Rising food prices (debate)
President
The next item is the Council and Commission statements on rising food prices.
János Martonyi
President-in-Office of the Council. - Madam President, thank you for inviting the Hungarian Presidency to participate in this debate on rising food prices.
For a second time in three years, the issue is on the agenda. Once again, rising food prices are causing social unrest and political instability in several countries. Families in the poorest regions of the world are in difficulty. Moreover, the Food and Agriculture Organisation tells us that the outlook is not good, with prices set to rise further this year as a result of adverse climatic conditions. This is a pressing issue. It was discussed between Agriculture Ministers and WTO Director-General Lamy in Berlin on 22 January 2011, and once again in the Agriculture Council on 24 January this year.
The reasons for this latest rise in prices are complex and are a mixture of structural and temporary factors. On the demand side, we have more people to feed than ever before. On the supply side, droughts and floods have played their part in wrecking harvests, input costs have risen and this has all been compounded by financial speculation in the commodity markets.
So what can the European Union do to address this problem? We need to get our internal policies right, we need to improve global governance in this area and we need to make a real contribution to the most vulnerable. Now is not the time for complacency, but we did make some important progress in all three aspects as a result of the last food prices crisis. The Council, along with Parliament, is engaged in an intensive debate on the future development of the common agricultural policy. This is highly relevant with regard to global food security. Recent Council debates put food security at the centre of the discussion, asking the question how best to ensure that agricultural production in the EU will be both economically viable and environmentally sustainable in the future.
Let me also say that we have read with great interest Parliament's resolution on the recognition of agriculture as a strategic sector in the context of food security, based on the report by the honourable Member, Daciana Sârbu. There are ongoing discussions in the Council concerning the Commission's Communication of 18 November 2010 on the future of the CAP, and the Hungarian Presidency plans to adopt Council conclusions at the Council meeting of 17 March.
We hope that the discussions concerning the legislative proposals scheduled to come out in the second semester of 2011 will lead to concrete progress. We have made important progress towards a more coordinated and long-term international response to world food security. We are a long way from reaching the Millennium Development Goal to halve the world's hungry people by 2015. Hunger and food insecurity remain a reality for a billion people, but one of the UN's recent achievements, following much work by the EU, has been the creation of the global partnership for agriculture, food security and nutrition. This is being implemented by the revitalised Committee on World Food Security in the FAO.
The EU has also been spearheading the renewal and modernisation of the Food Aid Convention in order to better contribute to world food security and to improve the ability of the international community to deliver food assistance to the most vulnerable populations. This is the way forward in order to enhance global governance in this area.
From a food security perspective, I would like to remind you of the Commission's Communication on humanitarian food assistance, adopted at the end of March 2010, and the subsequent Council Conclusions in mid-May 2010, thus outlining a new policy framework for EU humanitarian action to strengthen efforts to tackle food insecurity in humanitarian crises. The Commission's Communication on assisting developing countries in addressing food security challenges, also adopted last year, called at the same time for a new common food security policy framework, further strengthening EU leadership in the global food security agenda and improving the effectiveness of EU assistance. To this end, the Commission and Member States are jointly developing an implementation plan to translate this policy framework into concrete actions on the ground.
Let me also mention the EU's EUR 1 billion food facility, which was agreed by Parliament and the Council. We are in the third year of operation of this instrument which helps farmers in the developing world to increase agricultural production capacity. This is a tangible sign of our determination to bring real assistance to the most vulnerable.
Decisions are about to commence on the future orientation of the EU development policy based on the Green Paper on EU development policy in support of inclusive growth and sustainable development. With the Green Paper process, the Commission takes the initiative of attributing priority to economic growth generation, agriculture and food security in development cooperation in order to achieve inclusive and sustainable development in developing countries on the grounds of pro-poor solutions. Given the rising food prices and rapid population growth, enhancing developing countries' own food production capacities is of paramount importance.
We also welcome the new impetus given by the G20 Seoul summit to the WTO Doha development agenda. The EU would give full backing to a deal which would make a significant contribution to providing stability by getting rid of export subsidies and prohibiting export restrictions. The latter only serve to exacerbate price volatility and have exactly the opposite effect of the one desired.
Let me now come back to the issue of financial speculation. The extent to which it contributes to price volatility is unclear, but there is a good reason to enhance transparency on the commodity markets. The French Presidency of the G20 has identified this as a priority for the coming year. The Hungarian Presidency of the EU is ready to work shoulder to shoulder with the French Presidency of the G20 to achieve concrete results. The Hungarian Presidency is fully committed to working with you towards a first reading agreement on the Commission proposal on over-the-counter derivatives.
The world's poor and hungry deserve an adequate and lasting response to their worries about rising food prices. The European Union has been at the forefront in efforts to tackle the issue since the first crisis three years ago, but more needs to be done. The Council remains fully committed to a collective and coherent response, both at EU and international level. I am sure we can count on your support in all our efforts.
Thank you very much for your attention.
Dacian Cioloş
Member of the Commission. - (FR) Madam President, ladies and gentlemen, thank you for giving me this opportunity to make a statement on behalf of the Commission on rising food prices. It was at my request that this issue was debated at the Agriculture Council of 24 January. I therefore also welcome the opportunity given to me to have this dialogue with the European Parliament on a subject of such vital importance.
On this point, I would like to address two topics, which I think are interconnected: firstly, the situation on the world's agricultural markets, where prices have been rising for several weeks, and, secondly, the G20 process on issues of food security and the volatility of agricultural prices.
Let us begin with the situation on the world's agricultural markets. Different reports produced by several international institutions, including that of the Food and Agricultural Organization of the United Nations (FAO), on rising agricultural and food prices have once again placed the world on alert. Are we in the process of reliving the same rise in prices as in 2007-2008? Although prices, particularly grain prices, have risen sharply since the summer, and also more recently, we do not seem to have reached the price levels of 2008.
The situation around the world as regards common wheat is tight, but there is not a problem with market supply. Current harvests in the southern hemisphere are larger than expected. Nonetheless, to facilitate the end of the marketing years for the European Union market, we are thinking of suspending customs duties for imports under the tariff quotas for common wheat of low and average quality and for feed barley in the belief that this is one of the measures that could help to ease the market a little at European level. It should be noted that the forecasts for global common wheat stocks at the end of the 2010-2011 marketing year are higher than in 2007.
As for sugar, the prices are once again at record highs with, for white sugar, a price close to EUR 625 per tonne in mid-January. The increase in prices follows two years of a global deficit resulting from low production. The production of the current marketing year was recently revised downwards in certain countries, including Australia. However, according to the latest forecasts, the world sugar balance should be in balance for the period 2010-2011.
However, there is a lesson to be drawn from all this. While markets may be tight, there has certainly been an over-reaction at the level of prices given what the physical fundamentals tell us. Food security and the underlying issue of the volatility of agricultural prices are clearly global issues, which must be dealt with at a global level, and I am glad that the issue of food security and volatility is one of the priorities set by the G20 in Seoul. This is a major challenge for the Commission as a whole.
As Commissioner for Agriculture and Rural Development I have already, and repeatedly, expressed my commitment in this area, in Berlin at the end of January for example, with my counterparts in the various countries involved in the G20, but also recently, within the United Nations, with the Secretary-General, Ban Ki-moon, during a recent visit to New York.
Let us also remember that the issue of food security is clearly stated as being one of the challenges of the common agricultural policy (CAP) in the Commission Communication on 'The CAP towards 2020'. It is a crucial issue both for the European Union and the world's poorest countries, which is why I am working closely with Commissioner Piebalgs on these issues in order to also adapt the EU's development policy to this issue of food security better.
Today I would like to share with you my thoughts on these issues, in particular on four areas: transparency, stocks, volatility management options and the role for trade. We hear that volatility is aggravated by a lack of transparency both for the physical markets and derivatives markets. For the agricultural markets there are sources of data on production, consumption, trade and stocks. International organisations, national services and specialised organisations, such as the International Grains Council, produce detailed data on this subject.
