PARIS (Reuters) - French calls for tighter regulation of commodity markets proved a stumbling block at G20 agricultural talks on Wednesday, which agreed to pool farm data to help curb volatile food prices.
French President Nicolas Sarkozy sought to win over agricultural ministers from the Group of 20 leading economies over the need for stricter market regulation as he welcomed them at the start of their first-ever gathering at the G20 level.
So far, the ministers have achieved consensus around other proposals tabled by the French G20 presidency, such as a global data-sharing initiative, sources close to the talks, which conclude on Thursday, told Reuters.
“A market that is not regulated is not a market but a lottery where fortune favors the most cynical instead of rewarding work, investment and value creation,” Sarkozy told the ministers at the Elysee presidential palace.
“Reinvestment, transparency, coordination, regulation: these are the key words of the action plan you have developed with (French farm minister) Bruno Le Maire. I hope that you will be able to approve it tomorrow.”
Paris has made tougher commodity trading rules a priority of its 2011 chairmanship of the G20, but partners like Britain remain opposed to stringent controls.
“The question of speculation is one where the jury is out,” British Agriculture Secretary Caroline Spelman told reporters in Paris ahead of the G20 meeting.
“I think it is not obvious that it’s the only reason why there is price volatility. I think it is principally because of supply and demand so we have to actually address the fundamentals in the market place if we are to get stable prices,” she said.
Finance ministers were in a better position to handle market regulation issues, she added.
France has also faced opposition to its farm agenda from Brazil and Argentina, proponents of a production-led response to food tensions, and reluctance from the likes of China and India to share their farm data.
But sources close to the negotiations said that agreement had been reached on issues other than market regulation, which they said would be discussed further by farm ministers later on Wednesday before a final session on Thursday.
The proposed joint database on agricultural production and stocks would provide much more transparency than is presently available and reduce price fluctuations driven by concern about world supplies of grains and other food staples.
“Financial regulation is the only thing left to be discussed,” one source said. “That is for the discussion to take place after dinner.”
A draft communique obtained by Reuters last week showed the main points of a potential accord on areas like data transparency.
Additional reporting by Helen Popper in Buenos Aires, Aleksandras Budrys in Moscow, Marion Douet and Camila Reed in Paris; Writing by Gus Trompiz; Editing by Eric Onstad