Abstract
Recent years have seen global food prices rise and become more volatile. Price surges in 2008 and 2011 held devastating consequences for hundreds of millions of people and negatively impacted many more. Today one billion people are hungry. The issue is a high priority for many international agencies and national governments. At the Cannes Summit in November 2011, the G20 leaders agreed to implement five objectives aiming to mitigate food price volatility and protect vulnerable persons. To succeed, the global community must now translate these high level policy objectives into practical actions. In this paper, we describe challenges and unresolved dilemmas before the global community in implementing these five objectives. The paper describes recent food price volatility trends and an evaluation of possible causes. Special attention is given to climate change and water scarcity, which have the potential to impact food prices to a much greater extent in coming decades. We conclude the world needs an improved knowledge base and new analytical capabilities, developed in parallel with the implementation of practical policy actions, to manage food price volatility and reduce hunger and malnutrition. This requires major innovations and paradigm shifts by the global community.
Highlights
People are becoming increasingly dependent on global and regional markets for the supply of food
The researchers conducting this review propose a Global Food Aid Compact which would be more inclusive of recipient countries, specify donor commitments, contain monitoring and enforcement mechanisms and a compulsory code of conduct
We conclude that the five G20 Cannes objectives can be effective, but some major innovations are required by the global community
Summary
People are becoming increasingly dependent on global and regional markets for the supply of food. Other researchers argue there is “compelling” evidence that the recently expanded food-commodity derivatives market led to speculative investment leading to increases in global prices in excess of normal supply–demand forces [49]. This tends to suggest that safety nets can protect the poor from price volatility while building longer term self-sufficiency To succeed in this objective of the G20 action plan, and protect vulnerable persons, the world needs to achieve better targeting, and overall management, of food aid [97]. A contrary story is emerging from empirical studies involving lead-lag analyses of trading and price data [36,47,48] These studies are showing us that speculative activity on markets is linked to increased price volatility and significantly contributes to price surges. Which pathway is more risk averse? Given the severity and urgency of the food price crisis some researchers suggest that in the absence of conclusive evidence well designed regulations are the more prudent, and risk averse, way forward [36]
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