Data from the UN Intergovernmental Panel on Climate Change show that rain-dependent agriculture could be reduced by half by 2020.

Rising world food prices, caused principally by dwindling stocks of cereals and burgeoning demand, call for concerted international intervention on several fronts. While the price of wheat has touched a 10-year high, the United States Department of Agriculture says that current world stockpiles are at a 30-year low. Any hope of improvement is said to depend heavily on the harvest in countries in the southern hemisphere, still recovering from the 2006 drought.
According to Hindu.com, adverse weather, robust demand from emerging economies, disincentives on exports, and increasing cost of freight are said to underlie the spike in prices of cereals, dairy products, and animal feed. But the Food and Agriculture Organization (FAO) ascribes the price rise as much to the surge in biofuel production that has triggered a demand for corn, soyabean, and vegetable oil.
The European Union is considering the release of additional land for agriculture--set aside under a 1992 regulation to control excess capacity--even as manufacturers of food products in France, Italy, and Britain have started passing the rise in cost on to consumers. While the US is contemplating a similar move, Russian farmers face the prospect of a tax levy on wheat exports by a government anxious to ward off inflationary pressures ahead of parliamentary elections.
Against this backdrop, the UN World Food Program has voiced concern that the cost of food aid has risen by 50 percent over the past five years, imposing new strain on its efforts to save millions from starvation in the least developed countries.
The current price rise has also revived interest in the system of buffer stocks in preference to cash donations by the rich countries to help the poorer ones in coping with price fluctuations. Although the idea has been in the air for some decades, it never took off.
It has now become particularly relevant for sub-Saharan Africa, where 95 percent of agriculture relies on precipitation. Data from the UN Intergovernmental Panel on Climate Change show that rain-dependent agriculture could be reduced by half by 2020.
The current scenario on prices provides an opportunity for developing and middle income countries to invest more in agricultural infrastructure, enhance access to finance, and help boost global food supplies. But that prospect is also linked to the vexed issue of the adverse impact of high farm subsidies and trade barriers in the industrialized world.
Strong lobbies tend to perpetuate the trade distorting subsidies. Aside from being burdensome for tax-payers as well as consumers in the developed countries, they undercut markets in the developing world and hamper agricultural trade liberalization.

Against a backdrop of recent disturbances in financial markets, the IMF’s main policy guiding committee called for the Fund and other international institutions to distill lessons from recent events and consider actions to prevent further turbulence and strengthen the foundations for sustained global growth.
It pointed to the need to analyze recent market turbulence, identify and address information gaps, and provide for further discussions and actions.
In its October 20 communique, the International Monetary and Finance Committee (IMFC) said financial innovation and securitization, while having contributed to enhanced risk diversification and improved market efficiency, had also created new challenges “that need to be properly addressed.“
The IMFC indicated that the areas to be addressed included risk management practices related to complex structured products; valuation and accounting for
off-balance sheet instruments, especially in times of stress; clarifying the treatment of complex products by ratings agencies; addressing basic principles of prudential oversight for regulated financial entities; and liquidity management.

Wall Street Tumble
The IMFC, which comprises 24 finance ministers from major developed and developing countries, met against the backdrop of renewed volatility in markets, with Wall Street stocks tumbling again this week after a period of recovery. The IMF had earlier cautioned that market adjustment to the fallout from the meltdown in the US subprime mortgage market is likely to be uncertain and longer than expected.
The session, on the first day of the IMF-World Bank 2007 Annual Meetings, was chaired by Italian Economy and Finance Minister Tommaso Padoa-Schioppa, selected last month to succeed Gordon Brown as head of the key committee. It was the last IMFC meeting for IMF Managing Director Rodrigo de Rato, who will be succeeded by Dominique Strauss-Kahn on November 1.
At a briefing for reporters, Padoa-Schioppa said that while recent market turbulence had successfully been countered by timely and determined action by several central banks, it had also “revealed a number of problems that may be deeper than the specific episode that triggered the tensions.“

Global Economic Outlook
Although the recent disturbances in financial markets are expected to have “a moderating effect on growth in the near term“ and increase downside risks to the global economic outlook, the IMFC noted that the global economy “continues to be underpinned by strong fundamentals and the robust growth of emerging market and other developing economies.“
The IMF is predicting that world growth will slow from 5. 2 percent in 2007 to 4.8 percent in 2008, down from the 5.4 percent registered in 2006.

