Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-05-20-Speech-2-390"
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"en.20080520.29.2-390"2
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"The Commission is actually very concerned about the impact of the current high prices, both within the European Union and also in the more global context. Developing countries and the most vulnerable populations have actually been hit very disproportionately with the consequent risks of hunger, malnutrition and social unrest.
The communication that the Commission has presented today tries to analyse the root causes of these high prices. The Commission has presented a series of initiatives to counter the short-term effects of the food price shock, to increase agricultural supply and ensure food security in the longer term, and to contribute to the global effort to tackle the effects of the price rises on poor populations.
Concerning the root causes, there are many factors which are simultaneously reducing global supplies: adverse weather conditions in key grain-producing and exporting countries, mainly Russia and Ukraine, which was previously called the bread basket of the Soviet Union. We have had adverse weather conditions in Australia for three consecutive years. We have had higher energy costs. We have had slower increases in yields and increasing global consumption. These direct impacts on supply and demand are significant contributors to agricultural commodity prices and to the increases that we have seen.
Against the backdrop of food price increases, and in the wake of the financial market crisis, there has been increased activity in commodity-related financial markets to hedge price risk or diversify investment portfolios. These activities may have led to increased price movements and volatility on futures and spot commodity markets and have amplified the underlying price movements, but their influence on long-term price formation remains uncertain. So in today’s communication the Commission commits to monitoring closely activities by speculative investors in commodity-related financial markets and their impacts on price movements.
The communication notes that some exporting countries have responded to the rising prices by actually restricting their exports. India has introduced export bans, Vietnam and Thailand rice export limits, Indonesia export taxes on palm oil, and Kazakhstan a ban on wheat exports. Such taxes and export bans are designed to protect the domestic markets from short-term supply shortfalls and price shocks. However, they further tighten international agricultural markets to the detriment, especially, of the food-importing developing countries. In a medium-term perspective, such restrictions clearly send the wrong market signals, reducing the incentive for farmers to invest and to increase their production, and contributing to an imbalance on regional markets.
The issue of the very negative impact of export restrictions should be raised at the relevant forthcoming meetings of the WTO and in other relevant international fora. The Commission remains convinced that there are significant potential gains for developing countries from the Doha Round in terms of new market opportunities, which would help generate additional export income, stimulate agricultural production and facilitate access to foodstuffs, thereby alleviating the current food price hikes. The Commission will therefore continue to work for a comprehensive and balanced Doha deal.
The Commission trusts that it can count on the support of this House for the policy direction presented in today’s communication as a basis for tackling the challenges that we are facing in this situation with prices that are actually going through the roof in some areas."@en1
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