Surge In Food Prices Research Articles

Towards food security by 2050

Keywords Foodsecurity .Policy .RisksThe hungry poor shall weep no more,for the food they can never earn;There are tables spread, ev’ry mouth be fed,for the world is about to turn.Rory Cooney, Canticle of the TurningIntroductionSince the food price spike of 2008 there have been multiplereportsonthechallengesoffeedingmorethan9billionpeopleby 2050. The low end of the projected increase in food sup-plies needed to ‘feed the world’ is about 60 % (Alexandratosand Bruinsma 2012), but it could be greater, depending onassumptions about population, incomes and diets.The key drivers of increased food demand are humanpopulation increase, urbanisation and a rise in per capitaincomes. Increased incomes, in particular, bring changesin diet and the types of food consumed. The conclusion ofmany, but not all, of the existing food supply projectionsis that, given sufficient farm inputs and investment inresearch and development, the additional 2.4 billion peo-ple needing to be fed in 35 years time can be accommo-dated with the resources available. It will, however,require on-going increases in farm yields (Grafton et al.this volume) and strong growth in total factor productivity(output per unit of all productive, measured inputs) inagriculture (Hertel this volume). While technology(Grafton and Yule this volume) and plant genomics(Rivers et al. this volume) offer exciting production pos-sibilities, the food supply benefits will not arise withoutsuitable investment in research (Hertel this volume)andbiosecurity (Kompas et al.this volume). Such investmentis needed because of the large impacts of plant diseasesand other epidemics on farm production and livelihoods(Avelino et al. this volume).Asbigasthechallengeistofeedmorethan9billionpeopleby 2050, increasing food availability is not sufficient becausefoodneeds tobeproducedinwaysthatallow for its sustainedsupply,donotdegradeourabilitytoproducefoodinthefutureand do not seriously compromise critically important ecosys-tem services. It is also not possible for the levels of consump-tioninfoodandmaterialgoodsenjoyedbythewealthyinrichcountries to be enjoyed by all without grave, and possiblycatastrophic, risks to the global environment in terms of bio-diversity loss, water scarcity and climate change (McKenzieand Williams this volume). While reductions in food wasteand changes to less meat-intensive diets would reduce green-house gas emissions and reduce the need for land clearing(Tilman and Clark 2014), wishing this were the case is verydifferent from making it happen.The proportion of chronically undernourished people hasdeclined substantially since the world food crisis of 1973, butthereisnoassurancethatthiswillcontinue,especiallyassomecountries experienced a reduction in per capita food supplyover parts of this period. Indeed, food prices increased byabout 80 % between 2004 and 2008 mostly due to higher oilprices and support for first-generation biofuels. This foodprice surge was the major contributing factor to the additionof more than 100 million people globally to the chronically

Varied nutritional impact of the global food price crisis

Two crises among the worst experienced since the start of the modern era have signed the global scene by the end of the first decade of the current century. The first was signed by a sudden and dramatic rise of food prices and developed into the second one which was mainly of a financial nature. Food price rises typically erode the purchasing power, in particular of those at the lower end of the income distribution, therefore working as a driver of economic and social inequalities. This paper has assessed the implications of the international food price surge in terms of food availability and access to food in low- and middle-income countries.

Rising Food Prices and Household Welfare in Ethiopia: Evidence from Micro Data

This paper analyzes welfare implications of rising commodity prices in Ethiopia based on household budget surveys. Our findings suggest that a rise in relative prices of such necessities as cereals would lead to a large deterioration in the welfare of households in urban areas. In rural areas generally land-rich households tend to benefit significantly from the recent surge in food prices, while the land-poor and typical farm households tend to experience negative growth. Thus, price shifts in favour of agriculture could aggravate poverty conditions in rural areas. Simulated Gini computed from simple demand systems indicate worsening income distribution in urban areas due to price shifts that would exacerbate the already dire poverty conditions. The paper also reported own and cross-price elasticities mainly for cereals to gain insight into magnitude of demand shifts due to income and price changes.

Income vs price subsidy: policy options to help the urban poor facing food price surge

PurposeThe purpose of this paper is to analyze and compare the costs of price and income subsidies when the food security policy targets the urban poor. The result may help policymakers choose a desired subsidy scheme to ensure food security for the urban poor facing food price surge.Design/methodology/approachThe analysis consists of three parts: constructing an empirical model on provincial panel data in 1993‐2009 estimating the impact of grain price on food security among urban residents by different income level; evaluating the potential costs of shifting to income subsidy aiming to maintain the real income levels of the low income, lowest income or the poor residents if grain price increases by 20 percent; and comparing with the cost of price subsidy to achieve the same policy goal.FindingsThe paper finds that, food price surge will hurt the urban poor much more seriously than the high income population; the rich residents may receive more benefit from price subsidy; and income subsidy has obviously a cost advantage while the targeted people benefit more.Originality/valueThe obvious value of the paper is to show that income subsidy is much more desired than price subsidy, if the policy goal is to help the poor during food price surge.

