Food Commodity Markets in an Age of Overlapping Emergencies: The Case for Price Stabilization

The world has entered an age of overlapping emergencies, with disruptions to food production and transport systems and episodes of extreme price volatility becoming more frequent. In this context, proposals to stabilize food commodity prices have received renewed attention. We argue that the evaluation of price volatility and stabilization schemes, like buffer stocks, is contingent on the choice of theoretical framework. Our paper demonstrates how taking a Keynesian approach alters the standard Neoclassical cost–benefit analysis of buffer stocks, in favor of ex-ante price stabilization schemes. We show how the Keynesian approach offers a better empirical fit for the 2022–2023 food price crisis, which suggests that buffer stocks are a promising policy tool for preparedness against global volatility.