The European Union now has less than one-quarter the stocks it held in 1993. If there is insufficient investment in the agriculture and rural sectors, real cereal prices could rise. The degree of success with which China and the countries of eastern Europe and the former Soviet Union make reforms along these lines will significantly influence future global food supply and demand. Rising prices can quickly put food out of reach of the 1.1 billion people in the developing world who live on a dollar a day or less. Public policies to deal with rising prices must not harm poor producers while helping poor consumers.
Some analysts think that grain fed to livestock can buffer price rises.
As grain prices go up, meat prices will too. Meat demand will decline, freeing up grain for direct consumption. As the gap between rich and poor widens, however, wealthier consumers may not reduce their consumption of meat much, even at higher prices, and the burden of reducing grain demand to the level of supply may fall mostly on the poor. The international community and individual countries can take action to dampen price rises or alleviate their negative effects. Industrial and exporting countries can continue to hold sufficient grain stocks or join together to create a new global grain reserve to increase supplies when prices rise and dampen price shocks.