LESSONS FOR THE FUTURE 97


account the clear preference of developing countries for domestic market stabilization. Another potentially important implication of our research on both the 1972–74 and 2008 crises is that it is the actions of major grain traders (exporters and importers) that has the greatest impact on international mar- kets. As a result, binding agreements between a smaller set of large producers and importers may be sufficient to stabilize international markets.


Addressing Long-Term Threats to Global Food Production The global system largely satisfies the objective of producing sufficient food to feed the world’s population. Moreover, as noted above, the short-term supply response to the most recent crisis was surprisingly strong. But despite these encouraging signs that the production side of the global food system did address the food crisis adequately, several prevailing trends threaten the long-term security of global food production. The challenge most relevant to the food crisis is clearly the diversion of crops from food or feed to biofuels. As noted in Chapter 2, a growing number of studies are finding that biofuels production has a large positive impact on food prices, but virtually no negative impact on energy prices. In the foreseeable future, biofuels production does not look good for global food security, unless ways can be found to minimize the diversion from food production or involve poor farmers in biofuels produc- tion. But technologies and investments that would achieve these outcomes seem a long way off.


A second major challenge to longer term food production is climate change and resource degradation. We found that there is no real evidence that envi- ronmental factors were a major cause of the crisis—the only potential link is Australia’s unusually severe drought—but some studies find that climate change and resource degradation could severely impact food production in much of the developing world (Lobell et al. 2008; Slater et al. 2008). We also found no link between the food crisis and the “affluent diets” hypothesis. Moreover, in the past increasingly affluent diets seem to be asso- ciated with a decline in real prices (after all, U.S. cereal prices have declined with only a few interruptions since the 19th century). Nevertheless, policy- makers and researchers should not ignore the potential impacts—positive or negative—that increasingly affluent diets and climate change may have on food security in the future.


Improving Social Protection


In response to rising international prices governments and aid agencies have used a wide range of tools to directly or indirectly protect consumers from rising food prices (World Bank 2008a; Demeke, Pangrazio, and Maetz 2009). These include:


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