June 16, 2011 / 10:58 AM / 8 years ago

UPDATE 2-Sarkozy urges G20 farm transparency deal next week

* Says need for database on world farm supplies and demand

* Stresses does not want to intervene on commodities prices

(Adds OECD chief comments)

By Sybille de La Hamaide

PARIS, June 16 (Reuters) - French President Nicolas Sarkozy urged G20 agriculture ministers to agree at talks in Paris next week to launch a farm information system that would gather and store market-sensitive data such as food stocks.

“It is not normal that we don’t have information on world production, harvest forecasts, consumer demand or world stocks,” Sarkozy said on Thursday in a speech to farm unions gathered at the Organisation for Economic Co-operation and Development headquarters.

“I would like us to agree on this new system as soon as next week’s G20 agriculture ministers meeting,” he said.

Sarkozy has made stronger regulation of commodities markets, mainly agricultural, a priority of France’s year-long presidency of the Group of 20 leading economies.

France cited as evidence of volatility a surge in grain prices since last year, which revived memories of soaring food prices in 2007-2008, which sparked rioting in some countries.

Sarkozy said he wanted the database, to be hosted by the United Nation’s Food and Agriculture Organisation (FAO), to gather all data on farm supplies, including those that concern public and private stocks, and be accessible to anyone.

Transparency of information, notably on supplies, is among areas where agreement is seen as reachable when G20 agriculture ministers gather for a two-day summit in Paris on June 22-23.

WALK ON ITS TWO LEGS

Resistance still exists among members, notably China, which has expressed reluctance to share information it considers as strategic.

France has also put forward measures targeting derivative markets, but Sarkozy stressed the aim was not to control prices.

“To put back some sense in the economy, make capitalism walk on its two legs, does not imply intervening on prices,” he told representative of more than 120 farm bodies from 75 countries. “I would like the commitments that have been made by G20 countries to improve the functioning of derivative markets, in particular oil derivatives, to be extended to agricultural derivatives.”

In a speech earlier this week, Sarkozy called on cash deposits to be required for all derivative transactions and for regulators to have the power to impose position limits in a bid to curb speculation. [ID:nLDE75D162]

Angel Gurria, secretary general, of the Organisation for Economic Cooperation and Development (OECD) agreed on the urgent need for political action and increased transparency to avoid volatility.

“We don’t know what is happening with food because some countries chose to say that this is strategic,” he told Reuters in an interview on the sidelines of the conference.

“If you do not take a policy decision on the matter, then you are at the mercy of elements that you don’t control and you are playing with people’s food,” he added.

France notably faces opposition on derivative regulation from the UK, which has rejected the idea of speculation as a primary cause of price volatility. [ID:nLDE75E0Z9] <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Factbox on G20 plans for commodities regulation

[ID:nLDE75C0IA]

Interview with French farm minister on G20 plans

[ID:nN16207106] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Yann Le Guernigou; writing by Gus Trompiz, editing by Jane Baird)

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