The policy options in response to the likelihood of increasing volatility in food and commodity prices were explored at the Global Food and Agriculture conference at Wilton Park on Monday 11 – Wednesday 13 April 2011, and summarised in the conference report on 25 May 2011.

Issues discussed at the conference included the roles and effects of speculation, stocks, export restrictions, global markets, trade and governance, farm policies, biofuels, and how to determine who is particularly vulnerable to food price spikes, and how best to assist them.

It was argued that approaches and analysis need to be context-specific. The question of what is meant by volatility, and, whether it is possible to distinguish between it and higher price trends was raised.

Speculation was thought not to have contributed greatly to food prices during the 2007/08 spike but could have increased volatility at certain points, and analysis of this issue should be narrowed to particular groups, products, markets and locations.

Stocks were considered a useful means of helping to reduce volatility, but who should hold them and how they should be managed is unclear.

The application of export restrictions, while at times understandable, was thought to be damaging. It was argued that, with certain exceptions, they should be prohibited. Markets and the international trade system need to remain open in order to work effectively and rules should be tightened to this end. The importance of completing the Doha Round was acknowledged but questions raised about whether it still reflects global realities.

Farmers expect volatility to be a constant in the coming years which, when it leads to higher prices, can provide incentives for them to invest. Volatility in international markets is difficult to address, so national strategies are required to mitigate risk. In the European Union (EU), for example, risk is managed, in part, through direct payments to farmers.

The effects of biofuels, the conflict between energy policies and the welfare of the poor, and the need for more flexible biofuel mandates – in which targets for biofuel use are stipulated by governments – all need to be taken into account when formulating policy.

The provision of safety nets to help vulnerable groups of consumers and producers in poor countries cope with the effects of volatility is essential. More research is required on vulnerability thresholds and coping mechanisms. The importance of sound nutrition and the fact that policies in one area affect those in another need to be recognised. Vulnerable groups should be included in policy-making processes.

Further policy recommendations included the need to: enable low-income countries to benefit from higher prices in staple crops, while simultaneously protecting vulnerable groups; increase investment in infrastructure and agricultural research and development in poor countries; improve the collection, sharing and transparency of data throughout supply chains; and recognise that policy attention will still be required when markets settle, as price spikes will recur.

Investment in agricultural research and development, as well as in infrastructure such as storage facilities, needs to be increased in low-income countries. Agricultural productivity should remain a priority even when commodity prices fall.

Greater transparency and information sharing is required throughout supply chains and also among global institutions. Measures to address volatility fall under the remits of the FAO, the WTO and the World Bank, so understanding and knowledge of the others’ activities is essential.


Wilton Park reports are brief summaries of the main points and conclusions of a conference. The reports reflect rapporteurs’ personal interpretations of the proceedings – as such they do not constitute any institutional policy of Wilton Park nor do they necessarily represent the views of the rapporteur.