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7 October 2013

Ministerial Meeting on International Food Prices

 

Distinguished ministers,

Ladies and gentlemen,
 

I would like to thank you all for accepting my invitation to join us to discuss food prices at this Second Ministerial Meeting on International Food Prices.

We have over 30 ministers and deputy ministers and other high-level authorities here with us today, participating in our second ministerial meeting on the subject.

Our first meeting last year took place when we were still working to keep food prices from spiking, after the sharp rise in maize prices in July 2012.

And that is where I want to start, striking a positive note. After three price spikes in the last five years, the outlook for international food commodity markets finally looks calmer this year.

 Grain production has rebounded and higher stock-to-use ratios should bring greater stability to prices. The FAO Cereal Price Index is 20% lower than one year ago. 

The price spike that some feared last year did not happen. Improved global governance and our collective efforts played an important role in making that possible.

Last year we had implemented a new weapon in our arsenal to fight excessive price volatility: AMIS, set up by the G20 during the French Presidency.

AMIS provided timely and reliable information, increasing transparency in the international food market. Just last week, the AMIS Market Information Group had its fourth meeting to continue its work on improving market information and short-term forecasts.

AMIS ensures better coordination among the main players to reduce market instability and unilateral action. And it has established itself as a key element in global governance of food markets.

But this does not mean that our food price problems are over. The G20 Leaders’ Declaration at the recent Saint Petersburg Summit was right to recognize that the agricultural market situation still needs close attention.

International prices have declined but they are still above their historical levels. And prices are expected to remain volatile over the next years.

If higher and volatile prices are here to stay, then we need to adapt to this “new normal”. Two key issues arise from this scenario.

Obviously, we welcome the fall in food prices for the relief this brings to poor consumers. But the recovery in food prices is not necessarily bad news. We need to remember that the recent rise in food prices comes after a three-decade fall that brought the agricultural sector in many poor countries to its knees.

These are two sides of this coin, and we are trying to bring them together to improve access.

So the first question is how can we use high prices for the benefit of poor small-scale farmers in the world?

The current situation offers an opportunity for farmers to reinvest in agriculture. But many small-scale producers do not have the means to take advantage of higher prices. We need to look carefully at this issue and ensure that a right set of policies is in place to support them.

The second issue is how to protect the low-income families, who now face higher prices. We need to increase the resilience of the poorer populations by strengthening social protection programs, including cash transfers. And whenever possible, creating ways to link social protection to productive support.

Countries throughout the world are having great success when using this menu of social protection and productive support to fight hunger and poverty.

Excellencies, Ladies and Gentlemen,

Our meeting last year was prompted by episodes of rising food prices and fear of a new global crisis.

This time around the context is very different. Markets are calmer. This gives us an opportunity to reflect, away from potential crisis situations, on a more considered assessment. By sharing experiences and knowledge, this Ministerial Meeting will help find lasting solutions to the issues surrounding food price volatility. It is also a good occasion to demonstrate and renew our political commitment to eradicate hunger and malnutrition.

Thank you for your kind attention and I would like now give the floor to Mr. Joe Glauber, representing the United States, current chair of AMIS.