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.
A report released by the World Bank and International Monetary Fund last month suggests that good progress has been made on reaching some of the Millennium Development Goals, such as reducing extreme poverty, while progress on other targets, such as those related to child and maternal mortality, has been much slower.