SAARC for food security of south Asia

The present paper is an attempt to study the reasons for recent surge in food prices and also explore the opportunity for SAARC region to collectively resolve the problem of starvation, based on specialization and free trade. The cutting across of political boundaries, based on bio-physical parameters and existing cropping patterns, there are clear cut demarcated agro-climatic zones. For each zone, crop specific common forums for research and development, value addition, and information sharing system need to be set up to cater to the requirements of the entire area. Cooperative efforts on production, marketing, distribution and risk mitigation can help minimizing the food security problem.

Food Security as a Public Good: Oman’s Prospects

The recent phenomenal crisis in the financial sector and the surge in food prices have resurrected the debate on the role of government, in economic management and in particular in securing national food security. This paper briefly reviews the theoretical literature in favor of government intervention in the market to secure food security. It is argued that food security needs to be considered as a public good, hence justifying government intervention in supplying it. Sustaining the potential to domestically produce safe minimum amounts of a staple food should be considered as a national strategic objective to achieve food security. Wheat is a staple food in Oman and it has been a major crop in the farming systems of Oman. Wheat cultivation under present circumstances of crop prices, yield, agricultural technology and resource availability in Oman’s commercial farming is not viable, without government support. With the use of a linear programming model that simulates the farming systems; in a major agricultural region in Oman (Batinah region) the production subsidy that is required as an incentive to promote the cultivation of wheat is estimated. The wheat yield in Oman is considered as 3 Tons/Ha and world price of wheat is around 100 OR/Ton. Wheat cultivation under commercial farming would be viable if a subsidy of at least 414 OR/Ha (138 OR/Ton) is provided. This subsidy can be instrumented as an input subsidy and/or price supports as Saudi Arabia had done (190 OR/Ton of wheat). If the wheat yield could be increased through technological and managerial means to global potential yield of 5 Tons/Ha then the price support needs to be at least 83 OR/Ton of wheat. The extent of its achievement in terms of extent of land cultivated and total domestic production of wheat, need to be considered in relation to the trade-off of fiscal cost and political choice of the degree of food security deemed as necessary to achieve. <em>Sri Lankan Journal of Agricultural Economics Vol.10/11 (2008/2009) 61-74</em> DOI: <a href="http://dx.doi.org/10.4038/sjae.v10i0.4591">http://dx.doi.org/10.4038/sjae.v10i0.4591</a>

Estimating the Short-Run Poverty Impacts of the 2010–11 Surge in Food Prices

Global food prices have increased substantially since mid-2010, as have prices in many developing countries. In this study we assess the poverty impact of the price changes between June and December 2010 in twenty-eight low and middle income countries. This is done by gathering detailed information on individual households' food production and consumption levels for thirty-eight agricultural and food commodities to assess the impacts on household welfare. This study estimates that this sudden food price surge increased the number of poor people globally, but with considerably different impacts in different countries. The heterogeneity of these impacts is partly related to the wide variation in the transmission of global prices to local prices and partly to differences in households' patterns of production and consumption. On balance, the adverse welfare impact on net buyers outweighs the benefits to net sellers resulting in an increase in the number of poor and in the depth of poverty. We estimate that the average poverty change was 1.1 percentage points in low income countries and 0.7 percentage points in middle income countries with a net increase of 44 million people falling below the $1.25 per day extreme poverty line.

Food crisis and export taxation: the cost of non-cooperative trade policies

This paper aims to assess the rationales for export taxes in the context of a food crisis. First, we summarize the effects of export taxes using both partial and general equilibrium theoretical models. When large countries aim to maintain constant domestic food prices, in the event of an increase in world agricultural prices, the optimal response is to decrease import tariffs in net food-importing countries and to increase export tariffs in net food-exporting countries. The latter decision improves national welfare, while the former reduces national welfare: this is the price that must be paid to keep domestic food prices constant. Small net food-importing countries are harmed by both decisions, while small net food-exporting countries gain from both. Second, we illustrate the costs of a lack of regulation and cooperation surrounding such policies in a time of crisis using a global computable general equilibrium (CGE) model, mimicking the mechanisms that appeared during the recent food price surge (2006–2008). This model illustrates the interdependence of trade policies, as well as how a process of retaliation and counter-retaliation (increased export taxes in large net food-exporting countries and reduced import tariffs in large net food-importing countries) can contribute to successive augmentations of world agricultural prices and harm small net food-importing countries. We conclude with a call for international regulation, in particular because small net food-importing countries may be substantially harmed by those policies that amplify the already negative impact of a food crisis.

How Will the Food Price Shock Affect Inflation in Latin America and the Caribbean?

