Davos: During the 2008 crisis Japan proposed introducing some tentative rules along those lines. But developing country food exporters shot down the idea.

Now it is time to look at the question again, said Anabel Gonzalez, Foreign Trade Minister of Costa Rica -- a small developing country that exports tropical products like bananas, pineapples and coffee but relies on imports for staples such as wheat and soybeans.

"This is a pending issue for a future agenda that certainly needs to come into play," Gonzalez told Reuters. "All of the provisions of the WTO are more concerned with imports and whatever you have on export restrictions is very limited."

Indonesia`s trade minister, Mari Pangestu, agrees. The huge Indonesian archipelago is Southeast Asia`s biggest economy and is a major commodity producer. But as well as growing rice, it imports the staple to ensure steady food supplies and keep prices down for its millions of poor.

Indonesia is one of the promoters of the special safeguard mechanism -- an instrument that would allow developing countries to raise tariffs temporarily to block a flood of food imports that could hurt their local farmers.

Pangestu, a respected economist, says the current high level of food prices does not invalidate the proposal. "Commodity prices have a way of up quickly and also going down quickly."

Financial investment in commodities has fuelled this volatility and created uncertainty for farmers.

The long-term answer must include better investment in agriculture, not least to deal with the impact on production of climate change, rural credit, and hedging possibilities for farmers through well-functioning futures markets, she said.

But export restrictions need to be looked at too.

"We have to have a balanced discussion on this. A country`s need to safeguard their stocks, that`s a given. How do they do it in a way that doesn`t lead to an impact on global markets?"

Bureau Report

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