Copy of Policy Note 1

This policy brief by Jayati Ghosh for the South African Institute of International Affairs examines the drivers of global food insecurity, specifically the 'ratchet effect' where domestic food prices in low- and middle-income countries remain high even after global prices fall. The author argues that recent price spikes were driven by financial speculation and agribusiness profiteering rather than supply shortages, and proposes a series of strategic interventions including public buffer stocks, financial regulation of commodity markets, and capital flow management to protect vulnerable economies.

• Global food insecurity has increased significantly, with approximately 122 million more people facing hunger in 2022 compared to 2019, and over 3.1 billion people unable to afford a healthy diet in 2021.
• The sharp rise in global food prices in early 2022 was not caused by supply shortages from the Ukraine War, but rather by financial speculation in commodity futures and profiteering by large agribusinesses.
• Low- and middle-income countries (LMICs) experience a 'ratchet effect' where domestic food prices continue to rise even when global indices fall. For example, while the FAO Global Food Price Index dropped 11.5% in the year leading to September-October 2023, food prices in low-income countries rose by nearly 30% during the same period.
• Currency depreciation in LMICs, driven by external shocks such as tighter monetary policies in advanced economies and the COVID-19 pandemic, has exacerbated food insecurity by making imports costlier and creating debt distress in at least 70 countries.
• The author proposes the implementation of public buffer stocks and strategic grain reserves to reduce price volatility and incentivize sustainable agriculture, noting that India and China already use such systems.
• To stabilize global prices, the brief recommends re-regulating commodity markets in the US and EU by imposing strict capital and margin requirements and closing the 'swap-dealer loophole' to prevent purely financial institutions from speculating on food futures.
• The South African G20 presidency is encouraged to lead efforts on buffer stocks, capital flow management, and an expert review with the FAO and UNCTAD to examine how speculative activities drive food insecurity.

APA

South African Institute of International Affairs (n.d.). Copy of Policy Note 1. https://saiia.org.za/wp-content/uploads/2024/09/SAIIA_PN_7_G20FoodSecurity.pdf

Chicago

South African Institute of International Affairs. Copy of Policy Note 1. n.d. https://saiia.org.za/wp-content/uploads/2024/09/SAIIA_PN_7_G20FoodSecurity.pdf.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Copy of Policy Note 1 |url=https://saiia.org.za/wp-content/uploads/2024/09/SAIIA_PN_7_G20FoodSecurity.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairsndcopy, author = {{South African Institute of International Affairs}}, title = {{Copy of Policy Note 1}}, institution = {South African Institute of International Affairs}, url = {https://saiia.org.za/wp-content/uploads/2024/09/SAIIA_PN_7_G20FoodSecurity.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }