Monday, 6 October 2014
Ministerial Meeting on Governance and International Commodity Markets
Your Excellency Mr. Lassaad Lachaal, Minister for Agriculture of Tunisia, Chairperson of the FAO Regional Conference for Africa and chair of today’s meeting.
Distinguished Ambassadors and Permanent Representatives,
Ladies and Gentlemen,
I would like to thank you all for accepting my invitation to join us for this third ministerial meeting on commodity market issues where our focus is governance.
The first two meetings dealt with excessive food price volatility that, in some ways, is a symptom of governance problems.
This year, we have also invited the heads of international commodity organizations and other relevant international organizations involved with commodity production and trade.
Our first two meetings took place against a background of heightened risks in international food markets with three price spikes in a space of only five years.
Fortunately, this year recovering production and stock levels have calmed markets. However, many people took the price spikes as evidence that international food markets were “broken” and that there was a failure of governance.
Indeed, a new element in international governance, the Agricultural Market Information System (AMIS), had to be created in response to those price spikes, to improve information, enhance market transparency and to promote policy coordination.
AMIS has already made an important contribution to limiting volatility and preventing crises since then.
The food price hikes attracted global attention. It provoked a broader debate not only on aspects of market behavior and governance, transparency and stability, but also on how these relate to poverty, food security, growth and development.
Ladies and gentlemen,
Price volatility is a major issue affecting all agricultural commodities.
However, the focus on food price volatility distracted some attention away from other, long-standing issues in international agricultural commodities markets not just for basic foods but also for tropical products such as coffee or agricultural raw materials such as cotton.
For commodity dependent countries, developments on world markets clearly impact sharply on poverty, economic growth and development and the incomes and food security of smallholders.
Civil society groups have highlighted the need for more inclusiveness governance of international commodity markets and the need for governance to reinforce the linkages between commodities, sustainability, growth and development.
Until recently, commodity market governance issues had not been much discussed in international fora since the 1970s, or even earlier. At that time, much of the dedicated institutional architecture governing the international commodity economy was being discussed or established, such as the international commodity agreements and organizations. The Common Fund for Commodities, for example, was negotiated in the late 70’s and became effective in the late 80’s.
The period since then has seen enormous changes in market structures, policies and technology.
These changes have had far-reaching implications not only for how international commodity markets work but also for food security, property rights and access to productive resources, and the position of smallholder commodity producers.
In FAO, we have had a major review of the Committee on Commodity Problems and its intergovernmental commodity groups to ensure they remain relevant to today’s commodity issues.
We have also successfully piloted the idea of creating inclusive multi-stakeholder fora involving all stakeholders in a particular commodity market –government, private sector producers and traders, consumers and NGOs.
We need more: we need a broad and inclusive discussion on the future of the international commodity economy and its governance in line with changing global priorities.
Excellencies, Ladies and Gentlemen,
By sharing experiences and knowledge, this Ministerial Meeting will help put commodity market governance issues on the international agenda.
It is taking place the day before the CCP meets and there will be a report of this meeting on the CCP agenda. I encourage the CCP and the other relevant international organizations to take this discussion forward.
Thank you for your kind attention.