Agriculture ministers from the G20 nations have backed tougher regulation of food commodities markets, as part of an action plan to tackle price volatility for food and crops.

The five-point action plan is more moderate in its language than that used by the French Government in recent days,  but it still calls for tougher regulation of commodities trading.

"We strongly encourage G20 Finance Ministers and Central Bank Governors to take the appropriate decisions for a better regulation and supervision of agricultural financial markets," said ministers today (23 June) following two-day talks in Paris.

But, their statement added: "We recognise that appropriately regulated and transparent agriculture financial markets are indeed key for well-functioning physical markets. These markets facilitate price discovery and allow for market participants to hedge their exposure to price risks."

Record prices for food commodities mean that food and drink firms are facing higher costs. Growing demand from emerging markets, together with a series of poor harvests, have contributed to the price rises. However, some have also blamed the increase on futures market traders, or what French president Nicolas Sarkozy referred to last week as "financial speculators" who are able to trade up to "46 times the world production of wheat".

Proposals on greater regulation of commodities markets are set to be put forward by G20 finance ministers later this year.

The G20 agriculture ministers' agreement, while backing greater regulation, also seeks to improve transparency in markets. It provides for the creation of a global 'agricultural markets information system (AMIS)', in order keep track of stocks and provide supply forecasts. Initially, AMIS will only cover wheat, maize, rice and soybeans, although other commodities "will also be added to AMIS’ work in the future", the G20 said.

AMIS officials will hold their first meeting in September 2011, but will not publish their first outlook until June 2012.

Alongside AMIS and better regulation, the G20 action plan calls for an increase in crop production, better international coordination and new risk management tools for governments, companies and farmers.

On production, the ministers said: "To feed a world population expected to reach more than 9bn in 2050, it is estimated that agricultural production will have to increase by 70% over the same period, and more specifically by almost 100 percent in developing countries."

For the full G20 agreement, click here.