From the Nourishing the Planet blog, Epoch Times writer Kremena Krumova summarizes the disscusion of food reserves.
At the G-20 meeting last month in Rome, leaders discussed developing an emergency reserve system, aimed at servicing the most vulnerable countries.
Still, world powers could not reach a consensus on what French Agriculture Minister Bruno Le Maire called, the “very last solution,” in a meeting with Agriculture Secretary Tom Vilsack in Washington earlier this month.
Some of the sticking points mentioned by Le Maire are Brazil and Argentina’s desire to reduce price volatility, but at the same time willingness to allow commodity prices to keep rising. And China has found it difficult to accept the idea of increasing transparency in the markets, which is what a global reserve system would require.
Further discussions will be held at the next G-20 meeting in Paris, June 22-23. France currently holds the G-20 presidency and has been spearheading the effort.
Another option would be to agree to “virtual reserves,” which is based on shared and coordinated commitment for supplying food between participating countries. In this system, commodities would be bought in the futures market as hedges. In other words, they would be promissory, not actual budget expenditures.
The concept has its critics, however, who see it as an inferior option.
“Virtual reserves concept is flawed from the beginning. Countries need out-of-market, physical reserves,” argues Harwood D. Schaffer, research assistant professor at the Department of Agricultural and Resource Economics of the University of Tennessee Institute of Agriculture.
Schaffer says that the issue of food reserves is purely a question of politics.
“We can easily solve the problem with food production. What makes this hard to solve, are actually politics and ideology,” he said.