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This report examines the market outcomes of different policy options that could be adopted in the event of a future spike in the world price of wheat and rice. The three policies – additional border measures, consumer subsidies or public stocks – only partly mitigate the effect of a price spike on consumers in the implementing countries. However, taxpayer costs can be large, particularly for broad consumer subsidies or to build and carry grain stocks. Trade measures reduce domestic prices to producers, suppressing long-run supply response. There are also negative unintended consequences for international markets and market participants in other countries that trade on these markets. New consumer subsidies or trade measures introduced by some countries to offset rising international grain prices causes those prices to rise even more in other countries. Releasing public stocks eases tight markets and lowers prices in all markets, helping to reduce the price spike, but stock building and rebuilding phases mean higher market prices and less food consumption at other times. In conclusion, none of these policies is an unambiguous solution that sustains food consumption during times of high prices with minimal taxpayer and other costs.

Agriculture and Food

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Ce rapport examine les résultats des différentes solutions qui pourraient être adoptées en cas de flambée future des prix mondiaux du blé et du riz. Les trois options – des mesures supplémentaires aux frontières, des subventions à la consommation ou l’utilisation de stocks publics – n’atténuent qu’en partie l’effet d’une flambée des prix sur les consommateurs dans les pays qui y recourent. Le coût pour les contribuables peut toutefois être très élevé, en particulier si de larges subventions à la consommation sont accordées ou s’il est nécessaire de construire et d’entretenir de vastes entrepôts. Les mesures commerciales aux frontières réduisent les prix intérieurs à la production, en éliminant les réactions de l’offre à long terme. Elles ont aussi des conséquences négatives non voulues pour les marchés internationaux et pour les intervenants sur les marchés des autres pays qui négocient sur ces marchés internationaux. De nouvelles subventions à la consommation ou de nouvelles mesures commerciales introduites par certains pays pour compenser la hausse des prix internationaux font encore monter davantage ces prix dans les autres pays. L’utilisation des stocks publics provoque une détente des marchés et fait baisser les prix sur tous les marchés, ce qui atténue la flambée des prix, mais la constitution de stocks et leur reconstitution font monter les prix de marchés et baisser la consommation de denrées alimentaires à d’autres moments. En conclusion, aucune de ces mesures ne représente une solution qui permette véritablement de soutenir la consommation de denrées alimentaires en période de prix élevés et à un coût minimum, notamment pour les contribuables.

Agriculture and Food

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Reducing hunger and undernourishment is a global priority and the Sustainable Development Goals (SDGs) have the ambitious target of eradicating hunger entirely by 2030. Using the OECD-FAO Agricultural Outlook to 2024, this paper provides projections on the availability of calories at the national level, for the number of persons undernourished, and for the proportion of undernourishment (PoU) that are consistent with the market projections of the Outlook’s baseline. It also considers the impact on undernourishment of four alternative scenarios: faster income growth relative to the baseline in developing countries; stronger growth in agricultural productivity; a combination of a faster income growth with a stronger productivity growth; and finally a more equitable access to available food supplies. Under the baseline, the global PoU is projected to fall from 11% to 8% over ten years, with Latin America as a whole dipping under the 5% threshold at which the FAO considers hunger to be effectively eradicated. The PoU falls from 12% to 8% in Asia and the Pacific and from 23% to 19% in Sub-Saharan Africa. The global total of undernourished people declines from 788 million to 636 million. The number of undernourished individuals fall the most in Asia. Higher income growth or more productive agriculture removes more people from the ranks of the undernourished, but in most cases, more equitable access to food leads to the biggest reductions. The analysis confirms that it is not lack of available food that is the fundamental problem, but rather effective access to that food. Trade plays an increasing role in ensuring national food availability for many countries.

Agriculture and Food --- Development