlier in the day over the proposed control of biofuel output, the sources said. …On the biofuel issue, a summit working group agreed to promote international dialogue and thorough research as part of their compromise, said the sources. …” [Kyodo News (Japan)/Factiva]

AP adds that “…A copy of the draft obtained by AP ends with a pledge to alleviate the suffering caused by the crisis, to stimulate food production, to increase investment in agriculture, to address obstacles to food access and to use the planet's resources in a sustainable way. …

The draft appeared to seek a balance between contrasting positions on biofuels that were highlighted during the summit. It said it was ‘essential’ to address the ‘challenges and opportunities’ posed by biofuels. …” [The Associated Press/Factiva]

FT notes that “…The dispute over biofuels overshadowed a consensus reached yesterday to boost investment in agriculture to tackle the slowdown in farming productivity and announcements of multi-million dollar contributions to food aid and farm projects.

France promised $1 billion, Spain $500 million and the Islamic Development Bank $1.5 billion for food aid and agricultural development over the next five years. Kofi Annan, the former UN secretary-general, said that higher levels of investment were critical to address rising global demand for food to meet population growth. …” [The Financial Times (UK)/Factiva]

WSJ adds that “Governments at a global food conference pledged new financial aid to mitigate the effect of rising food prices in poor countries, but the promises fell far short of the $30 billion a year in extra spending the UN says is needed to halve world hunger. … [The Wall Street Journal/Factiva]

Africa Needs Strong Leadership To End Poverty-WEF.

“Africa needs strong leaders who will connect with the global community and follow up on the many promises made to help pull the continent out of poverty, officials said at the World Economic Forum (WEF) on Wednesday.

The 18th WEF on Africa began in South Africa's second biggest city and would discuss how the continent could sustain recent strong economic growth and tackle challenges including soaring food and fuel prices...Senior delegates said as Africa's development continually topped the world agenda, leaders on the continent should follow up on pledges to help the continent out of its poverty trap. …” [Thomson Reuters/Factiva]

AFP notes that “…Five presidents from across the continent were upbeat as they addressed the opening of the conference, attended by over 800 business and political leaders from across Africa, on how to make the best of economic opportunities.

South African President Thabo Mbeki brushed off questions about his concerns for the continent, saying he would rather be positive, while his counterparts from Burundi, Malawi, Ghana and Kenya did the same. …Mbeki said countries such as Burundi and Kenya, which had both been wracked by violence resolved through peace negotiations, sent a positive message about Africa's capacity to confront its problems. …” [Agence France Presse/Factiva]

Thomson Reuters notes that “. The African continent has averaged 5 percent economic growth over the past five years, and although the future outlook is ‘bright’, power, energy and skills shortages are the main challenges. …Forum delegates said the continent also needed to educate and train its people in order to propel economic growth. …” [Thomson Reuters/Factiva]

BuaNews reports that the interactive opening sessions “…on ‘Africa Economic Brainstorming - Drivers of Change’…will hold a forward-looking prism to the major drivers of change that the continent would need to be anticipating this year.

Complementary to this, another key session will look at the important nascent signals that could herald major changes in the near future, while another session will advance views crucial to understanding the global phenomenon of climate change and its local consequences. …” [BuaNews (South Africa)/Factiva]

World Environment Day Calls For End To CO2 Addiction.

“The UN urged the world on Thursday to kick an all-consuming addiction to carbon dioxide and said everyone must take steps to fight climate change. UN Secretary-General Ban Ki-Moon said global warming was becoming the defining issue of the era and will hurt rich and poor alike. …

‘Addiction is a terrible thing. It consumes and controls us, makes us deny important truths and blinds us to the consequences of our actions,’ he said in the speech to reinforce this year's World Environment Day theme of ‘CO2 Kick the Habit’...” [Thomson Reuters/Factiva]

AFP notes that “Crises over soaring food and oil prices should reinforce rather than distract from the need for action over climate change, the head of the UN Environment Program (UNEFP) said Thursday. UNEP executive director Achim Steiner said it was inevitable that attention on climate change would abate this year after the intense international focus on it in 2007. …

Steiner said any loss of public support for climate change measures - amid a shift of focus to food and fuel prices - could spell disaster for a global deal. … ‘World Environment Day should be a signal it's time to get mobilized again.’ Worries about future food supplies were closely linked to climate change and should not be seen in isolation, he said. …” [Agence France Presse/Factiva]

