France warns G20 farm deal far from guaranteed

PARIS Fri Jun 17, 2011 10:15am EDT

A woman selects vegetables at a market in downtown Sofia June 14, 2011. REUTERS/Stoyan Nenov (BULGARIA

A woman selects vegetables at a market in downtown Sofia June 14, 2011.

Credit: Reuters/Stoyan Nenov (BULGARIA

PARIS (Reuters) - A deal on steps to curb food price volatility between G20 agriculture ministers next week is reachable but far from guaranteed, French Farm Minister Bruno Le Maire said on Friday.

"Negotiations have been tough. A deal is possible, it is within reach, but it is not guaranteed at all," Le Maire said on the sidelines of a farm organizations meeting at the Organization for Economic Co-operation and Development (OECD) headquarters.

"It will be a tough deal to wrench," he said. "The closer we get to the term, the more negotiations are becoming strained."

The main stumbling blocks at this stage were proposals for more transparency on food supplies, calls for more regulation of derivative markets and a proposed limitation of export restrictions for humanitarian aid.

He stressed that France would not make any substantial concessions to an action plan currently under discussion.

"It will be like the Pope's election. It will be white smoke or black smoke," he said. "Either you have a global deal or you don't have a deal at all."

The agriculture ministers are due to adopt an action plan next week, of which Reuters obtained a draft on Thursday.

In the draft, ministers mainly agree on purely agricultural issues such as the launch of a database on countries' farm supplies, a research program on wheat and a rapid response forum between member states in case of a food crisis.

Members are also due to agree on humanitarian food reserves and limits on export restrictions for humanitarian aid.

FINANCIAL REGULATION

Farm ministers cannot make binding decisions regarding reform of agricultural derivative markets, that will be left to finance ministers, but the action plan is also due to include a chapter on the matter, Le Maire said.

"Each of these words is negotiated during hours at the highest level of states, such as the advisers of (China's President) Hu Jintao or (U.S.) President Obama," he said.

He stressed France would not sign a deal next week that would not tackle the financial aspects.

"I will not sign a deal that will not include the question of the regulation of financial commodities markets, let's be very clear," he said, after having explained that the main opponents on this matter were Britain and Australia.

Le Maire said an other issues at this stage was transparency with some reluctance from big countries, such as China or India, where collection of data on agriculture stocks and production may be difficult and sensitive.

French President Nicolas Sarkozy urged G20 farm ministers on Thursday to agree on the information system.

Some member states were worried about France's proposal to limit export restrictions for humanitarian purposes, Le Maire said.

"States want to have the guarantee that they will be able to feed their people whatever the agriculture situation of their country," he said.

Russia imposed a unilateral ban on grain exports in the summer 2010 after one of the most severe drought in its history ravaged its harvests.

(Reporting by Sybille de La Hamaide; editing by Jason Neely)

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