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G20 ministers meet in a bid to tackle high food prices France wants more regulation of food commodity prices
(about 11 hours later)
  
Agriculture ministers from the G20 nations are meeting in Paris, in an attempt to tackle volatile food prices. French President Nicolas Sarkozy has called for the G20 nations to put in place tighter regulation of food commodity prices.
The meeting comes a day after the World Bank unveiled a new measure to provide protection from volatile food prices in developing countries. His comments came in an address to G20 agriculture ministers, who are meeting in Paris to devise ways to tackle the high cost of food.
Rising food prices have become a threat to the global economic recovery. "A market that is not regulated is not a market but a lottery," said Mr Sarkozy.
Robert Zoellick, the president of the World Bank called volatile food prices " href="http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22945434~pagePK:34370~piPK:34424~theSitePK:4607,00.html" >the single gravest threat" the developing nations were facing. Formal announcements from the two-day meeting are due on Thursday.
"People are hungry for food and for action on a global level," he added. France is leading the call for tougher limits on speculation in food commodities, but the UK is taking a more cautious approach.
'Sensible financial engineering' "The question of speculation is one where the jury is out," said Britain's Agriculture Secretary Caroline Spelman.
The World Bank said that since June last year, rising and volatile food prices have led to an estimated 44 million more people living in poverty, under $1.25 (£0.77) a day. "I think it is not obvious that it's the only reason why there is price volatility.
It estimated that there are close to one billion hungry people worldwide. "I think it is principally because of supply and demand so we have to actually address the fundamentals in the market place if we are to get stable prices."
'Shielding consumers'
The meeting comes after the World Bank unveiled a new measure to provide protection from volatile food prices in developing countries.
Looking at the threat posed by volatile food prices, the World Bank has introduced a new risk management tool for the developing nations called the Agriculture Price Risk Management (APRM).Looking at the threat posed by volatile food prices, the World Bank has introduced a new risk management tool for the developing nations called the Agriculture Price Risk Management (APRM).
The organisation said, its new tool will allow better access to hedging and thus shield consumers and producers of agricultural commodities from price volatility. The organisation said, its new tool will allow better access to hedging, and thus shield consumers and producers of agricultural commodities from price volatility.
It will protect buyers from price rises in food-related commodities such as wheat, sugar, cocoa, milk, live cattle, corn, soybean, and rice, the bank said.It will protect buyers from price rises in food-related commodities such as wheat, sugar, cocoa, milk, live cattle, corn, soybean, and rice, the bank said.
"With this new tool, we can help farmers, food producers, and consumers protect themselves against price swings, strengthen their credit position, and increase their access to finance," said Mr Zoellick. "With this new tool, we can help farmers, food producers, and consumers protect themselves against price swings, strengthen their credit position, and increase their access to finance," said World Bank President Robert Zoellick.
"This tool shows what sensible financial engineering can do: make lives better for the poor," he added."This tool shows what sensible financial engineering can do: make lives better for the poor," he added.
Small-scale farming Mr Zoellick said volatile food prices " href="http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22945434~pagePK:34370~piPK:34424~theSitePK:4607,00.html" >the single gravest threat" the developing nations were facing.
While hedging may help safeguard against unprecedented surge in food prices, experts say that improving productivity, especially that of small-scale farmers is key to feeding the poor and impoverished. "People are hungry for food and for action on a global level," he added.
"Millions of poor, smallholder farmers struggle to raise output on tiny plots of degraded land, far from the nearest market," said Shenggen Fan, Director General of the International Food Policy Research Institute (IFPRI). The World Bank says that since June last year, rising and volatile food prices have led to an estimated 44 million more people living in poverty, under $1.25 (£0.77) a day.
"Lacking access to decent tools, quality seeds, credit, and agricultural extension, and being highly susceptible to the vagaries of weather, they work hard but reap little," he added. It estimated that there are close to one billion hungry people worldwide.
Mr Fan said that increasing the productivity of small-scale farmers will help improve the food supply situation in regions where it was needed the most, Sub-Saharan Africa and South Asia.
He said the two regions were not only home to the majority of small-scale farmers, but also to people living under poverty.
"Improving smallholder agriculture could take pressure off global food and agricultural markets and cushion the negative impact on poor people who are most vulnerable to volatile markets," Mr Fan said.