Op-ed FAO Chief Economist Máximo Torero - Strengthening what we know already works: G20 Agricultural Market Information System (AMIS)

The Agricultural Market Information System (AMIS) was created in 2011 as part of the G20 Action Plan on Food Price Volatility and Agriculture to enhance international food markets’ transparency and related policy coordination for wheat, maize, rice and soybeans in times of market uncertainty. Over ten years of operation, AMIS has become a globally respected source of information on food markets, providing up-to-date, reliable and comparable information regularly. AMIS has become a trusted tool for promoting policy dialogue among countries trading food commodities. In addition, it has helped to prevent unexpected price hikes and strengthen global food security.

AMIS consists of three groups. First, the Global Food Market Information Group, which comprises technical representatives from AMIS participants. The group provides reliable, accurate, timely and comparable market and policy information. Second, the Rapid Response Forum that is composed of senior officials from AMIS participants. The Forum promotes discussions on critical market conditions and how to address them at an early stage. Finally, the Secretariat, which is made up of ten international organizations and entities. The inter-agency Secretariat is hosted by the Food and Agriculture Organization of the United Nations (FAO) and produces short-term market outlooks, assessments and analyses, and supports the Global Market Information Group and the Rapid Response Forum.

AMIS has greatly enhanced food market transparency and coordination of policy responses by providing up-to-date and objective data and analyses, as well as a platform for dialogue. The system has been put to test several times. Most recently, AMIS was credited for helping to stabilize global food markets during the COVID-19 pandemic by providing data indicating sufficient food supplies and arguing against the use of export restrictions. An important area of concern was food trade logistics; where there was a clear need to increase the availability of information.

In response to the conflict between the Russian Federation and Ukraine, which has roiled global food markets and poses a serious threat to global food security, AMIS is being put at test and organized an extraordinary session of the AMIS Rapid Response Forum. The session demonstrated the willingness of all AMIS participants to continue to work together to prevent a global food crisis, notwithstanding geopolitical tensions. In addition, AMIS has been providing information through its Market Monitor reports and joint statements by its chairs.

COVID-19 and the war in Ukraine have revealed several areas in which AMIS could progress even more, most notably in fostering a better understanding of global input markets, expanding the monitoring work of the Secretariat to other markets and commodities, and strengthening research and analysis. At the same time, there is an urgent need to consolidate the existing system.

Specifically, and in view of the rapid increase in prices for many agricultural inputs, especially fertilizers, an expansion of AMIS to the market-monitoring activities to farm input markets will be essential.  Similarly, there is great value in bolstering the current market-monitoring activities in oilseeds to target vegetable oil markets. With soybeans being one of the four-targeted AMIS crops, the Secretariat will be able to draw on existing expertise in the oil crops complex, which will facilitate the integration of this workstream.

To support regular monitoring activities, AMIS needs to boost access to modelling tools coming from the international organizations that are part of AMIS. This includes conducting targeted research projects to identify relevant indicators of market risk, developing early warning tools, measuring effects of trade restrictions, and expanding capacity to measure private stocks. This work might also include integrating model-based analyses into the AMIS work programme.  While modelling has not played an important role in the short-term forecasting work of AMIS, scenario analyses using partial and general equilibrium models proved particularly valuable in the current Ukraine crisis, as they indicated some possible market outcomes in the next season. In addition, with the Secretariat potentially expanding its forecasting work by including climate risks there could be additional linkages to model-based projection work. Given this, it would be a valuable investment to integrate model-based analyses into the AMIS work programme.

Finally, disruptions in international food trade logistics have the potential to cause market uncertainty, push up global food prices, thus threatening food and nutrition security. AMIS needs to strengthen its monitoring capacities in food-trade logistics to regularly report on the state of the world’s critical food trade chokepoints, analyse emerging risks as they develop, and offer expert commentary both on their geopolitical and food security implications and on opportunities for effective risk mitigation.

You can read more about the AMIS here.