IMF Conference Debates How to Manage Food Price Volatility

  • Conference examines how best to respond to food price spikes, volatility
  • Monetary, fiscal policies can be effective at offsetting food price shocks
  • Accessibility of food— not just boosting supply—should be policy priority
  • Academics, policymakers, and representatives of international organizations gathered in Rabat, Morocco, in late February to discuss the causes and socioeconomic challenges of wide fluctuations in food prices.

    Food prices have been persistently high and volatile in the last decade, which has widespread welfare implications, disproportionately affecting poor households and food-importing countries.

    The two-day event—jointly organized by the IMF, the OCP Policy Center, and New York University’s Center for Technology and Economic Development—focused on appropriate policy responses to spikes in food prices as well as the broader challenge of food security.

    Access to food is key

    Agricultural production makes up only 3 percent of the global economy, but the sector employs 1.3 billion people, observed Axel Bertuch-Samuels (IMF Special Representative to the United Nations). But while food production is a prominent concern in the face of rising global population, issues of food security go beyond the agricultural sector, participants noted.

    Jomo Kwame Sundaram (Food and Agriculture Organization) suggested that the real issue of food security is not the availability of food, but rather access to food. Government policies are needed to help people procure access to affordable staples, especially the most vulnerable population segments and during periods of food price shocks. These vulnerable populations are largely concentrated in Sub-Saharan Africa and parts of Asia, according to the Global Food Security Index, presented by Leo Abruzzese of the Economist Intelligence Unit.

    Results for the 2013 Global Food Security Index

    Policymakers from such food-importing African nations as Mauritania, Zimbabwe, Swaziland, and Tunisia shared their strategies for coping with global food price spikes. Their policy responses ranged from cash-for-work programs to compiling strategic grain reserves and encouraging crop rotation. Government interventions deemed successful included subsidized mechanization of agricultural production in Swaziland, inflation targeting in Mauritania, and providing fertilizer and seeds to targeted groups in Zimbabwe.

    Food security also involves broader economic development measures, participants observed, such as...

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