Leaders around the world are worrying that record-high food prices will create political instability and are considering an international political response.
But agriculture minister Gerry Ritz insists there is a simpler solution – free trade.
He promoted his ideas at a meeting of agriculture ministers last week in Germany.
During a later news conference, he was cool to the idea of national political decisions to impede exports or regulate speculators.
“There’s a number of answers to food security around the world, first and foremost unfettered trade,” he said.
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“When you have a situation where Russia closes the border to the export of wheat, it creates a ripple effect that drives the price up around the world.”
Ritz told Canadian reporters during a teleconference from Morocco Jan. 28 that the sudden rise in international food prices is the result of bad weather in producing countries rather than commodity speculators or hording.
The price increases have led to rioting and growing hunger in poor countries.
Ritz said the situation is also an argument for a greater acceptance of genetically modified crops around the world.
“There’s a growing argument for biotechnology to make sure that we produce more using less, that we have a lighter carbon footprint,” he said.
The French government said last week it will use its term as president of the G20 group of countries to press for international action on spiraling food prices.
The Organization for Economic Co-operation and Development said governments should act together to reduce food market swings. It recommended more public information about food supplies and political discipline over the tendency in some countries to restrict trade in response to the crisis.
“Commodity markets need to function better and more transparently,” OECD secretary general Angel Gurra said in a statement issued from Paris.
And in a manual issued for policy makers in poor countries affected by surging food prices, the United Nations’ Food and Agriculture Organization urged caution when designing reactive policies.
In its Guide for Policy and Programmatic Actions and Country Level to Address High Food Prices, the FAO urged governments to consult widely to make sure they understand the consequences before imposing policies.
“In a situation where there is some degree of urgency, particularly when there is intense political pressure, experience shows that quick policy fixes do not necessarily result in the desired outcomes because they are taken without proper consultation of stakeholders or a sufficient analysis of the consequences that decisions taken will have on the economy.”
Meanwhile, Ritz said World Trade Organization talks remain deadlocked. Canada will remain at the WTO table “in a fulsome manner,” but he insisted that no Canadian concessions are needed to advance the talks.
“I don’t think we have any concessions we need to make,” he told reporters. “We’re one of the least subsidized situations around the world and the way we run our agriculture has not been an impediment to any of these (bilateral free) trade deals that we talk about.”
There has been pressure on Canada from other WTO countries to make concessions on high protection levels that are used to shield supply-managed sectors from imports.
Ritz said agriculture is not the reason for the WTO impasse after more than nine years of talks.
“It’s actually not agriculture that has stalled the round, it’s the NAMA (non-agricultural market access),” he said.
“This is an exercise between the Americans and the European Union on the one side and developing markets like China, India and Brazil on the other and until those types of situations are resolved, the agriculture side is basically on hold.”
