There continues to be a raging debate – all right so in global governance and global summitry there is hardly likely to be a raging anything – but there continues to be a serious difference of opinion among officials and experts over the success of the G20 Leaders Summit. Some have argued that the G20 proved effective, at least in the immediate context of the financial crisis in 2008 – especially after the turbulence from the Lehman Brothers’s bankruptcy. Others, while admitting the immediate success have suggested that as this critical crisis receded, so did the effectiveness of the G20. Thus, the G20 Leaders has become unwilling to accept the economic and financial coordination identified by various international organizations and regulatory bodies.
Well I suspect there is no immediate way to resolve the debate – to determine definitively – the overarching success or failure – the final measure of effectiveness for global governance – of the G20 Leaders Summit.
But I think there is a possibility of some assessment in the near future. The possible metric that we may use to gauge the G20 Leaders capability to coordinate action and to avoid, or at least ameliorate a possible crisis comes in the area of food prices. The assessment available is, or will be, the G20 action(s)/or not, to avoid a recurrence of food price spikes that led in 2008 to riots in a number of developing countries.
Since that time global summitry has been busy addressing – at least rhetorically – the question of food price volatility. Former President Sarkozy was particularly engaged in food security though he leaned toward the influence of derivatives on commodity prices as much or more of a direct factor on food supply and demand.
First at the Seoul Summit the G20 Leaders identified a food security pillar in the Seoul Consensus. Then the ministers of Agriculture gathered in June 2011 in Paris and produced an “Action Plan on Food Price Volatility and Agriculture”. And even more recently at the Los Cabos Summit the agriculture vice-ministers annexed a Report (Report May 18, 2012) to the Los Cabos Declaration (see paragraphs 55 through 62) describing the progress made on previous food security commitments.
Now comes the drought in North America that poses an immediate threat to the supply of commodities and the real prospect of significant prices increases. Apparently it would seem that Mexican, French and US officials are urging their colleagues to hold a conference call in the week of August 27th to discuss the possibility of calling a meeting of the Rapid Response Forum (RRF). The RRF is a creature of AMIS or the Agricultural Market Information System (AMIS) that was launched in September 2011. The main objective of AMIS is to encourage major players on agri-food markets to share data and enhance information systems. That would seem more than reasonable but a number of nations particularly China have been unwilling to do so and private agri-business – major players in the food distribution chain – are reluctant to play as well.
Now the RRF is a body designed to “promote early discussion among decision-level officials about abnormal international market conditions.” What could this body discuss? Well it might well encourage producing states to avoid placing food export bans on key commodities. It was the Russian embargo that exacerbated prices in the already volatile commodity markets in 2008. And major producers – the US for instance that uses approximately 40 percent of the corn crop to make biofuels – could consider lifting the mandates on bio-fuel production.
Well you’ll not be surprised that a number of experts have already “pooh poohed” the likelihood of action by G20 countries. As trade expert Simon Evenett was quoted as saying:
Beyond words, expect little from the G20 on rising food prices. … With a string of broken promises on protectionism, no serious enforcement, monitoring well after the horse has bolted, and a tendency to pull their punches, any G20 promises on food trade won’t be taken seriously – by the G20 themselves or by anyone else.
Well here is a useful test of the G20s capacity to coordinate action in the face of what appears to be a real prospect of price increase in such critical commodities as corn, wheat and soybeans.
Image Credit: OMAFRA report authored by John Chippa July 13, 2012