The European Commission’s 11th-hour decision, made under French pressure, to put on hold the publication of the strategy on how to secure Europe’s supply of raw materials was very welcome (“Raw materials plan delayed”, EuropeanVoice.com, 25 January).
France’s President Nicolas Sarkozy was right to be concerned about the strategy’s omission of food commodities. He is also right to want to use France’s presidency of the G20 to push for action to address the role of financial market speculation in driving up commodity prices, including farm goods.
Clearly, it is good news that the Commission picked up on these issues in the strategy published a week later (“Commission bows to French pressure on food-price paper”, 27 January-2 February). But Europe cannot just talk the talk; it must also walk the walk. The Commission ought to move to integrate measures to tackle food speculation within the review of the Markets in Financial Instruments Directive (MiFID) later this year and work with the G20 to ensure appropriate measures are also adopted at the global level.
Even when harvests are good, price volatility will continue to affect millions of people unless governments intervene to regulate the market.
Just three years after the 2007-08 spike in cereals prices on world markets, the sharpest seen in 34 years, food prices are on the rise again and causing alarm. Since the start of the year, the increasing cost of food has prompted, or contributed to, riots in a range of countries, including Algeria.
But while the strategy has addressed the omission of food commodities, it contains some worrying elements. Among its proposals to ensure European access to raw materials, the Commission argues it should force developing countries to ban or curb the use of export taxes, which many rely on to help them develop. This risks selfishly serving European interests at the expense of poor countries.