Maximo Torero, IFPRI
The world faces a new food economy that likely involves both higher and more volatile food prices, and evidence of both phenomena was on view in 2011. After the food price crisis of 2007–08, food prices started rising again in June 2010, with international prices of maize and wheat roughly doubling by May 2011. The peak came in February 2011, in a spike that was even more pronounced than that of 2008, according to the food price index of the Food and Agriculture Organization of the United Nations. When prices of specific commodities are adjusted for inflation, though, the 2011 price spike did not reach the levels of 2008 (Figure 1).
Although the food price spikes of 2008 and 2011 did not reach the heights of the 1970s, price volatility—the amplitude of price movements over a particular period of time—has been at its highest level in the past 50 years. This volatility has affected wheat and maize prices in particular. For hard wheat, for example, there were an average of 27 days of excessive price volatility a year between January 2001 and December 2006 (according to a measure of price volatility recently developed at IFPRI1). From January 2007 to December 2011, the average number of days of excessive volatility more than doubled to 76 a year (Figure 2).2
Figure 1: Inflation-adjusted prices of agricultural commodities and oil, 1990–2011
Source: Food and Agriculture Organization of the United Nations, FAOSTAT database; International Grains Council, World Grain Statistics 2009 (London, 2009); US Energy Information Administration, World Crude Oil Prices (online data) (Washington, DC, 2011). Note: Prices are adjusted for inflation using a consumer price index base year of 1982–84 (that is, 1982–84 = 100). Maize is US No. 2 Yellow, wheat is US No. 2 Hard Red Winter, rice is White Thai A1 Super, soybeans are US No. 1 Yellow, and crude oil is the spot price for West Texas Intermediate at Cushing, Oklahoma. Download a larger version of Figure 1
High and volatile food prices are two different phenomena with distinct implications for consumers and producers. High food prices may harm poorer consumers because they need to spend more money on their food purchases and therefore may have to cut back on the quantity or the quality of the food they buy or economize on other needed goods and services. For food producers, higher food prices could raise their incomes—but only if they are net sellers of food, if increased global prices feed through to their local markets, and if the price developments on global markets do not also increase their production costs. For many producers, particularly smallholders, some of these conditions were not met in the food price crisis of 2011.
Figure 2: Excessive food price variability for hard wheat
Source: C. Martins-Filho, F. Yao, and M. Torero, “High Order Conditional Quantile Estimation Based on Nonparametric Models of Regression.” Accessed April 3, 2012.
Apart from these effects of high food prices, price volatility also has significant effects on food producers and consumers. Greater price volatility can lead to greater potential losses for producers because it implies price changes that are larger and faster than what producers can adjust to. Uncertainty about prices makes it more difficult for farmers to make sound decisions about how and what to produce. For example, which crops should they produce? Should they invest in expensive fertilizers and pesticides? Should they pay for high-quality seeds? Without a good idea of how much they will earn from their products, farmers may become more pessimistic in their long-term planning and dampen their investments in areas that could improve their productivity. (The positive relationship between price volatility and producers’ expected losses can be modeled in a simple profit maximization model assuming producers are price takers. Still, it is important to mention that there is no uniform empirical evidence of the behavioral response of producers to volatility.) By reducing supply, such a response could lead to higher prices, which in turn would hurt consumers.
It is important to remember that in rural areas the line between food consumers and producers is blurry. Many households both consume and produce agricultural commodities. Therefore, if prices become more volatile and these households reduce their spending on seeds, fertilizer, and other inputs, this may affect the amount of food available for their own consumption. And even if the households are net sellers of food, producing less and having less to sell will reduce their household income and thus still affect their consumption decisions.
Finally, increased price volatility over time can also generate larger profits for investors, drawing new players into the market for agricultural commodities. Increased price volatility may thus lead to increased—and potentially speculative—trading that in turn can exacerbate price swings further.
Drivers Behind Recent Food Price Volatility
Among the key factors playing a role in creating price volatility are increasing biofuel production, the medium- and long-term effects of climate change, and higher levels of trading in commodity futures markets. Export restrictions in important food-producing countries also contributed to price increases and market jitters in 2010 and 2011.
