AGRICULTURE ministers of the leading economic powers want information on how a global grain stocks buffer would work to help humanitarian emergencies and limit price volatility.
A modest global grain reserve might have a role in humanitarian emergencies, but a big stock building program should not be overemphasized as a solution to hunger and price volatility.
The global grain reserve idea was raised at a recent meeting in Italy of agriculture ministers from the eight leading economies, including Canada, plus major developing countries such as China and India.
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The extraordinary gathering was a response to the turmoil sparked by shortages and soaring food prices in 2007-08 and the wider economic meltdown now causing people to distrust markets and look to governments for a more balanced system.
The farm ministers wisely avoided rash action and called for an investigation to see whether a grain reserve would be effective and how it might work.
They also denounced protectionism in farm trade, supported more public and private investment in sustainable agriculture and rural development, supported an analysis of factors affecting price volatility in commodity markets, including speculation, and encouraged biofuel production from new non-food sources.
These latter ideas would likely have more success in feeding the world’s growing population and stabilizing farming than setting up a version of the reserve that the biblical Joseph created during the seven fat years in Egypt, preparing for the lean years to come.
Managing such a storehouse in a single country might be possible, but an international effort would likely be rife with problems and disagreements.
Grain importing countries would want its management oriented toward keeping prices low while exporters would want higher prices. It would be hard to ever favour the interests of exporting farmers when people are hungry – and there are always hungry poor people.
Remember, hunger and poverty were serious global problems even when grain prices sank to unsustainable lows early this decade.
Also, a global stocks reserve would likely create a price-depressing complacency because buyers could expect that whenever production fell short of demand, the storehouse would simply release grain.
As for managing the reserve, previous and current examples of international co-operation and intelligence do not instill confidence.
Even if it is a model of efficiency, it would likely be no faster or better at relieving shortages than the market.
After all, the market reacted quickly as shortages developed in 2007. The rally that began in the summer of 2007 sowed seeds that autumn that would lead to a record world harvest in 2008.
Grain prices began dropping as soon as it became clear that the bounty would be harvested.
In future meetings, farm ministers should focus on ensuring farmers, especially those in poor countries, can produce to their best ability. To do so they need investment, information, technology, credit, market information and transportation.
In so doing, farm ministers will follow other ancient advice: Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.
Bruce Dyck, Terry Fries, Barb Glen, D’Arce McMillan and Ken Zacharias collaborate in the writing of Western Producer editorials.
