Food Price Spikes: Dealing with International Shocks
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Food Price Spikes: Dealing with International Shocks Kym Anderson University of Adelaide, Australian National University and IFPRI Board of Trustees [email protected] IFPRI 2020 Conference on Building Resilience , Addis Ababa, 15-17 May 2014
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May 16 in Parallel Session 3D "Food Price Spikes & Financial Crises: Dealing with Regional & International Market Shocks". Presented by Kym Anderson.
Transcript of Food Price Spikes: Dealing with International Shocks
Food Price Spikes: Dealing with International Shocks
Kym Anderson
University of Adelaide, Australian National Universityand IFPRI Board of [email protected]
IFPRI 2020 Conference on Building Resilience,Addis Ababa, 15-17 May 2014
Three key facts1. Food prices in international markets have always fluctuated, but in 20th
century around a declining long-run trend
Real int’l food prices, 20th century(Source: World Bank, 1977-79 = 100)
y = -0.60x + 134R² = 0.41
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Three key facts
2. Food prices in international markets have spiked three times since 2007
and been 50% higher on average than in previous two decades
Real int’l food prices, 21st century: 3 cereal spikes since 2007 (FAO, 2002-04 = 100)
Three key facts
3. Food prices in international markets are now more-closely correlated w ith fossil fuel prices
Real international prices, 1960 to 2013 (World Bank, 2005 = 100)
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Energy
Food
US$ prices of grain & petroleum
Some analytical questionsWhy are international food prices higher?
Is this the new norm? Are biofuel policies to blame?
Will food prices continue to be more volatile?Role of climate change vs temporarily low stocks
How closely have domestic food price movements matched international ones?
How have policy responses to recent spikes added to them?
& how have they affected malnutrition & hunger?
Three policy questions
1. How to strengthen resilience in the global food system
To reduce food price fluctuations around a lower long-run trend level What roles for:• WTO? • Climate-smart agricultural R&D?
Three policy questions
2. How to strengthen food system resilience at the regional level?
A role for shared public grain stocks? • Would that crowd out private stock-holding?
Three policy questions
3. How to strengthen resilience in national food systems?
Improve financial & insurance markets?Invest more in rural education & infrastructure?Improve the targeting of social safety nets?
