ABSTRACT
The Uruguay Round of the General Agreement on Trade and Tariffs trade negotiations has stimulated numerous studies of the possible economic effects of trade liberalization on world grain markets. The variability of world grain prices also seems likely to decline as increased trading opportunities serve to pool production risks more globally. Even in the absence of sizeable government-owned stocks, private storage, together with the potential buffering effects of the livestock feedgrain market, ought to be able to moderate the price effects of most global production. The International Monetary Fund Compensatory Finance Facility already plays this type of role in providing balance-of-payments support to compensate for precipitous increases in the cost of cereal imports. Much less developed country’s already seek to enhance their food security through programs of national self-sufficiency in basic food grains. Irrigation investments often act to reduce production instability while also increasing average productivity.
