FAO in North America

Innovative agricultural finance and risk management

Submitted by Teresa Buerkle on July 24, 2012

FAO in cooperation with the European Bank for Reconstruction and Development (EBRD) has just published a new working paper titled Innovative agricultural finance and risk management. The publication looks into the issue of risk management in agricultural finance in transition countries. These countries – like Kazakhstan, Ukraine and Russia – have the potential to become major world grain exporters if their agricultural yields, with investment from the private sector, increase to reach the standards achieved in similar countries around the world. This would help address the problem of rising global food demand - which FAO estimates could grow 60-70 percent by 2050 as a result of population and income growth. But to attract private investment in agriculture, new financial and risk management instruments need to be developed.

The paper identifies effective ways for international finance institutions like the EBRD to adjust their investment portfolio in order to support the creation and development of agricultural finance and risk management products, mechanisms and institutions. These include pre- and post-harvest financing instruments, price risk management and the development of trading platforms. According to the report, these advances could help reinforce the entire agriculture supply chain so that it is more profitable and secure for all parties involved, and consequently food production could be substantially improved.

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Do forest pests bug you?

Submitted by admin on November 10, 2011

A new guide released today by FAO aims to help countries prevent forest-damaging pests from spreading to new areas. The Guide to implementation of phytosanitary standards in forestry responds to risks posed by increased international trade and is the result of significant international collaboration, says Kerry Britton of the U.S. Forest Service, one of the specialists who coordinated development of the publication. (Read more.)

Not only that, but it may be the only publication on the subject whose rollout includes a rap video:

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Does food price volatility matter?

Submitted by Teresa Buerkle on July 13, 2011

Not according to Cristopher Barrett (Cornell) and Marc Bellemare (Duke). Writing in Foreign Affairs, they argue that the real problem is expensive food and that global leaders are wrong to focus on unstable prices rather than high ones.

“Policies aimed at curbing food price volatility, such as export bans, price stabilization schemes, and subsidies for farmers are misguided if policymakers aim to increase the welfare of the poor, or avert political unrest in developing countries.”

The full paper, including notes and statistical tables, is available here.

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Safeguarding food security in volatile markets

Submitted by admin on June 13, 2011

©FAO/Assim Hafeez

Price fluctuations are a common feature of well-functioning agricultural markets. But when these become large and unexpected – volatile – they can have a negative impact on the food security of consumers, farmers and entire countries. Since 2007, world markets have seen a series of dramatic swings in food prices, which today remain high and are expected to remain volatile.

At their summit in November 2010, G20 leaders asked FAO, IFAD, IMF, OECD, UNCTAD, WFP, the World Bank and the WTO to develop options on how to better mitigate and manage the risks associated with the price volatility of food and other agricultural commodities, without distorting market behaviour. Their response was presented to the G20 on 2 June in the form of an interagency report that provides recommendations for preventing or reducing price volatility and for mitigating its consequences, particularly among the most vulnerable.

The report identifies actions that can be taken at individual, national, regional and international level. Some would help avert a threat; others involve contingency plans to improve readiness, while still others address long-term issues of resilience.

Concerned about the consequences of price volatility on international and domestic markets, and on the capacity of countries to ensure the food security of their populations in an increasingly unpredictable environment, FAO is giving greater priority to the analysis of market volatility and to policy guidance. A new report, Safeguarding food security in volatile global markets, opens the policy dialogue by gathering the latest thinking on the issues and controversies surrounding price volatility in global food markets to begin to map a way forward.

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