Volatility in agricultural commodity markets continues to be a concern , but an important message from the Commodities Forum was the progress being made in stabilizing the impact of price volatility – on smallholder farmers in particular, but also on global trade generally.  One such stabilizing initiative is the Agricultural Market Information System that was endorsed by the G20 Cannes Summit and has since been implemented under the auspices of the FAO.  AMIS provides monthly market assessments along with a statistical database and assistance on capacity development, governance plus indicators and market monitoring for four major staples – wheat, maize, rice and soybeans.  We also heard presentations that were more directly focused on improving smallholder farmers’ efficiency.  Cargill, for example, has projects to enable and support smallholder farmer productivity improvements in such diverse agricultural products as palm oil, cocoa, cotton and grains.  We heard a lot about projects oriented to improving access to financing for smallholders through collaborative programs but also to risk management schemes in localized commodity exchanges.

Although we did hear from one expert who insisted that subsistence farmers don’t need any help with efficiency measures because they are mostly responsive to existing market signals, we were quite taken by the impressive outreach being done by the transformation of information flows for smallholder farmers as in the Ghana-based “Esoko”, a mobile phone service using the Swahili for “market” in its trade name.  The key point, perhaps, is that smallholder farmers do make decisions based on the market conditions they face and that the main priority should then be directed to improving those market conditions as a way to stimulate their willingness to risk increasing investments in inputs for higher productivity outcomes.   Overall, we heard many instructive messages on how smallholder farmers should and could strengthen their bargaining capacity and pooling of risk in agricultural supply chains outside of their immediate local communities and on how governments should pursue policies to encourage local entrepreneurs to move up the value chain by converting more primary commodities into processed or finished products.

From the CMBD News 25 March 2013

The CMBD visit to OECD on 14 to 15 March 2013, hosted by the Business and Industry Advisory Committee, is an annual event for CMBD members in cooperation with representatives from several other business organizations.  The program this year offers comprehensive overviews from BIAC and from the Public Affairs and Communications Division.  These are supplemented with the ever informative global economic analysis from the OECD Deputy Secretary-General and Chief Economist Pier Carlo Padoan and global energy analysis from the International Energy Agency, plus updates on new approaches to trade data, corporate governance, taxation, internet issues and the OECD’s labor and social agenda.   We also look forward to a briefing on G20 developments from the OECD Sherpa and Chief of Cabinet Gabriela Ramos, as well as a chance to visit with the Secretary-General Angel Gurria himself on the second day.  As background information, we have prepared a summary of CMBD News commentaries over the past three months on the issues that will be covered on this visit, available on request.  Our thanks to CMBD member Charlie Heeter and his team at Deloitte for preparing such an excellent program.   Mr. Heeter, by the way, is also the Chair of BIAC and the link between CMBD and many of the other business organizations that are participating in this annual event.   In this time of transition, however, we will miss our friend the former Secretary-General of BIAC, Tadahiro Asami, who left in December, and we extend our welcome to the new BIAC Secretary-General Bernard Welschke from the German business federation, BDI, who will start his term on 1 April 2013.  We will have a full report of the visit in our next newsletter.

From the CMBD News 11 March 2013

The Russian Presidency of the G20 hosted the first of the G20 meetings of finance ministers and central bank governors for 2013 over the weekend, on 15 to 16 February. The usual closing Communiqué was produced.  See it here.  It has been widely reported in the media that the consensus Communiqué included supportive language for the Japanese regarding exchange rate flexibility reflecting “underlying fundamentals” rather than any competitive devaluation.  The Communiqué did reaffirm that G20 governments “will not target our exchange rates for competitive purposes” and “will resist all forms of protectionism and keep our markets open”.    Another item widely reported was the reference to concerns about revenue base erosion and profit shifting, something that the UK, France and Germany have joined together to push for.   On this matter, the Communiqué praised a report from the Organization for Economic Cooperation and Development (OECD) and authorized the OECD to submit a comprehensive action plan in July.  The OECD will be supported by a G20 transfer pricing group chaired by the UK, another group on preventing erosion of the corporate tax base chaired by Germany, and a third group co-chaired by France and the USA on determining tax jurisdiction.  (Note:  CMBD Members are invited to a “Business Visit to the OECD” on 14 to 15 March 2013, when members will have the opportunity to discuss these kinds of issues directly with the OECD officials involved.  See below for further information.)

