Following the dramatic food price increases in 2007–08, an estimated 150-million people joined the ranks of those who go hungry. Since then, almost nothing has been done to stabilise the market and in 2011 prices reached a new record high. Low international grain stocks are one of the main causes of these crises, says Oxfam International.

On June 22 to 23 the G20 is meeting to discuss the issue of food price volatility. In the preparatory papers, the option of establishing national buffer stocks has been brushed aside using the same arguments that led to their dismantling in the 1990s.

This briefing paper argues that local and national food reserves can play a vital role in price stabilization and food security policies. Contrary to the arguments developed by mainstream economists and echoed by world leaders, several experiences demonstrate that food reserves can be effective in limiting the transmission of international price fluctuations, and are often the last bastion when it comes to supplying domestic markets at times of crisis.

Food reserves can also be an instrument – when combined with other measures – to support domestic productivity gains, thus lowering net food importing countries’ dependence on international markets and enhancing national food security.

Policy makers need to learn from past experience, but solutions also need to be adapted to the context. Regulating markets does not necessarily mean carrying out highly interventionist policies. The time has come to reassess the potential of food reserves in the context of more integrated but also more volatile agricultural markets, and to experiment with innovative and complementary instruments that can improve the efficacy of food reserves, while at the same time addressing market failures and providing benefits and incentives to small-scale farmers.