Can the Next Rice Crisis be Prevented?

Food prices have always fluctuated, and indeed it is important that they do so, at least to some extent, for a variety of reasons (for example to smooth the availability of supplies over time at a reasonable cost). But there are substantial costs to food price volatility, both economic and political (Timmer, 1989; Dawe, 2001; Myers, 2006), and the rice crisis brought these costs into sharp focus. These costs suggest that the optimal level of price stabilization is nonzero.