That said, certain data can be improved, especially data concerning stocks, on which there is a lack of information, in particular on the worldwide distribution of stocks. The G20 leaders meeting in Seoul also asked the competent international organisations to improve information on stocks and production forecasts. Improving the relevance of these data is a prerequisite for improving the transparency of the markets. We also need to examine the issue of a forum for discussion at a global level among key market makers, both exporters and importers, so that crises are not simply noted when they occur. That is why these three issues are linked: we must first have the information, then be able to process these data, and, finally, have a forum, at international level, where the situation noted can be discussed.
The Commission has published several communications on the price of agricultural products and foodstuffs. In its most recent communication, the Commission launched actions to improve transparency along the entire food chain, and I am cooperating with European Commission Vice-President Antonio Tajani to move this key issue forward.
Proposals have also been announced to improve the transparency and supervision of products derived from agricultural commodities. As volatility increases, it is important that futures markets continue to fulfil their risk hedging and price discovery role. We therefore need a balanced and rigorous approach, and I welcome the work carried out by Commissioner Barnier in this area and am fully in favour of his work also covering the specific issue of agricultural raw materials.
On 2 February the Commission published a new, more global, communication on the commodities market and the financial markets that are derived from it. This constitutes a contribution to the discussions conducted within the G20 both on the volatility of commodity prices and on the supervision of derivative markets. We want to contribute, together with our G20 partners and more broadly, to more effective regulation of derivative markets in the interest of producers and users alike.
Therefore, I think that we need to work as a matter of priority in the coming months - until the summer I think - on the following issues: first, the availability and transparency of information relating to private and public stocks as well as to production and consumption; second, the collection, processing and dissemination of this information; the security mechanism for countries facing a situation of food tension; the role and organisation of food aid at international level and in the European Union; the improvement of international governance, for example through mechanisms for institutional dialogue between key countries; the levels of investment in sustainable agricultural production and research not only in the European Union but also in the poorest countries. The priority to be assigned to agriculture in development policies is also an issue to be addressed, especially as the Commission is preparing to adapt and reform development policy. I think that, in this context, the European Union should have a far greater presence, not only with food aid but, above all, by providing support to countries in the south to enable them to develop their own local production capacities in a sustainable manner.
In the European Union we need to look more seriously - and I have every intention of doing so - into identifying market mechanisms that would enable us to prevent catastrophes in certain sectors as a result of temporary squeezes on the income levels of producers and input costs. I am thinking in particular of livestock breeding.
Let me turn, finally, to the role of trade. We believe that trade can contribute to global food security as it enables available food to be distributed around the world. Export restrictions have only strengthened the spiralling increase in prices to the detriment of already fragile countries. However, trade policy concerning foodstuffs should be connected to other policies relating to food at the international level if we want a coherent approach on this issue.
In conclusion, I can assure you that I am closely monitoring trends in food prices and I want to work in the future in consultation with you, here, in Parliament, and with the Council, on this issue, so as to come forward with concrete proposals, first and foremost with the reform of the common agricultural policy, but also with other, more specific, instruments.
Mairead McGuinness
on behalf of the PPE Group. - Madam President, can I thank both the Council and Commission for a very clear statement of their intent on this very crucial issue of rising food prices. Those of us in the Committee on Agriculture and Rural Development who are in the Chamber today are more accustomed to debating agricultural matters at midnight. I am delighted that when agriculture suddenly becomes food, we debate this very important issue in the middle of the day when people can hear. I think we should remember this.
(Applause)
Let me say very clearly that the disconnect between agriculture and food is part of the problem that we are debating here today. The realities of agriculture and the low farm incomes in both Europe and the developing world are central to this debate and, lest we also forget, one of the crucial problems - and the Commission identified it in its position paper - is that rising commodity prices and rising food prices do not translate into higher farm incomes. The real problem is that the costs of producing food are rising faster, and this is a treadmill on which farmers cannot continue.
The challenge for us as policy-makers is how to increase food production in a sustainable way, how to produce more from less, how to manage our stocks and how to deal with the issue of stock dislocation that the Commissioner has identified. Global stocks are no longer the key figure; we need to know where the stocks are and to realise that they will not come out of China or India.
What we need to do - and I think this has started to happen since my report during the last Parliamentary term - is to put agriculture and food centre stage.
Let me finish by saying this: we need to be cautious as to how we reform our agriculture policy. We must maintain and increase food production within the European Union as part of our contribution to global food security. And yes, let me endorse your point about agriculture in the developing world: it has been neglected for far too long. It is now high time that our policies assisted that agriculture.
Stéphane Le Foll
on behalf of the S&D Group. - (FR) Madam President, President-in-Office of the Council, Commissioner, I fully agree with the remark that Mairead McGuinness has just made on the fact that there is a fundamental link between the issues of food and agriculture.
The issue we are addressing is rising food prices and the consequences that may have for a certain number of populations around the globe, as well as in Europe.
I would first like to make the following observation. The trend towards ever higher agricultural and commodities prices is, in my view, a long-term trend, which will continue for three main reasons: first, world demographic trends and a rising world population; second, the fact that, with global warming, we are experiencing problematic weather hazards such as drought and floods; third, because the world is also developing. With new emerging economies consumption levels are increasing. Therefore, the tight situation on agricultural markets and agricultural commodities is a trend that is on the increase. It is aggravated by price volatility, and price volatility is a consequence of the financialisation of the global economy.
This is what we should be addressing if we want to resolve the agricultural issue and the food issue. To do this - what the Commissioner said is important - there are two elements: yes, there needs to be transparency on stocks, but we also need a public policy on stocks in Europe and stock management at a global level, especially at the level of the United Nations.
Secondly, regulation of the financial markets and market speculation is essential, in particular by ensuring that there is no longer any connection between the speculative volume and the physical quantities exchanged on the markets. As regards food, it is unacceptable that speculators speculate without taking account of the consequences this may have for world food and humanity.
This leads me to draw two major conclusions. Firstly, we need a strong European policy and to strategically reassert Europe's commitment to being a global player in the food and agricultural sectors. Secondly, we need to change our development policy to ensure that globally - and Europe is a global player - we once again invest in agriculture, because we need agriculture to feed the world.
(Applause)
George Lyon
on behalf of the ALDE Group. - Madam President, it is welcome that we are actually discussing agriculture and food issues in the middle of the session on a Wednesday afternoon rather than at midnight. I very much welcome that. One of the reasons is that the massive volatility that we are witnessing today in food prices has at long last acted as a wake-up call to politicians across Europe.
Over the last 30 years, we have all become complacent as food prices declined year after year after year in real terms. Food has never been cheaper than it has been in the last few years. We have come to expect our supermarket shelves to be overloaded and groaning with food 24 hours a day. Too much food was thought to be the problem. That dominated the debate up until 2007, rather than the problem being too little.
The recent price spikes are a turning point, a sign that the days of plenty may be drawing to a close. Our current agricultural production model has been based on cheap energy, an abundance of land and plentiful supplies of water. That model cannot meet the challenges we face in the future. A rising population to 9 billion, growing demand from developing countries and the impact of climate change. As Professor John Beddington, the UK's Chief Scientific Officer, recently predicted, unless we take action we face a perfect storm of scarce energy supplies, scarcity of water and food shortages.
We need to act now and build a new agricultural model. Europe needs to take the lead and the reform of the common agricultural policy gives us the opportunity to map out a sustainable food production system that can meet that huge demand in world food supplies that is going to be needed in the future.
José Bové
on behalf of the Verts/ALE Group. - (FR) Madam President, Commissioner, as in 2008, the price of agricultural raw materials is soaring on world markets. We are only at 3% of the 2008 level. The fall in production in certain traditionally exporting areas due to climate change, the diversion of cereals to biofuel production and the financial speculation accentuating the price rises are responsible for this situation, as evidenced by the reports of the International Monetary Fund (IMF) and the French authorities, and as also indicated by the Commission.
The consequences of this new food crisis are exacting a heavy toll on the 1.2 billion people in the world who live on less than USD 1.5 a day. Since October, 44 million more people have joined those who live below the poverty line.
Just two days before the meeting of the G20, what is Europe waiting for before it takes measures similar to those voted in favour of by the United States? Since 13 January 2011, the US administration has demanded the limitation and the transparency of the positions taken by the financial funds on the agricultural commodities markets. This is a first step towards countering the appetites of the speculators.
