Foodgrain Prices Research Articles

INFLUENCE OF CLIMATE CHANGE ON THE GROWTH RATES AND DIRECTION OF GROWTH OF OUTPUTS OF SELECTED FOOD GRAINS IN NIGERIA (1981-2020)

The study assessed the influence on the growth rates and direction of growth of prices of outputs of selected food grans (rice, maize and wheat) in Nigeria from 1981 to 2020. Time series data were collected from secondary sources. The data was analyzed using regression analysis. The analysis showed that, the instantaneous growth rates were 4.8%, 4.3% and 1.5% for outputs of maize, rice and wheat, respectively, per annum increase in Nigeria (1981-2020); Whereas the value of the coefficient of quadratic term (t2) for rice (5.22), maize (0.649) and wheat (-0.62) were positive for rice and maize but negative for wheat which implies stagnated growth rates in rice and maize production and accelerated growth process in wheat production. In the same, the result revealed that the instantaneous growth rates were 15.5%, 13.2% and 13.1% for prices of maize, rice and wheat, respectively, per annum increase in Nigeria (1981-2020). Also, the value of the coefficient of t2 for rice (13.2%), maize (15.5%) and wheat (13.1%) were all positive and significant – which implies accelerated growth process in Nigeria (1981-2020). The study concluded that, climate change, environmental degradation and stagnating yields could have catastrophic effects and reduce yields and increase prices of food grains like rice, maize and wheat in Nigeria. It was therefore, recommends that, effort should be made by government and other relevant stakeholders in agriculture towards providing irrigation facilities in order to adjust any unfavourable influence of increase or decrease in rainfall on food grains’ growth and yield in Nigeria.

Grain Trade, Climate Change and Famines: A Study of Awadh from c. 1858–1900

This study is based on an interesting debate between the British authorities and the Indian nationalists over the issues of frequent famines during the colonial period in India. The British officials largely emphasised the role of deficient rainfall behind the occurrence of famines. But the Indian nationalists saw these famines as an impact of the colonial policies like unequal redistribution of the food-grains available in the local markets as a trade item which led to the rise in prices of food grains and made it beyond the reach of the masses. In the nationalist approach, the man-made scarcity of food grains and the price rise of the same were the main reasons behind the famines. However, some British surveyors argued that the unplanned destruction and conservation of the forests for the capital accumulation not only led to irregular rainfall pattern which gradually affected agricultural output but also deprived the local masses from the benefits of forests especially during the famine period. Thus, the present article takes up some of the issues like rainfall pattern, deforestation, food grain production and grain trade to understand the occurrence of famines in the region of Awadh soon after the direct British rule over India since 1858, mainly using the official data of nineteenth century along with the secondary works.

Impact of oil demand and supply shocks on food-grain prices: a Markov-switching approach

ABSTRACT This study examines the impact of structural oil demand and supply shocks on the prices of four food-grains: corn, rice, soybean and wheat. We first derive two oil demand shocks-one is due to the change in the global economic condition and the other is oil-market-specific-and an oil supply shock that reflects the change in global oil production. The structural shocks are then used in the linear, and nonlinear Markov-switching models to examine their effects on the four food-grain prices. The results show that an unanticipated oil supply shock does not affect price of any of the four food-grains significantly. An increase in the demand for oil, which is not induced by the change in global economic condition, increases only the corn price in the less volatile corn market. An improvement of global economic condition impacts wheat and corn prices in high volatility regimes. However, oil shocks that are older than one month usually do not affect the food-grain prices.

Speculation and food-grain prices

ABSTRACT The impact of speculative activities in financial markets on food-grain prices is a topical but debated issue. We consider four major food-grain commodities and several speculation measures–which represent different underlying definitions of speculation–in structural vector autoregression models to examine this issue empirically. Results show that the impact of speculation depends on the commodity in question (rice and wheat are generally less sensitive than corn and soybean) and the measure of speculation used. Further analysis shows that traders’ behaviour in the futures market is different for wheat and rice, around 80% of which are directly used for human consumption, compared to corn and soybean, only around 15% of which are directly used as human food. We also show that the heterogeneous effect of different speculative measures is mostly due to their construction. Results are robust to various modifications of the models. From a policy perspective, we think a blanket regulation for all the commodities may not be optimal.

