Spotlight G20: The G20 Agricultural Action Plan: Changing the Course of Capitalism?

Jennifer Clapp and Sarah Martin*

Nicolas Sarkozy made no secret of his aim to use France’s presidency of the G20 as a platform to address food price volatility with tough measures, including regulating speculation on agricultural commodity futures markets.  As the first ever meeting of the G20 Agriculture Ministers got underway yesterday, he was optimistic about their efforts: “In adopting this plan you will change not only the lives of a billion farmers but the course of capitalism itself so capitalism once again contributes to the development and well-being of people.”

But the Agriculture Ministers, despite having a number of extensive policy options to address volatility, opted for a ‘light’ touch rather than changing the course of capitalism. The Action Plan adopted by the Ministers includes several marginal measures, none of which tackles market regulation. The centrepiece of the plan is the Agricultural Market Information System (AMIS).

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How to Add Value to the G20 Agriculture Ministers’ Meeting

Jennifer Clapp

The G20 Agriculture Ministers will gather together for their first ever meeting next week in Paris (June 22-23) to discuss potential measures for the G20 governments to endorse regarding food price volatility. Many are sceptical about what the G20 can accomplish in this area. This scepticism was reinforced by the fact that some G20 members did not even want the meeting to take place when it was first suggested by France, this year’s G20 host.

But the meeting is going ahead. So let’s give the Ministers the benefit of the doubt for a moment. How can they add the most value?

Before they release any statements, the Ministers will likely spend time reviewing recommendations in the policy report Price Volatility in Food and Agriculture Markets: Policy Responses written by ten international organizations, released on June 2. This document is the latest version of a report which has gone through several iterations since it was first leaked back in March.

There is much to applaud in the latest version of this IO report to the G20. Among the various measures proposed are: boosting investment in food production in developing countries, establishing agricultural information systems, improving transparency in commodity futures markets, removing trade barriers, reducing conflicts between food and fuel, instituting emergency reserves, and so on. It is a long shopping list, covering the gamut of potential factors that influence food price volatility.

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How to Add Value to the G20 Agriculture Ministers' Meeting

Jennifer Clapp

The G20 Agriculture Ministers will gather together for their first ever meeting next week in Paris (June 22-23) to discuss potential measures for the G20 governments to endorse regarding food price volatility. Many are sceptical about what the G20 can accomplish in this area. This scepticism was reinforced by the fact that some G20 members did not even want the meeting to take place when it was first suggested by France, this year’s G20 host.

But the meeting is going ahead. So let’s give the Ministers the benefit of the doubt for a moment. How can they add the most value?

Before they release any statements, the Ministers will likely spend time reviewing recommendations in the policy report Price Volatility in Food and Agriculture Markets: Policy Responses written by ten international organizations, released on June 2. This document is the latest version of a report which has gone through several iterations since it was first leaked back in March.

There is much to applaud in the latest version of this IO report to the G20. Among the various measures proposed are: boosting investment in food production in developing countries, establishing agricultural information systems, improving transparency in commodity futures markets, removing trade barriers, reducing conflicts between food and fuel, instituting emergency reserves, and so on. It is a long shopping list, covering the gamut of potential factors that influence food price volatility.

Read the rest of this entry »

European Debt Crisis and “Currency Wars” Halted G-20 Progress

Martin Khor
Part of a Triple Crisis series on the Nov. 11-12 G-20 meetings.

Triple Crisis blogger Martin Khor published the following opinion article for the Malaysia Star on the two issues that prevented progress at the G-20 meetings in Seoul: the new financial near-crisis in Europe and the ongoing debate about the competitive devaluation of currencies.

Inconclusive end to G-20 summit

The world economy remains in a web of serious problems with the potential to break out in new crises. The G20 summit last week discussed them but could not agree on the causes or how to resolve them. Even as the G20 leaders were meeting in Seoul, the real drama was taking place half a world away, as Europe stood on the brink of a new financial crisis.

Ireland faced a big jump in the interest cost of its debt, arising from (and giving rise to) fears that it would have to be bailed out, like Greece some months ago, or even face a debt default.

It seems like the crisis of investors losing confidence could also spread to Portugal, Spain and Italy.

Read the full article at the Star.

European Debt Crisis and "Currency Wars" Halted G-20 Progress

Martin Khor
Part of a Triple Crisis series on the Nov. 11-12 G-20 meetings.

Triple Crisis blogger Martin Khor published the following opinion article for the Malaysia Star on the two issues that prevented progress at the G-20 meetings in Seoul: the new financial near-crisis in Europe and the ongoing debate about the competitive devaluation of currencies.

Inconclusive end to G-20 summit

The world economy remains in a web of serious problems with the potential to break out in new crises. The G20 summit last week discussed them but could not agree on the causes or how to resolve them. Even as the G20 leaders were meeting in Seoul, the real drama was taking place half a world away, as Europe stood on the brink of a new financial crisis.