There is widespread concern that recent increases in international food prices may have significant effects on domestic food prices and inflation. This note assesses the impact of the recent food price shock on food, non-food and consumer inflation in the countries of Latin American and the Caribbean (LAC). Vector Autoregressive Regressions (VARs) are estimated for each country to trace the effect of international food prices, the price of oil and the value of the US dollar on domestic prices. The results are then used to calculate the potential impact of higher food prices and to project the expected rise in domestic prices to the end of 2011 and beyond, given the actual increase in food prices until February 2011. It is concluded that, due to the food price surge, increases in inflation could exceed 5 percentage points in Bolivia, Dominican Republic, Guatemala and Honduras unless additional policy actions are taken. In some countries with flexible exchange rate systems, such as Brazil, Colombia and Mexico, currencies tend to appreciate as a response to higher food prices and as a result the impact on domestic prices is muted. However, there is no simple pattern of differences between floaters and fixers; the speed and extent of pass-through is quite heterogeneous and dependent on factors such as the importance of food in the overall inflation index and local policy measures.

Causes, Consequences and Policy Implications of Global Food Price Shocks: Introduction and Overview

Between January 2006 and April 2008 the real price of food traded on world markets rose by around 80%. The factors behind this dramatic surge are varied and, to an extent, remain contested, although fundamental shifts in patterns of demand, the effects of climate change, and the greater use of grains and oilseeds as fuel substitutes played a major role. Financial factors, including asset-price bubbles in commodity-backed securities, may also have played a role. As more recent events suggest, the era of high and volatile food prices is likely to persist which demands a better understanding of the economics and political economy of food price shocks in low-income economies. The papers in this volume, drawn from an AERC conference in May 2009, examine key issues in the origins and consequences of the recent global food price surge and seek to identify the public policy lessons for government and their international partners.

Global Food Price Shock and the Poor in Egypt and Ukraine

The global food price shock of 2006-2008 has particularly affected poorer strata of populations in several developing countries. In Egypt and some other countries it has put food subsidy schemes to the test. This paper develops two comparable computable general equilibrium models for Egypt and Ukraine which are used to simulate direct and indirect impacts of the food price surge and various policy options on the performance of the main macroeconomic indicators as well as on poverty outcomes. The results illustrate the limited ability of realistic policy responses to mitigate negative social consequences of an external price shock. Food import tariff cuts are a partial remedy faring better than other analysed options. Furthermore, the Egyptian system of food subsidies needs substantial reforms limiting the related fiscal burden and improving the targeting of the poor population.

Poverty Impact of Commodity Price Boom Using Household Survey - The Case of Maize in Zambia

This paper uses Household Survey data to analyze the possible effects that a food price surge could have on poverty and overall welfare. In particular, we use the Zambian Living Conditions Monitoring Survey I collected in 1996 (LCMS I) to estimate a demand system that enables us to simulate various price scenarios for the Zambian main staple and its possible effects for different population categories. Differently from previous studies, in our demand system we address two flaws usually encountered in this type of applications: one is the possible selection bias due to non-consumption of a particular staple among households, the other is the difference between the quantity used for estimation (typically logarithm) and the quantity of interest (level). Jointly, this increases the reliability of our technique. Our results show that a 50 percent increase in maize prices, which is in line with the actual surge in Zambia, could lead to an average consumption decrease of 17 percent among Zambian households and overall poverty could rise from 40 percent to 43 percent fairly quickly at national level.

Making a profit, making a living: commercial food farming and urban hinterlands in north-west Nigeria

AbstractThe article explores the nature and development of commercial food farming during the 1990s around Sokoto, and its reliance on a floating labour force, something which is not unique to that city but is part of Nigeria's nationwide farming boom, focused on urban and regional markets. The evidence collected from the Sokoto hinterland suggests a new buoyancy in commercial agriculture and an inflow of investment, as under the present economic and political conditions the elites and managerial classes have moved into farming as private and state contracting has proved less rewarding. Large-scale grain and fadama farming and food trading have a long history, but now they are embedded in new analytical categories which indicate a strengthening of capitalist relations of production, and there are signs that a wide spectrum of interests believe capital accumulation can be achieved in the agricultural sector. There are big profits in food fanning provided the farmer has sufficient capital to invest and can meet recurrent labour costs. In the 1990s medium-size farms, especially on irrigated lowland represent a significant shift towards capitalist agriculture, at least in the short term. The introduction of motorised pumps via the World Bank's Agricultural Development Projects marks a substantial innovation in irrigated farming, which also has a long history and has yielded food surpluses traded over a wide area. It is plain that the farmers who have benefited most from partial mechanisation and the surge in food prices are the better-off small commodity producers in the villages, often linked by descent or clientage with traditional rulers and/or politicians, together with the new urban managerial classes.

Food Price Policy and Income Distribution in Low-Income Countries

The complex interrelationships of price policy and income distribution are analyzed, beginning with the simple effects of changes in food prices as they are reflected in consumer-budget data and consumption patterns and the effects on producers of different income levels. The analysis progresses to a more complex study of the effect on agricultural technology and production and on employment in non-agricultural areas. The impact is shown to be greatest on low-income groups, whose economic condition also has the greatest impact on food demand. Secondary impacts on employment and income of low-income groups also result from changes in the real income of high-income consumers as prices change. On the basis of this analysis, the author suggests food-pricing policies that will encourage technological change in agriculture and employment growth in industry.