Abstract
The author of this paper argues that the establishment of a new international grain reserve system will not provide the desired food security and it will be a very large and costly enterprise. Rather, he suggests that the world needs to integrate its national foodgrain markets so that when shortages occur, sharing of available food will be induced by market-price adjustments. He discusses why markets do not work properly now, including such factors as sale of US grain surpluses, farm-income- support policies, internal market disturbances, etc. He then treats various aspects of a reserve system in terms of its main objectives — stabilizing prices and insurance against catastrophe — and the potential conflicts/trade-offs between them. The author argues finally that better security would be found through ‘broader markets’ and puts forth a different proposal for food-financing on this basis.
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