Watch-out, the G20 has noticed there is a food problem with higher prices so that means that they want to do something. With commodity prices reaching near highs of 2008, there is a growing concern that governments should act to allay the increase in prices. There has been a rise in hunger and political instability in many developing countries so the governments should do something instead of just letting market forces work.
French president Sarkozy is placing food security at the top of the G20 agenda; however, some of the blame of any food crisis should be associated with the current agricultural policies of the G20. In 2009 at the L’Aquila summit, the G20 promised $22 billion in financial support to third world countries including a special fund called Global Agriculture and Food Security Program. Only $350 mm has been received for this program. Just stop with the money promises that cannot be kept.
If you want to solve a shortfall in corn, stop subsidies for ethanol. Stop subsidies to inefficient production in the EU. Stop policies that stilt production in third world countries through developed market import restrictions. Allow for more genetic crop production, or at least let the science try and improve crop yields.
Regulation of agricultural markets cannot be a substitute for production. Allow markets to allocate funds through reduced interference in agricultural markets. It is not what policy-makers want to hear, but it is worth a try.
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