The impact is also dramatic for European farmers. They are no longer able to feed their animals. Hundreds of farms have gone bankrupt. Five years ago, wheat was worth EUR 100 per tonne; today it is traded at close to EUR 300. This is a whole new ball game.
The Commission is demanding that farmers adapt to market signals. It would do well, today, to follow its own advice. Faced with this crisis, the European Union cannot wait until 2014 to find solutions. The crisis must be confronted and I propose three concrete actions.
Firstly the immediate creation, in the relevant countries, of cereal stocks to be made available to farmers at a subsidised price. Secondly, the indexation of meat prices paid to farmers to fodder prices. Thirdly, for 2011, a mechanism for transferring part of the aid directed at supporting cereals towards livestock farming.
James Nicholson
on behalf of the ECR Group. - Madam President, rising food prices can bring governments to their knees. We have seen that in recent days.
I would just like to take us back a little bit. I have been a Member of this Parliament since 1989. When I came to Europe in 1989, we did not have a food problem. We had beef mountains, we had butter mountains, we had milk lakes and we had cereal mountains. Now they are all gone and we are not producing enough food fast enough to feed ourselves.
So where has the food gone and why have we only a small supply? When a drought in any part of the world can actually cause total confusion in the whole market for everyone else, this is not a situation that we can allow to continue.
We have a situation in the European Union where farmers are leaving the industry hand over fist in every Member State. In actual fact, what we are doing is to encourage them to go even faster, and we have no young farmers coming into the industry.
We must act before it is too late to reverse the trend in rising global food prices. This action must be taken sooner rather than later to alleviate the pressure that has been put on ordinary people.
Shelter for ordinary people can be constructed through a strong common agricultural policy which ensures high-quality food at reasonable prices without negative impacts on the environment. A strong pillar of direct payments is vital for the world and to meet food demands. Further steps can be taken to solidify this in the future, which is much needed as far as investment and, indeed, research and development is concerned. Hopefully we can find a way to do that.
The problem as I see it is that everyone comes here to these debates and makes all the right statements, says all the right platitudes, but they are not prepared to take the tough decisions necessary to help those most in need.
I have to say that talking is no longer enough: it is action we need on global stocks and volatility in the market, and until you start to tackle that problem, you will not solve the problem.
Gabriele Zimmer
Madam President, as a politician involved in development policy, I always ask myself why it is actually so difficult to learn lessons from past crises and disasters. It seems to me that the drama of the hunger riots of 2008 has still made too little impression on the minds and hearts of those with political and economic power and also of those who are unscrupulously speculating on the agricultural commodities markets. The number of starving people worldwide has once again risen above a billion, and it is the poorest people in the world who are most affected by the price rises on the food markets. They have to spend more than 80% of their money each day on food.
The global promises of 2009 to provide more than USD 20 billion in agricultural aid to the developing countries, including USD 6 billion via the World Bank, for the fight against hunger have not been honoured. So far only USD 925 million has been paid. Speculations on the agricultural commodities markets no longer concern foodstuffs but are now almost exclusively concerned with financial market activities and transactions, which have a direct effect on food prices. I am therefore pleased that the Commission is now starting to abandon its reticence towards this situation.
Nevertheless, the speculation in relation to price developments has not become more transparent, nor has it been controlled or restricted. However, that is crucial if we are to be able to act effectively here and to bring about changes. I therefore call on the Council, the Commission and the Member States to give the fight against hunger top priority in all policies, agendas and strategies and also to consider new methods and new approaches, such as food sovereignty, so that ultimately those who work the land have more creative power and influence over the supply of food to their own people in their regions.
John Stuart Agnew
on behalf of the EFD Group. - Madam President, whilst food prices are undoubtedly rising, the situation at the farm gate is very different. British farmers producing beef, sheep meat, pig meat and eggs have actually seen a drop in the value of their produce over the last year; poultry meat is unchanged and milk only marginally higher; sugar beet will fall next year.
These businesses are facing huge cost increases themselves and cannot sustain the status quo for more than a few months. Then they will either succeed in claiming higher prices from the retailers or they will cease production. Either way, retail food prices can only go higher.
What is the EU doing about this? Well, it is making it unnecessarily expensive to import non-GM soya beans. It is charging farmers a global warming levy on their electricity bills, whilst those same farmers have lost thousands of tons of sugar beet and potatoes in the ground due to very cold weather. The EU wants to increase the public subsidy to organic farming rather than allowing this sector to be consumer-led. Any switching of conventional production systems to organic will lead to a reduction in food supplies.
Diane Dodds
Madam President, the main reasons for food inflation have been rising global commodity prices, soaring energy prices and volatility within the marketplace, and there is no doubt that the consumer is suffering. It is, however, the agricultural industry which has been dealing with this for some time, as well as rising feed prices and rising fertiliser prices. Profit margins have been reduced and many farmers, especially those in the intensive sectors, face financial ruin.
I would ask Parliament today to consider the consequences if we did not have support for farmers from the common agricultural policy. What would we be paying for food in that financial climate? I would also urge Parliament to consider very strong support for the common agricultural policy in the very important debates that are coming up.
It is important that we have a policy that will support farmers and ensure adequate food supply at a fair price. I would also say that fairness is absolutely essential, and in fairness we need transparency within the food supply chain. This will only come, particularly in the United Kingdom, if we have a supermarket ombudsman.
Jean-Paul Gauzès
(FR) Madam President, Mr President, Commissioner, I will address an issue that has been raised on several occasions and often presented as a single reason: speculation.
I believe that, with regard to speculation, moderation is required. It is clear that there is a definite link between certain financial activities and increased volatility and prices for raw materials. However, looking at the entire issue solely in terms of financial speculation would certainly be a mistake, since part of what we call speculation is actually the legitimate hedging of prices on the part of producers and, as we are well aware, these producers could not do without this hedging possibility.
However, a situation must be avoided in which direct investment in commodities has a harmful impact on price volatility because of its massive scale or its purely speculative nature.
In this regard, the proposals made by Commissioner Barnier on financial matters, in particular the regulation of short selling and derivatives, and also the revision that is going to come from the Markets in Financial Instruments Directive (MiFID), must give Parliament the opportunity to take account of aspects of commodities speculation in financial regulation and supervision, which will be put in place to ensure that those markets are also regulated in an effective yet pragmatic manner.
Commissioner, you said that these efforts should continue, and I believe that Parliament which, in a financial crisis, has complied with and, sometimes, anticipated what the Commission proposed, will live up to its responsibility.
Finally, I welcome the declaration of the Hungarian Presidency indicating that Europe would support the French Presidency of the G20, which has made the regulation of the commodities markets one of its priorities.
Luis Manuel Capoulas Santos
(PT) Madam President, prevention is always better than cure when it comes to disasters. There is a real risk of a global food crisis. That is not my phrase: it came from the government of one of the founding Member States of the European Union. The signs are worrying. The prices of some essential food products such as cereals do not stop rising and even hit record levels in January, according to the United Nations Food and Agriculture Organisation. The problem is obviously not European and, as has already been highlighted here today, the contribution of each of the hypothetical causes explaining the phenomenon is very far from being known
We know that the Commission is not ignoring the issue, and its communication of 2 February is a document that deserves to be read closely.
Nonetheless, the specific nature of agricultural production deserves particular attention in the context of the common agricultural policy (CAP), by dedicating proper risk-analysis instruments to development cooperation policy, and by backing food production to the detriment of other forms of international aid.
I should also like to welcome France's stance in the G20 here, influencing the regulation of the financial markets and the combating of price manipulation, as well as establishing rules that could prevent the sudden interruption of trade flows, as happened with Russia recently, for example.
Alyn Smith
Madam President, feeding our population has to be the highest duty of government, and indeed feeding our population is the primary objective of the common agricultural policy.
Food security is our North Star and this is an EU success story. It is worth remembering there have been food riots on every continent but ours over the last year, and we are seeing governments fall on a virtually daily basis, it seems, across the rest of the world, while we have at least been able to provide a degree of a safe haven for our citizens so far.