Biofuel policies. With oil prices at significantly high levels during 2011, and with the European Union and the United States subsidizing and setting mandates for biofuel production, farmers have shifted their cultivation toward biofuel crops, most of which are also used as food or feed, such as maize, sugar, and oilseeds (Figure 3). To comply with biofuel mandates, farmers have ramped up production of such crops, increasing the demand for land, water, and nutrients—and therefore the production costs of other food crops. Furthermore, the production of biofuel crops strengthens the links between the highly volatile energy markets and food markets, thereby increasing the volatility of food prices. With more countries, such as India and Peru, enacting biofuel mandates, food price volatility is likely to increase even further. Flexible biofuel mandates that will not contribute to food price volatility could represent alternative mechanisms to reduce the potentially negative impact of biofuel policies.3
Figure 3: Share of US maize crop used to produce ethanol, 1995–2010
Source: Data from Earth Policy Institute, Data Center: Climate, Energy, and Transportation (2011).
Extreme weather and climate change. Extreme weather events helped raise food prices and fuel price volatility in 2007–08 and 2010–11,4 and climate scenarios predict more variable weather events in the future.5 More intense and frequent natural disasters (such as droughts and floods) resulting from climate change could trigger significant yield losses and subsequent price increases and higher volatility. Indeed, IFPRI simulations show that climate change is likely to push prices up, regardless of whether population (and thus demand for food) grows faster or slower. In contrast to the 20th century, when inflation-adjusted prices of staple grains declined, in the first half of the 21st century, these prices are likely to rise.6
Commodity futures trading. One signal of higher price volatility has been the significant increase in the volume of agricultural commodity futures traded in the Chicago Board of Trade, a leading agricultural futures exchange. (Futures are contracts between a buyer and a seller that specify a current price for a commodity to be delivered on a certain date in the future. These contracts can themselves be traded by investors who do not physically own the commodity or plan to take delivery of it.) From 2005 to 2006, the average monthly volume of futures trading for wheat and maize grew by more than 60 percent. In 2007, traded volumes again rose significantly for wheat, maize, rice, and soybeans. In fact, the average monthly volume of trading in soybean futures was 40 percent larger than in 2006 (Figure 4). Futures trading continued to increase during 2010–11 for all commodities. Between March 2006 and December 2011, the volume of commodity index funds trading increased (in terms of the number of transactions of 5,000 bushels) by 157 percent, 200 percent, and 169 percent for maize, soybeans, and soft wheat at the Chicago Board of Trade and by 124 percent for hard wheat at the Kansas City Board of Trade. Investors have increased their trading of food commodity futures, but only 2 percent of these futures contracts have resulted in the delivery of real goods. For maize, for example, the volume of futures traded on exchanges worldwide is more than three times greater than the global production of maize.
Figure 4: Monthly volume of futures trading, 2002–11
Source: Chicago Board of Trade. Download a larger version of Figure 4
Changes in futures prices have been shown to lead to changes in day-to-day, or “spot,” prices. This pattern of increasing commodity futures trading and higher prices for commodity futures can create a vicious circle that exacerbates the volatility of spot prices for food commodities to excessive levels.7
Other factors. Today’s agricultural markets have three characteristics that make the price responses to these challenges more extreme. First, export markets for the main staple commodities—rice, maize, wheat, and soybeans—are either highly concentrated in a few countries or very “thin” (that is, only a small share of production is traded) (Figure 5). Given these high levels of concentration, the world’s capacity to cope with shocks is limited. Any incidence of poor weather or other production shocks in these countries will immediately affect global prices and price volatility. Similarly, any policy changes—such as trade bans, customs taxes, or other restrictions on exports—in any of the top exporters will significantly affect the levels and volatility of food prices (see Figure 6). Research suggests that such policies explained almost 40 percent of the increase in the world market price for rice during the 2007–08 food price crisis.8
Figure 5: Major exporters’ shares of global maize, wheat, and rice exports, 2008
Source: Food and Agriculture Organization of the United Nations, FAOSTAT database. Note: Paddy rice is mostly exported by the United States, and milled rice is exported by other countries. Download a larger version of Figure 5
Figure 6: Effects of trade policy reactions for selected countries on world wheat prices
Source: A. Bouet and D. Laborde, Economics of Export Taxation in a Context of Food Crisis: A Theoretical and CGE Approach Contribution, IFPRI Discussion Paper 994 (Washington, DC: International Food Policy Research Institute, 2010).
