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Trading-off volatility and distortions? Food policy during price spikes

Nynke — Wed, 25 May 2016 09:36:52 +0000

This paper in the Food Policy journal analyses the trade-off between price distortions and reduced volatility when governments intervened in agricultural and food markets during the recent food price spikes and concludes that there is much room for policy improvement. The authors develop a model to derive how much distortions a government would introduce when it cares about price stability in a situation with limited policy options and show that there is a trade-off and identify the optimal combination of distortions and stability for given international price shocks and interest groups preferences for stability. The theoretical findings are compared with empirical indicators on actual government interventions in staple food markets. The authors conclude that several countries have been able to reduce (short run) price volatility in the domestic markets while at the same time allowing structural (medium and long term) price changes to pass through to producers and consumers. However, this is not the general case. For many countries, even when explicitly taking into account the trade-off (and the benefits of reducing volatility) government policies appear far removed from the optimal trade-off and there appears to be opportunities for policy improvement.

Sources of food price volatility and child malnutrition in Niger and Malawi

Nynke — Mon, 25 Apr 2016 10:00:33 +0000

This article in the Food Policy journal investigates how other indicators than just international food price spikes influence food price volatility and child malnutrition in Niger and Malawi. In recent times, considerable attention has been paid to the nutritional impact of the sharp hikes in the international food prices which took place in 2007–8 and 2010–11. While understandable, this growing focus has perhaps obscured the impact of other variables affecting malnutrition in Sub-Saharan Africa, i.e. the long-term impact of agricultural policies on food supply and prices, large and persistent seasonal variations in food prices, and the impact of famines which still affect parts of the continent. This paper focuses on the relative impact of these factors on child malnutrition (measured by the number of child admissions to feeding centres) in Malawi and Niger, two countries which closely represent the situation of other small, landlocked, subsistence agricultural economies facing severe food security problems. Their analysis shows that in these countries the drivers of changes in domestic staple prices and child malnutrition are related not only – or not primarily – to variations of international food prices but also to the impact of agricultural policies on food production and prices, in a persistent food price seasonality, and in recurrent and poorly managed famines. These factors can exert a strong upward pressure on food prices and child malnutrition even during years of falling international prices.

Managing food price volatility: Policy options to support healthy diets and nutrition in the context of uncertainty

Nynke — Mon, 25 Apr 2016 09:33:37 +0000

This policy brief (PDF) from the Global Panel on Agriculture and Food Systems for Nutrition (GLOPAN) identifies policy interventions that can anticipate and mitigate the negative dietary and nutritional outcomes of price volatility and market uncertainty. Food price volatility is a serious global concern. Since the food crisis of 2008, the world has struggled to address unexpected, rapid rises and falls in global food prices, which have sparked political unrest and increased economic risks across the food system. Price volatility has also become a major concern for governments as they seek to ensure consumers’ access to healthy diets. GLOPAN recommends policymakers to invest in market monitoring and market-based insurance systems; to invest in agricultural productivity growth; to facilitate efficient food markets; to build food transformation capacity; to establish targeted cost-effective consumer protection.

Debunking the ‘new normal’: Why world food prices are expected to resume their long run downward trend

Nynke — Mon, 04 Apr 2016 14:01:36 +0000

This article in the journal of Global Food Security argues that contrary to the opinions expressed by many commentators, the recent episode of higher prices for agricultural commodities is likely a transitory phenomenon. When compared to the last half-century, population growth is expected to be much slower in the coming decades, with nearly all of the growth occurring in lower income countries, where added population places less pressure on global markets. The impact of the recent surge in growth rates in the developing world, and the associated dietary upgrading, will be insufficient to overcome the population effect. Further, earlier projections of bio fuels growth are proving overly enthusiastic in the wake of lower oil prices and environmental concerns. Consequently, the projections of the authors show that in the long run, food prices are expected to be slightly lower at mid-century than they were prior to the food price crisis (2006). However, this outcome is shown to depend critically on the rate of productivity growth in agriculture. The projections involve expected global productivity growth over the 2006–2050 period which is only 60% as fast as over the historical period: 1961–2006. If total factor productivity growth slows more than this, perhaps due to adverse climate impacts or reduced investment in R&D, then prices could rise in the coming decades. In addition, the authors could not rule out the possibility of a steeper price decline in the wake of recent signs of robust productivity growth in the developing world.