So, food security is our priority. You would not think it listening to some of the NGOs and lobbyists and, indeed, some of the politicians who have been involved in the debate about the reform of the common agricultural policy going forward.
Food security must be our focus and must be our priority, and I would disagree on one point with colleagues. I do not believe that free trade is the answer. I do not believe that global food security is something that we can achieve or should strive for. Export bans caused by countries seeking to feed themselves are not, in themselves, unjustifiable, and I would quote the English President of the National Farmers Union, if you would forgive me briefly: 'if we are talking about morality, a country seeking to feed itself is nothing compared to rich countries allowing their agriculture to decline and then expecting the rest of the world to feed them. We have a responsibility to lead the world in producing more, not less'.
Hynek Fajmon
(CS) Madam President, if we are to have a genuinely serious discussion about rising food prices, we cannot avoid the issue of how the European Union is itself contributing to this unwelcome trend, however uncomfortable that may be for some. All commodities market analysts agree that there are two main factors behind the rise in food commodity prices.
The first is the large-scale printing of new money in the USA and the European Union in recent months. This influx of new money into the markets is pushing the price of food and other commodities upwards. It is not speculators that are to blame here, as the report under discussion today asserts, but rather the misguided policies of American, European and other central banks.
The second factor pushing up food prices is the EU and US policy of forcing consumers to make ever greater use of biofuels. The commitments that the EU and the US have assumed in this area have led to a sharp increase in the amount of non-food commodities grown on agricultural land. As a result, less and less agricultural land is used for food production, and it is therefore only logical that food prices increase. If we want to succeed in lowering global food prices, we must abandon this absurd policy on biofuels.
Patrick Le Hyaric
(FR) Madam President, Minister, Commissioner, all the hungry people in the world, all those who have to pay more to feed themselves or to clothe themselves, expect us to respond with more energy to the greatest calamity afflicting our planet today, that is, the calamity produced by money-grabbing food speculators. They are the ones who are driving up food prices to the detriment of farmers and consumers.
I listened carefully to the impassioned plea by Jean-Paul Gauzès, but he will be aware that, in his region, cereals have been bought this year for the next harvest even before they have been sown. Consequently, we are indeed talking about speculation. The only way forward is for the European Union to act in several directions.
Firstly, it must act to stop these financial speculators by setting up a global agricultural and food fund, building up emergency stocks, putting in place mechanisms for stabilising real prices for actual and not virtual production under the auspices of the United Nations Organisation (UNO). Our common agricultural policy must also revert to a system ...
(The President cut off the speaker)
Krisztina Morvai
(HU) Madam President, today in the European Parliament we are discussing the issue of rising food prices. This phenomenon, of rising food prices, is felt by consumers in Hungary and other European countries alike. Those who do not feel it are farmers and, in particular, smallholders. How is this possible? Where does the money go? This puzzle, this mystery is solved, among others, by point (d) of the excellent motion for a resolution submitted by the Group of the Greens/European Free Alliance, but the whole motion for a resolution is in itself excellent and I must congratulate them on it. It also offers detailed answers and solutions. Point (d) draws attention to the phenomenon of speculation. It states that there has been an increase in speculation by purely financial institutions, that is, the commodity market speculation of money capital, which is causing an artificial inflation of commodity prices. We therefore partially have the solution. The money goes to the speculators, and to the purchasers and traders whose hunger for profits often knows no bounds.
How proud the Hungarian people would be if the Hungarian Presidency treated the resolution of this issue, that of food speculation, as a priority. I must ask the attending representative of the Hungarian Presidency whether we can by any chance count on this, and I ask Mr Cioloş, EU Commissioner for Agriculture, what solution he envisages to food-related speculations.
Gay Mitchell
Madam President, in developed countries the average household spends 10% to 20% of its income on food, whereas in developing countries the figure is generally as high as 80%. This underlines the dreadful consequences for those suffering countries. We must respond and we must continue responding until they stand on their own feet.
In December 2008 this Parliament voted overwhelmingly in favour of my report on the EUR 1 billion food facility to provide financial aid to developing countries in light of soaring food prices at that time. The purpose of this facility was to respond to those soaring prices, the causes of which were mainly, though not exclusively, droughts in grain-producing countries and rising oil prices. The situation remains extremely volatile, affecting producers and consumers in both the EU and developing countries.
We must learn how to cooperate with other countries such as Thailand. In the region, Thailand is a major producer of food, yet when some of its neighbours like Burma and Vietnam were in poverty and running out of food, we did not accept Thailand's offer to cooperate with us and act as our agent in the region. We have to learn how to do that. We must ensure a quick transition to stability in North Africa. We must ensure that aid is delivered to regions hit by unforeseen natural disasters such as Haiti and Pakistan, and in this regard we must continue to mobilise the reserve for emergency aid, allowing the EU to respond promptly to specific aid needs arising from such events.
Kader Arif
(FR) Madam President, ladies and gentlemen, first allow to me to express the regret that it took a crisis in Europe to trigger the debate we are having today and the motion for a resolution we will vote on tomorrow.
Just last year, when the developing countries rose up in what was called the 'food riots', Europe simply proposed emergency response measures, that is, to send seedlings and fertilisers, as though the problem were cyclical, when we have long been warning of structural problems. We have a common agricultural policy (CAP) that lacks effective regulatory mechanisms because the liberal majority still believes that nothing must restrict the market. There is widespread, economically destabilising and morally unacceptable speculation on agricultural products of developing countries that are prisoners of single-crop farming for export, with a Europe that does not support them and allocates only 4% of its development aid to the agricultural sector.
With this resolution, Parliament as a whole finally acknowledges that the right to food is a basic human right, that it is unacceptable that the hunger of some is exploited for the benefit of others, that regulation is indispensable in ensuring price stability, and that trade agreements must preserve small family farms and the right to food.
Today, Parliament is delivering a clear message. It is up to the Commission and the Council to translate it.
Nirj Deva
Madam President, by the time I sit down, 16 people will have died of starvation. That is about the size of that part of the Chamber over there. Every day 36 000 people die of starvation around the world because they do not have enough food to eat.
The European Union was self-sufficient in food until recently. Now it is importing food. It is actually taking food away from the poorest people's mouths. I am told that the EU is importing from the rest of the world an amount of food that would take about 35 million hectares of land to grow. We should be self-sufficient in food, and we should help the developing countries to be self-sufficient in food.
There is an answer to all this. In the 1960s in India, there was a revolution in green agriculture under Professor Borlaug. People said that India would starve. India did not starve. Brazil is now self-sufficient in food. We can do it if we have the will.
João Ferreira
(PT) Madam President, three years after the crisis of 2008, the world is on the brink of another food crisis. To prevent it, we have to look at its causes and attack them.
We have to look at the agricultural and trade policies that are destroying small and medium-sized agriculture, that promote models of intensive production for export and that, in this way, threaten food security and sovereignty; as is the case with the common agricultural policy (CAP). We have to look at the trend towards increased oil prices and at farmers' high level of dependency on this raw material; this dependency must be reduced. We have to look at the enormous power of the agribusiness multinationals that have a monopoly on the key factors of production; at the growing use of fertile soil for purposes other than food production; at the appropriation of land from the local communities that live and work on it.
Above all, we have to look at and attack the irrationality of an inhuman system that allows speculation on foodstuffs. We have to put an immediate stop to the financial instruments that enable speculation: the EU has to accept this or be complicit - as it already is - in its consequences.
Peter Jahr
(DE) Madam President, Commissioner, ladies and gentlemen, eating and drinking - hardly anything could be more commonplace and self-evident for us. However, what we take so much for granted is, for many people, becoming a serious challenge that they are barely able to cope with. Food prices have now risen sharply, which has made the situation even worse for many people.
A package of measures is needed to tackle the multiple causes of the price rise. In this regard, it is important to prevent price speculation and to establish stocks. In so doing, the dominant position on the market of some food corporations and chain stores must also be examined. The developing countries also need greater support from us to develop their agriculture. That is the only way we will succeed in providing food for the poorest people and improve their economic situation.
In order that we may have no misconceptions about this: appropriate prices for agricultural commodities are not the problem. On the contrary, they represent the solution to the problem. Appropriate prices for agricultural commodities - appropriate, as far as I am concerned, means free of speculation - are, in my opinion, the crucial prerequisite for the establishment of agriculture in the developing countries.