In a separate piece, Thomson Reuters reports that “High food prices may add pressure for more fishing along coasts where the environment faces threats from pollution and climate change, a UN University report said on Wednesday. It said 40 percent of all people lived within 50 km (30 miles) of coasts and that governments needed to work out better policies to safeguard resources. …The study said world fish catches peaked in the late 1980s with larger species, such as tuna and swordfish, being progressively fished out. …” [Thomson Reuters/Factiva]

OECD Ministers Discuss Measures To Cut Greenhouse Gas Emissions

“The proposed creation of an international framework to cut greenhouse gas emissions came under debate Wednesday at a meeting of economic ministers from the 30-member Organization for Economic Cooperation and Development (OECD).

French economic minister Christine Lagarde, who is chairing the OECD Ministerial Council Meeting, urged the ministers to expedite use of international trading in national quotas for greenhouse gas emissions to combat global warming. Taking advantage of a market mechanism to stem global climate change is the most cost-efficient approach, so it is desirable to ensure that as many nations as possible will take part in the trading, said Lagarde…

This position is expected to be incorporated into a chairman's summary to be released Thursday to wrap up the two-day parley, also attended by US Trade Representative Susan Schwab, the European Trade Commissioner Peter Mandelson and Japanese Economy, Trade and Industry Minister Akira Amari. …” [Kyodo News (Japan)/Factiva]

Meanwhile Thomson Reuters reports that “Trade powers tried to keep struggling global trade talks alive on Thursday with supporters saying a deal could help counter the world's food crisis and soften an economic slowdown. Ministers from the US, the EU, India, Brazil, Japan and other World Trade Organization (WTO) countries were discussing ways out of the stalemate with just weeks remaining before the WTO's Doha round risks suffering another long delay. ‘It's crunch time. We have to crunch these negotiations, crunch the figures and ensure we are working for a ministerial (meeting) in the coming weeks,’ Mandelson told Thomson Reuters as he arrived at the meeting. …” [Thomson Reuters/Factiva]

Commentary: Free The Farmers

A commentary by Hudson Institute, Senior Fellow, Rod Hunter published in The Wall Street Journal writes: “…This food crisis has been decades in the making, with demand overtaking the world's farms' flagging capacity. Since the collapse of international communism, we have witnessed an astonishing spread of prosperity and consumption to once destitute and deprived corners of the world. …

Growth has accelerated over the past five years, as annual global GDP growth rates of 5 percent and developing-country growth beyond that have boosted incomes for tens of millions, especially in developing countries. …The world's farms have not kept pace. Over the past century, agricultural commodity prices have fallen by half in real terms, with price spikes during the 1940s and 1970s. … Persistently declining prices blunted investment incentives globally, and agriculture fell out of fashion in development policy circles. …

Looking to the future, the picture is daunting. To meet demand, farm output may need to expand by 50 percent by 2025 and double by 2050, as prosperity spreads and population reaches a projected nine billion. …Here are some things that can be done to empower developing-country farmers:

-- Remove trade barriers. Global trade talks encompassing agriculture should be expanded and brought to a swift conclusion resulting in complete elimination of agricultural tariffs, export restrictions, and trade-distorting subsidies. … Elimination of all trade barriers would foster regional trade among developing countries and food security for all.

-- Build market infrastructure. Developing countries need to build the infrastructure necessary for their farmers to participate in the global economy: storage facilities, roads, rails and ports, as well as regulatory institutions to assure consumers around the world that their products are safe. Mr. Zoellick's innovative financial risk management ideas could also help. The World Bank and other development agencies have the skills and wherewithal to do this now that agriculture and rural development are back on the agenda.

-- Promote technological innovation. Farmers in developing countries need to harness modern innovations such as crop and animal biotechnology. Private sector and government-supported initiatives to develop crop varieties adapted for Asia and especially Africa will help.

