Coping with external shocks to food and nutritional security
The sharp commodity price spikes in 2007-08 underscored the fragility of the world’s food systems in their ability to ensure food security for the poor. Macroeconomic policies that led to large exchange rate shifts, crop failures as a result of droughts and natural calamities, higher prices on world energy markets and increased biofuels demand all contributed to the price surges.
Excessive price volatility on international markets encourages inward-looking strategies of self-sufficiency at the expense of efficiency in use of scarce resources or comparative advantage. Unfortunately, such strategies set the stage for increased world price fluctuations in the future.
The coping mechanisms of poor households are few, given their limited assets and the fact that the economic crisis occurred so soon after the food crisis.
In coping with economic and other external shocks, government policy responses must protect and promote those investments in public goods and services that build long-term capacity and resilience of the agricultural and rural sectors.
To avoid recurrence of food crises, vulnerable countries need to enhance investment in research, development and extension services that are essential for food security in the future.