Global food prices have spiked several times in recent years, most notably in 2007–2008 and again in 2010–2011. A sharp increase in food prices, especially in staple grains such as corn, wheat, and rice, can have dramatic consequences for low-income families around the world, and can spark or exacerbate civil strife and conflict in politically precarious regions. Worse, countries that try to shield their people from the effects of a sudden food price increase, whether through trade restrictions such as export bans or some form of food price controls, often end up aggravating the global food crisis.
The Council on Foreign Relations hosted a workshop to examine volatility in food prices and its consequences. The workshop gathered a score of experts, including current and former policymakers, economists, political scientists, nongovernmental organization leaders, traders, and corporate leaders. The goals were to explore the causes behind recent food-price increases and the potential for future volatility, examine the broader geopolitical fallout from such events, and identify ways policymakers can help avoid them and blunt their impact. This report, which you can download here, summarizes the discussion's highlights. The report reflects the views of workshop participants alone; CFR takes no position on policy issues.
Framing Questions for the Workshop
Sources of Food Price Crises
What accounts for the recent volatility in food prices after thirty years of relative stability? Is it a temporary interruption of the long-term trend or is there something fundamentally new about the market? (Possible influences to consider include: rising global incomes, changing food preferences, increased biofuel production, changes in the agricultural trade regime, changes in financial speculation in commodity markets, declines in good quality available farmland, and price volatility in agricultural inputs.) Are there other foreseeable factors—for example, climate change—that might affect the likelihood or course of food price crises in the future?
Food Price Crises and International Trade
How significant were export restrictions in exacerbating past food price crises? What other trade policies have had a notable impact on the trajectory of past crises? Are there policies that can make a crisis worse on the international level but succeed in shielding domestic prices from contagion? How should policymakers weigh the merits of such policies? How can policymakers—at both the domestic and international levels—maximize the upsides of trade for mitigating food crises and minimize the downsides? What consequences have the actions of national governments to address food price crises (for example, reducing export subsidies, instituting export bans, or building domestic food stockpiles) had on the function and effectiveness of the international trade regime? What can be done now to build agreement on trade policies addressing food stockpiling, export restrictions, and other food security provisions to minimize the risk of such coping mechanisms undermining trade institutions during a crisis?
Food Prices and Political Crises
Under what conditions are rapid changes in food prices most likely to lead to political crises? Are there common indicators or metrics that are useful to track? Should multilateral institutions approach food price spikes that threaten to spark political instability differently from other food price spikes? Are there international rules or institutions that could and should be put in place to minimize the risk of food-related political crises before they begin? Should international aid organizations and institutions take into account the risk of political unrest in designing their responses to food crises? How might they do so? How, if at all, should organizations at various points in the constellation of food security groups (for example, the Food and Agriculture Organization and the World Food Program) approach this issue differently? To what extent would intervening (or not) in a food-related political crisis undermine aid organizations' status as politically disinterested?
Charts From This Report