Review of stockholding policies

Transcription

1 Review of stockholding policies Annelies Deuss Trade and Agriculture Directorate OECD Global Forum on Agriculture 2 December 2014, Paris

2 Outline presentation 1. The renewed interest in public stockholding 2. Classification of public stocks 3. Public stocks that influence prices 4. Factors that affect the potential of stock programs to achieve their objectives 5. Other impacts of buffer stocks and social safety net stocks 6. Discussion points for the forum OECD Trade and Agriculture Directorate 2

3 Renewed interest in public stockholding food price crisis Loss of confidence in the ability of international markets to guarantee a stable food supply Countries reconsider stockholding policies as a way to: Reduce price volatility Address food shortages Public stocks have grown significantly since 2007 Many developing countries plan to continue expanding their public stocks in the future OECD Trade and Agriculture Directorate 3

4 Types of public stocks Classification according to the primary purposes of the stocks: 1. Buffer stocks used to stabilise commodity prices aim to protect producers from price drops and/or consumers from price hikes Influence prices 2. Social safety net stocks working stocks for regular food distribution programs aim to provide social safety nets for the impoverished and the chronically food insecure 3. Emergency stocks provide assistance during transitory food shortages and crises, which are caused by sudden supply shocks, such as natural disasters 4

5 Public stocks that influence prices Type of stock Buffer stocks Purpose Influence on prices Stabilise prices Alter price levels Target Producers Consumers Social safety net stocks Distribute food at subsidised prices Consumers Note: Not easy to distinguish between the different types of stocks Impossible to separate stockholding policies from other domestic policies OECD Trade and Agriculture Directorate 5

6 Factors that affect the potential of stock programs to achieve their objectives Multiple and conflicting objectives reduce performance increase costs Decisions related to the design and overall working of the program Physical amount of stock to keep, how to finance the program, rules for procurement and release, composition of the stock, location of the stock, Physical and financial limitations Country cannot keep buying stock (not enough funds/warehouses, huge stockpiles) Country cannot keep releasing stock: once depleted, program loses capability to achieve its objectives OECD Trade and Agriculture Directorate 6

7 Other impacts of buffer stocks and social safety net stocks Distributional impacts Inefficient targeting can increase inequality Programs that aim to provide high prices for producers and low prices for consumers often only achieve one goal at the expense of the other mainly buffer stocks Fiscal impacts Direct costs Opportunity costs (less funding is available for programs that might be more efficient at reducing price risk) mainly buffer stocks OECD Trade and Agriculture Directorate 7

8 Impacts of buffer stocks and social safety net stocks (continued) Crowding out of the private sector Unpredictable acquisition and release of public stocks Large public stock programs Unwanted international spill-overs Acquisition or release of large amounts of grains can affect world market prices Import tariffs and export restrictions improve working of buffer stocks but have detrimental effects on trading partners buffer stocks OECD Trade and Agriculture Directorate 8

9 Discussion points for the forum How can the design of stockholding programs be improved so that their negative impacts on domestic and neighbouring economies are minimized? Is it possible for stockholding programs to target both consumers and producers? How can it be ensured that stockholding programs reach their intended beneficiaries? OECD Trade and Agriculture Directorate 9

10 Thank you! OECD Trade and Agriculture Directorate 10