Global crop prices below last year’s levels, some spikes at the country level

Nynke — Thu, 18 Feb 2016 15:46:36 +0000

This article on the Food Security Portal states that international cereal prices remain significantly below last year’s levels due to abundant global supplies and strong export competition. While the Food Price Monitoring and Analysis (PDF) of FAO shows that cereal prices are low, the regional story is more mixed. Grain prices continued to decline in most West African countries, but maize prices have soared throughout southern Africa, particularly South Africa and Malawi. In addition, rice prices were slightly more varied depending on their origin; prices rose slightly for Thai 100%B white rice but fell for rice from Vietnam, India, and the US. Major producers in South America are experiencing some weather-driven price shocks. Reduced 2015 wheat yields and depreciating currencies have sent wheat prices upward in recent months in several countries, including Argentina, Brazil, Colombia, and Bolivia. In Chile, on the other hand, prices of wheat and wheat flour remained largely unchanged in January due to a good 2015 harvest. The FAO report records several domestic price warnings. These warnings are included when one or more of a country’s basic food commodity is seeing abnormally high levels that could potentially have negative effects on food security. This month’s warnings impact Brazil, Argentina, Haiti, Honduras, Malawi, South Africa, Tanzania, and Zambia for maize, Indonesia for rice, and the Dominican Republic for beans.

Promoting local foods in small island states: examining the willingness-to-pay of consumers

Nynke — Wed, 10 Feb 2016 16:37:43 +0000

This article in Food Policy journal examines the willingness-to-pay of consumers on small island states for locally produced and organic food products. To attain food security the successful production in agriculture is key and the authors argue that strategies that tackle agricultural development through the production and consumption of sustainable food products are necessary. The authors observed that when consumers were informed about pesticide use, they were more willing-to-pay higher prices for organic food products. In addition, consumers were more willing-to-pay for products from local origin than for imported products. This seems to be related to the fact that consumers feel that a product from local origin carries an implicit guarantee of product quality with it. The authors argue that to increase food security in small island states, a strategy to develop the local food sectors by increasing consumers’ awareness about local products with sustainable characteristics could be a solution. They used an experiment to assess the consumers willingness-to-pay for yams with sustainable characteristic in the Caribbean. The results showed that labeling significantly changes consumers’ valuation of the different yam profiles. They conclude that a labeling strategy could be improved when policy targets the development of the local food sector.

Global food prices continue to fall despite climate concerns

Nynke — Tue, 09 Feb 2016 16:41:30 +0000

This article in the Financial Times elaborates on the impact of extreme weather on food prices and on the reasons for the declining global food prices despite climate concerns and the impacts of El Niño. International food prices, including sugar and dairy, have been falling for the past four years, with only one exceptional spike in October, particularly for sugar. The sudden spike in sugar prices illustrated the economic impact of the unusual weather events triggered by El Niño, which is expected to further disrupt commodity prices in 2016. Nevertheless, agricultural prices, as measured by the FAO’s price index, have fallen almost 30% since 2011 as a result of increased production. The index has been sliding in part because of the strengthening US dollar, which is the benchmark for global commodities, as well as the surplus in some food basics. In 2015, all agricultural sectors covered by the FAO’s food price index showed declining prices. Meanwhile, the FAO continues to stress that food security remains a great concern. People in some 33 countries, with the majority in Africa, may face food shortages either because of El Niño-caused drought and floods, or violent conflicts, particularly in Syria and Yemen.

The state of agricultural commodity markets 2015-16

Nynke — Mon, 18 Jan 2016 16:11:06 +0000

This report (PDF) from the Food and Agriculture Organization (FAO) elaborates on the relations between trade and food security. It aims to reduce the current polarization of views on the impacts of agricultural trade on food security and on the manner in which agricultural trade should be governed to ensure that increased trade openness is beneficial to all countries. Rules governing international trade of food and agricultural products should be crafted with an eye to improving countries’ food security and other development objectives. Since trade will increasingly influence the extent and nature of food security across all regions of the globe, a pragmatic approach that would align agricultural and trade policies at the national level is needed. By providing evidence and clarity on a range of topics, the report seeks to contribute to a more informed debate on policy choices and to identify required improvements in the policy processes within which these choices are made.

