Thu, 06/09/2011

G20 Interagency Report on Food Price Volatility

This report released on June 2, 2011, coordinated by the FAO and the OECD, with collaborative efforts from the FAO, IFAD, IMF, OECD, UNCTAD,WFP, the World Bank, the WTO, IFPRI and the UN HLTF, addresses price volatility, (variations in agricultural prices over time), and its effects on food security is a complex issue with many dimensions, agricultural and non-agricultural, short and long-term, with highly differentiated impacts on consumers and producers in developed and developing countries.

The report begins with a discussion of volatility and of the ways in which volatility affects countries, businesses, consumers and farmers. Lessons learned from recent experiences are briefly reviewed as well as the factors determining likely levels of volatility in future. This report offers suggestions for a systematic and internationally coordinated response building on the lessons learned as a result of the 2007-2008 crisis.

Here is an excerpt from the report:

Volatility has been higher during the decade since 2000 than during the previous two decades and this is also the case of wheat and rice prices in the most recent years (2006-2010) compared to the nineteen seventies. Another conclusion that emerges from the study of long term trends in volatility is that periods of high and volatile prices are often followed by long periods of relatively low and stable prices. Finally, it is well established that agricultural markets are intrinsically subject to greater price variation than other markets.