When a fails somewhere, the first response of exporting governments is to restrict export.
The measure protects domestic consumers and is defensible from inside one country.
Its aggregate effect is to raise the world price that everybody is responding to.
Analyses of the two most recent price attributed a substantial share of the increase to restrictions rather than to harvests.
The dynamic is a textbook problem with an unusually clear mechanism.
Each restriction is individually rational and the sequence leaves every country worse off.
Importing countries respond by seeking , which is expensive where the land is unsuitable.
Growing wheat in a desert costs more than a and delivers less security.
Reserves have their own failure mode, since a reserve sold too early does nothing and one sold too late is a subsidy to a .
Regional reserves shared between several states perform better because the shocks are not perfectly correlated.
They require a release rule agreed in advance, which is the part that negotiations fail on.
Information is the cheapest intervention available and was the most effective in the last episode.
A shared database of stocks and expected harvests removed the assumption of that was driving purchases.
Several governments that had prepared restrictions did not impose them once the figures were public.
The database costs a fraction of one country's agricultural budget and depends on honest reporting.
A state that its stocks gains an advantage in one season and loses the system afterwards.
Nothing enforces honesty here except the expectation of a next crisis.
That expectation has held so far, which is a thinner foundation than the arrangement deserves.