Local view for "http://purl.org/linkedpolitics/eu/plenary/2011-02-16-Speech-3-405-000"
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"en.20110216.15.3-405-000"2
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Madam President, ladies and gentlemen, thank you for giving me this opportunity to make a statement on behalf of the Commission on rising food prices. It was at my request that this issue was debated at the Agriculture Council of 24 January. I therefore also welcome the opportunity given to me to have this dialogue with the European Parliament on a subject of such vital importance.
That said, certain data can be improved, especially data concerning stocks, on which there is a lack of information, in particular on the worldwide distribution of stocks. The G20 leaders meeting in Seoul also asked the competent international organisations to improve information on stocks and production forecasts. Improving the relevance of these data is a prerequisite for improving the transparency of the markets. We also need to examine the issue of a forum for discussion at a global level among key market makers, both exporters and importers, so that crises are not simply noted when they occur. That is why these three issues are linked: we must first have the information, then be able to process these data, and, finally, have a forum, at international level, where the situation noted can be discussed.
The Commission has published several communications on the price of agricultural products and foodstuffs. In its most recent communication, the Commission launched actions to improve transparency along the entire food chain, and I am cooperating with European Commission Vice-President Antonio Tajani to move this key issue forward.
Proposals have also been announced to improve the transparency and supervision of products derived from agricultural commodities. As volatility increases, it is important that futures markets continue to fulfil their risk hedging and price discovery role. We therefore need a balanced and rigorous approach, and I welcome the work carried out by Commissioner Barnier in this area and am fully in favour of his work also covering the specific issue of agricultural raw materials.
On 2 February the Commission published a new, more global, communication on the commodities market and the financial markets that are derived from it. This constitutes a contribution to the discussions conducted within the G20 both on the volatility of commodity prices and on the supervision of derivative markets. We want to contribute, together with our G20 partners and more broadly, to more effective regulation of derivative markets in the interest of producers and users alike.
Therefore, I think that we need to work as a matter of priority in the coming months – until the summer I think – on the following issues: first, the availability and transparency of information relating to private and public stocks as well as to production and consumption; second, the collection, processing and dissemination of this information; the security mechanism for countries facing a situation of food tension; the role and organisation of food aid at international level and in the European Union; the improvement of international governance, for example through mechanisms for institutional dialogue between key countries; the levels of investment in sustainable agricultural production and research not only in the European Union but also in the poorest countries. The priority to be assigned to agriculture in development policies is also an issue to be addressed, especially as the Commission is preparing to adapt and reform development policy. I think that, in this context, the European Union should have a far greater presence, not only with food aid but, above all, by providing support to countries in the south to enable them to develop their own local production capacities in a sustainable manner.
In the European Union we need to look more seriously – and I have every intention of doing so – into identifying market mechanisms that would enable us to prevent catastrophes in certain sectors as a result of temporary squeezes on the income levels of producers and input costs. I am thinking in particular of livestock breeding.
Let me turn, finally, to the role of trade. We believe that trade can contribute to global food security as it enables available food to be distributed around the world. Export restrictions have only strengthened the spiralling increase in prices to the detriment of already fragile countries. However, trade policy concerning foodstuffs should be connected to other policies relating to food at the international level if we want a coherent approach on this issue.
In conclusion, I can assure you that I am closely monitoring trends in food prices and I want to work in the future in consultation with you, here, in Parliament, and with the Council, on this issue, so as to come forward with concrete proposals, first and foremost with the reform of the common agricultural policy, but also with other, more specific, instruments.
On this point, I would like to address two topics, which I think are interconnected: firstly, the situation on the world’s agricultural markets, where prices have been rising for several weeks, and, secondly, the G20 process on issues of food security and the volatility of agricultural prices.
Let us begin with the situation on the world’s agricultural markets. Different reports produced by several international institutions, including that of the Food and Agricultural Organization of the United Nations (FAO), on rising agricultural and food prices have once again placed the world on alert. Are we in the process of reliving the same rise in prices as in 2007-2008? Although prices, particularly grain prices, have risen sharply since the summer, and also more recently, we do not seem to have reached the price levels of 2008.
The situation around the world as regards common wheat is tight, but there is not a problem with market supply. Current harvests in the southern hemisphere are larger than expected. Nonetheless, to facilitate the end of the marketing years for the European Union market, we are thinking of suspending customs duties for imports under the tariff quotas for common wheat of low and average quality and for feed barley in the belief that this is one of the measures that could help to ease the market a little at European level. It should be noted that the forecasts for global common wheat stocks at the end of the 2010-2011 marketing year are higher than in 2007.
As for sugar, the prices are once again at record highs with, for white sugar, a price close to EUR 625 per tonne in mid-January. The increase in prices follows two years of a global deficit resulting from low production. The production of the current marketing year was recently revised downwards in certain countries, including Australia. However, according to the latest forecasts, the world sugar balance should be in balance for the period 2010-2011.
However, there is a lesson to be drawn from all this. While markets may be tight, there has certainly been an over-reaction at the level of prices given what the physical fundamentals tell us. Food security and the underlying issue of the volatility of agricultural prices are clearly global issues, which must be dealt with at a global level, and I am glad that the issue of food security and volatility is one of the priorities set by the G20 in Seoul. This is a major challenge for the Commission as a whole.
As Commissioner for Agriculture and Rural Development I have already, and repeatedly, expressed my commitment in this area, in Berlin at the end of January for example, with my counterparts in the various countries involved in the G20, but also recently, within the United Nations, with the Secretary-General, Ban Ki-moon, during a recent visit to New York.
Let us also remember that the issue of food security is clearly stated as being one of the challenges of the common agricultural policy (CAP) in the Commission Communication on ‘The CAP towards 2020’. It is a crucial issue both for the European Union and the world’s poorest countries, which is why I am working closely with Commissioner Piebalgs on these issues in order to also adapt the EU’s development policy to this issue of food security better.
Today I would like to share with you my thoughts on these issues, in particular on four areas: transparency, stocks, volatility management options and the role for trade. We hear that volatility is aggravated by a lack of transparency both for the physical markets and derivatives markets. For the agricultural markets there are sources of data on production, consumption, trade and stocks. International organisations, national services and specialised organisations, such as the International Grains Council, produce detailed data on this subject."@en1
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