Using Public Food Grain Stocks to Enhance Food Security

The recurrent global food price spikes in 2008 and 2010 rekindled interest in the use of national food grain stockpiles ('stocks') to enhance food security. They were a commonly used instrument in government responses to these food prices spikes. They were also widely considered as a useful tool after the 1974 food crisis and its associated food price volatility and supply disruptions. Large stocks became a reality at the global level in the 1980s and 1990s as a side-product of farm income support policies in the developed countries. However, large 'buffer' or 'intervention' stocks, as the grain accumulations in developed countries came to be called, eventually proved to be very costly forms of producer income support and were drawn down for fiscal and other reasons starting in the late 1990s. This report, prepared for government and development partner practitioners, revisits the issues and evidence concerning grain stocks. It starts with an open mind concerning stocks as policy tools and specifically seeks to avoid the polarization of views that grew up around the topic in the 1980s and 1990s. It takes the form of an evidence-based review of developing country experience. Historically, grain stocks have been used for two main purposes. First, to stabilize domestic prices and second, to provide readily available emergency food and safety net reserves targeted at the most vulnerable. The assessment of actual experience of using grain stocks for these two purposes is summarized as follows. Using grain stocks to stabilize domestic prices has generally not been an effective instrument to improve food security outcomes. Developed countries no longer use stocks to stabilize domestic prices due to the unpredictability and often unsustainably high budget costs. In Africa and Asia, where price stabilization programs are still frequently pursued, high fiscal costs are crowding out needed public investment in agricultural productivity and rural infrastructure. The often unpredictable grain purchases and releases of stabilization programs are discouraging private investment in both grain production and storage, which are the key to lowering both the level and volatility of food prices.

Bibliographic Details

Main Author:	World Bank
Language:	English
Published:	Washington, DC 2012-09
Subjects:	ACCOUNTING, AGRICULTURAL COMMODITIES, AGRICULTURAL COMMODITY, AGRICULTURAL GROWTH, AGRICULTURAL POLICIES, AGRICULTURAL POLICY, AGRICULTURAL PRODUCTION, AGRICULTURE, ARBITRAGE, BAGGING, BANKING SYSTEMS, BASIC NEEDS, BENEFICIARIES, BUTTER, CA, CASH PAYMENTS, CASH TRANSACTIONS, CASH TRANSFER, CASH TRANSFERS, CENTRAL BANKS, CEREALS, CHEESE, COCOA, COLLECTIVE ACTION, COLLECTIVE ACTION PROBLEM, COLLECTIVE ACTION PROBLEMS, COMMODITIES, COMMODITY, COMMODITY PRICE, COMMODITY PRICES, COMPETITIVE ADVANTAGE, COMPETITIVE MARKET, COMPETITIVENESS, CONSUMER EXPENDITURES, CONSUMER PRICE, CONSUMER PRICE INDEX, CONSUMER PRICES, COST OF CAPITAL, COUNTRY TO COUNTRY, CRITICAL NEEDS, CURRENCY, DEFAULTS, DEFICITS, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPING ECONOMIES, DIVIDENDS, DOMESTIC MARKET, DOMESTIC MARKETS, DOMESTIC PRICES, ECONOMIC CRISES, ECONOMIC DOWNTURNS, ELECTRONIC CASH, ENERGY PRICES, EXCHANGE RATE, EXPENDITURE, EXPENDITURES, EXPORTER, EXPORTERS, FINANCIAL SERVICES, FINANCIAL SUPPORT, FOOD AID, FOOD AID PROGRAMS, FOOD CROPS, FOOD DEMAND, FOOD DISTRIBUTION, FOOD FORTIFICATION, FOOD IMPORTS, FOOD INSECURITY, FOOD MARKETS, FOOD NEEDS, FOOD POLICY, FOOD POLICY RESEARCH, FOOD PREFERENCES, FOOD PRICE, FOOD PRICE INFLATION, FOOD PRICES, FOOD RESERVES, FOOD SAFETY, FOOD SECURITY, FOOD SHORTAGES, FOOD STAPLES, FOOD SUBSIDY, FOOD SUBSIDY PROGRAMS, FOOD SUPPLY, FOOD TRANSFERS, FOODGRAINS, FORWARD MARKETS, GOVERNMENT INTERVENTION, GOVERNMENT SUBSIDY, GRAIN PRODUCTION, GRAIN RESERVES, GRAINS, GROSS DOMESTIC PRODUCT, HOLDING, HOUSEHOLD INCOME, HOUSEHOLD INCOMES, IFPRI, INCENTIVE STRUCTURE, INCOME, INCOME GROWTH, INCOME SHOCKS, INCOMES, INFORMATION SYSTEM, INPUT PRICES, INSTRUMENT, INSURANCE, INTEREST RATES, INTERNATIONAL BANK, INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE, INTERNATIONAL MARKET, INTERNATIONAL MARKETS, INTERNATIONAL TRADE, INVENTORIES, INVENTORY, INVESTING, JOB CREATION, LOAN, LOCAL ECONOMIES, LOGISTICAL SUPPORT, LONG-TERM INVESTMENTS, MAIZE, MARKET CONDITIONS, MARKET DEVELOPMENTS, MARKET DISTORTIONS, MARKET FAILURES, MARKET INFORMATION, MARKET LEVEL, MARKET LEVELS, MARKET PLAYERS, MARKET PRICE, MARKET PRICES, MARKET TREND, MARKET TRENDS, MARKETING, MEAL, MILLS, MONOPOLY, NATURAL RESOURCES, OPPORTUNITY COSTS, OUTPUT, OUTPUTS, PADDY, POLITICAL STABILITY, POVERTY ALLEVIATION, PRICE BAND, PRICE BANDS, PRICE CEILING, PRICE FLOOR, PRICE FLUCTUATIONS, PRICE INCENTIVES, PRICE INFLATION, PRICE INSTABILITY, PRICE LEVELS, PRICE MOVEMENTS, PRICE POLICY, PRICE STABILITY, PRICE STABILIZATION, PRICE VARIATIONS, PRICE VOLATILITY, PRIVATE INVESTMENT, PRODUCER PRICES, PROFIT MARGINS, PROTEINS, PUBLIC BUDGETS, PUBLIC INVESTMENT, PUBLIC INVESTMENTS, PUBLIC POLICY, PUBLIC SPENDING, PUBLIC STOCK, PUBLIC STOCKS, PURCHASING, PURCHASING POWER, RATES OF RETURN, RECURRENT EXPENDITURE, REGIONAL INTEGRATION, REGIONAL TRADE, REMOTE AREAS, RESERVE, RETURN, RICE MARKETING, RISK AVERSION, RUBBER, RURAL INFRASTRUCTURE, SAFETY NET, SAFETY NETS, SALE, SALES, SAVINGS, SECURITY RISKS, SELLING PRICES, SOCIAL COSTS, STABILIZATION POLICIES, STOCK MANAGEMENT, STOCKS, STRUCTURAL PROBLEM, SUPPLY CHAIN, SUPPLY CHAINS, SUPPLY SHOCKS, SURPLUS, SURPLUSES, TRANSPARENCY, TREASURY, VITAMINS, WAREHOUSES, WFP, WHEAT, WHOLESALE PRICE, WORLD FOOD PROGRAMME, WORLD MARKET, WORLD MARKETS, WORLD TRADE,
Online Access:	http://documents.worldbank.org/curated/en/2012/09/16687047/using-public-food-grain-stocks-enhance-food-security https://hdl.handle.net/10986/11878
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