Alternative mechanisms to reduce food price volatility and price spikes

The 2007–08 food price crises caused hardship on a number of fronts in countries throughout the world. The steep rise in food prices led to economic difficulties for the poor and generated social and political turmoil in many countries. Haiti, Egypt, Bangladesh, Cote D'Ivoire, Uzbekistan, Yemen and Indonesia are among the 33 countries that saw violent food riots, demonstrations, or social unrest as a result of rising food prices. In addition to the economic, social, and political impacts, the crisis may also lead to long-term, irreversible nutritional damage, especially among children. For example, across several Latin American countries, simulations have shown important reductions in calorie intakes at both the national level and within vulnerable households with children 0-2 years of age. In all countries, poorer households that were already consuming at levels below the calorie adequacy threshold showed greater reductions in calorie intakes (Robles and Torero 2009). These reductions in calorie consumption are likely to be combined with even stronger reductions in diet quality, inducing long-term health effects that are especially detrimental to already vulnerable populations and should be taken into account on the cost side as solutions to these price spikes are examined.