DETERMINANTS OF AGRICULTURAL FOOD GRAIN COMMODITY PRICES IN NIGERIA

The study analyzed the determinants of agricultural food grain commodity prices in Nigeria. Secondary data was used for the study and covered the period of 1981-2018. Data obtained was analyzed using regression techniques. The findings revealed that inflation, importation policy, oil prices, quantity consumed of maize, corruption, population, that quantity supplied of maize and time variable significantly influenced the prices of maize in Nigeria within the period under review. Inflation, importation policy, quantity consumed, corruption, government capital subsidy, population and time variable significantly influenced the price of wheat in Nigeria within the period under study. The results further disclosed that on aggregate level, inflation, importation policy, quantity consumed of grains, corruption, government capital subsidy, population, quantity supplied of grains and time variable significantly (P≤0.5) influenced the price of food grains in Nigeria within the period under review based on the specified model. The study therefore, recommended that government should put in place necessary strategies to curb the rate of corruption and ensure political stability in the country that favours food grain price regulation as well as ensure that the prices of food grains in Nigeria, especially that of wheat and maize are made affordable to consumers and that it encourages the farmers to remain in the production of food grains in Nigeria.

Major constraints in production and agricultural prices of major food grains in Chhattisgarh

Major constraints in production and agricultural prices of major food grains in Chhattisgarh

Dynamics of Food Inflation: Assessing the Role of Intermediaries

The recent upsurge in the food prices experienced by the Indian economy since the latter half of 2000s has made it imperative for the policymakers to identify the crucial factors, which affect food prices within the economy. Against this backdrop, the present article determines the various key factors impacting the prices of food grains, specifically elucidating the role of intermediaries in this regard. By applying the autoregressive distributed lag (ARDL) approach to cointegration and quantifying the role of intermediaries by computing the price wedge between wholesale and retail prices of food grains, the study establishes the existence of both short-run and long-run relationships between price wedge and food grain inflation.

The burden of food subsidy and mounting stocks of food grains in India: Empirical analysis

The distribution of food grains through Public Distribution System (PDS) to the consumers to the targeted sections, at affordable prices has been an important objective of food management policy in India. The current food stocks in the country are far more than the needs. The problem of plenty is not going vanish away soon and it is a main concern of the policy makers. Along with this, the quantum of food subsidy has been increasing in India and has increased more rapidly during the recent years. This is basically because of the hike in Minimum Support Prices (MSPs), increase in procurement incidentals and distribution costs and expansion in the scale of PDS. The study intends to compute the rising trend in food subsidy and its determinants. It also intends to analyze the impact of rising MSPs on procurement and off take of food grains and finally to compare the role of MSP on rising food subsidies and rise in food grain stock. The study is based on the time series data on PDS off take, MSPs, PDS stocks, Central Issue Prices of food grains, food subsidy and production of food grains compiled from RBI hand book of statistics on Indian Economy economic survey, FCI reports and from ministry of food and public distribution. As the study finds that a two way relation between MSP and food subsidy and MSP and increasing stocks of food grains the role of MSP in the procurement operations of the government have to be taken into the account. Further, the study suggests that the food subsidy reforms have to be initiated to rationalize the burden of exchequer. The plan to computerize the TPDS databases along with the introduction of the Aadhaar/UID and NPR systems is the important stride to move forward.

Expenditure Management in the Public Distribution System

Food subsidy is a significant part of the cost incurred by the national exchequer. The Public Distribution System (PDS) has been long criticised for its inefficient track record with enormous leakages. This is a significant loss to the country. One of the main reasons for existence of leakages in the PDS system is the price differential that exists between market prices of food grains and the price at which it is sold at PDS. Additionally, the PDS has also faced criticism in recent years with regards to the quality of food distributed through them, transparency in the distribution network, and lack of coverage for passing benefits to the lower economic strata. This paper describes a new model for the PDS which makes use of technology along with appropriate process changes to address the issues plaguing the current system. It proposes changes to the manner in which food grains are supplied to Fair Price Shops (FPS) and last mile delivery of grains to entitled individuals. Together, it leads to the creation of a robust tight system aimed at effective delivery of benefits to the needy individuals without wasteful leakages. Moreover, the paper considers the fact that more than ensuring mere food security, it is also important to ensure that the needy receive a nutritious meal at an affordable price. For this, the paper recommends making use of the extensive reach of the PDS to distribute a more nutritious mix of food items to the poorer masses of the country. Usage of PDS as a tool to regulate prices of critical food items will also result in significant cost savings for the poor and the nation as a whole.

