Abstract
Version française de l'articleShould cereal prices be stabilised? With the Sahel food crisis of 2005, followed by soaring prices on international markets in 2008 and 2010, this is an increasingly pressing issue in national, regional and international policy debates, which address it in a uniform manner. However, the question calls for different analyses and responses depending on whether it concerns domestic markets in developing countries that are subject to food insecurity, domestic markets in developed countries, or international markets.
Highlights
The Sahel food crisis of 2005 sent shock waves throughout the world
SShould cereal prices be stabilised? With the Sahel food crisis of 2005, followed by soaring prices on international markets in 2008 and 2010, this is an increasingly pressing issue in national, regional and international policy debates, which address it in a uniform manner
The question calls for different analyses and responses depending on whether it concerns domestic markets in developing countries that are subject to food insecurity, domestic markets in developed countries, or international markets
Summary
The State may give in to pressure from the streets or lobbies and take untimely measures, which disrupt markets: fearing State intervention that could lead to price drops, private operators refrain from storing or importing, which may increase price instability These two obstacles could be removed by creating an international fund to finance cereal price stabilisation policies in developing countries. The organisation of cereal farmers into powerful lobbies, added to the low impact of high prices on consumers, may lead policy-makers to overvalue floor prices This would lead to inefficiency on three levels: economic inefficiency, as the surpluses generated would be sold on international markets with the help of costly subsidies, generating unfair competition for developing countries; social inefficiency, as aid based on price support would be of greater benefit to large-scale farmers; and environmental inefficiency, as subsidised prices would provide incentives to increase production, regardless of the damage caused to the environment. An international agreement sharing the burden of cereal storage will make it possible to increase the level of global stocks and to guarantee that they will not fall below the minimum level required to avoid price surges
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