Policies, Institutions, and Global Initiatives

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.

The structure and behavior of agricultural input markets, such as fertilizer or seed markets, can have significant regional and global effects on agricultural development and, thus, food security. Prohibitively high costs and other constraints can limit the use of beneficial inputs and lead to decreased agricultural productivity, which can negatively impact farmers as well as consumers. On the other hand, input producers may benefit from higher prices.

The 2007-08 food crisis saw the international price of staple agricultural commodities (such as wheat, maize, soybeans, and rice) more than double; today the international price of many of these commodities is again on the rise. A common assumption is that as the international price of such commodities increases, the domestic consumer price of basic food items such as bread, flour, wheat, corn, tortillas, and rice will also increase. However, the degree of this transmission may vary from country to country and from commodity to commodity.

Social protection encompasses safety net programs such as conditional cash transfers, insurance programs such as microinsurance or weather securities , and social sector programs such as free primary education. In addition to creating a fairer society, social protection programs can also be key in promoting economic growth through reducing risk and encouraging investment and innovation.