Market stabilisation policies

Interest in market stabilisation policies has revived following the 2007-08 food price spike. A large number of developing countries responded to the crisis by seeking to stabilise domestic markets and thereby isolate their consumers from events in world grain markets (Abbott, 2009 Demeke et al., 2008 Jones and Kwiecinski, 2010). Trade policy actions included tariff reductions as well as restrictions on exports via taxes, quantitative restrictions or outright bans. Domestic measures – such as tax cuts on food, subsidies and releases of stocks – were also employed, in order to limit the transmission of world price shocks onto domestic markets.