Explaining grain and oilseed price volatility: The role of export restrictions

Nynke — Mon, 18 Jan 2016 16:10:14 +0000

This study in the Food Policy journal examines the impact that export restrictions have on price volatility. Since 2007 food prices have become significantly higher and more volatile. This impacts food security because it affects household incomes and purchasing power. In general, food price volatility is problematic for policy makers and can disrupt the food supply chain. A more and more frequent response to price volatility is the use of export restrictions to stabilize domestic prices. However, when a country is a large exporter, the restrictions can even increase global price volatility. The authors of this article used data on the prices of maize, wheat, rice and soy to estimate the impact of export taxes and quantitative restrictions on global price volatility. The results showed that the export restriction that were implemented between 2006 and 2011 increased price volatility for wheat and rice, however the did not increase prices for maize and soybean. With a simulation method, the authors show that the contribution of export restrictions has almost the same impact on price volatility as key macroeconomic variables.

Food security under climate change

Nynke — Mon, 18 Jan 2016 15:50:45 +0000

In this article in Nature Climate Change Hertel argues that using food prices to assess climate change impacts on food security is misleading. Since climate changes has different impacts on income a broader measure of household well-being, like changes in absolute poverty, is needed. Household food consumption depends on the balance between prices and income. Many farmers and farm workers benefit from higher food prices through better sales, more jobs or higher wages, as long as they sell more than they buy. In countries where poverty is concentrated among agricultural households, such as Bangladesh or Uganda, higher food prices should lead to improved incomes and food security for the poor. However, not all poor households will benefit – neither now, nor in the future. Climate change will most likely drive down agricultural production and drive up food prices. Many poor rural households will paradoxically boost their food security as climate change advances, as they gain more from price rises and trade advantages than they lose from falling production. But urban households will tend to suffer. Hertel thus concludes that projecting the future of food security under climate change requires much more attention to future trends in the distribution of poverty – for example between rural and urban areas, women and men, employees and self-employed farmers – to complement our recent focus on future agricultural production. As people become more urban and agriculture more commercial, food price rises will increasingly disadvantage more people than they benefit, yet the deepest poverty may well remain in rural areas, and here higher food prices can be an effective engine for raising incomes.

This article of CGIAR on the article provides more related readings and background.

How does a shorter supply chain affect pricing of fresh food? Evidence from a natural experiment

Nynke — Wed, 23 Dec 2015 15:56:10 +0000

This article (PDF) which was published in the Food Policy journal elaborated on the impacts of shorter supply chains on the prices of fresh food in Turkey. The market for fresh food is often characterized by a large number of intermediaries delivering the product from the farmer to the retailer. The existence of these intermediaries is often claimed to introduce market frictions that push fresh food prices up. Using data from a policy reform in Turkey in the market for fresh fruit and vegetables, the authors tested the hypothesis that scaling down these frictions reduces the level of prices. A new Turkish law from January 2012 aims to remove informal intermediaries; reduce the farmers’ cost of access to formal intermediaries; and to provide the farmers with the option to directly sell their products to retailers. The authors found that the reform has strikingly reduced the prices in the wholesale market. They also provide some rough evidence that there is no price effect in the retail market, which suggests that part of the wholesale markups may have been transferred to the retailers. The results suggest that consumers have not received any direct benefits from the reform—ignoring the general equilibrium effects.

Price stabilization and impacts of trade liberalization in the Southeast Asian rice market

Nynke — Tue, 22 Dec 2015 15:55:10 +0000

This article in Food Policy journal investigates the impact of trade liberalization in major rice trading countries of Southeast Asia. It focus its attention on the price stabilization mechanism that were adopted by governments in Indonesia, Malaysia and the Philippines. Using a simulation the authors found that the removal of state trading enterprises in these three countries would lower their domestic prices by as much as 34% but increase the world prices by about 20%. When free trade liberalization is realized in 2020, domestic prices decline further in Indonesia and the Philippines, leading to an increase in their imports, which are estimated to be as much as 4.5 million tons. The impact on domestic prices, however, is absorbed nearly evenly among Indonesia, the Philippines, Thailand and Vietnam.

