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Emergency food reserves, or strategic reserves, have received considerable attention since the 2007-08 food crisis. Since that time, many countries have either established new strategic reserve programs or scaled up their existing programs by increasing stock levels. The rationale behind these policies is that, with increasing international food price volatility, governments must be prepared to protect their most vulnerable populations from food price shocks, declining purchasing power, and famine.
The effectiveness of increased stock levels is a controversial topic and is widely debated. While many believe that larger stocks will better protect a larger portion of the population, some research has shown that increasing stock levels can actually have a negative effect on market prices, further hurting poor producers. Effective strategic reserves depend, therefore, on appropriately designed stock sizes, rotation mechanisms, and storage locations; these programs can also be enhanced by social safety net programs such as school feeding programs.
Watch Senior IFPRI Research Fellow Shahidur Rashid discuss strategic grain reserves in Africa and read the case study for Ethiopia.
Download the report by IFPRI Division Director Maximo Torero on using emergency reserves to reduce price volatility.