Adequate food is a human right and hunger is a crime against humanity. Supplying the population with high-quality and affordable food within the European Union, but also worldwide, must therefore be a central concern of European agricultural policy.
Richard Ashworth
Madam President, for the past 30 years food prices have been both low and stable. Now, the United Nations FAO has warned that rising energy costs, growing world population, greater wealth and climate change are about to present huge challenges to the world food system and to the cost of food.
This will have two important consequences on European governments. First, the rising cost of food and energy hits the very poorest families hardest. Second, at a time when Europeans most need a period of price stability while the economy recovers, rising food prices will fuel inflation. In the short term, the temptation will be to import cheaper food and to expect the food and farming industry to absorb the greater cost.
Neither route would be wise. Over-reliance on imported food would dangerously expose consumers to price volatility, and over-pressuring the farming sector, which already faces steep cost increases and depressed margins, would endanger productive capacity.
We need to invest in the common agricultural policy. Technology will be the key and now is the right time to do this.
Sergio Paolo Francesco Silvestris
(IT) Madam President, Commissioner, ladies and gentlemen, the increase in food prices requires two types of response. The first concerns the need to plan medium- and long-term actions. In this sense, answers must come from the new common agricultural policy, which must ensure food security for European citizens, provide consumers with food at affordable prices and protect farmers' incomes. With the new CAP we must give - and this is what we are in fact doing - strong support to farm incomes under the first pillar and support measures for rural development, increasing investment in agriculture and food security.
The second response is the need to intervene with emergency measures to protect the weakest link in the chain, because when food prices fluctuate, the effects are actually quite strange: when prices rise, producers and farmers do not derive any benefit, but when prices fall, producers see their profits and their already meagre earnings decrease. It is clear then that there are problems in the supply chain and a lack of transparency.
Commissioner, these serious problems in the supply chain include, for example, abuse of dominant purchasing power, unfair contractual practices - including late payments - unilateral changes to contracts, advance payments for access to negotiations and uneven distribution of profit margins along the food supply chain.
The Commission must propose measures ...
(The President cut off the speaker)
Paolo De Castro
(IT) Madam President, Commissioner, ladies and gentlemen, social tensions, such as the recent ones in North Africa, are almost always triggered by rising food prices. The record increase in the prices of cereals, sugar and vegetable oils is a clear sign of the increasing imbalance between global supply and demand.
A further - sadly possible - rise in prices would have dramatic consequences particularly for those parts of the world where food expenditure accounts for more than 40% of per capita income. It also poses a real risk of creating tensions throughout the entire planet in an increasingly interdependent world economy. The European Union must therefore have a clear awareness that agricultural policies - the common agricultural policy for the European Union and the Farm Bill for the United States - have a role of extraordinary and strategic importance to play in the world order, a role that goes far beyond the legitimate protection of farmers' incomes.
We need, Madam President, a new global food policy capable of coordinating agricultural policies at international level. Personally I hope that the forthcoming G20 summit will be an opportunity to actually embark on this new path.
Struan Stevenson
Madam President, the relentless increase in the price of oil and its consequent upward pressure on fertiliser prices, together with swingeing increases in the price of wheat, maize and other cereals, is creating a crisis in our farm sector, as well as a growing global crisis.
It is worth remembering that the uprising in Tunisia which set off the domino effect across the entire Middle East began with the self-immolation of a poor street food trader.
Europe's farmers can make a positive intervention in helping to resolve this crisis if they are provided with the appropriate tools. It is time we grasped the opportunities provided by biotechnology to help us meet growing demand for quality food products.
More than 125 million hectares of GM crops are being grown commercially worldwide by more than 13 million farmers, and yet we do not mention biotechnology in this resolution.
Wake up and smell the coffee, Europe, before we have food riots on our streets!
Georgios Papastamkos
(EL) Madam President, there are several reasons for the widespread volatility in food prices: extreme weather conditions, limited natural and energy resources and the increase in the world population. Another two reasons should also be highlighted: concentrations, by which I mean the oligopoly of the multinationals in the food supply chain, and a lack of transparency and speculation on the commodity markets.
In the wake of deregulation of the financial markets, futures trading on the commodity exchanges changed from a hedging tool to a tool for speculative transactions. The most important exchanges are located outside Europe.
Following the financial crisis, various hedge funds turned to the commodity exchanges, where financial reserves are now fifteen times higher than actual agricultural stocks, in order to recoup their losses. We therefore need an institutional framework limiting their investments in derivative agricultural markets directly linked to the food sector.
I welcome the initiatives being taken by the French Presidency of the G20 and I firmly believe that maintaining a strong European agricultural sector in order to safeguard food security depends on securing a fair income for farmers and taking effective measures to regulate the market within the framework of the new CAP.
Michael Cashman
Madam President, let me make it absolutely clear that I speak on behalf of those in the developing world and not in defence of the common agricultural policy.
According to the World Bank, over 44 million people have been plunged into dire poverty as a result of rising food prices. There are a myriad of contributory factors - fewer smallholdings, deforestation, desertification, lack of access to water and climate change.
Hence, we need a holistic approach to ensure that we encourage people to take care of their own development needs and to ensure food security at local level. We need to reform the common agricultural policy and the common fisheries policy so that there are no direct or indirect negative impacts on the developing and developed countries.
We must promote local land ownership and, finally, we must strip away the obscenity of land grab, whereby land is bought and used by foreign investment companies and foreign companies for their own needs. There is no defence for this obscenity.
Czesław Adam Siekierski
(PL) Madam President, consumers as well as farmers have every right to ask us politicians what is going on. Why is the food market in the situation it is in? Farmers know what profits they make, how much they sell their products for, and they know how much they and other consumers pay for food. What can we say to them today? Let us remember 2008 and the situation the food market was in. Did we learn from this? My answer is that we did not.
We are still limiting production. To make matters worse, we are paying to reduce production, while previously we paid to increase it. This Chamber has heard other comments concerning agriculture. Maybe our colleagues should come here today and listen. Maybe they would learn something about food security.
There is a continuing debate about the future of the common agricultural policy post-2013 and once again everyone wants to lower expenditure on the CAP. The current situation, this crisis, has occurred to warn us against a disastrous political decision. We have a chance to rectify our mistakes. We talk about stability. We ask why there are no reserves but we are limiting agricultural trends. Where are these reserves to come from? Who will pay for them?
Commissioner, this situation, this crisis is providing you with exceptionally strong arguments. Ladies and gentlemen present in this Chamber, we must convince those remaining of the seriousness of the situation and of the responsibility of this House for the future of the CAP and for feeding our society. The problem of food security is becoming a global problem. It is good that ...
(The President cut off the speaker)
Daciana Octavia Sârbu
(RO) Madam President, rising food prices hit the most vulnerable population groups. Against a background where, in 2010, the number of undernourished people in the world reached 925 million, providing food security must become a priority for the European Union. Extreme natural phenomena are not the only cause of rising food prices, but the volatility of the markets and the subsidy on biogas production also play a role.
I call on the Commission to create instruments to combat price volatility and excessive speculation, which in turn help exacerbate the global food crisis. I must also stress that, in most cases, the rise in food prices does not result either in an increase in farmers' incomes. On the contrary, due to the poor operation of the supply chain, the remuneration received by farmers is far from fair. I believe that the problem of rising prices helps dismantle the arguments against maintaining a strong common agricultural policy.
Herbert Dorfmann
(DE) Madam President, a few days ago one of the largest German newspapers had a picture on the front page of a bread roll with barbed wire around it. The article was about the fight for bread. I think that there will hardly be a topic that will occupy us as much during this and the forthcoming decades as the question of the availability of food. It is therefore good that we are talking about it as the reason for that - namely increasing demand - will not be going away and so prices will also continue to rise. We must now give political attention to this whole situation. We must consider how we can produce food and make it available. Commissioner, the idea of proposing further set-aside areas within the framework of the common agricultural policy by means of screening is the wrong approach. We need to make the land that we have productive.