An exploratory study of changing consumption patterns and the inclination to engage in food-related protests

Nynke — Wed, 18 Nov 2015 16:29:16 +0000

This article (PDF) in Sustainability Journal argues that the relationship between riots, dietary patterns and the willingness to riot is not straightforward since the changes in consumption of different food groups influence the willingness to riot in different ways. After the widespread food riots in 2008, some authors argued that higher food prices cause political unrest, or food riots. Nevertheless, research has demonstrated that political, cultural, and economic factors confound the impact of price in determining whether a food riot occurs. This paper explores: (1) the relationship between household demographic characteristics and reported willingness to riot due to future food price rises; and (2) the relationships between people’s diets and their reported willingness to riot due to future food price rises. Using household surveys and focus groups discussions carried out in Cameroon, they found that 70% of the respondents would riot if food prices went up. Also, in the event of food price rises households in Cameroon’s major cities are more likely to riot than the citizens of smaller cities and households with relatively higher educational level, high incomes, are less likely to riot. Finally, the relationship between dietary patterns and the willingness to riot is not straightforward as changes in consumption influence the inclination to riot in different ways. Overall, this paper demonstrates that preemptive strategies designed to avoid future food riots in Cameroon must take into consideration these spatial, demographic, and dietary factors.

Delicious, Disgusting, Dangerous: Eating in a time of food price volatility

Babs — Wed, 11 Nov 2015 13:53:53 +0000

This report (PDF) by IDS and Oxfam highlights the third year results of the study Life in a Time of Food Price Volatility, with a focus on changes in diets. The report explores what people on low and precarious incomes are eating now and how they are responding to the increasing commodification of food. Furthermore, the paper uncovers how these changes are linked to adjustments in work, residence and home life. The study shows that, for the consumer, there are undeniable benefits from the integration of world food trade: more stable supply, wider choice. Changes in food habits mean people are finding new ways to enjoy food and new foods to enjoy, often with greater convenience and ease. There is much to savour in the eating landscape as new markets for purchased and prepared foods open up. But the loss of control this brings has detrimental impacts on wellbeing. Most people feel they understand little about how new foods affect their health and nutrition; knowledge that they had accrued over generations and longer with respect to their customary cuisines. People have real worries about a new culture of fast food and fake food; they worry about additives, nourishment and food hygiene, and they feel that governments do too little to protect them from the risks. One of the recommendation of the report is that governments should preserve and promote customary food cultures and providing trustworthy information about new food choices.

Household-specific food price differentials and high-value crop production in rural Ghana

Babs — Tue, 10 Nov 2015 09:48:17 +0000

This article in Food Policy Journal examined the relationship between household-specific producer–consumer food price differentials and rural household cropland allocation between food and high-value crops. The authors tested the hypothesis that cereal price bands induce a shift of resources away from high-value crop production, making smallholders appear unresponsive to price incentives. The results lend support to this hypothesis, implying that a policy aiming at increasing farmers’ income through high-value crop production may fail if hard and soft infrastructure does not improve in rural areas, and if staple crop productivity does not increase significantly.

Habitual choice strategy, poverty and urban consumer demand for biofortified iron beans in developing countries: An application of random-effects double hurdle model

Nynke — Mon, 19 Oct 2015 08:22:50 +0000

This article (PDF) scrutinizes the urban consumer demand for nutritious foods in the context of bio-fortified iron beans as a public health intervention in Africa. The increasing urbanization process in developing countries creates current and future challenges for the global food system to deliver high quality nutritious foods and provide equitable access for the urban poor. This paper examines the role of habit, poverty and information for urban consumer demand of nutritious foods. The authors determined the consumer’s willingness to pay (WTP) for the nutritional value of bio-fortified iron beans and a random-effects double hurdle econometric approach to identify the magnitude of treatment effects. The provision of information on the nutritional value of iron translates into significant premiums for the iron bean varieties. An elimination of participatory fees, which is commonly used in experimental auctions, provides an alternative practical approach of mimicking market realities in the field and of identifying hypothetical bias in auction bids. Results suggest that poverty plays a significant role in consumer demand, thus it has a potential to widen the access gap for iron beans in urban areas in the absence of an equitable pricing system.

