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While agricultural trade policies are one factor affecting global food prices and price stability, they are not the only factor. Policies not directly related to trade can also have destabilizing effects if enacted by large countries and/or by a large number of small countries. Traditionally, focus has been put on agricultural policies and domestic support for developed countries’ farmers. Another strong example of this is the recent dramatic increase in pro-biofuels policies throughout both the developed and the developing world.

Just three years after the 2007-08 food crisis, the food security of poor people and vulnerable groups, especially women and children, is again threatened as the prices of basic food items increase rapidly and become more volatile. Expanding biofuel production, rising oil prices, U.S. dollar depreciation, export restrictions, and panic purchasing are again driving up food prices—to the particular detriment of the world’s poorest consumers, who spend some 50-70 percent of their incomes on food.

The G20 Finance Ministers and Central Bank Governors met again on April 14-15 in Washington DC to discuss ongoing challenges to the global economic recovery. The meeting addressed the increasing pressure faced by global commodity prices, stressing the need for commodities markets to be subject to regulation and supervision.

Read the full communiqué.

Recent trends in food prices—higher levels and higher volatility—mirror trends predicted by a number of experts. Given the complex web of factors influencing global food security, governments of developed and developing countries, as well as international organizations, must use a comprehensive approach to prevent a food crisis reoccurrence.

As the global population has become increasingly larger and more urbanized, and as incomes continue to rise, agricultural markets have changed drastically. The demand for high-value agricultural products and the emphasis placed on foreign trade means that poor rural farmers are often left out of the market. Smallholder farmers may not be able to compete with larger farmers who can provide consistent quantities of high-quality products.