Food stocks and grain reserves: evaluating whether storing food creates resilient food systems

Abstract

Many are worried that the global food system is entering a period of intense volatility driven by a combination of climate change and population growth. One way to address this problem is for governments and the international community to store more food as a buffer against crisis. The purpose of this paper is to explore the role of food storage as a component of a robust food security strategy in the twenty-first century. We do this by first drawing on historical examples from ancient Rome and China, where preindustrial government designed extensive systems that ensured adequate food storage to keep food systems stable. Next, we review the links between food storage and price volatility in the last 20 years and demonstrate that the size of food stores (and in particular grain reserves) directly relates to price volatility. Third, we explore three different types of policies designed to promote grain reserves, the US's Bever-normal granary^policy, the EU's Common Agricultural Policy, and the Strategic Grain Reserve in Africa. In this third section, we show how there has been a decline from state-owned strategic grain reserves in favor of a more market-oriented approach that is dominated by a handful of powerful corporations who maintain sophisticated supply chains. Because data on the amount of food supply these corporations hold in storage are proprietary secrets, it is impossible to assess how resilient or vulnerable this makes our food system. Finally, we conclude that over time, food storage has fallen in and out of favor, criticized for being expensive yet often shown to play an important role in protecting poor consumers in times of food crisis. Given the lack of data on current levels of supply chain and household storage, more research is needed to evaluate the scale at which food storage systems should be implemented to ensure food system resilience as well as the most effective mechanisms to govern and manage them.

The role of storage dynamics in annual wheat prices

“…We find that the overall downward trend in real prices since the 1970s can only be reproduced if this target level is assumed to decline, relative to average consumption (supplementary figure S5). This assumption is consistent with the observed decreasing trend in public stock-keeping, only partially being compensated by private stocks [21].…”

“…Similar arguments can be made on the demand side. End consumers of staple foods typically do not buy directly on the world market, but are at the end of a supply chain including wholesale, processing, and retail enterprises most of which keep some amount of their inputs and/or outputs in storage [21]. Governments also store food grains over longer periods of time as strategic reserves.…”

Reserves and trade jointly determine exposure to food supply shocks

“…We share this approach with other 'cascading shock' models applied to specific food commodities (Puma et al 2015, Gephart et al 2016, virtual water (Tamea et al 2016), industrial sectors linked by input-output relationships (Contreras and Fagiolo 2014) and aggregate economic production (Lee et al 2011). Our model differs from previous work by its inclusion of food reserves, which empirical research has shown may play a major role in the resilience of food systems (Fraser et al 2015).…”

An Empirical Analysis of the Impact of Agricultural Product Price Fluctuations on China’s Grain Yield

“…In the face of food price volatility and food security instability, safeguarding food security is very important [32]. Fraser and Legwegoh believe that national policies are needed to ensure adequate food storage [33]. Paul [34] and Sckokm [35] also thinks so.…”