However, we should not view all of this in too negative a light. For years we have complained that food prices are too low. If we consider, for example, whether EUR 100 for a tonne of wheat really is an appropriate price then we have to say perhaps not. If we consider what proportion of the price of the final product, for instance bread, is represented by the price of the raw materials then I think that the increase in the prices of the raw materials is not the only reason for rising food prices; other factors are also involved. Thus, this whole issue is also an opportunity for agriculture to put itself in a better position for the future.
Ulrike Rodust
(DE) Madam President, food prices have reached new record highs. The volatility of food prices has increased in recent years for various reasons. There is, therefore, great cause for concern. Climate change is causing extreme weather conditions and in some countries whole crops have been destroyed. In addition, there is increasing speculation on food, the danger of which cannot be overestimated - you only have to look at the financial crisis. Moreover, there is increasingly often competition between providing food for the poor and running the cars of the rich.
We need to find solutions so that farmers have sufficient incentive to produce food and that only areas that are not used for food production are used for the production of the likes of biofuels.
For me as a Social Democrat it is important that everyone has access to wholesome food at reasonable prices and at the same time that farmers are able to receive a reasonable income for their work.
Janusz Wojciechowski
(PL) Madam President, let us just say openly that there are powerful trade lobbies active in the European Union in whose interest it is to weaken European agriculture so that greater profits can be made by importing food from all over the world. We have heard it said many times in this Parliament that markets should be opened up in order to prevent prices rising. We reformed sugar production, opened up the markets, restricted sugar production in Europe and abolished export subsidies. What was the result? The result was that sugar prices did not fall, they simply increased. This should be a lesson for all of us. It is not the way forward. I agree with Mr Smith who said that the market is not the answer. We really should not bow to the trade lobbyists, but look to guarantee reasonable food prices by better protection of our agriculture, its production potential, and food security. Only then will we have sensible prices.
Giovanni La Via
(IT) Madam President, Commissioner, ladies and gentlemen, I fully share the concerns aroused by rising food prices, and I could hardly do otherwise, as this is an issue that is very closely connected to the lives of European citizens and especially of the less well-off classes. These increases result in an inability to meet the basic food needs of the populations of all countries in the developing world. Faced with this scenario, the developed countries, with the EU Member States among them, cannot remain indifferent.
In the new common agricultural policy, we must therefore provide instruments that are capable of reducing price volatility, limiting speculation on agricultural commodities and ensuring an adequate level of production within the EU. I must therefore stress the fact that we cannot leave land idle at a time when the world population is growing, making it necessary to increase the supply of food.
Marc Tarabella
(FR) Madam President, Commissioner, Minister, I would like to present a statistic, an observation, and three courses of action. The statistic is that, whenever food prices increase by 1%, 16 million people around the world are plunged into dire poverty. The observation is that, it is impossible to prevent volatility, especially on agricultural markets, extreme volatility is not inevitable and it can be combated, however difficult this may be.
The three courses of action, which have already been mentioned, are: firstly, to give priority, in development policy, to subsistence farming and regional food markets; secondly, the need for a public regulation policy, including through stock-piling and stock management; thirdly, an outright ban on speculation on basic food products.
Europe must be there, at the forefront, especially at the level of the G20. What I have heard from János Martonyi, Commissioner Cioloş and, in other places, from Commissioner Barnier, is to be welcomed. President Sarkozy was very clear and we have great hopes that the French Presidency will be a driving force in this area at the level of the G20.
Britta Reimers
(DE) Madam President, market fluctuations are important for the proper functioning of markets in order to create incentives for the buying and selling of goods. For us farmers, commodity futures trading is a basic component of the buying and selling of harvested crops. It provides an important opportunity to achieve planning certainty through the early setting of prices and quantities.
In contrast to the situation in our prosperous industrialised nations, rising food prices are a particular problem in the poor regions of the world where people have to spend a large proportion of their income on food.
We must not intervene in the markets every time the prices change in an attempt to combat natural fluctuations. However, without internationally applicable framework legislation for the financial markets, we cannot even start to think about regulating the commodities markets, because if there is too much money in the financial market it will find suitable equivalents, and commodities are currently highly regarded. Therefore, we should not be surprised if agricultural commodities are now also a sought-after trading objective.
Jaroslav Paška
- (SK) Madam President, the food crisis caused by the exceptionally poor harvest last year has highlighted to us the shortcomings of our agriculture and food policy. The current food price increases can be blamed partly on the poor harvest. If something is in short supply, the price of that item naturally rises on the market.
However, the issue is that the shortage of certain agricultural products, Commissioner, may to a large extent be ascribed to the misguided agricultural policy of the European Commission, which has long discriminated against the new Member States and their famers through its subsidy policy. Do not be surprised, Commissioner, if farmers who cannot get prices for their products that will at least cover production costs simply do not sow the crop or break up their herds. They are waiting patiently until hungry and rightly annoyed citizens direct their anger against those officials in Brussels who have long failed to resolve the general and widely recognised problems of agriculture.
You know, Commissioner, the shortage of agricultural products in the new Member States is not caused by poor harvests but by the fact that it no longer pays our farmers to produce under your subsidy and pricing policy. They are waiting, however. When they are given the same subsidies as their counterparts in France, they will definitely start planting crops.
Angelika Werthmann
(DE) Madam President, the provision of daily necessities, and in particular agricultural commodities, must not be left at the mercy of the efforts of speculators to maximise short-term profits. The projects announced by the Commission in the new strategy for commodities and raw materials, aimed at securing transparency and stability on the commodities markets, are therefore welcome. In view of the forecasts that food production will have to be increased by 70% by 2050 in order to meet demand, particular attention should be paid above all to pillar 3 - recycling and boosting resource efficiency - and proposals should be tabled soon.
In the area of raw materials diplomacy, I expect the EU to provide developing countries with the expertise to bring about the sustainable and environmentally sound extraction of raw materials.
Dacian Cioloş
Member of the Commission. - (FR) Madam President, ladies and gentlemen, an intense debate has been conducted on an issue which clearly causes us concern and which is highlighted when the situation so requires. It is, however, a permanent concern of the Commission and the European institutions, since we are lucky enough to have a common agricultural policy, which needs adapting, but which is an important tool in enabling us to manage these issues.
However, I think that this debate has also shown us that our stability now increasingly depends on international balances and world stability. This must be incorporated, even when we talk about our common agricultural policy.
I think it is also clear that rising food prices is a worrying trend which, in addition to the issue of volatility and the considerable variation in prices, makes the problem we have to solve even worse.
It is clear that, if there is a need for greater production on the market, there is a need for investment in agriculture. However, for farmers to be able to invest, they need, above all else, stable incomes to give them the courage to take this step.
That is why, in the medium and long term, our common agricultural policy must be conceived with this in mind. It must offer a minimum of stability and encourage investment so that our farmers can produce and supply our markets.
It has also emerged in the course of the debate that it is necessary to ensure that our common agricultural policy and the agricultural policies of developed countries are also in step with the development of agriculture in the southern countries and that our policy to support cooperation and development with the southern countries is in step with the common agricultural policy.
At the same time, our common agricultural policy must guarantee the sustainable development of agriculture. It may be necessary to review the instruments at our disposal for managing these extreme market situations, while allowing the market to play its role without, however, being deprived of the necessary instruments to enable us to act and to avoid being caught unprepared for crisis situations. The common agricultural policy still has work to do on this point in the months and years ahead.
The issue of speculation, and hence of volatility, needs to be addressed, and I am not speaking euphemistically. The Commission has already set out proposals, which it intends to follow up, to deal with this situation. On this point, therefore, we are not talking simply of wishes but of concrete proposals.
We must also consider the role that the European Union has to play on the international scene with regard to the food problem. This issue cannot be stabilised in the European Union if it is not stable at international level.
It may also be necessary to review our role in agricultural policy and in development policy and the way in which we address the food issue through different policies: trade policy, development policy, and financial policy. Perhaps here too we need concerted action.
I have also taken account of the need to act in the short term in certain sectors, and I am thinking in particular of the animal sector which, it is clear, is going through a difficult period as a result of strong pressure from all sides, low prices for producers, who are not benefiting from rising prices, and also high prices of inputs. I have taken note of this issue.