Ireland faced a big jump in the interest cost of its debt, arising from (and giving rise to) fears that it would have to be bailed out, like Greece some months ago, or even face a debt default.

It seems like the crisis of investors losing confidence could also spread to Portugal, Spain and Italy.

Read the full article at the Star.

Spotlight G-20: Capital Controls– They’re Not Just For Developing Countries

Kevin Gallagher and Stephany Griffith-Jones
Part of a Triple Crisis series on the Nov. 11-12 G-20 meetings.

Triple Crisis bloggers Kevin Gallagher and Stephany Griffith-Jones published the following opinion article in the Guardian on G-20 leaders’ concerns about US dollar devaluation, in which they propose cooperative capital controls as a potential solution to the QE2 debate.

How the US can fix its QE2 problem

Ben Bernanke has been criticised from different sides and perspectives for quantitative easing. From one side, inflation hawks prefer austerity over expansion. Those who favour expansion and growth have valid concerns that it may not work and, instead, have negative global effects. At the G20, the United States got criticised – rightly – by emerging countries for the negative impact of QE2 on their economies.

Read the full article at the Guardian.

Spotlight G-20: Capital Controls– They're Not Just For Developing Countries

Kevin Gallagher and Stephany Griffith-Jones
Part of a Triple Crisis series on the Nov. 11-12 G-20 meetings.

Triple Crisis bloggers Kevin Gallagher and Stephany Griffith-Jones published the following opinion article in the Guardian on G-20 leaders’ concerns about US dollar devaluation, in which they propose cooperative capital controls as a potential solution to the QE2 debate.

How the US can fix its QE2 problem

Ben Bernanke has been criticised from different sides and perspectives for quantitative easing. From one side, inflation hawks prefer austerity over expansion. Those who favour expansion and growth have valid concerns that it may not work and, instead, have negative global effects. At the G20, the United States got criticised – rightly – by emerging countries for the negative impact of QE2 on their economies.

Read the full article at the Guardian.

Spotlight G-20: Where’s the Growth Supposed To Come From?

Jayati Ghosh
Part of a Triple Crisis series on the Nov. 11-12 G-20 meetings.

Have governments everywhere simply lost their marbles? Not much emerged from the Seoul G-20 Summit – and definitely not anything really desirable in the form of coordinated Global Keynesian policies (of the kind that Matias Vernengo has advocated in this blog). But then, quite frankly, not much was really expected to come out, given the downplaying of expectations and the volume of discordant notes that preceded the Summit.

This reflects the absence of a global economic leader willing and able to fulfill the roles identified by Charles Kindleberger: discounting in crisis; countercyclical lending to countries affected by private investors’ decisions; and providing a market for net exports of the rest of the world, especially those countries requiring it to repay debt. For obvious reasons, the US cannot currently do these, and there is no evident alternative. That is why coordination is so critical right now for international capitalism.

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Spotlight G-20: A Post Mortem

Matías Vernengo

Another in the Triple Crisis Blog’s series, Spotlight G-20, which has featured posts by a wide range of analysts, including Gerald Epstein, Stephany Griffith-Jones, Martin Khor, Jane D’Arista, and Ilene Grabel and Ha-Joon Chang and stimulated responses from Paul Krugman among others.

The failure of the G-20 foreclosed the export-led recovery scenario.  Geithner’s proposal to limit imbalances to 4% of GDP and to force the appreciation of the currencies of the surplus countries, went nowhere as expected.  So we are back to the domestic economy.  Paul Krugman argued provocatively in one of his last posts that to solve the ‘deficit problem’ we should rely on death panels and sales taxes.

By that he means simply that health costs will have to be reduced and that tax revenues will have to increase, and Value Added Taxes (VAT) would be the best solution.  He also notes that the well-known health and tax specialist Henry Aaron defends a similar plan to reduce the deficit.  These views would also be an antidote to the president’s deficit commission plan.

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Spotlight G-20: Fed Bashing at the G-20: A Return to the Gold Standard Anyone?

Gerald Epstein
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.

A strange thing happened on the way to the G-20 meetings: world elite opinion has turned against the Federal Reserve’s “quantitative easing” (QE) program, the only significant “Keynesian” macroeconomic policy being implemented anywhere in the face of massive unemployment in much of the developed world; and this criticism is garnering some support from strange places, including among some progressive economists.  With all the hub-bub, the mercantilist policies of Germany and China and the pre-Keynesian Gold Standard-like stance of the European Central Bank (ECB), are getting a virtual free ride. Meanwhile, the true villain is escaping scrutiny all together: the elite consensus that there is too much sovereign debt in the world and so there cannot be any more fiscal expansion.

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