Are lower commodity prices a good thing?

Babs — Wed, 14 Oct 2015 14:29:49 +0000

This blog by Joseph Glauber , Senior Research Fellow at IFPRI, asks the question: are lower prices a good thing for the world? The author highlights that lower food prices could mean that households will have more money to spend on food and other household expenditures, but the impact for many will likely be small. In many developing countries, research suggests that consumers are often insulated from world prices. Lower crop and livestock prices mean lower income for rural households dependent on agriculture. While much progress has been made through the WTO in reforming agricultural policies, distortionary agricultural policies remain in many developed countries and, more recently, in some emerging developing countries. The author highlights the importance making further progress in disciplining and limiting those measures.

The impacts of food price and income shocks on household food security and economic well-being: Evidence from rural Bangladesh

Babs — Tue, 06 Oct 2015 10:43:05 +0000

This paper at MPRA examines the combined impacts of food price and income shocks on household food security and economic well-being in low-income rural communities. Using longitudinal survey data of 1,800 rural households from 12 districts of Bangladesh over the period 2007–2009, the authors estimated a three-stage hierarchical logit model to identify the key sources of household food insecurity. The first-difference estimator was then employed to compare pre- and post-shock expenditure for those households that experienced acute food shortages and those that managed to avoid the worst impacts of the shocks. On the basis of the results its is concluded that: (1) the soaring food prices of 2007–2009 unequivocally aggravated food insecurity in the rural areas of Bangladesh; (2) the subsequent income shocks of 2007–2009 contributed towards worsening food insecurity; (3) the adverse impacts of these shocks appeared to have faded over time due to labor and commodity market adjustments, regional economic growth, and domestic policy responses, leaving no profound impacts on households’ economic well-being in most cases; and (4) although the immediate adverse consequences of rising food prices were borne disproportionately by the poor, the longer term consequences were distributed more evenly across the rich and poor and were favorable for the landless day laborers.

Agricultural commodity price shocks and their effect on growth in Sub-Saharan Africa

Babs — Wed, 30 Sep 2015 09:35:20 +0000

This article in the Journal of Agricultural Economics, examines the importance of agricultural price shocks to economic growth in selected Sub-Saharan African countries. It quantifies the impact of agricultural commodity price shocks using a structural non-linear dynamic model. The novel aspect of this study is that the authors determine whether the response of per capita GDP for the selected Sub-Saharan African countries is different to unexpected increases in agricultural commodity prices as opposed to decreases in prices. The study concludes that there is very little evidence that an unanticipated price increase (decrease) will lead to a significantly different response in per capita incomes.

Food price spikes relation to malnutrition among children in Andhra Pradesh, India

Babs — Thu, 17 Sep 2015 10:10:37 +0000

This article (PDF) in the The Journal of Nutrition, investigated the associations between food price spikes and childhood malnutrition in Andhra Pradesh, one of India’s largest states. The authors tested the hypothesis that the escalating prices of rice, legumes, eggs, and other staples of Indian diets significantly increased the risk of wasting (weight-for-height z scores) in children. The article concludes that rising food prices were associated with an increased risk of malnutrition among children in India. The study highlights that not only average annual food consumption, but also temporal nutritional changes associated with acute food price spikes, should be evaluated to ensure nutritional adequacy as such policies and programs are introduced. Policies to help ensure the affordability of food in the context of economic growth are likely critical for promoting children’s nutrition.

Price shocks, vulnerability and food and nutrition security among rural and urban households in Tanzania

F&BKP Office — Tue, 04 Aug 2015 10:35:46 +0000

This paper (PDF) by the Italian Association of Agricultural and Applied Economics (AIEAA), investigates the impact of the recent food price crisis on the quantity and quality of the dietary composition of rural and urban households in Tanzania. Results using household data from the 2008/09, 2010/11 and 2012/13 waves of the Tanzania National Panel Survey show that urban households are more vulnerable than rural households to food price shocks. The researchers find evidence that price movements negatively affected also the quality of the diet, in particular, looking at the regional distribution, fats, calcium and vitamin A were the most cutback macro and micronutrients. The authors recommend short-term policy measures, such as food fortification or micro-nutrient supplementation programmes, in order to strengthen diet diversity and micronutrient intake of Tanzanian vulnerable households and to improve the ability of poor to cope better with food price instability.

