Brussels, 07/01/2011 (Agence Europe) - The European Parliament may soon call for “permanent and robust measures to address volatility in agricultural markets as a matter of urgency”. The report by Daciana Octavia Sârbu on “recognition of agriculture as a strategic sector in the context of food security” is to be examined during the first plenary session of the year 2011 by the European Parliament (17 to 20 January). It also considers Europe should act in concert with third countries and international organisations on the issues of price volatility and food security. France, which chairs the G20, has already stated considerable ambition in this field.
The price index on financial markets for primary agricultural goods has never been so unstable (especially for corn). Sârbu's report underlines that such phenomena are largely the result of speculation, and that speculative behaviour has accounted for up to 50% of the recent price hikes. The EP will call for revision of current legislation on financial instruments (which should provide for more transparent trading and minimum thresholds for the operators allowed to trade on these markets). It welcomes the Commission proposal for a regulation on OTC (over the counter) derivatives, and wishes to see safety nets against extreme price volatility available as a rapid reaction crisis tool. Furthermore, the report recommends coordination on legislation between the EU and third countries, such as the US, in order to “reduce opportunities for speculators to take unfair advantage of the differences between various regulatory systems”.
The report supports “European action to tackle the problem of speculation, including through a mandate issued to regulators and oversight bodies to restrict speculation”. The Commission is called on to ensure that “dealing with food commodity derivatives is restricted as far as possible to investors directly linked to agricultural markets”.
Global food stock network. The EP's agriculture committee also defends the idea of intervention stocks or strategic stocks to protect against major price fluctuations. The rapporteur considers that a targeted global system of food stocks would be beneficial (both emergency stocks to reduce hunger and stocks to be used to regulate commodity prices), helping to facilitate world trade when price spikes occur, warding off recurring protectionism and easing the pressure on world food markets. The EP considers such stocks should be managed by a common body under the aegis of the United Nations or by the FAO.
Furthermore, the report calls on the Commission to prioritise agriculture in its development aid, including assistance to farmers in gaining access to markets. Finally, it expresses its concern at the emergence of land grabbing and its consequences on food security in developing countries and on the future of farmers and farming. The Commission is called upon to deal with the question from the angle of land tenure and natural resources. (L.C./transl.jl)