A few other items of interest in the Communiqué, not featured in the mass media, merit our mention here.  First, we note that the ministers expressed satisfaction with the new legal identity for the Financial Stability Board and noted that further developments in its governance were targeted to be completed by the end of 2014.  We continue to be interested in the evolving transparency and accountability provisions for the FSB.  The FSB continues to work on such matters as financial regulatory reform, including “operational resolution plans” for all systemically important, “too big to fail” banks, over-the-counter derivative reform and regulation of shadow banking.  Another item of interest was the regret expressed in the Communiqué in the delays in merging accounting standards of the International Accounting Standards Board and the US-based Federal Accounting Standards Board.  The Communiqué also noted modest progress in consumer protection and financial literacy.  A new initiative is in the area of long-term financing, for which the G20 will now have a new Study Group on Financing for Investment, another topic on which the OECD will be doing some further work.   Finally, the Communiqué appeared to give lip service to the monitoring of international commodity and energy markets, easing of fossil-fuel subsidies, green growth and sustainable development priorities.

From the CMBD News 18 February 2013

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The International Labor Conference wrapped up last week with a new global framework for a social protection floor, policy guidance on youth employment and an action plan for the next four years on the implementation of the Declaration on Fundamental Principles and Rights at Work.  ILO Director-General Juan Somavia took these new products on his farewell tour of the Los Cabos G20 Summit last weekend, then on to the Rio+20 Summit and then to the high-level task force on decent work and inclusive growth at the United Nations Economic and Social Council.   In his last speech to the ILC, he observed that “it is a time for a policy rethink”; that there is “an inexorable trend to complement representative democracy with participatory democracy” and that “the diversity of voices in society want to be heard and be part of decision-making from the local to the national level, but also in relation to international organizations”.

At a side event during the International Labour Conference, we learned about a “Global Business and Disability Network” that has attracted some 55 multinational enterprises and 17 national employers’ organizations to join together in support of the hiring, development and retention of disabled people. Panelists included senior officials from CMBD member Novartis, as well as Dow Chemical and Carrefour.  The Network provides the opportunity for peer-to-peer exchanges and information on good practices based on the ILO Code of Practice on Managing Disability in the Workplace.  With some 15 percent of the world’s population with some kind of disability, it is good business to embrace diversity in the workforce and for enhancing business outreach to this substantial part of the world’s population as customers.

This article originally appeared in the 11 June 2012 CMBD News

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The Rio+20 Summit on Sustainable Development is upon us, promising to deliver “The Future We Want”, and the Internet is delivering an information overload that makes it difficult to screen out the fluff from the real nuggets for that future.  The main event, the Summit itself, has an ever-changing “outcomes” document with a daunting menu of general and sector-specific provisions that are yet to be finalized by member-state governments, surrounded by the “Major Groups” of legitimately organized special interests – NGOs, women, youth, local governments, business and industry, labour.   Some parallel activities are multi-sectoral – such as the “Rio+20 Dialogues” allowing web-based participants to vote on priorities to be submitted to the Summit and the First GLOBE Summit of Legislators allowing parliamentarians to submit a “legislative protocol” to their own governments, as it were.  Others are more geared toward special interests – such as the “People’s Summit” and the “Leaders Forum on the Future Women Want” and the “Corporate Sustainability Forum”.  In this week’s CMBD News we take a look at some of the nuggets we expect to see in the main event, as well as some of the fluff in the side events that could actually become the seeds of future nuggets for that “future we want”, as well as a look at another “20” event, the G20 Leaders Summit further north in the Western Hemisphere, in Los Cabos, Mexico, where a B20 – or multiple variations thereof – vies for institutional continuity within a Mexican salsa of Y20 (youth), L20 (labor), Think20 (think tanks) and a G20 Civil Society Dialogue!

From the CMBD News 11 June 2012