I am a student taking H2 economics at the 'A' levels. Recently, in one of our case study questions in one of the tutorials on the price mechanism and its applications, we covered the food crisis. As I was taught, two features define a food crisis:

  1. Shortage of food

  2. Prices of food going up

The case study covered the different strategies employed by governments to tackle the crisis. These strategies included having food reserves, giving subsidies to the producers of food crops and making investments in research and development. My teacher only discussed the latter two but not the first one. It is the first strategy (having food reserves) that I am rather interested in. Upon some researching online, I've found out that having food reserves has been a strategy which has received mixed attitudes from the people over the past few decades.

In a more chaotic and less secure world, governments pursued the strategy of having food reserves as it would act as a buffer in times of crisis, preventing price from going up too much. In a more secure and peaceful global climate, governments did not pursue this strategy so rigorously as there was no incentive to do so because governments relied on the fact that they could draw on global reserves in times of shortage.

I would like to understand this policy in more detail. Why has it received criticisms by academics and why is it encouraged in today's global climate?



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