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The G20's next project: Solve global crisis of unstable food prices

Onions and potatoes and a weigh scale in the produce section of a grocery store.

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Even as the G20 wrestles with the aftermath of the financial crisis, the group of global powers is preparing to tackle another of the world's most urgent issues - wild swings in food prices.

Volatile commodity prices have wreaked havoc in the developing world, threatening food supplies in some countries and creating sharp inflation in others.

The Globe and Mail has learned that, for first time, the work of the G20 will be expanded to include a special meeting of agriculture ministers who will advise leaders on ways of averting skyrocketing food prices. The solutions are far from easy. The idea of liberalizing trade policies - to tackle Russian wheat export bans or addressing concerns about speculators in commodities markets - is deeply contentious.

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Canada could help forge consensus given its strong commodity exports and experience as last year's chair of the G20.

Agricultural subsidies have long divided traditional and emerging powers. By putting the issue of food prices on the G20 agenda, France, which is this year's host, is clearly reaching out to emerging economies like China, India and Brazil, where food inflation is a major concern.

Possible options for the G20 include building and managing larger food reserves, beefing up the United Nations' monitoring of global crops and pushing for reduced farm subsidies. France also wants a clamp-down on stock market trading rules for the agricultural sector in response to concern that speculators are destabilizing the prices of the world's most basic items.

Finding a way forward will be a huge challenge for the G20, which is quickly losing the spirit of co-operation that marked its response to the 2008 financial crisis.

Driving the new sense of urgency is the latest report from the United Nations Food and Agriculture Organization, which found food prices are now higher than during the peak of the 2008 global food crisis. The spikes are highest for rice, sugar and oils.

Recent civil unrest in Tunisia, Algeria and Egypt is also connected to food prices.

France is hoping Canada will "bring its support" to the proposed changes in agriculture policy, France's outgoing ambassador to Canada, François Delattre, said in an email.

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While Canada has scaled back subsidies for its large farming base, Cecilia Rocha, an economist specializing in food security at Ryerson University, said the French and the European Union will likely come under fire from developing countries on the issue of subsidies.

"They will have to take a look at themselves and the policies that they have implemented in the past few years that have led to some of the problems that we are facing today," she said.

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About the Author
Parliamentary reporter

A member of the Parliamentary Press Gallery since 1999, Bill Curry worked for The Hill Times and the National Post prior to joining The Globe in Feb. 2005. Originally from North Bay, Ont., Bill reports on a wide range of topics on Parliament Hill, with a focus on finance. More

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