Effects Of Food Price Shocks Research Articles

Effects of Food Price Shocks on Dietary Composition of Farm Households’ in Nigeria

This study examined the effects of food price spikes on the quantity and quality of the dietary composition of farm households in Nigeria using the 2010/2011, 2012/2013 and 2015/2016 household survey panel data. The fixed effects models were estimated while controlling for participation in non-farm livelihood activities. Analysis indicated that seasonal comparisons of the average per capita daily calorie intake is lowest in the post-harvest season of 2011 (2511.44 kilocalories), which is higher than the average recommended intake. Results showed that rural households had lower per capita calorie intake and dietary diversity than urban households, which may be an indication of a shift in the calorie inadequacy from urban to rural farm households’ setting in Nigeria. In addition, income and education improvement are crucial for raising food calories and satisfaction of hunger needs among households with total food consumption expenditure of 79.0%. The study recommended that a combination of policy strategies, including income growth, agricultural development and targeted food distribution programs could reduce the problems of inadequate calorie consumption among farm households.
 Keywords: Food price increase, household, nutrition, dietary diversity

Effects of Food Price Spikes on Household Welfare in Nigeria

The dramatic global food price upsurges of 2007/2008 and the resurgence of 2010/2011 have kept the welfare effects of food price shocks at the epicentre of policy discussions worldwide. Studies have found heterogeneous impacts, but empiricallylittle is known in Nigeria. The key objectives of this study are to examine the welfare, i.e. food quantity consumption, dietary diversity, and economic welfare effects of food price spikes among households in Nigeria. Using the 2012/2013 and 2015/2016 Household Survey Panel Data, the linear individual (fixed) effects models were estimated while controlling for participation in safety net interventions and other factors to achieve the stated objectives. Findings suggest that higher spike in the price of cereals consistently has negative effect on food quantity (including calories) consumed, dietary diversity, and economic welfare of households, spikes of price of other staples, animal proteins, fats and oils, fruits and vegetables exert heterogeneous influence. Female headed households advance calorie consumption and dietary variety. Findings suggest that food distribution may be more effective in improving welfare of households than direct cash transfers.Efforts to mitigate extreme spikes in the prices of staples (especially cereals) are relevant for improved food security, nutrition and overall household welfare. However, if policy actions are complemented with food distribution and sensitively guided welfare related gender interventions, more improvementsfor livelihoods can be achieved.

Effects of food price shocks on child malnutrition: The Mozambican experience 2008/2009

A propitiously timed household survey carried out in Mozambique over the period 2008/2009 permits us to study the relationship between shifts in food prices and child nutrition status in a low income setting. We focus on weight-for-height and weight-for-age in different survey quarters characterized by very different food price inflation rates. Using propensity score matching techniques, we find that these nutrition measures, which are sensitive in the short run, improve significantly in the fourth quarter of the survey, when the inflation rate for basic food products is low, compared to the first semester or three quarters, when food price inflation was generally high. The prevalence of underweight, in particular, falls by about 40 percent. We conclude that the best available evidence points to food penury, driven by the food and fuel price crisis combined with a short agricultural production year, as substantially increasing malnutrition amongst under-five children in Mozambique.

Human development effects of large changes in food prices: Does openness policy matter?

This paper analyses the effects of food price shocks on selected disaggregated human development indicators and investigates the role of openness policy in mitigating the adverse effects of large changes in food prices. Using a panel of 74 developing countries from 1980 to 2012, I find that positive food price shocks reduce life expectancy at birth both in the fixed-effect model and in the dynamic panel model while negative food price shocks do not seem to matter for this human development indicator in the static model but adversely affect it in the dynamic model. I also find that both positive and negative shocks have no effect on youth literacy rate; this probably means that households do not react to food price shocks by taking children out of school. Analysing the role of commercial openness, I find that openness policy enhances countries’ capacity to manage the adverse effects of food price shocks on life expectancy at birth. This suggests that the tempting policy option of reducing openness to trade during food price shocks is not an efficient choice as regards the human development. Countries must therefore set institutional arrangements that could prevent policy-makers from taking this inefficient policy option.

Are Remittances and Foreign Aid a Hedge Against Food Price Shocks in Developing Countries?

This paper explores the role of remittances and foreign aid inflows during food price shocks. The results yield four findings. First, low income countries and the Sub-Saharan African region are the most vulnerable to food price shocks. Second, remittance and aid inflows dampen the effect of positive food price shock and food price instability on household consumption in vulnerable countries. Third, negative food price shock episodes are associated with a significant increase in household consumption in vulnerable countries. Fourth, a lower remittance-to-GDP ratio is required in order to fully absorb the effects of food price shocks.

Are Foreign Aid and Remittance Inflows a Hedge Against Food Price Shocks?

This paper explores the role of foreign aid and remittance inflows in the mitigation of the effects of food price shocks. Using a large sample of develop ing countries and mobilising dynamic panel data specifications, the econometric results yield two important findings. First, remittance and aid inflows significantly dampen the effect of food price shocks in the most vulnerable countries. Second, a lower remittance-to-GDP ratio is required in order to fully absorb the effects of food price shocks compared to the corresponding aidto-GDP ratio.

Political Economy of Recent Global Food Price Shocks: Gainers, Losers and Compensatory Mechanism

Food prices have increased steadily since 2003 to become a real burden to the poor and net purchasers of food, although price shocks could be an opportunity to stimulate agricultural production and enhance the contribution of agriculture to medium-run growth. In short, the recent food price shocks make gainers and losers. The complexity of the concerns is examined in a political economy analysis of the phenomenon. More specifically, countries have been differentiated according to their degrees of vulnerability to the rising food prices. The second step examined the heterogeneities in the macroeconomic effects of the rising food prices on malnutrition, public spending, current account balances and food production in developing countries, emphasising the specificities of African countries, the position of the countries as food importers or exporters, as oil exporters or not and finally on the political climate–conflict or post-conflict–that prevailed right before 1995–2006. The findings are that food inflation increases malnutrition, pushes up public spending and dampens the current account balances in vulnerable countries, whereas it constitutes a financial opportunity for less vulnerable countries and/or for vulnerable but net food-exporting countries. While oil exports absorb the negative effects of food price shocks, African specificities tend to magnify those effects. Actual responses of countries remain limited in number, despite the great number of policy options that have been designed by international organisations. While severe budget constraints are binding on the use of safety nets, administrative policies often constrain the considered economy. An alternative compensatory mechanism is to sustain agricultural supply response by converting the food price shocks into real price incentives in the developing countries, upon undertaking the appropriate and viable investment in the sector.