-- Avoid counterproductive policies. Some have suggested, for instance, creating food stocks modeled on the petroleum reserves held by oil-consuming countries. This strategy could backfire. …

Tight food markets will be with us for years to come. Spreading prosperity and growing population will tax the world's finite natural resources. Yet, ‘human beings,’ Mr. Simon explained, ‘are not just mouths to feed, but are productive and inventive minds that help find creative solutions to man's problems, thus leaving us better off over the long run.’ …” [The Wall Street Journal/Factiva]

Also in this edition; briefly noted…

African nations should be wary of growing biofuels on prime farm land or risk uprisings triggered by food shortages, former UN Secretary-General Kofi Annan said on Wednesday. African governments trying to produce biofuels, whether from sugarcane or other products, have to be careful to protect their essential farm lands, he told Thomson Reuters on the sidelines of the FAO summit to combat the food crisis. [Thomson Reuters/Factiva]

Food prices in Kenya rose 44 percent in the year to May reflecting a combination of global trends and the after-effects of the country's post-election turmoil earlier this year. Overall inflation in Kenya rose to 31.5 per cent year-on-year, the highest rate since the early 1990s, as rising fuel bills stemming from the record cost of oil compounded food price increases. [The Financial Times (UK)/Factiva]

Dubai World, the investment group of the Dubai government said on Wednesday it planned to increase its $4 billion investments on the African continent over the next few years. Dubai World's chairman, Sultan Ahmed bin Sulayem, said he was confident that the company's investments across Africa would grow beyond expectations. [Thomson Reuters/Factiva]

In Burkina Faso, the small scale production of fruit and vegetables as cash crops, is catching on. According to our calculations a market gardener can earn up to $465 a month in the right season, said agriculture ministry official Jeanne Zongo. [Agence France Presse/Factiva]

Brazil's Central Bank was expected to raise interest rates again last night as the country's inflation outlook continued to worsen. The move comes as the government is considering measures to tighten fiscal policy as an additional weapon against inflation. [The Financial Times (UK)/Factiva]

Cyclone survivors in Burma's devastated Irra-waddy delta could require food aid for as long as a year, given the severity of the damage to the region's rice production just weeks before planting season, the UN said yesterday. [The Financial Times (UK)/Factiva]

China's main cities are beginning to face growing fuel shortages as oil companies cut supply into the fixed-price local market in response to sky-rocketing global prices. Over the past week, petrol stations in Beijing, Shanghai and Guangzhou have reported worsening supply shortages - especially of diesel oil - which has forced them either to ration their stocks or operate for only a few hours a day. [The Financial Times (UK)/Factiva]

Donor support will be crucial to the success of Afghanistan's economic development strategy, the International Monetary Fund (IMF) said on Wednesday. In a statement following its review of Afghanistan's plans, the IMF cautioned that better financial management and transparency were also needed to ensure that public spending plans were used efficiently. [Thomson Reuters/Factiva]

EU Development Commissioner Louis Michel called on Wednesday for a green revolution in Africa to boost farm production on the continent. At the African level, the food crisis has suddenly made it impossible for a part of the population to get access to food, he told journalists. Even if prices stabilize in the coming months, the crisis' impact will be felt over a long period, he said, flanked by Ivory Coast Prime Minister Guillaume Soro. [Agence France Presse/Factiva]

Banks are funneling money to quality mining projects and M&A deals in a defensive move as the global credit crunch bites in other sectors, bankers and industry players said on Wednesday. Plenty of funds were available at higher costs, though there was a lid on how much banks would lend to untested firms that were developing new mines or to ones operating in risky areas, the World Mining Investment Congress in London heard. [Thomson Reuters/Factiva]

The worst of the turmoil that has engulfed global financial markets since the middle of last year appears to be over, but its effect on economic activity isn't, the Organization for Economic Cooperation and Development said Wednesday. In its twice-yearly Economic Outlook, the Paris-based think tank cut its 2008 and 2009 growth forecasts for the 30 developed economies that are its members. The OECD said it now expects their combined GDP to expand 1.8 percent this year and 1.7 percent next, having forecast in December that their combined GDP would increase 2.3 percent and 2.4 percent, respectively. [The Wall Street Journal/Factiva]

Monsanto, the leader in agricultural biotechnology, pledged Wednesday to develop seeds that would double the yields of corn, soybeans and cotton by 2030 and would require 30 percent less water, land and energy to grow. The announcement, coming as world leaders are meeting in Rome to discuss rising food prices and growing food shortages, appears to be aimed at least in part at winning acceptance of genetically modified crops by showing that they can play a major role in feeding the world. [The New York Times/Factiva]

Huge investment funds have already poured hundreds of billions of dollars into booming financial markets for commodities like wheat, corn and soybeans. But a few big private investors are starting to make bolder and longer-term bets that the world's need for food will greatly increase by buying farmland, fertilizer, grain elevators and shipping equipment. [The International Herald Tribune/Factiva]