Production, Procurement and Inflation: A Market Model for Foodgrains

Rapid rise in the prices of foodgrains and their continued upsurge is a matter of concern not only for the government and policy makers but also for anyone concerned with social welfare. This is particularly so because the increased prices of basic food items cause great distress to the poor sections of society who spend a large part of their income on food. Thus, a clear understanding of the causes of inflation is necessary for framing the right policy to tackle the problem. The current study tries to examine how prices are determined in the Indian foodgrain market. This requires a slightly different approach from the conventional demand and supply framework as government intervenes in the market through open-market operations. To this end, we propose a structural model, explaining the behaviour of foodgrain prices for the period 1980–81 through 2011–12 incorporating the role of government interventions. Our results confirm that there is a strong impact of demand- as well as supply-side factors. However, when it comes to controlling inflation, demand-side management turns out to be highly significant. Under supply-side management, increased capital stock is found to be important, in so far as it significantly boosts production. Government intervention through procurement and off-take plays a stabilising role. JELClassification: E31, Q11, Q18

English

Grains are important food items amongst many households because of their nutritional values. Quite often, there are distinct disparities between the wholesale and retail prices of these commodities. This study therefore investigated the degree of integration and price communications in food grains markets. Data were collected from 240 food grains marketers who were randomly selected from the 4 divisions in Ogun State, Nigeria. Multiple regression model, supply elasticities and price correlation co-efficients estimates were done. For rice markets in Egba division of Ogun State, there were strong inter-relationships between the retail and wholesale prices of the commodities. Similarly for cowpea, the values of the regression coefficients are generally high. Mamu market, Ijebu division, recorded the highest regression coefficient value of 96% while Kuto market in Egba division recorded the least value of 56%. For maize, the regression results indicated low R2 values ranging between 43% in Lafenwa (Egba division) and 16% in Makun (Remo division). On the average, cowpea has the highest elasticities, followed by rice, while maize has the lowest. Thus, a 1% increase in the wholesale price of food grains resulted in 76.15, 75.77 and 59.49% increase for cowpea, rice and maize respectively. Generally, high price correlation co-efficient values were obtained for the pairs of retail prices of rice and cowpea. There should a stable agricultural policy that will ensure moderate wholesale prices, and by extension retail prices of food grains so that the average household consumption level of the commodities could be sustained at high levels.   Key words: Elasticity, food grains, integration, price communication, wholesale, retail prices.

Foodgrain Stocks, Prices and Speculation

Much of recent work has raised the issue that the surge in prices of foodgrains in the last two years cannot be explained satisfactorily in terms of the fundamentals of supply and demand. It has also been suggested that the part that cannot be explained in this way is due largely to speculation. Speculation influences food prices in two distinct ways: one is the huge influx of capital from commodity index funds, hedge funds and pension funds in commodity futures markets or options. Some evidence suggests that expiry prices in commodity futures markets are considerably higher than cash or spot prices, implying that futures markets are not facilitating price discovery. The second form is purchase or hoarding of commodities on the presumption that their prices will continue to rise. The present analysis, based on a rational distributed lag model of global stocks of wheat, maize and rice and their prices over the period 1986-2008, confirms a positive long-run effect of rising prices on stocks. In the case of rice, this effect is considerably stronger. If this finding has any validity, although the need for correcting demand-supply imbalances remains a top priority, careful attention must also be given to limiting speculation. Various suggestions include the imperative of a 'virtual grain reserve' to be established to help calm markets through the futures market. But, above all, there is a strong case for a better functioning trading system-in particular, for trade liberalization in agriculture and to build trust in global food markets and stock management.

Food inventory policies under liberalized trade

This paper evaluates the role of food inventories or buffer stocks in stabilizing prices of foodgrains in India when private external trade in grain is liberalized. The model adopts a multi-market equilibrium framework with the direction of trade determined endogenously. World prices are assumed to be sensitive to the amount traded by India (the ‘large country’ effect). The simulation results demonstrate that holding foodgrain inventories is an inefficient mechanism for stabilizing domestic prices under liberalized trade. Variable levies/ subsidies on trade appear to be more cost effective. Freeing of trade lowers domestic price variability even though world prices are more volatile.

Foodgrain price stabilisation in an open economy: A CGE analysis of variable trade levies for India

Within the present multilateral trading system, the developing countries are obliged to gradually open up their agricultural sector to world markets. As a result of this, the effectiveness of conventional instruments of food price stabilisation will be greatly reduced. How then is food price stability to be maintained in a liberalised open economy? This article presents a general‐equilibrium evaluation of using variable trade levies on agricultural trade to stabilise foodgrain prices in response to exogenous shocks. This is done for the Indian economy with the help of a multi‐period computable general equilibrium (CGE) model, focused on agriculture and income distribution. The model is used to analyse the sensitivity of the economy's growth, income distribution and food security to external and internal shocks under varying degrees of trade openness. The results show that both shocks are distributionally regressive and, with external shocks, become more so, the more open the economy is. WTO‐consistent variable levies on agricultural trade are found effective in stabilising prices, checking real wage erosion and containing regressive distributional effects.

