Wanted: institutions for balancing global food and energy markets

Abstract

The increasing demand for biomass for energy use is further escalatingexisting food security risks. Managing these risks is a task forglobal institutions. These should ensure timely investment in theworld's capacity for producing biomass and balance the use of thisbiomass for foods and for non-foods. To achieve this, institutionalarrangements for global food markets must fulfil two important goals:reduce the short-term price instability of food markets and preventa structural scarcity of food in the long term. This paper analyseshow agro-food markets, energy markets and biofuel markets are currentlyregulated. As this regulation is ill-suited to manage food priceinstabilities and balance food and non-food use of biomass, new institutionsneed to be put in place. A coordinated system of global commoditymanagement -- not unlike the Commodity Control Organization proposedby Keynes for the post-WWII era -- is proposed to deal with thesecoming challenges.