Second, the world’s stocks of cereals are now at historically low levels (Figure 7). This situation leaves the world vulnerable to food price spikes and threatens the proper functioning of markets. The world’s cereals stocks, measured as a ratio of stocks to cereals use, were similarly very low when wheat prices spiked in the 1970s, 1995–96, 2007–08, and 2010–11. This indicates that for the market to function effectively, the food system must hold a minimum level of grain stocks to be able to respond to unexpected shocks (such as bad weather) and allow for the transport, marketing, and processing of grains.9 Given the current low levels, sometimes only a small dip in grain stocks leads to problems. In 2007–08 grain stocks were only about 60 million tons less than in 2004–05, representing a decline of just 2.7 percent of global production. But when prices rose sharply in 2007–08, this difference in grain stocks was enough to contribute to serious price increases, especially for commodities whose production is concentrated in just a few countries, such as rice.10
Third, appropriate and timely information on food production, stock levels, and price forecasting is sorely lacking. When information deficits lead to overreactions by policymakers, the result can be soaring prices.
Figure 7: Ratio of cereals stocks to use, 1996/97–2011/12
Source: Food and Agriculture Organization of the United Nations, Food Outlook (Rome, various years). Note: World excluding China is shown because China is an outlier in terms of reserves, and there are several questions about the quality of its reports.
Trade Restrictions Amplify Food Price Spikes
Kym Anderson, University of Adelaide
In 2011 export bans continued to hurt poor people. Governments often raise import barriers during turbulent times to mitigate immediate domestic concerns such as unemployment, but during the recent global financial and food price crises some countries raised export barriers.1 Such government action aims to make exporting food more difficult and expensive, thereby protecting domestic consumers from the effects of an international food price spike. Examples in 2011 were bans on grain exports in Tanzania, Ethiopia, and Russia—all of which were lifted before the end of the year. Such responses exacerbate the price spike (by restricting supplies in the international market) and affect the international welfare transfer associated with that spike in terms of trade (which defines how much a country needs to export in exchange for a given import volume).2
Much less appreciated is the fact that governments of food-importing countries are equally concerned for their consumers. As a result, many of them lowered their food import restrictions, and some even switched to food-import subsidies. This further exacerbated the international price spike—which meant it weakened the initial attempt by food-exporting countries to shield their consumers.
New evidence on the extent of the change in domestic relative to international prices in food exporting and importing countries reveals that
- historically, only around half the movement in international food prices is transmitted to domestic markets within the first year;
- both grain-exporting and grain-importing countries react to food price spikes with a similar speed and on a similar scale when restricting trade;
- the changes in restrictions on global grain trade during 2006–08 are responsible for estimated increases in the international prices of rice, maize, and wheat of around two-fifths, one-fifth, and one-tenth, respectively;
- domestic prices of wheat would have risen less on average across all countries if trade restrictions had not been changed; and
- altered trade restrictions caused rice price increases in both high-income and developing countries to be only one-quarter to one-third less than what they otherwise would have been.
The policy conclusion is this: in our globalizing world, attempts to insulate domestic consumers from international food price spikes are mostly futile. Those actions hurt all food-importing countries by increasing the price of their imports. Stronger World Trade Organization disciplines on both exports and imports are clearly needed to limit how much damage such beggar-thy-neighbor government responses can do in the global marketplace when food prices spike.
1 - K. Anderson and S. Nelgen, “Agricultural Trade Distortions during the Global Financial Crisis,” Oxford Review of Economic Policy 28, no. 1 (2012). . [Back]
2 - W. Martin and K. Anderson, “Export Restrictions and Price Insulation during Commodity Price Booms,” American Journal of Agricultural Economics 94, no. 2 (2012): 422–27. [Back]
Actions and Proposals
In the wake of the two recent food price crises, some actions have been taken and many proposals have been put forward to prevent such events from occurring again. These can be grouped by the objectives they try to achieve: (1) better information and more research, (2) easier trade in agricultural commodities, (3) larger food reserves and better-managed grain stocks, (4) more active use of financial instruments to influence agricultural commodity markets, and (5) stricter regulation of these markets. Scholars and policymakers are debating the merits, feasibility, and likely effectiveness of many aspects of these proposals.
