EU Takes Regulatory Step to Ease Food Prices

MEPs criticise speculation in food commodities, agricultural raw materials and energy markets, all of which puts food security at risk. The G20 is urged to work for the convergence of market regulations by involving countries that are not part of the G20 in the fight against food price manipulation.

2/18/2011 --- Climate change and commodity speculation are among the main factors threatening food security inside and outside the EU, according to a European Parliament resolution adopted on Thursday. MEPs call for urgent measures to combat food price manipulation and ensure that food production is maintained in the EU.

Droughts, floods, fires and storms, on a greater scale than in the past, are reducing agricultural capacity all over the world, says the resolution. Soil and water management must be improved to prevent loss of farmland, and the Commission should monitor national climate change mitigation measures, believe MEPs.

MEPs criticise speculation in food commodities, agricultural raw materials and energy markets, all of which puts food security at risk. The G20 is urged to work for the convergence of market regulations by involving countries that are not part of the G20 in the fight against food price manipulation.

Parliament asks the Commission to consider giving the new European Security and Markets Authority more power to prevent abuses in commodity markets. Dealing in food commodities should be limited to investors who have a genuine link with agricultural markets, MEPs believe.

In addition, MEPs call on national governments not to impose curbs on exports, as these "provoke greater uncertainty in the markets and disrupt world markets, and therefore have the potential to drive prices up further at global level".

To guarantee food security in the EU, a strong Common Agricultural Policy is needed, says the resolution. Declining farm incomes, caused by higher production costs to meet health, environmental and animal welfare standards, need to be urgently addressed to ensure there are farmers in the EU in the future. Market intervention tools, such as intervention and strategic stocks, must be part of the policy, says Parliament.

Since agriculture is a key economic sector in the developing world, MEPs call for a larger proportion of the financial aid for this sector to be used to support more effective and sustainable farming practices. They add that land ownership should be promoted to reduce poverty and increase food security.

The resolution was approved by show of hands.