Abstract

Beyond the recent hike in global food prices, the markets for food commodity are likely to have entered a period of strong instability given the poor state of infrastructure and the recurrent phenomenon of seasonal variation in food. Whether the approaches based on the management of buffer stocks or the market based approach complemented by a few safety nets, the effectiveness has been limited. Yet the challenge of stabilizing prices is more than ever relevant to avoid political turmoil. High and unstable prices can be disastrous for the poor since food staples constitute a large share of poor consumers’ expenditures. As an entry point to understanding how to effectively manage food stabilization policies, this article reviews the nature of grain commodity flow in Nigeria, typologies of food price instability and governance options. It argues that a particular governance strategy is not sufficient and given the much uncertainty in the twenty first century, a mix of strategies that are efficient as well as equity loving should be considered.

Key words: Price instability, grain commodity flow, root causes and governance options.