US farm group supports world grain reserve proposal

Setting up a world grain reserve would reduce the risk of food shortages and protect farmers from big price shocks, according to a senior official with the US National Farmers Union (NFU) on Thursday (Mar 19).

 

The proposal to create world grain stocks was the top priority in a meeting of farmers' unions from G8 countries in Rome, aiming to come up with a common position on food security.

 

Not only will a world grain reserve protect against times of food shortages, it will also function as a price floor that allows grain to be taken off the market and put into the reserve when production is high and prices are low, said Robert Carlson, the NFU's director of international relations.

 

World grain prices surged to record highs in 2007 and in the first half of 2008, drove up food prices so much that riots were triggered in some developing countries. Bumper harvests last year have since forced down prices, but food prices remained high in many domestic markets.

 

Carlson said the proposal requires a lot of study and discussion to figure out how the world reserve would work but it is a more realistic option than the current free trade agenda.

 

Carlson said the Doha round of negotiations on international trade needed to be recalibrated to take into account the importance of agriculture.

 

Participants at the Rome meeting generally wanted mechanisms to protect farmers and consumers from market volatility and speculation, although not all were in favour of a world grain reserve.

 

Meurig Raymond, deputy president of the British NFU, said his group supported negotiations with large food retailers so that everyone in the supply chain can have their margins rather than large intervention stocks.

 

The meeting's final statement called for a better management of world stocks and urged governments to invest more in agriculture to cope with growing demand, stating that an unregulated market would create unacceptable social costs for agriculture businesses.

 

The recommendations will be discussed at a G8 meeting of agriculture ministers in April. The G8 summit in July is also expected to discuss food security.

 

The G8 includes Britain, Canada, France, Germany, Japan, Russia and the US.