Highlights: 

Jointly prepared by the World Bank, the World Food Programme of the United Nations (WFP), and the Food and Agriculture Organization of the United Nations (FAO), this report examines how Strategic Grain Reserves (SGRs) can be strengthened at country, regional, and global levels, amid alarming global food security challenges. 

This report aims to inform policymakers and development practitioners on good practice’s guiding principles for designing and managing SGRs that would help enhance food security. 

This report reviews lessons learned from public stock management in developing countries with a long history of using them. It draws insights from the existing literature and the background studies prepared for this report on Bangladesh, India, the Philippines, and Uzbekistan in Asia; Ghana, Ethiopia, Zambia, and the ECOWAS regional reserve in Sub- Saharan Africa (SSA); Egypt and Tunisia in the Middle East and North Africa (MENA) region; and Honduras and the Dominican Republic in the Caribbean. These provide ample examples of key aspects of SGR management, offering practical insights on successful strategies and common pitfalls. 

The lessons learned show that SGRs can generate positive results if they follow key principles and when integrated with broader food security strategies. SGRs can deliver results when they are underpinned by clear and manageable objectives, prudently managed from a fiscal standpoint, and employed smartly to mitigate the impact of temporary food supply disruptions. Successful SGRs use market channels such as commodity exchanges for interventions or are embedded in targeted safety net programs and maximize development impacts by supporting smallholder commercialization. The lessons learned also show that SGRs fail to enhance food security when they are managed as buffer stocks to address too many and often conflicting policy objectives. There are numerous causes of SGR failure, including lack of clarity of objectives, high fiscal costs, and crowding out of private storage and trade.  

Country-level SGRs are most likely to succeed. International price stabilization schemes for agricultural commodities have historically failed, and there is no reason to assume that international grain reserves will succeed in the near future. Regional reserves, despite their potential, face coordination challenges and trust issues among participating countries. Lessons from existing regional reserves, described in this report, underscore the need for more robust coordination and agreements, considering diverse socio-economic factors and crisis contexts. While stronger regional cooperation can improve early warning systems, information sharing, and capacity building for public stock management, regional reserves are unlikely to replace country-level SGRs in the near future. 

The following principles should be followed to maximize the impact of SGRs: 

• Ensuring effective governance, transparency, and communication; 

• Avoiding multiplicity and unclear objectives; 

• Keeping SGR’s fiscal costs manageable; 

• Reducing price distortions and other economic costs; 

• Reducing the cost of SGR replenishment; 

• Improving outcomes of stock release; 

• Integrating SGRs into social safety net programs; 

• Pursuing complementary trade policies; 

• Investing in storage infrastructure, technology solutions, and innovations.