Dealing with High Food Prices: Trade Policy vs. Safety Nets

Outlines how developing countries have typically responded to recent spikes in food prices through the use of trade policies. This compares with orthodox policy advice that risk-management instruments and safety nets should be used to insure producers and consumers against food price volatility as opposed to direct market intervention through production, trade and storage policies. However, the conclusion drawn is that both trade policies and safety nets can exacerbate food price increases, and they should therefore be judged on their relative merits.