Publication Globalization - Food Sovereignty Buffer Stocks against Inflation

How public food stocks can stabilize prices and help to transform our food systems



June 2024

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Grain storage in silos in South Africa
Grain storage in silos in South Africa Photo: Jan Urhahn, 2023

The global food crisis is part of a broader polycrisis in which the impacts of climate change and the COVID-19 pandemic have become entangled with the economic and debt crises and the repercussions of geopolitical conflicts and wars. This manifested itself in 2020–2023 in a global food price crisis, which fuelled inflation driven by profit increases. Hedging and speculation on global markets, further pushing up prices that were already soaring during the pandemic.

Higher prices mean that people have to spend a disproportionately high share of their real income on food. Ten million people are pushed into extreme poverty for every percentage point increase in food prices. Low-income households are disproportionately exposed to high inflation, not only in the Global South, but also in Germany.

In the new study Towards a Post-Neoliberal Stabilization Paradigm: Revisiting International Buffer Stocks for an Age of Overlapping Emergencies Based on the Case of Food, commissioned by the Heinrich Böll Foundation, the Rosa Luxemburg Foundation, and TMG Research, Isabella Weber and Merle Schulken analyse how the build-up of national, regional, and global public buffer stocks for food can help stabilize prices on global agricultural markets and limit inflation. The establishment of public buffer stocks for food can also counteract social inequality.

Furthermore, buffer stocks secure the physical availability of key staple foods, minimizing the risk of shortages and promoting food security. Stocks that are explicitly created to increase food security can help to balance out short-term fluctuations in price and volume (for producers and consumers alike) and limit price peaks.

In this policy paper based on the study, Isabella Weber and Merle Schulken (University of Massachusetts Amherst), Lena Bassermann (TMG), Lena Luig (Heinrich Böll Foundation), and Jan Urhahn (Rosa Luxemburg Foundation) conclude that public buffer stocks for food, if linked  with the right state incentives, can help to transform food systems. For instance, public procurement of agricultural commodities can be linked to diversified and agroecological cultivation.

The procurement of agricultural goods can, for example, be linked to reduce the use of synthetic fertilizers and chemical pesticides, or to the use of open-pollinated seed varieties adapted to local conditions. Purchasing a wide range of storable agricultural commodities would secure incomes for regional producers and diversify cultivation on the one hand, while reducing the need to import staple foods on the other, making economies less dependent on volatile markets.

The United Nations Food and Agriculture Organization (FAO) could be tasked with the global coordination of a public buffer stocks for food system. Stocks for key staple foods such as maize, rice, wheat, vegetable oils, and other products could be set up at strategically important locations. In times of sharp price increases, a decision could be made to release stocks and thus stabilize prices.

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