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Apparent similarities between today’s rising wheat prices and the food-price crisis of 2007-2008 are just that: apparent, not real. Suggestions to the contrary serve to drive up prices and hurt poor people, who spend much or most of their incomes on food. They need neither jittery markets nor ad hoc protectionism, which has exacerbated past food crises.
Recent events in Russia, one of the largest suppliers of wheat in the world, have raised concern about the current and future price of wheat and wheat-based products. This article briefly examines the issue and determines if there is in fact cause for serious alarm.
Summary of Facts
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.
Price volatility is one of the most critical economic and food security challenges facing global policymakers today. Moreover, spikes in food prices can have significant impact on incomes, markets, and nutrition worldwide.
“The G-20 is the premier forum for our international economic development that promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability. By contributing to the strengthening of the international financial architecture and providing opportunities for dialogue on national policies, international co-operation, and international financial institutions, the G-20 helps to support growth and development across the globe.” ( G20 Mandate )