World Food Policy Volume/Issue 2-2/3-1 Fall 2015/Spring 2016 | Page 136

Food Security in an Age of Falling Commodity and Food Prices

international community was deeply
concerned about global food security
and the world’s capacity to feed a growing
population. Several high-level meetings
were held, all the way up to the ranks of
heads of state and government, to consider
programs that could improve the state of
affairs. And indeed, all sorts of promises
were made to assist countries in need, to
calm down the situation on international
food markets and to foster the productivity
of world agriculture.1

After their 2008 peak, food prices
on international markets as well as prices
of other commodities declined again
for some time, though by far not to the
much lower levels that had prevailed
before 2007. But then prices began to
rise again, and for a number of years
they fluctuated around rather high levels,
with an extraordinary degree of volatility.
Beginning in 2014, though, commodity
and food prices embarked on a declining
trend that appears to continue, if not to
accelerate, until these days. While the
precarious situation of food consumers
was a major matter of concern in the years
following 2007, the fate of farmers around
the world has come into sharp focus as
agricultural commodity prices appear to
be ever declining. Yet, as many farmers,
in particular in developing countries, are
also poor food consumers, the pressure
that declining farm product prices impose
on farm incomes may also have negative
implications for their food security. This
complex web of relationships between
changing market trends and food security
was the theme of the presentation to the

Bangkok World Food Policy Conference
in December 2015 on which this article is
based.

When discussing this theme,
three specific questions would appear
to be particularly relevant. (1) Is the
price decline experienced in the recent
past likely to continue? (2) What are the
implications for world food security?
(3) How should policies, both domestic
and international, respond? The article is
structured along the lines of these three
questions. The focus will be on prices
of food and agricultural commodity
prices, while other commodities will be
mentioned only in passing. Given the
limited time available for the presentation,
the treatment of the theme dealt with here
is necessarily somewhat selective if not
eclectic.

Is the Current Price Decline Likely
to Continue?

O

ne of the most frequently cited
sources of information on
international market prices for
food and agricultural commodities is the
Food and Agriculture Organization (FAO)
of the United Nations. A frequently used
FAO graph showing price developments
is reproduced in Figure 1. A quick view
at the lines in this graph may suggest that
prices of major food commodities have
declined dramatically in recent months. A
naive observer might get the impression
that they are in free fall, possibly even
approaching zero. It is, though, important

1

For a discussion of the factors that had triggered the price spikes on international food ma