Food price spikes and poor, small economies: What role for trade policies?

Babs — Tue, 04 Aug 2015 08:57:30 +0000

This paper (PDF) in the African Journal of Agricultural and Resource Economics reviews conceptually, and then empirically for a sample of small and poor economies, the role of trade measures for achieving the social objective of assisting those hurt by sharp changes in food prices. The data are monthly for the period of 2006 to 2012, and annually since 1990. The paper concludes by exploring the efficacy of using trade policy instruments versus domestic measures to reduce the risk of welfare losses for vulnerable households, and stresses the importance for small and poor economies of supporting multilateral efforts to outlaw beggar-thy-neighbour policy responses to food price spikes.

Food price watch June 2015

Babs — Wed, 29 Jul 2015 09:50:36 +0000

International food prices declined 14% between August 2014 and May 2015, sliding into a five-year low and continuing the sharp price declines observed in previous months. Price declines have been generalized across key food commodities—although to different extents—and are the result of continuously improving production outlooks and strong levels of food stocks. Yet uncertainties have not completely dissipated, and the arrival of El Niño, the dollar appreciation, and recent increases of oil prices—after months of continued declines—might have effects on international food prices in the upcoming months. Domestic prices of grains have remained mostly stable during the last year, an outcome associated with favorable production and international food price declines. The largest increases in domestic food prices were observed in countries whose currencies depreciated and where weather-related disasters affected production and disrupted trade. This issue of the Food Price Watch reflects on the unforeseen breadth and depth of the current oil price crash, and the potential impacts it might have on international food prices, poverty, and inequality. It includes following headings: global price trends; domestic price trends; and linking international oil and food prices.

The short-term impact of price shocks on food security-Evidence from urban and rural Ethiopia

Babs — Tue, 28 Jul 2015 13:49:33 +0000

This study in the Food Security Journal, investigates the impact of food price changes on food security in urban and rural Ethiopia. Using a quarterly household survey panel dataset and price data collected directly at markets, a negative effect of high cereal prices on some, but not all considered indicators of food security was found, controlling for unobserved heterogeneity across households. The results indicate that increases in cereal prices are generally, but not always, associated with households having a lower number of meals and switching to less preferred foods. Diet diversity and calorie consumption, however, show no clear response to grain price changes. Only partly in line with existing notions, the results suggest that the aggregate effect is negative for both the urban and rural populations (with the strongest among the urban poor) but that even poor households are able to maintain their basic food consumption through periods of moderate price changes.

Do high food prices and droughts fuel conflict?

F&BKP Office — Thu, 11 Jun 2015 16:36:09 +0000

This IFPRI blogs shares highlights from Chapter 7 of the 2014-2015 Global Food Policy Report. The blog shows that natural disasters aggravate existing civil conflicts or may contribute to fueling new conflicts, by intensifying social tensions, by deepening inequalities between groups or by raising food prices. Also, food price shocks are both a determinant and effect of conflict. The authors suggest that to tackle natural disasters and food price shocks, governments should promote inclusive policies that build resilience to shocks and well-targeted and effective responses following these shocks.

How do governments respond to food price volatility?

Babs — Thu, 11 Jun 2015 15:11:44 +0000

A collaborative project between Cornell University, University of Copenhagen, and UNU-WIDER on the political economy of food price policy studied how selected governments responded to increasing food price volatility, and explains why they responded as they did. The degree to which world market price volatility was transmitted to national and local markets varied greatly among the 16 countries included in the project. This was due to trade policies, differences between import and export parity prices, and several other factors. The low degree to which international prices were reflected in domestic prices in some cases, and the large impact of national factors—such as local weather events, poorly functioning domestic markets, and limited dependence on foreign trade—meant that the behavioural response by governments to the international food crisis tended to be similar to the responses to earlier food price fluctuations caused by national factors. On the basis of the findings from the 16 study countries, eight policy recommendations are given, including strengthening the policy-relevant evidence base and making of investments to increase food supply elasticity.

