By Javier Blas in London
The G20 group of leading nations is set to sidestep the most contentious issues in global agricultural policy, including biofuel subsidies and export bans, as a deep split hampers efforts to reach a broad agreement at this week?s first meeting of the group?s agriculture ministers.
The two-day meeting, which starts on Wednesday in Paris, comes after France made global food security and commodities regulation a centrepiece of its G20 presidency after the 2007-08 food crisis.
Yet countries such as the US, Russia, Argentina, the UK, France and Brazil are divided about how to respond to record high food prices around the world.
The G20 commissioned international bodies, including the World Bank, the UN?s Food and Agriculture Organisation and the International Monetary Fund, to research how to address rising food prices. But many of their recommendations are to be left on the table.
The draft of the G20 communiqu?, called ?Action Plan on Food Price Volatility and Agriculture? and seen by the Financial Times, contains only vague references to the most difficult issues facing agricultural producers.
While the G20 nations largely agree on the need to improve agricultural productivity and enhance transparency, they disagree on biofuels, export restrictions, and on the regulation of commodities markets.
The World Bank and FAO report had called on the G20 to ?remove . . . policies that subsidise or mandate biofuels production or consumption?. But the draft communiqu? only agrees on ?the need for further studies?.
This reflects the fact that the debate on biofuels is pitting the US and Brazil, which transform corn and sugar cane respectively into fuel, against France, the UK and several developing countries, officials said.
Washington and Bras?lia are unlikely to cede ground at the meeting. Tom Vilsack, US agriculture secretary, said biofuels were only a ?minor? contributor to food inflation.
The World Bank and FAO report also said that ?export restrictions by major food exporters had strong destabilising effects on international markets? and recommended that the G20 use them only as a last resort policy and under a tight time frame. The communiqu? says the G20 agrees to remove restrictions only for ?food purchased for non-commercial humanitarian purposes? while allowing the duties and bans for commercial purchases.
The UK, Japan and Indonesia want a specific stronger mention about the impact ?export restrictions can have on international price volatility?. But the group is unlikely to reach a wide agreement on this, owing to strong opposition from Russia and Argentina, which have in the past three years curbed overseas sales in order to keep their domestic markets supplied and hold local prices down.
? The Financial Times Limited 2011