Food Reserve Stocks and Critical Food Shortages - a Proposal Based on the Needs of Sub-Saharan Africa

This working paper examines the food security policy, where food security means ensuring an adequate supply of food for hungry people. In particular, the recommendations of FAO are being used as a measuring rod against which food security policies are assessed. By means of FAO's database a statistical analysis of all Sub-Saharan Africa countries with respect to measuring the incidence and severity of critical food shortages are carried out. Stock policies seem to have been the answer when issues of ensuring adequate supplies have surfaced. In the paper, an estimate of the costs of keeping stocks is provided, and the costs are quite staggering. Based on the statistical analysis an estimate of the number and volume of acute food shortages per year in Sub-Saharan Africa is achieved. Upon this number a much cheaper alternative to keeping stocks for security purposes is proposed. It is proposed that a financial fund is set up with the sole purpose of purchasing grains on the open market when acute food shortages occur. In order for the fund to achieve its goals it must be completely independent of politics, and the financing and replenishing of the fund must be automatic. The advantages are that a lot of costs are saved which could be used to improve food security policies in developing countries. Furthermore, the supply of food aid is done via a global fund, and is not the result of political considerations in donor (big exporting) countries. The reservations voiced by some developing countries that further liberalisations in agricultural policies in the WTO round of negotiations could jeopardise food security is answered by this fund. Liberalisations of agricultural policies may lead to lower food stocks in the big exporting countries, but the proposed financial fund does not rely on such stocks. It is found that the purchases the fund would have to conduct only comprise a small fraction of the world trade in cereals.