Protecting the Food Insecure in Volatile International Markets — Canadian Foodgrains Bank

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In the wake of the 2007/8 and 2010-11 food price crises, the Canadian Foodgrains Bank, a partnership of all the major Canadian church-related development agencies, was alarmed at the realization that sudden food price spikes had the potential to make additional millions of people at least temporarily food insecure. Such price induced food crises can quickly overwhelm the total gains made by the recent decades of effort to reduce hunger in developing countries.

The many analyses which were made in the years following have underlined the complexity of factors which contributed to the crisis, but it is clear that some factors built on others and that it may be possible to address several of the causes by looking at a single aspect – the exceptionally low stock-to-use ratio for major cereals (i.e. low food reserve levels) in the period leading up to the crisis.

Accordingly, we saw the need to research the issue of public food reserves. Early in the post World War II period there were deliberate food reserve policies in place, initially as part of the International Wheat Agreement, and later as part of the domestic policies of the US and the European Community. In addition, many developing countries also maintained food reserves. All of these policies were changed in the 1980s; it was widely accepted at the time that such policies were no longer appropriate. Without prejudging the case, we have sought to re-examine the issue in the light of the 2007/8 and 2010/11 price spikes.

The report which follows, prepared by Ian McCreary, an economist and former director of the Canadian Wheat Board, follows on a recent work prepared by Sophia Murphy of the Institute for Agriculture and Trade Policy. It proposes, in addition to other complementary policy measures, a new possibility for a multilateral food reserve policy suited to our current predicament. We look forward to the discussion which we hope it will generate. The views contained in this report are not necessarily endorsed by the Canadian Foodgrains Bank.

Stuart Clark, Canadian Foodgrains Bank