In 2007, global markets experienced significant and rapid fluctuations of varied duration in the prices of some foodstuffs. As a result, many ACP countries suffered from rising import costs and a profound disruption of local food markets. This trend led to a geopolitical crisis and instability not witnessed in recent times. The crisis hit the poorest households hardest, exacerbating malnutrition and triggering widespread civil unrest.
The underlying causes were extreme climate conditions, increased use of farmland to supply the growing biofuels and animal feed industry, the explosion of trading on food futures markets, export restrictions, a high degree of concentration in export markets (operators and countries) and low levels of cereal reserves.
A new period of instability occurred in 2010; however, echoing the action plan adopted by the G20 in Cannes to address price volatility, experts attending a recent Brussels Development Briefing1 recommended a number of measures aiming to limit price swings or mitigate their effects. In the short term, it is crucial to create or restore small-scale emergency food reserves, to improve information systems on market data, and to set up safety nets for the most vulnerable consumers and producers. In the long term, the most important goal is to promote increases in productivity, particularly among smallholders. It is important for ACP countries to take these measures on board, since they are most at risk from food price volatility.