Better information and more research. Recognizing the need for better information, the Group of 20 (G20) countries agreed in June 2011 to launch the Agricultural Market Information System (AMIS). The AMIS is designed to encourage major players in global agrifood markets to cooperate more and to share data and information. If it is properly linked to existing early warning systems at global and national levels, it could substantially improve countries’ ability to make sound decisions on food security and help reduce price volatility. To make the AMIS effective, countries and regions need to develop transparent and publicly accessible systems for monitoring food security and collecting data so that they can provide appropriate information on food production balances and reserves. In addition, the system will require the full participation of private agrifood companies, which hold much of the world’s stocks of grain. So far, private companies are merely urged to participate in the AMIS on a voluntary basis, and without their participation the information will be incomplete and the system will have limited impact.
Two other key proposals have been made to improve information and coordination in ways that would increase market confidence and relieve temporary disruptions in supply. The first, from Brian Wright and Alex Evans, is for an international food agency,11 following the example of the International Energy Agency. This food agency would report on stock levels and develop protocols for the global response to shortages to help prevent market panic. Two criticisms have been directed at this proposal. First, generating better information on stocks will likely involve considerable effort and international coordination—and therefore cost. Currently, information is lacking not only on the public stocks held by key producer countries such as China and India, but also on the stocks held by private enterprises, which consider them commercial secrets. Second, with this information asymmetry, it is not clear how the proposed agency would identify the threshold of stocks at which international collaboration would be required or how countries would agree on an emergency response.
The second proposal, from Carlos Martins-Filho, Maximo Torero, and Feng Yao, consists of an early-warning mechanism for identifying abnormally high price volatility in the futures prices of staple food crops on a daily basis.12 This information could help reduce the potential asymmetry of information between buyers and sellers and thereby help dampen price volatility. There is one main caveat for this model: it currently operates only for commodities traded on the futures market, but it could be extended to spot markets if better price information existed.
Easier trade in agricultural commodities. In the 2007–08 and 2010–11 food price crises, many countries responded by cutting exports or boosting imports in ways that worsened price increases. Some proposals therefore aim to facilitate trade to reduce risks in grain trading when supplies are low and to avoid disruptions in global grain markets. One proposal is for a food import financing facility that would help poor countries afford food imports at times of high prices, as well as an international grain clearinghouse arrangement to ensure the availability of staple food imports.13 This clearinghouse would guarantee contracts for grain deliveries, reducing the risk that exporters would renege on contracts when supplies are tight. In a different approach, other observers propose preventing export bans to avoid any disruption of supplies.14
Larger food reserves and better-managed grain stocks. Proposals have been put forth for physical reserves, including emergency reserves,15 international coordinated grain reserves,16 regional reserves, and country-level reserves.
An emergency reserve is a modest stock of about 300,000–500,000 metric tons of basic grains—about 5 percent of current global food aid flows—which would be supplied by the main grain-producing countries and funded by a group of more than a dozen countries. This reserve, to be used exclusively for emergency response and humanitarian assistance, could be managed by the World Food Programme. In 2011, in response to this proposal, the G20 proposed studying the feasibility of a global humanitarian emergency reserve through a pilot program in West Africa under the leadership of the Economic Community of West African States and with the support of the World Food Programme.
Global or regional reserves will require a trigger mechanism that determines when to release stocks to calm markets in times of stress, and it is essential that such a mechanism be transparent. The proposed early warning system for price volatility, mentioned earlier, could be a solution.
Finally, a physical reserve, whether regional or global, will not resolve the problem of links among the financial, energy, and food commodity markets. This is a key problem that could be extremely relevant if excessive speculation is indeed a cause of extreme price spikes.
More active use of financial instruments. Two major proposals are linked to the use of financial instruments: (1) virtual reserves17 and (2) a toolbox of market-based risk management tools.
