These guidelines have been prepared to assist those countries which have moved, or are in the process of moving, towards a liberalised system for marketing agricultural produce and who wish to maintain a strategic grain reserve to guard against possible failures of the free market to cope adequately for the food needs of the population.
Past experience of maintaining strategic grain reserves has mostly been associated with strictly regulated cereal markets in which the government, or a government controlled agency, was the only official participant. With liberalisation interventions by government, unless they are carefully designed, are likely to distort the normal functioning of the market which, in turn, will have implications for the activities of private sector participants. To minimise such disruptions there is a need to adopt a different approach for the management and operation of such reserves which takes into account the mechanisms operating in the free market.
Various options are available for the design and operation of a reserve depending on the medium- to long-term objectives of government and the general conditions influencing the functioning of the market. To assist in this process, various options which should be considered in deciding which are the most appropriate to meet the government's policy objectives are presented in these guidelines.
