This paper analyzes the use of storage and trade policies to achieve food price stabilization in a small open developing country. Optimal stabilization policies are identified using a rational expectations storage model with risk-averse consumers and incomplete markets. Without public...

In times of highly volatile commodity markets, governments often try to protect their populations from rapidly rising food prices, which can be particularly harmful for the poor. A potential solution for food-deficit countries is to hold strategic reserves that can be called on when...