ABSTRACT
This combination of high and volatile food prices understandably raises global food security concerns. One consequence is that food price volatility has been high on the agenda of the G8 and G20 meetings (FAO et al., 2011). However, the set of factors influencing the long-run trend level of food prices is not the same as the set affecting the short-run volatility of food prices around that trend. As well, the distributional and poverty effects of food price spikes – and of policy responses to them – differ from the effects associated with changes in the trend price level. This is important to recognize because unless societies and governments clarify what concerns them most and understand the underlying causes, they will not be able to identify the most appropriate and cost-effective policy actions or reforms to ease those concerns.