Food price policy in an era of market instability: A political economy analysis

Nynke — Mon, 11 May 2015 16:01:53 +0000

This book published by Oxford Scholarship Online tries to enhance knowledge on responses to price volatility of governments and on the political economy of agricultural policy-making in general. The analysis starts from the global food crises of 2007-9 when prices surged for key staple food commodities and uses the variety of reactions from governments of different countries to generate knowledge on responses to price volatility. Since governments experienced similar food price shocks, the author argues that this case offers an excellent natural experiment for generating this knowledge. The central aim of the study is to uncover which political economy factors—ranging from the constellation of different interest groups to the nature of political institutions—explain variations in policy responses across countries. The research output proves valuable for at least three target audiences. First, it can inform international organizations and donors about which types of policy interventions can mitigate price volatility and whether they are feasible given a country’s political economy context. Second, it can help national policy makers better understand the trade-offs of certain policy interventions. Third, it generates much-needed further knowledge about the agricultural policy-making process in developing countries, which remains incredibly scarce despite the importance of agriculture to these countries’ economies.

Short- and long-run impacts of food price changes on poverty

F&BKP Office — Thu, 07 May 2015 13:05:38 +0000

This study (PDF) by the World Bank, aims to assess the impacts of changes in global food prices on poverty in individual countries and for the world as a whole. Household models based on detailed expenditure and agricultural production data from 31 developing countries were used. The analysis finds that food price increases unrelated to productivity changes in developing countries raise poverty in the short run in all but a few countries with broadly-distributed agricultural resources. This result is primarily because the poor spend large shares of their incomes on food and many poor farmers are net buyers of food. In the longer run, two other important factors come into play: poor workers are likely to benefit from increases in wage rates for unskilled workers from higher food prices, and poor farmers are likely to benefit from higher agricultural profits as they raise their output. As a result, higher food prices appear to lower global poverty in the long run.

Food Price Crisis Observatory

Babs — Wed, 22 Apr 2015 11:36:20 +0000

The Food Price Crisis Observatory by the World Bank is an interactive information platform for policymakers, civil society and global organizations, the private sector and anyone else interested in identifying multi-country food crises as they unfold, tracking where and why food riots take place, and monitoring country-specific policies that can mitigate food price crises. Four modules are covered, providing an integrated approach to food crisis monitoring: 1) the food price watch: a biannual report that highlights trends in domestic food prices in low- and middle-income countries, and outlines the policy implications of food price fluctuations (September 2014); 2) the crisis monitor which looks at countries’ vulnerability to food price crises and their capacity to react to areas of concern, based on food price trends and macro-economic variables; 3) the food riot radar, which tracks food riots across the world using interactive maps and media coverage and spots social unrest episodes related to food price instability and 4) the policy monitor, which focuses on the policies countries can use to prevent, mitigate and cope with food price hikes.

2015

Climate and environmental change: views from life in a time of food price volatility

F&BKP Office — Wed, 22 Apr 2015 10:32:03 +0000

This discussion paper (PDF) by IDS explores the views of people living on low and precarious incomes on the connections between food price changes and climate and environmental change. It is based on the 2012 findings of the four-year (2012–2015) Oxfam–IDS research project “Life in a Time of Food Price Volatility” which was designed to explore experiences of food price volatility, through qualitative research in 23 research sites in 10 countries. This paper suggests that the public discourse about food price changes in these low-income communities treats them as causally connected to climate change and overall the links between climate and environmental change and food insecurity for many of the respondents were robust and clear.

Analysis of banana value chains and impacts on small farmers & workers

F&BKP Office — Tue, 31 Mar 2015 07:41:11 +0000

This blog post by Oxfam highlights the role of supermarket chains, especially discount retailers, on food prices. It is stated that German supermarket chains are partly responsible for substantially undercutting the legal minimum price for bananas in countries such as Ecuador, which has dire consequences for small agricultural producers and plantation workers. This is all according to a report (PDF) based on a study commissioned by Oxfam and carried out by the French research institution BASIC as well as on interviews with experts from Germany and from the banana-producing countries. Similar results (PDF) were found by Fairtrade on the role of British supermarkets.