As G20 financial leaders discuss food prices, some push for fulfillment of G8 pledges

Feb 23 2011

As G20 financial leaders met in Paris over the weekend, the Washington Post reports on the "debate over how to respond" to the recent increase in food prices. France, the G20 chair, spurred discussion about "whether new regulations on commodity trading might prevent speculators from pushing up prices by investing heavily in grains or other goods on the expectation that they will increase even further in value. Yet it is unclear how much of a role speculation plays in the movement of prices," the Washington Post writes.

Some food experts and analysts have said G20 leaders should "focus on promises already made and fund a marquee world initiative on food security" instead of coming up with a new plan, the Washington Post writes. A 2009 G8 food security initiative "has so far garnered less than $1 billion in pledges, and of that only $367 million has been paid," the newspaper reports, adding that "so far only six nations have provided money. Other contributors include Canada - the largest donor at $224 million - Australia, South Korea, Spain and Ireland," the newspaper notes. "A U.S. pledge of $475 million has gone largely unfulfilled, with Congress stripping all but $66 million of the proposed funding, according to U.S. and program officials. Major European nations - still strained by the recent recession - have yet to contribute to the fund, and fast-growing emerging market nations such as China and Brazil are also absent from the donor list, according to program documents," the article states.

"What may be more helpful to those most affected by short-term price increases is to boost investment in local agriculture," the Washington Post writes. "Reliance on local products is one reason why the recent price increases aren't having an even more devastating effect on the world's poor, the World Bank noted in a recent food price survey. In Africa, for example, the jump in grain prices has prompted some to eat more local products such as cassava and sorghum," the article notes.

Kimberly Elliott, a senior fellow at the Center for Global Development; Rep. Jim McGovern (D-Mass.); and a U.S. Treasury official are quoted in the article (Schneider, 2/19).

French President Asks Gates To Present Innovative Financing Ideas At November G20 Meeting

At the G20 meeting on Friday, French President Nicolas Sarkozy said he has asked Bill & Melinda Gates co-chair "Bill Gates to come up with ideas on how innovative financing could be used to fund aid to poor countries" and to present the ideas at the November meeting in Cannes, Reuters reports. "France has already said it will push to introduce a financial transaction tax that would target speculators to raise funds to aid poor countries, even if the tax has to be introduced in a small group of countries as a first step," Reuters reports (Le Guernigou, 2/19).

"Campaigners for an international tax on financial transactions - the so-called 'Robin Hood tax,' welcomed the move, which reflects France's determination to press ahead to look for innovative ways of boosting resources for Africa," the Guardian reports. "We welcome Bill Gates' investigation and his commitment to consider all good ideas that will provide additional funds to lift people out of poverty. A financial transaction tax is an idea whose time has come - it could be the most popular tax in history," said Max Lawson, a spokesperson for the Robin Hood tax campaign (Stewart, 2/18).