In 2011, the G20 Agriculture Ministers released an action plan on food price volatility and agriculture to address sustainable increases in agricultural production and productivity. The plan recognized that such increases would necessitate improvements in land and water management, improved agricultural technologies, a strong enabling environment with increased investment, particularly from the private sector, well-functioning markets and better market information, and efforts to mitigate and manage the risks associated with excessive agricultural commodity price volatility. Addressing all of these factors calls for programs that are adapted to countries’ and regions’ specific situations, particularly the role of smallholder producers.
The Action Plan encompassed five major objectives: (1) improve agricultural production and productivity in both the short and the long term in order to respond to a growing demand for agricultural commodities; (2) increase market information and transparency in order to better address and manage expectations from governments and economic operators; (3) strengthen international coordination in order to enhance confidence in international markets and to prevent and respond to food market crises more efficiently; (4) improve and develop risk management tools for governments, firms, and farmers in order to build capacity to manage and mitigate the risks associated with food price volatility, particularly in the poorest countries; and (5) improve the functioning of agricultural commodities’ derivatives markets.
Among the actions set forth, the establishment of the Agricultural Market Information System (AMIS) is particularly important for its focus on timely, accurate, and transparent food price and agricultural market information. The system encourages market players to share data, to enhance existing information systems, to promote greater understanding of food price developments, and to further international policy dialogue and cooperation.
The Food Security Portal supported the Action Plan through the establishment of the Food Price Excessive Volatility Early Warning System. The tool provides information to AMIS on price variability in global markets and shows when periods of excessive price variability are occurring. It also supports the G20’s call for improved early warning systems by providing policymakers with a global trigger mechanism to develop country-level contingency plans, including the need to release and use grain reserves during periods of extreme price variability. An example of one such plan is the World Food Programme’s emergency humanitarian food reserve, which is now being implemented by ECOWAS.