I have also noted the various proposals and suggestions that you have put forward. As regards the balance of aid between the crop sector and the animal sector, for example, the Member States already have the possibility to act on the decisions taken in 2008 in the health check of the common agricultural policy.
On the issue of stocks, it is an issue that must be analysed once again and reviewed since, with high prices, it is now impossible to speak of intervention stocks. However, it may be necessary to decide what role such stocks can play and how they could influence the proper functioning of the markets. I think that these are questions we must ask ourselves before we put forward proposals to this effect.
Finally, I would like to say to Jaroslav Paška that differences in payment between Member States do not necessarily come from the Commission. It is a decision taken by the Council, and by the agriculture ministers. The final decision always comes from the regulation proposed by the Commission, but these are regulations of the Council and, now, of the Council and of Parliament.
I also wish to make clear that no subsidy is given to agricultural production for biofuels in the European Union. Therefore, it is not the common agricultural policy that is stimulating the production of biofuels. Nor is it the intention of the Commission to set land aside. Something quite different is involved but, in any event, land is not going to be set aside in a situation where we actually need to produce.
These are the various points I wished to add in response to the issues raised. I also thank you for this fruitful debate and I hope that today's debate will still be fresh in people's minds in a few months' time when we will discuss the resources to be allocated to the common agricultural policy, a policy that is a basic instrument in addressing food security.
János Martonyi
President-in-Office of the Council. - Madam President, I would like to thank all the Members for this constructive debate. I believe that the high level of political attention afforded by Parliament to this issue provides a helping hand to the Presidency to fulfil its agenda with regard to the rising food prices.
As has also been highlighted in this debate, due to the extent and depth of this issue, it requires multifaceted cooperation and complex solutions across various areas such as agriculture, regulation of financial products and services as well as development policy.
With respect to biofuel production, I would just like to repeat that the EU is fully aware that the unsustainable production of biofuels can have negative effects, notably mass deforestation and food shortages. That is why the EU is committed to stepping up the development of second-generation biofuels made of non-food crops. The EU has also abolished the perverse financial incentives for biofuel production at the expense of food production.
Given the deep structural global roots of the problem, Europe needs to play a leading role in tackling food prices and food security at global level. This is already taking place through a number of international organisations and programmes such as FAO and the World Food Programme, as well as through more general forums such as the G20.
I would just like to add that, on a personal level, this debate has reinforced my long-standing conviction that, to tackle global challenges, such as hunger in the world, volatility of food and raw material prices, turbulence on the financial markets, regulation of financial products and services, there is a need for much more global governance and more global rule-making.
Europe, based upon its unique experiences with governance and rule-making, does have a very special mission and responsibility here. It is for this reason that we believe that Europe and the European Union have to take a leading role in combating all these challenges.
The Hungarian Presidency is pleased to note that it can count on Parliament to maintain the work being made by the EU, both in terms of policy and of efforts at international level.
President
To wind up the debate, six motions for resolutions have been tabled under Rule 110(2) of the Rules of Procedure.
The debate is closed.
The vote will take place on Thursday, 17 February 2011.
Written Statements (Rule 149)
Michèle Striffler
Global food security is a crucial issue for the European Union. Immediate and sustained action must be taken to guarantee the food security of the citizens of the EU and the planet as a whole. It is essential to develop sustainable agriculture in developing countries and to allocate an appropriate share of EU development aid to the agricultural sector. The spectacular reduction in the level of development aid allocated to agriculture since the 1980s is regrettable, and it is to be hoped that recognition of this need will reverse this trend. The European Commission really must give priority to agriculture in its development aid, particularly aid to allow farmers to gain access to markets and aid to small and medium-sized family farms. Humanitarian food aid must respond to the needs, challenges and structural limitations of developing countries, with account being taken of production, distribution and local transport as well as the trading capacities of these countries, in order to help lay the foundations of their long-term food security.
Liam Aylward
in writing. - (GA) Security of food supply is a major concern today. There are 79 million people in the EU living below the poverty threshold and during the winter of last year food aid was given to 16 million people in the EU.
Since the cost of food is at a new high level for the seventh month in a row and since the volatility in prices is creating serious problems in the food chain, more people will have difficulty finding wholesome food at a reasonable cost. Common agricultural policy (CAP) programmes, like the Programme for Deprived Persons, are of critical importance for providing food. Programmes of this kind must be supported and prompt, long-term measures adopted to ensure security of food supply in the EU and throughout the world.
Currently 30% of the food produced in the world is wasted. This is unacceptable, immoral wastage and must be curbed. A strong agricultural industry, a strong CAP and a food supply chain in which every effort is made to curb food wastage are essential for tackling the food supply challenge.
Janusz Władysław Zemke
in writing - (PL) I approve of the fact that the European Parliament has focused on rising food prices. Unfortunately, these price rises are not a short-term phenomenon, but seem to be developing into a long-term trend. This is compounded by a growing demand for food, notably for cereals, poor harvests in recent years and low stocks, and also unfortunately financial operations and a weakening dollar. All this is causing chaos on the markets. From our point of view the social consequences are more significant. The populations of many countries are growing exponentially, and they are permanently malnourished and hungry. Their despair creates a source of increasing political tension.
We cannot observe these events passively. We need international cooperation under the auspices of the UN and the European Union. Countries that are members of the G-20 should effectively counteract speculation in agricultural products. We should look again at the regulation of agricultural markets in Europe so as not to artificially restrict potential growth. There should be no speculation in global hunger as the effect of this speculation will be that many innocent people will die of hunger, especially in the poorest nations.
Tunne Kelam
During the second half of 2010, the wholesale prices of agricultural produce increased by 32%. World grain consumption increased to 41 million tonnes between 2005 and 2010 compared to 21 million tonnes between 1990 and 2004. According to various analysts, a substantial food crisis in 2011 is a reality; it would take just a single failed crop. The biggest exporting countries Russia, Ukraine, China and Mexico have already been forced to import in order to ensure their supply. The reasons for the increase in prices are vague, and one can no longer talk about the trends of the agricultural produce market. Recent price increases have been dramatic and unpredictable as a result of various speculations. I would like to draw your attention to the fact that the growing use of biofuel is increasingly reducing the share of grain used for animal and human consumption. This has caused a very tense situation where we need to realise that increasing food prices lead to a growth in inflation, feed protectionism and cause unrest, all of which could lead to social, economic and political instability in Europe as well as globally. Europe, as one of the biggest importers of food products, has a great influence on global food prices, but that equally makes it vulnerable to various price shocks. I support the endeavours of the European Commission to accept a new legislative package by spring 2011 which would give the Commission greater authority to regulate markets and prevent speculation. The European Union must find means to ensure sustainable prices and a sustainable economy. A balance needs to be established between security and openness as well as development. We must be ready to face a potential crisis.
Spyros Danellis
The current high prices are a good thing for some people and a bad thing for others. For example, they benefit wheat farmers in the EU, but not animal-based food producers. They benefit countries with cereals available for export, but they create a deadlock and hunger for the people in developing countries who depend on cereal imports for their food. Of course, the final outcome may differ from one area to another and/or from one producer to another. That is because, concealed behind each group of winners and losers are problems in the agrofood chain in the EU, the threat of climate change to food security and the deadlocks created by superficial and inconsistent choices in connection with production, trade and development. The EU must find realistic and balanced solutions, by evaluating the conditions calmly and seriously, with a sense of its role on the international markets. The CAP reform must help in this direction.
Csaba Sándor Tabajdi
in writing. - (HU) The steep rise in food prices is caused by the simultaneous effect of three factors: the loss of yields caused by natural disasters, the growing demand for food, especially on the part of China and India, and commodity exchange activities, that is, price speculation. French President Nicolas Sarkozy raised a very pertinent question a couple of weeks ago: If money markets are regulated, why aren't commodity markets? We must take action against speculation far more effectively at both EU and global level. The main cause of the food price shock has been the tremendous fluctuation in supply. Only 10-20% of cereals change hands on the global market, and yet a reduction in production can result in a state of panic. Based on forecasts of diminishing supplies, importers drive up prices.