A virtual reserve would involve intervening in futures markets based on price volatility data from the early warning mechanism already described or, in extreme cases, a decision by a technical committee. This intervention would consist of executing a number of progressive short sales (that is, selling a firm promise to deliver the commodity at a later date at a specified price) until futures prices and spot prices decline to specified acceptable levels. This increase in short sales would reduce spot prices and should lower extreme price volatility by cutting the probability of abnormal returns. Most of the time, futures contracts would be settled through off-setting purchases or sales—in other words, the whole operation would be virtual. Only rarely would it be necessary to obtain the necessary grain supply to comply with futures contract delivery requirements. A virtual reserve has several advantages compared with a physical reserve: it is just a signaling mechanism; it does not put more stress on commodity markets; it does not incur the significant storage and opportunity costs of a physical reserve; it resolves the problem of the interlinkages between the financial and the commodity markets; and given that it is only a signal, it should have only a minimal effect on markets.
The toolbox, proposed in the 2011 meeting of the G20 ministers of agriculture, would include mechanisms such as physical or financial commodity price hedges, insurance, and guarantee instruments, as well as countercyclical lending, which could help vulnerable countries mitigate the risks associated with excessive food price volatility. Two initiatives are being implemented. The first, under the management of the International Finance Corporation, involves a new Agriculture Price Risk Management tool that will allow producers and consumers to hedge against downside or upside price risks on a pilot basis. The second is a World Bank proposal to facilitate governments’ access to risk management markets. It entails helping to structure and execute financial and physical commodity risk hedging and to build capacity related to the legal, regulatory, and technical requirements associated with using these tools. Both of these initiatives will need to be evaluated to ensure their effectiveness, viability, and sustainability.
Stricter regulation. Since late 2005 problems have plagued the futures and cash markets for maize, soybeans, and wheat. The main problem is lack of convergence between cash and futures prices. To address this issue, the US Commodity Futures Trading Commission, other agencies in the US government, and the European Commission, along with the futures industry, have moved forward with setting seasonal storage rates, imposing limits on the number of delivery certificates an entity can hold for noncommercial purposes, and putting out an additional issue of the Commitments of Traders report to increase transparency. For example, in October 2011 the US Commodity Futures Trading Commission approved caps on speculation in food, energy, and metals, restricting the size of positions to 25 percent of deliverable supply. If the structural changes put in place do not significantly improve the price convergence between futures and cash prices, then a cash-settled contract must be seriously considered.
The global food price crises of 2007–08 and 2010–11 led to economic difficulties for the poor, contributed to political turmoil in many countries, and in the long run could undermine confidence in global food markets, thereby hampering these markets’ performance in balancing fundamental changes in supply, demand, and production costs. More important, food price crises can result in unreasonable or unwanted price fluctuations that can harm the poor, especially by compromising their nutrition security. One consequence is long-term, irreversible nutritional damage, especially among children. Therefore these recent food market episodes highlight the need to reform the architecture of international financial and agricultural markets to address the problem of price spikes and protect the most needy and vulnerable.
In response to the food price crises, a mix of policy actions have been taken. Many countries have tried to build up costly national reserves, and others have focused on increasing self-sufficiency. Still others have lost confidence in the reliability of food trade in global markets, which has led some countries to acquire farmland overseas to ensure national food security. In addition, some countries are pressing for more regulation of commodity exchanges—however, whether this would prevent extreme price spikes or instead distort markets even further is questioned. All of these policy actions threaten to move food and agriculture markets further away from efficient arrangements. A more promising step may be regionally coordinated reserves, as recently planned by the Association of Southeast Asian Nations. This global problem needs international institutional responses.
The analysis here points to three clear messages. First, we need to respond to the structural problems faced by the agricultural sector—that is, the concentration of global exports of staple grains among just a few exporters, the low levels of global grain stocks, and the lack of appropriate information. Second, it is crucial to evaluate the effects of policies designed to promote biofuels and investments in derivative markets, such as commodity futures, as well as the limited actions taken to cope with the risks of climate change, such as weather insurance. Finally, we will need to carefully monitor many current actions being taken to reduce the frequency of price spikes and excessive volatility to assess how cost-effectively they cope with the new developments in global food markets.
Rethinking the Role of Food Reserves
Peter Timmer, Professor Emeritus, Harvard University
In 2011, the world again saw proof that large food reserves dampen the volatility of food prices, as large rice stocks in India kept global rice prices from following wheat and maize prices to record high levels. Although they are costly to maintain, larger food reserves provide supplies in times of crisis. More importantly, in vulnerable countries, reserves build confidence that trade remains the most efficient mechanism for stabilizing domestic food economies. Low levels of foodgrain reserves, on the other hand, make commodity markets nervous and subject to sudden demand and supply shocks—and even to speculative activities. Therefore, if less volatile food prices are desired, two questions remain: How large should grain reserves be? And who should own them?