Foodgrain price stabilization: Implications of private storage and subsidized food distribution

Through simulation exercises, this paper explores the implications of private storage and subsidized distribution of foodgrain for price stabilization policies in India. A multi-market equilibrium approach is used to incorporate the simultaneity in the determination of supply and demand for the three major cereals, namely, rice, wheat, and coarse cereals. The policy implications of the results obtained are relevant to the current debate on agricultural policy reforms in India.

Islam, Nurul, and Saji Thomas. Foodgrain Price Stabilization in Developing Countries: Issues and Experiences in Asia. Washington DC: International Food Policy Research Institute, Food Policy Review No. 3, 1996, viii + 136 pp., paper $@@‐@@4.50

Islam, Nurul, and Saji Thomas. <i>Foodgrain Price Stabilization in Developing Countries: Issues and Experiences in Asia</i>. Washington DC: International Food Policy Research Institute, Food Policy Review No. 3, 1996, viii + 136 pp., paper $@@‐@@4.50

Food Security in Pakistan: Can It Be Achieved?

Wide fluctuations in world prices of food-grains, especially rice and wheat, in the seventies and the early eighties forced many developing countries to strive for self-sufficiency in food-grain production. Pakistan is among the countries where near self-sufficiency was achieved in wheat in the early eighties. It also maintained its status as a leading rice-exporting country. However, a continuously high rate of population growth, a changing pattern of income distribution, and a greater level of urbanisation have greatly influenced the demand for food-grains. At the same time, additional factors like a sharp rise in the cost of irrigation, a dramatic decline in the world price of rice, a heavy debt burden, the lack of technology and human capital development, and mismanagement in the distribution system have contributed towards a slower growth of grain production as compared with the levels achieved in the sixties and the eighties. This change in the demand and supply situation with respect to food has necessitated the need to re-evaluate the existing agricultural policies. Within demand and supply constraints, the question is whether or not Pakistan can attain selfsufficiency in wheat while at the same time maintaining its status as a significant exporter of rice. In the immediate future, the situation appears desperate, but in the long-run, when available resources are adequately utilised and consistent policies are adopted, there is hope and optimism. This study not only reviews the current food situation in Pakistan but also develops alternative policy scenarios which are consistent with the target of food security in Pakistan.

Foodgrain Prices and Class Relations

Foodgrain Prices and Class Relations

Composite Indicators for Famine Early Warning Systems

Traditional famine early warning systems use a host of indicators to predict food crisis situations, from rainfall and increased rate of marketing of household durables to the behavior of birds and animals. Although many of these indicators are valid in general, limited understanding of the sensitivity and specificity of the distress signals makes food crisis prediction a highly subjective exercise. In order to make the system more effective and credible, we need to identify a limited number of 'composite' indicators, which naturally summarize most relevant food-related information contained in the specific predictors of food crisis. Considering the chronology of the food production and consumption chain, three composite indicators specific to three different stages of the chain have been identified. The satellite data based Normalized Deviation of Vegetative Index (NDVI), prices of major food grains, and malnutrition rates are found to be correlated not only with the quality and quantity of inputs of this process but also with the final outcome. Both NDVI and price data are widely used as important predictors of food crisis by famine warning systems. What we have demonstrated is that improved sensitivity of the indicators is likely to be due to their inherent capability of summarizing information from various specific measures. Child malnutrition rates also summarize inputs and outputs of the food consumption process very effectively, and therefore should be able to predict community level food crisis in an efficient manner. The empirical results confirm this conjecture by showing that malnutrition rates can predict food crisis probability three months into the future with a high degree of specificity. The use of 'composite' indicators not only simplifies the problem of aggregation, but is also likely to yield forecasts that are highly specific and sensitive.

Does Undernutrition Respond to Incomes and Prices? Dominance Tests for Indonesia

Recent evidence suggests that food energy intakes are less responsive to incomes of the poor than was once thought. However, it is not intakes per se that there is concern about, but undernutrition. Two facts have long confounded assessments of impacts on undernutrition: individual nutrient requirements vary in a generally unobserved way, and intakes are observed with error. By modelling observed intake distributions econometrically, straightforward stochastic dominance tests can permit robust qualitative inferences. An application to Indonesia in the mid-1980s indicates that regional differences in energy intake distributions are influenced by average income levels, intra-regional inequalities, and local prices of staple food-grains, all with unambiquous effects on undernutrition. The results suggest that any adverse effects on inequality of a growth process would need to be large to outweigh the desirable effect on undernutrition. Plausible effects on rual incomes are insufficient to outweigh adverse effects on undernutrition of higher rice prices.