It is not fair towards either the producers or the consumers that internal prices, too, are determined by export prices, since at least 80% of production is used where it has been produced. Russia, in its former position as an exporter, and currently as an importer, has been a fundamental influence on the European cereal and oil seed market. The supply shock is further exacerbated by speculation on the futures markets, resulting in a food price shock. The main problem is therefore not caused by a physical lack of food, but by food prices the poor can no longer afford. This results in foodstuffs remaining in storage instead of being sold at equitable prices. High prices have a debilitating effect on consumers, in particular those in the poor strata of society.
Luís Paulo Alves
We are discussing a problem that is above all a political issue requiring a vision for the future. However, much more than short-term remedies, what is needed is the courage to establish a new architecture that reconciles the need to increase food production by 70% in the next 40 years with the increasingly limited natural resources. Therefore, what is done or not done in Africa, in Asia, in the Americas or in Europe affects everyone, everywhere, with consequences for availability, for access and for food prices. This is severely affecting the poor, as well as producers of meat and milk. That is why the response must be global and goes far beyond the field of agricultural policy: it is essential to invoke a set of other policies, without which we will not truly be achieving the necessary solutions. At global level, these solutions include advocating food as a right, supporting the countries' abilities to feed themselves, supporting farmers and ensuring their fair access to value in the food chain, limiting financial speculation, protecting access to land, and creating food reserves.
Sirpa Pietikäinen
in writing. - (FI) People's right to adequate nutrition is a human right that has been acknowledged in the UN's Universal Declaration of Human Rights since 1948. We should therefore remember that when we discuss the price of food, in fact we are talking about fundamental human rights.
The reform of the European Union's common agricultural policy is taking place at the same time as a rise in global market prices for food. If we are to respond to these changes in a sustainable way, based on human rights, we will need a comprehensive outlook and policy. The price of food and food price trends are affected by several critical issues in global agriculture, such as climate change, energy policy, and the availability of natural resources and how efficiently they are used. The European Union should be a pioneer for a new way of thinking about agriculture. We need a food policy in which whole elements of the entire food production chain are assessed critically and its effects on health and the environment are taken into account. A more natural and resourceefficient food policy needs to be supported and guided by means of both economic and policy measures.
Speculation on food prices should furthermore be restricted. Michel Barnier, Commissioner for Internal Market and Services, has proposed new measures to curb speculation on basic commodities in the derivatives market. Barnier has the right idea. The dramatic fluctuations in the price of food are harming farmers, consumers and even entire national economies. Commitments made in the derivatives market must be made more transparent and subject to greater monitoring, and, if necessary, restrictions on trading using the price of food should be introduced. The creation of a sustainable food policy is at present one of the most important issues for the European Union.
Pavel Poc
According to a statement from the World Bank, food prices have risen by over 15% since October 2010, and the price of grain, for example, has risen at an annual rate of 39%, according to the FAO. Not only does an increase in food prices threaten the lowest income groups, but it also reveals much deeper and more serious problems that will pose a major threat in the future. Global food production is threatened by a number of factors, such as pests, diseases and natural disasters. These factors are currently being exacerbated by extreme weather conditions that are probably due to climate change. A good example of this would be the drought and fires in Russia in 2010, or the floods in Pakistan, and more recently in Australia. We can expect the problem of rising food prices to get worse in the future. It is pointless to discuss the causes of climate change here, because the risks are real and to doubt them is an unacceptable gamble. However, food prices are also affected by economic factors, especially abuse of the market system through government manipulation of the US dollar exchange rate and irresponsible speculation in commodity trading. Europe must realise that decisions made now will affect the future of the whole food system. In the short term, we can focus on minimising food waste, decreasing dependence on imports, reducing or stabilising demand, and establishing regulatory mechanisms on the market in order to prevent speculation.
Elisabeth Köstinger
In view of current political conflicts, the fact that food prices are at their highest level since records began is a more pressing problem than ever. At the end of the day, this is a matter of food supply, and in developing countries it is a question of the essential supply of basic foods. The European Union is called on to speed up the progress of the global fight against poverty and hunger - there are around 1.4 billion people suffering extreme poverty. Poverty is an issue within European borders, too. The only means of guaranteeing food supply in Europe is through the European common agricultural policy. The challenges faced by agriculture are huge and they encourage the tendency to produce 'more from less'. Higher food prices will not automatically be reflected in higher incomes for farmers; the gap between producer and consumer prices is widening. The reality of price management is complex: scarce raw materials, higher production costs, high fuel prices, dependency on harvests, exports and the world market - a dense network of causes that have to be disentangled by means of targeted measures. In order to tackle these causes, measures and agreement across all policy areas are urgently needed. I call on the Commission to make fundamental progress in strengthening agricultural production in Europe and in the developing countries. Speculation on our most vital goods is unethical and we must take stronger action in this regard.
Edite Estrela
Food prices have been rising significantly in recent years, not so much because of the laws of supply and demand, but above all because of speculation. The fact is that these increases primarily affect poorer people who have to spend more than half their income on food. It is unacceptable some should profit from the hunger of others, whether in Europe or in developing countries.
Citizens have a right to food security, a precondition of which is access to healthy food for all. Food shortages have a number of causes: examples include, inter alia, the wrong spatial planning and agricultural support policies, and climate change. It is therefore crucial that the EU support farmers in cultivating their land and producing the necessary food products. It is unacceptable that consumers should pay a lot and producers earn little, while speculators reap the rewards. Climate change must also be an EU priority in the interest of food security.
Sandra Kalniete
in writing. - (LV) The last few months have seen a sharp rise in food prices, as a result of which the number of people living on the margins of poverty has rapidly increased. The situation in Europe is not so critical, as our citizens' incomes are incomparably greater than those in developing countries. Nevertheless, our voters too are becoming aware of increasing food prices. According to World Bank statistics, around 44 million people in developing countries have fallen into poverty since last June, since food prices at the beginning of 2011 have reached the 2008 level, when rising food and oil prices had a significantly adverse effect on poverty throughout the world. Of course, the price of oil in the world has an effect on food prices, but we should still remember that in the summer of 2008, oil was standing at USD 140 a barrel, whereas today it costs about USD 100, which means that the rise in prices has been partly caused by speculation. In order to avoid such situations in the future, the G20 countries must develop a mechanism to prevent such a price rise and speculation in foodstuffs. In order to achieve this, we must have joint working at an international level. The problem posed by variable food prices is further proof that we need a powerful common agricultural policy that is fair and provides a level playing field for all European farmers, so that our population can obtain good-quality food of high value at acceptable prices.
RadvilMorkūnaitė-Mikulėnien
in writing. - (LT) On the subject of food prices, I would like to draw attention to two areas. Firstly, as recent experience in my country shows, by manipulating public opinion a little it is very easy to influence rising food prices. Due to resellers the price of sugar rose by more than 10% in one day in the whole of Lithuania. Therefore we cannot leave everyday foodstuffs to self-regulation. They may be considered an investment, the management of which requires specific knowledge that the growers of agricultural products (farmers) do not possess. Although the free movement of goods is one of the fundamental principles of the functioning of the EU free market, it is necessary to take more stringent measures both at Member State and EU levels, to restrict speculation in foodstuffs and defend the rights of the weaker half - consumers, small-scale farmers and traders - in relations with large processors and shopping centres. The second dimension is the close link between food products and energy sources and the interrelationship between their prices. On the one hand, in order to combat gas emissions that are driving climate change, we promote the use of biofuel (and have even set obligatory quotas for its use). On the other hand, the growing on agricultural land of plants intended for biofuel, rather than products intended for food, is precisely the thing that is driving up food prices. Thus, although combating climate change is one of our priority objectives, we must find a means of not influencing the prices of foodstuffs, for instance, only land that will never be suitable for growing agricultural products should be used for biofuel.
Véronique Mathieu
The resolution on rising food prices addresses the finding that food prices are steadily increasing. It is because of this increase that we are calling for urgent measures to combat price manipulation. Climatic phenomena are one particularly noteworthy cause of this increase; in other words, better water and soil management are needed. The direct impact on the world's population of an increase in food prices, which could provoke riots and unrest, must also encourage the G20 leaders to come to an agreement on market measures to combat speculation.