The role of transparency in avoiding a COVID-19 induced food crisis

Early in the COVID-19 outbreak, there were concerns that the health crisis would develop into a large-scale food crisis similar to the 2007-08 food price crisis, when panic buying and counterproductive policies exacerbated initial supply disruptions. While food supply chains have seen disruptions, and there are future risks that require attention, a food price crisis has been avoided so far, in part thanks to improved transparency in global staple crop markets.

A recently published OECD policy brief discusses the importance of transparency and the different requirements for effective information-sharing, using the example of the Agricultural Market Information System (AMIS). The key messages in this policy brief are:

• Transparency on market conditions and policies in food and agriculture markets can help reduce market uncertainty, expose bottlenecks and highlight risks. This is essential to avoid panic buying or counterproductive policy responses, and to allow market participants and policymakers to develop more effective responses in times of crisis.
• Transparency is an essential underpinning of well-functioning global markets able to provide a resilient supply of affordable food.
• Transparency is not automatic: it requires investments in gathering comparable information, monitoring market and policy developments, and communicating clearly about the findings.
• The Agricultural Market Information System (AMIS), a G20 initiative created in response to the 2007-08 food price crisis, plays an important role in supporting transparency for the world’s major staple crops (wheat, maize, rice, and soybeans). Thanks to consistent reporting and monitoring on market indicators and policy decisions, AMIS monitors market conditions and identifies where bottlenecks and risks are emerging, helping policy makers to identify priorities for early attention and policy responses.
• During extreme situations as the COVID-19 outbreak, market conditions change quickly, and increasing the frequency of monitoring and reporting is necessary to support informed decision-making. This is more easily achieved where there is an existing infrastructure to build on or scale up, underscoring the importance of investing upfront in the necessary mechanisms and institutions. Timely information to underpin decision-making in times of crisis depends on the investments made in calmer times.
• With risks to food security continuing to accumulate, efforts to increase transparency need to continue across the entire agro-food sector to avoid or minimise the risks of global food crises, now and in the future.