This paper deals with the precise policy issue raised by the increased volatility in grain prices. While price stabilization implies different sorts of costs, it brings benefits to several social groups, as well as to society in general. The case of rice in Asia is used as an illustration of such benefits. Assessing the benefits should not rely too heavily on Armington elasticity considerations, as the latter appear as highly policy-dependent in a number of cases. On another hand, trade policy seems more effective as regards food security than price stabilization considered as a safety net for the poor, contrary to prevailing opinion. The paper argues that trade restrictions may be welfare improving under some circumstances and that it makes more sense for the world market to act as a shock absorber than for domestic consumers and producers to be the shock absorbers, at least in the poorest countries. Instead of discretionary government interventions, tariffs could be rule-based, though this would call for changes in WTO's agreement. The private sector could consequently act in favor of food price stabilization, long term contracts being then used as complements to actions resulting in price stabilization.
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