Food Crisis and Related Risk Factors

Successful global agricultural trade hinges on open, secure agricultural markets. Such markets provide risk management by allowing for inter-regional diversification of crops and food products and by reducing price differences through market integration. In other words, secure, well-functioning markets can balance one country’s food deficit with another’s surplus, and vice versa. In this way, global trade can support global price stability and food security.

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.