Private markets have a clear and coherent answer to the first question, but only if governments stay out of the business of holding grain stocks. Long-standing models show that optimal storage levels exist when price expectations match the expected returns from holding grain in storage. Unfortunately, with regards to ownership, foodgrain stocks held in private hands are usually insufficient to provide a politically acceptable level of food security, especially in large countries. This typically results in governments stepping in to stabilize domestic food prices, using one of two basic methods: (1) imposing restrictions on food trade, which tends to increase price volatility in world markets, or (2) enabling public ownership of food reserves, which can be expensive.
The evidence supporting the need for large grain reserves clearly exists, but collective action at the global level is not likely. Helping countries build up their own domestic reserves, however, is possible. Larger reserves will help stabilize the global food economy and thus allow trade to play a larger (and less disruptive) role. If the international development community, in partnership with governments of large countries, wants a more stable global food economy, we need to change the long-run incentives for stockholding behavior and use increased stocks to build confidence in the role of the international market for foodgrains. Because holding larger stocks will turn out to be very expensive, a scenario can be imagined where the larger stocks are built gradually and steadily create renewed confidence in the world grain market as prices become more stable. Stocks will then be reduced (gradually) as the reality of the fiscal burden sinks in. What should remain is the renewed trust in trade and how it can help even large countries sustain their food security.
1 - C. Martins-Filho, M. Torero, and F. Yao, “Estimation of Quantiles Based on Nonlinear Models of Commodity Price Dynamics and Extreme Value Theory” (Washington, DC: International Food Policy Research Institute, 2010), mimeo. [Back]
2 - Figure 2 shows the results of a model of the dynamic evolution of daily returns based on historical data going back to 1954 (known as the Nonparametric Extreme Quantile [NEXQ] Model). This model is then combined with extreme value theory to estimate higher-order quantiles of the return series, allowing for classification of any particular realized return (that is, effective return in the futures market) as extremely high or not. A period of time characterized by extreme price variation (volatility) is a period of time in which we observe a large number of extreme positive returns. An extreme positive return is defined to be a return that exceeds a certain pre-established threshold. This threshold is taken to be a high order (95 percent) conditional quantile (that is, a value of return that is exceeded with low probability: 5 percent). One or two such returns do not necessarily indicate a period of excessive volatility. Periods of excessive volatility are identified based on a statistical test applied to the number of times the extreme value occurs in a window of 60 consecutive days. [Back]
3 - P. Al-Riffai, B. Dimaranan, and D. Laborde, “Global Trade and Environmental Impact Study of the EU Biofuels Mandate,” report on a study carried out by the International Food Policy Research Institute (IFPRI) for the Directorate General on Trade of the European Commission (Brussels, 2010), mimeo; P. Al-Riffai, B. Dimaranan, and D. Laborde, “European Union and United States Biofuel Mandates: Impacts on World Markets,” Technical Notes No. IDB-TN-191 (Washington, DC: Inter-American Development Bank, 2010); D. Laborde, Assessing the Land Use Changes Consequences of European Biofuel Policies and Its Uncertainties, ATLASS research report for the Directorate General on Trade of the European Commission (Brussels, 2011). [Back]