It may be more than a year away, but Americans already think they know what the big issues of the 2008 presidential election will be.
On the thousands of web pages, acres of newsprint and hours of airtime already devoted to the long race to the White House, two subjects get most attention: how and when to end the war in Iraq and how healthcare should be paid for.
But another issue is gaining prominence, one which is of much greater significance to the rest of the world. Indeed, it is one that could have profound implications for the global economy. The issue is free trade, reported BBC.

Faltering Idea?
George Bush’s immediate priority is persuading Congress to approve his administration’s latest free trade pacts with Colombia, Peru, Panama and South Korea. But his remarks are also part of a more general debate that is unfolding in the US about whether free trade is in the country’s interest at all.
America, it seems, is experiencing a revival of protectionism.
Almost all of the candidates vying to be the Democratic Party’s presidential nominee next year have adopted stances that flatly contradict the current president’s fondness for free trade deals.
Front-runner Hilary Clinton wants all free trade deals to be revised every five years, including those that were negotiated by her husband’s administration. John Edwards, currently placed third among the Democratic hopefuls, has gone so far as to question how committed Americans really are to global trade.

Voter Worries
What of the Republicans? Surely they share their president’s belief in the benefits of free trade? Perhaps not.
A recent Wall Street Journal poll found 60 percent of Republican voters think free trade is bad for America.
In contrast to the Democrats and their close ties to the trade unions, the Republican Party has a long tradition of pushing the agenda of American business.
So if two-thirds of Republican voters do not think it is a good idea, then the cause of free trade could be in real trouble in the world’s biggest economy. Most economists have no doubt that the US has benefited hugely from the global reduction of tariffs and the removal of other trade barriers over the last two decades. Many also argue that it would profit even more if the remaining barriers were to be taken down.

Economic Boost
Gary Hufbauer at the Peterson Institute for International Economics in Washington devotes much of his research to measuring the impact of trade policy on the US economy.
He has calculated that if the US could negotiate free trade deals with all of its trading partners it would add between $450 billion and $600 billion to the value of US output.
Divide that across the population and global free trade could make every household in the country up to $5,300 richer each year. If economists are so convinced of the benefits of free trade, why aren’t American voters?
The answer, of course, is that those combined benefits are not necessarily felt by individuals. Instead, what many Americans, including US business owners, notice is that trade with other countries can make them poorer.

The so-called new generation of Singapore issues in the economic partnership agreements (EPAs) will make the conclusion of the deals unlikely by the December 31 deadline.
Senior researcher with the South African Institute for International Affairs (SAIIA), Nkululeko Khumalo, told Ipsnews.net in an interview that the coercive approach adopted by the European Union on service liberalization poisons the negotiating atmosphere. SAIIA is a non-governmental international relations research organization based in Johannesburg, South Africa.
“It harms the prospects for a possible breakthrough in concluding the EPA with the Southern African Development Community before the end of the year,“ Khumalo said.
South Africa has been resolutely opposed to the inclusion of the new generation issues, which include liberalization of the services sector, investments, competition policy and intellectual property rights. It has stuck to the view that the EPAs do not have to include these issues to be compatible with World Trade Organization (WTO) rules.
Moreover, the argument goes, it is prudent to have the necessary legal frameworks and infrastructure in place prior to opening up local markets to competition with European companies.
The Southern African Development Community (SADC) EPA group has contended that the gains from including services and the new generation issues are not automatic, according to a report by the researcher Talitha Bertelsmann-Scott presented at a conference held by SAIIA, the European Centre for Development Policy Management and the Regional Trade Facilitation Program in Brussels earlier this year.
Delegates to this conference pointed out that some critical preconditions are necessary for the EPAs to be successful. These included domestic legal, administrative and regulatory capacities.
Khumalo told IPS that the EU should remember that the EPAs are meant to enhance development. Demands for the liberalization of services to be included before the end of the year defeat that objective.
Another hurdle involves SADC and the EU’s differential approaches to “Aid for Trade“. The SADC EPA group has proposed the inclusion of a development chapter in the EPA for continued funding for trade capacity development.
It is intended as a guarantee of financial support from the EU for necessary structures and mechanisms to ensure that the EPAs yield meaningful economic development for the region, from SADC’s point of view.
According to Bertelsmann-Scott, SADC has asked for guarantees of additional EU funding towards development beyond the expiry of the Cotonou agreement in 2020. This rests on concerns that even with access to European markets, some SADC countries will still require more time to become competitive at a level that will produce benefits from international trade.