On Friday November 4, G20 leaders issued a Cannes Summit Final Declaration , wrapping up the 2011 G20 Summit. Among the issues addressed at this year's summit was the challenge posed by food price volatility and its impact on global food security, as well as the need to create an international emergency humanitarian food reserve system. In this final statement, G20 leaders welcomed the plan of the Economic Community of Western African States (ECOWAS) to set up a regional emergency food reserve system as a pilot program.

FAO GIEWS released today the November 2011 Final Food Outlook, a comprehensive analysis of the global agricultural market situation. According to the report, the outlook for the agricultural commodities markets remains difficult to predict; despite improved supply prospects and weakening demand for several important commodities, volatile prices and the uncertain global economic situation continue to play a part in high food prices.

In a long-awaited move, the US Commodity Futures Trading Commission on October 18 approved limits on trading in the commodities markets . Specifically, the new rules limit the number of commodity contracts that any investor can hold in agriculture, energy, or metals contracts. The trade limits, originally mandated in the Dodd-Frank Financial Reform Act which was passed in July 2010, stemmed from worldwide concerns that commodity index and other funds contributed to the 2008 surge in food and fuel prices, and could again be contributing to recent price spikes.

The ongoing crisis in the Horn of Africa has shown that the challenge of food insecurity is alive and well. The 2011 G20 meetings have paid particular attention to the issues of high food prices, food price volatility, and food insecurity. G20 leaders have involved leading international institutions, such as the FAO, IFAD, WFP, and IFPRI, and have established several action plans to address these important issues.

Download the scoping report on the Agricultural Market Information System, designed to improve food market transparency and information-sharing.

The ongoing crisis in the Horn of Africa has shown that the challenge of food insecurity is alive and well. The 2011 G20 meetings have paid particular attention to the issues of high food prices, food price volatility, and food insecurity. G20 leaders have involved leading international institutions, such as the FAO, IFAD, WFP, and IFPRI, and have established several action plans to address these important issues.

View a presentation by Maximo Torero (Division Director, Markets, Trade and Institutions Division, IFPRI) on food security and the G20.

In a recent issue of Foreign Affairs , Christopher Barrett and Marc Bellemare write a stimulating note on the recent price movements in agricultural commodity markets. They appear to have three clear messages for policymakers:

First, price levels and price volatility are different concepts. In recent months, markets have been characterized by very high price levels, but volatility “although high these past few years, is not out of line with historical experience and is generally lower than it was in the 1970s.”

IFPRI launched the Excessive Food Price Variability Early Warning System today. This new tool measures excessive food price variability and is the only mechanism currently available to identify time spans of increased price variability. It is updated daily and forewarns policymakers and humanitarian agencies of periods of time with excessive food price variability.

With food security remaining a critical issue for both developed and developing countries, the Meeting of G20 Agriculture Ministers met on June 22-23 to discuss food price volatility and improved sustainable agricultural policies. The Action Plan developed at the meeting highlights greater sustainable productivity, better market information, more open trade, comprehensive rural development and agricultural policies, and sustained investment in agricultural development.

Download the full report.

Risk characterizes everyday life for many of the world’s poorest households. These households are more likely to be located in environments where livelihoods are highly susceptible to weather and price variability and where health risks are pervasive. Reducing the risks faced by poor households, and enabling poor households to better deal with adverse events when they do occur, is essential to improving their welfare in the short run and their opportunities for income growth in the long run.

G20 leaders at their summit meeting in November 2010 requested FAO, IFAD, IMF, OECD, UNCTAD, WFP, the World Bank, and the WTO to work with key stakeholders “to develop options for G20 consideration on how to better mitigate and manage the risks associated with the price volatility of food and other agriculture commodities, without distorting market behaviour, ultimately to protect the most vulnerable.”