4 - Organisation for Economic Co-operation and Development, Rising Food Prices: Causes and Consequences, OECD Policy Report (Paris, 2008); J. von Braun, Rising Food Prices: What Should Be Done? IFPRI Policy Brief (Washington, DC: International Food Policy Research Institute, 2008); US Department of Agriculture, World Agricultural Outlook Board, World Agricultural Supply and Demand Estimates, WASDE-460 (Washington, DC, 2008); D. Headey and S. Fan, Reflections on the Global Food Crisis: How Did It Happen? How Has It Hurt? And How Can We Prevent the Next One? Research Monograph 165 (Washington, DC: International Food Policy Research Institute, 2010); HM Government, The 2007/08 Agricultural Price Spikes: Causes and Policy Implications (London: Department for Environment, Food and Rural Affairs, 2010). [Back]
5 - R. H. Kripalani, J. H. Oh, A. Kulkarni, S. S. Sabered, and H. S. Chaudhari, “South Asian Summer Monsoon Precipitation Variability: Coupled Climate Model Simulations and Projections under IPCC AR4,” Theoretical and Applied Climatology 90, nos. 3–4 (2007): 133–159; M. J. Salinger, “Climate Variability and Change: Past, Present, and Future—An Overview,” Climatic Change 70, nos. 1–2 (2005): 9–29; K. Viatcheslav, F. W. Zwiers, X. Zhang, and G. C. Hegerl, “Changes in Temperature and Precipitation Extremes in the IPCC Ensemble of Global Coupled Model Simulations,” Journal of Climate 20, no. 8 (2010): 1419–1444; F. Giorgi, X. Bi , and J. Pal, “Mean, Interannual Variability and Trends in a Regional Climate Change Experiment over Europe. II: Climate Change Scenarios (2071–2100),” Climate Dynamics 23, nos. 7–8 (2004): 839–858. [Back]
6 - G. C. Nelson, M. W. Rosegrant, A. Palazzo, I. Gray, C. Ingersoll, R. Robertson, S. Tokgoz, et al., Food Security, Farming, and Climate Change to 2050: Scenarios, Results, Policy Options (Washington, DC: International Food Policy Research Institute, 2010). [Back]
7 - M. Hernandez and M. Torero, “Examining the Dynamic Relationship between Spot and Futures Prices of Agricultural Commodities,” in Commodity Market Review 2009–2010 (Rome: Food and Agriculture Organization of the United Nations, 2010). [Back]
8 - W. Martin and K. Anderson, “Trade Distortions and Food Price Surges,” paper prepared for the World Bank–University of California, Berkeley, conference “Agriculture for Development—Revisited,” Berkeley, CA, USA, October 1–2, 2010. [Back]
9 - B. Wright, International Grain Reserves and Other Instruments to Address Volatility in Grain Markets, Policy Research Working Paper 5028 (Washington, DC: World Bank, 2009). [Back]
10 - P. Timmer, “Reflections on Food Crises Past,” Food Policy 35, no. 1 (2010): 1–11. [Back]
11 - B. Wright, Speculators, Storage, and the Price of Rice (Giannini Foundation of Agricultural Economics, University of California, Berkeley, 2008); Wright, International Grain Reserves and Other Instruments to Address Volatility; A. Evans, The Feeding of the Nine Billion: Global Food Security for the 21st Century (London: Chatham House, 2009). [Back]
12 - Martins-Filho, Torero, and Yao, “Estimation of Quantiles Based on Nonlinear Models of Commodity Price Dynamics.” [Back]
13 - A. Sarris, Hedging Cereal Import Price Risks and Institutions to Assure Import Supplies, FAO Working Paper (Rome: Food and Agriculture Organization of the United Nations, 2009). [Back]
14 - Wright, International Grain Reserves and Other Instruments to Address Volatility; J. Lin, “Prepared Remarks Presented at the Roundtable on ‘Preparing for the Next Global Food Price Crisis,’” Center for Global Development, Washington, DC, October 17, 2008. [Back]
15 - J. von Braun and M. Torero, Physical and Virtual Global Food Reserves to Protect the Poor and Prevent Market Failure, Policy Brief 4 (Washington, DC: International Food Policy Research Institute, 2008). [Back]
16 - Lin, “Prepared Remarks Presented at the Roundtable”; J. von Braun, J. Lin, and M. Torero, “Eliminating Drastic Food Price Spikes: A Three-Pronged Approach for Reserves,” note for discussion (International Food Policy Research Institute, Washington, DC, 2009); and for rice: Timmer, “Reflections on Food Crises Past.” [Back]
17 - von Braun and Torero, Physical and Virtual Global Food Reserves; J. von Braun and M. Torero, Implementing the Physical and Virtual Food Reserves to Protect the Poor and Prevent Market Failure, IFPRI Policy Brief 10 (Washington, DC: International Food Policy Research Institute, 2009); J. von Braun and M. Torero, “Exploring the Price Spike,” Choices 24, no. 1 (2009), accessed March 16, 2012. [Back]