Foreign Policy Blogs

Is Food Price Volatility a Concern?

Is Food Price Volatility a Concern? Global food prices have been reaching new highs as fluctuations in global food markets have continued since late 2007.  To help make sense of these trends, the United Nations Food and Agricultural Organization (FAO) offers a Food Price Volatility Portal, providing links to websites that monitor food markets, as well as reports and resources that are intended to help policymakers.

A new backgrounder on “Food Price Volatility and Insecurity” by the Council on Foreign Relations (CFR) provides a comprehensive review of instability in food prices and the recent policy responses prescribed to deal with them.

In the CFR publication, Foreign Affairs, Christopher Barrett and Marc Bellemare’s article “Why Food Price Volatility Doesn’t Matter”  questions these policy responses for labeling food price volatility as the culprit behind increasing difficulty of people around the world to purchase affordable food.

“But high food price levels and high food price volatility are not the same things. Food price levels are at historic highs, but food price volatility, although high these past few years, is not out of line with historical experience and is generally lower than it was in the 1970s. This means that the world does not necessarily face a price volatility problem. It faces a high food price problem.”

In light of the discussions at the recent G-20 agriculture summit, this new article raises an interesting counterpoint to the problems that were explored in Paris.

Homi Kharas at the Brookings Institution analyzes political and social factors when “Making Sense of Food Price Volatility,” although ultimately attributing the unstable rise in the cost of food to price volatility in food markets.

Who makes the most persuasive argument?  Please comment below.

Posted by Michael Lucivero.

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