Leveraging strategic grain reserves to enhance food security

Global hunger and malnutrition are rising again after decades of progress. In 2024, 343 million people across 74 countries faced acute food insecurity—driven by the lasting effects of the COVID-19 pandemic, conflicts, and economic shocks.

In addition, food supply disruptions at local and global levels have become more frequent and severe. Since the 2007–08 global food price spike, countries have increasingly restricted food exports during inflationary periods, heightening supply risks for import-dependent nations. Geopolitical tensions have made it even harder for international trade to quickly soften food price shocks. Another concern is the lack of sufficient resources and access to support households facing acute food insecurity with humanitarian assistance or government safety nets. 

Strategic grain reserves can help address the abovementioned concerns

Strategic grain reserves (SGRs), which are government-managed stockpiles of staple grains, can play a vital role in making sure food is available in times of emergency when food supply is disrupted, particularly in import-dependent, vulnerable and isolated countries. However, managing SGRs calls for careful consideration of fiscal costs and market distortions. SGRs are most effective when integrated with broader food security strategies in which trade, private sector development, and safety nets play important complementary roles. One thing is clear: SGRs are likely to fail if aimed solely at achieving food price stabilization.

A new report titled Strengthening Strategic Grain Reserves to Enhance Food Security, jointly published by the World Bank, the World Food Programme, and the Food and Agriculture Organization, provides guiding principles for policymakers and development practitioners to design and manage SGRs effectively with an eye to advancing long-term food security.

Focusing on country-level rather than regional or global SGRs, which have historically faced significant challenges for various reasons, the report finds that SGRs can play a larger role in net food-importing nations and need to be designed with specific country contexts in mind.  

Guiding principles to keep SGRs small, simple, and smart for improved food security

According to the report, SGRs can generate positive results if they align with broader food security strategies and follow key guiding principles, some of which are outlined below:

• Ensuring effective governance and communication: The success of SGRs hinges on adhering to clear and well-defined objectives, in the absence of which many public stock initiatives end up failing.  Stock size, procurement, and release decisions should follow market principles, be limited in scope, and be communicated in a timely manner.
• Keeping reserves small and costs manageable: Maintaining SGRs can be costly due to their size, combined with the uncertainties associated with emergency situations. To reduce costs, countries should keep the relatively small reserves, optimize the timing of stock procurement and releases, and minimize SGR-related expenses. To minimize price distortion, SGRs should focus on mitigating food supply disruptions and providing relief during crises, not on generating profits or stabilizing prices.
• Ensuring smart SGR replenishments and releases: Effective strategies for procurement include acquiring staple grains transparently at market prices through open tenders. Integrating smallholder farmers into procurement mechanisms and prioritizing supplies from regions with limited traders’ presence can yield development benefits. Releasing stocks through market channels such as auctions and commodity exchanges can enhance market functionality, ensure price transparency, and increase food availability during price surges.
• Integrating SGRs into social safety net programs: Where releases through market mechanisms have limited impacts, SGRs should be integrated with safety net programs to ensure food reaches vulnerable populations during emergencies.
• Investing in infrastructure and innovation: Investing in transport connectivity, modern and resilient grain storage, and digital monitoring technologies can further reduce costs and maintain grain quality by minimizing losses and detecting early spoilage and pest infestations.

Looking ahead, SGRs merit renewed attention and targeted investment. Theycan maintain compatibility with liberalized grain markets, avoid large-scale interventions, and respond pragmatically to food supply disruptions. While their design will typically vary from country to country, keeping them small, simple, and smart can maximize efficient management, cost-effectiveness and food security impacts, and increase the chances that SGRs can complement other policy efforts.

Source : World Bank