“Safety nets needed” to curb food price volatility

By Sarah Hills

- Last updated on GMT

Changes to the food production chain are needed in order to manage constantly growing price volatility and ensure the existence of safety nets, according to a new report.

That is one of four major recommendations to tackle a global food crisis, put forward in the study by the Barilla Center for Food & Nutrition (BCFN) called “Food Security: Challenges and Outlook”.

Price volatility is constantly growing. Therefore the study said it is necessary to evaluate and select the best practices at every level “in order to create stocks of food and of raw materials, defining the costs, the timing and the role of an overall global “insurance” system”.

In addition, it said that a new regulatory framework was needed for the food commodity market. This would “enhance the not merely economic value of these traded commodities and coordinate trade policies at the international level, promoting access to the markets and the qualitative growth of products coming from developing countries”.

It gave the example of including active forms of supervision by an independent authority or by imposing position limits to ensure that the money invested did not constitute operations of an excessively speculative nature.

Another key recommendation was to manage dietary habits.

The report said that actions and guidelines were needed to govern lifestyles that encourage highly imbalanced dietary habits, driven by increasing consumption of animal-derived products and the “westernization” of consumption models among growing segments of the population.

It also suggested strengthening global governance mechanisms, stating that the whole food production system would have to be redesigned and regulated in view of greater accessibility, sustainability and nutritional quality.

Lastly it called for the promotion of economic development and increased agricultural productivity, stating that it was necessary to identify and implement sustainable development approaches, transferring scientific knowledge and best agricultural practices.

The study adds weight to those calling for firmer policy surrounding food commodity markets in order to tackle price volatility, as well as strengthening food security and enhancing food production and supply - issues on the agenda at the up-coming G20.

Commenting on the economic and geopolitical aspects of food security, Mario Monti, economist and member of the advisory board of the BCFN, said: “Recent years have been marked by a sequence of crises worldwide: a global financial crisis and serious economic downturn, and social and political crises in a number of countries that rightly received the attention of the international community.

“However the food crisis, even as a less visible emergency, also drives social unrest, inequality and global conflicts. The BCFN believes that governments and policy makers globally need to keep food high the agenda as one of the most pressing challenges that the world is facing.”

Related topics: Market Trends

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