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Higher world food prices have led many developing countries to adopt policies to mitigate the impact on low-income households. This article sets out a partial equilibrium framework to evaluate the efficiency, distributional, and revenue implications of alternative policy responses. The model is applied to evaluate tariff reductions and targeted transfers in Madagascar. Although lowering tariffs generates substantial efficiency gains, these accrue mainly to the top half of the welfare distribution, and poor net sellers are actually worse off. Developing a system of targeted direct transfers to poor households is likely to be a substantially more cost-effective approach to poverty alleviation.
Book Synopsis Evaluating Alternative Policy Responses to Higher World Food Prices by : David Coady, Paul Dorosh, and Bart Minten
Download or read book Evaluating Alternative Policy Responses to Higher World Food Prices written by David Coady, Paul Dorosh, and Bart Minten and published by Intl Food Policy Res Inst. This book was released on 2009 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: Higher world food prices have led many developing countries to adopt policies to mitigate the impact on low-income households. This article sets out a partial equilibrium framework to evaluate the efficiency, distributional, and revenue implications of alternative policy responses. The model is applied to evaluate tariff reductions and targeted transfers in Madagascar. Although lowering tariffs generates substantial efficiency gains, these accrue mainly to the top half of the welfare distribution, and poor net sellers are actually worse off. Developing a system of targeted direct transfers to poor households is likely to be a substantially more cost-effective approach to poverty alleviation.
From 2006 to mid-2008 the international prices of agricultural commodities increased considerably, by a factor larger than two. This upward trend in agricultural prices captured the world's attention as a new food crisis was emerging. Several explanations for these movements in prices, ranging from demand-driven forces to supply shocks, have been provided by analysts, researchers, and development institutions. This paper is an attempt to empirically validate these explanations using time series econometrics and data at monthly frequency. We focus on the international price of corn, wheat, rice, and soybeans. First, we identify variables associated with the factors mentioned as causing the increase in these agricultural commodities prices. Second, we use time series analysis to try to quantitatively validate those explanations. The empirical work presented here includes first difference models and rolling Granger causality tests. Overall, our empirical analysis mainly provides evidence that financial activity in futures markets and proxies for speculation can help explain the observed change in food prices; any other explanation is not well supported by our time series analysis.
Book Synopsis Recent food prices movements by : Bryce Cooke
Download or read book Recent food prices movements written by Bryce Cooke and published by Intl Food Policy Res Inst. This book was released on with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: From 2006 to mid-2008 the international prices of agricultural commodities increased considerably, by a factor larger than two. This upward trend in agricultural prices captured the world's attention as a new food crisis was emerging. Several explanations for these movements in prices, ranging from demand-driven forces to supply shocks, have been provided by analysts, researchers, and development institutions. This paper is an attempt to empirically validate these explanations using time series econometrics and data at monthly frequency. We focus on the international price of corn, wheat, rice, and soybeans. First, we identify variables associated with the factors mentioned as causing the increase in these agricultural commodities prices. Second, we use time series analysis to try to quantitatively validate those explanations. The empirical work presented here includes first difference models and rolling Granger causality tests. Overall, our empirical analysis mainly provides evidence that financial activity in futures markets and proxies for speculation can help explain the observed change in food prices; any other explanation is not well supported by our time series analysis.
This semiannual journal from the Latin American and Caribbean Economic Association (LACEA) provides a forum for influential economists and policymakers from the region to share high-quality research directly applied to policy issues within and among those countries.
Book Synopsis Economía: Spring 2010 by : Roberto Rigobón
Download or read book Economía: Spring 2010 written by Roberto Rigobón and published by Brookings Institution Press. This book was released on 2011-11-01 with total page 176 pages. Available in PDF, EPUB and Kindle. Book excerpt: This semiannual journal from the Latin American and Caribbean Economic Association (LACEA) provides a forum for influential economists and policymakers from the region to share high-quality research directly applied to policy issues within and among those countries.
Increases in cereal prices can have adverse effects on poor net food buyers. This is a particular problem in Ethiopia because of frequent natural calamities – especially droughts – that lead to significant price hikes. Conversely, falling domestic prices of some cereals (especially maize), typically at harvest time, can be detrimental to producers who are net sellers. Price stabilization efforts are therefore an important consideration for Ethiopian policy makers. This paper sheds light on options for cereal price stabilization in Ethiopia drawing on experiences of other developing countries. The international experience in food price stabilization shows that while some countries have achieved success, the efforts of many others have actually destabilized market prices at great fiscal cost. We assess the extent to which price stabilization efforts in Ethiopia were effective during the major El Niño induced drought of 2015/16 and find that opportunities were missed to enhance food security and consumer welfare through permitting private sector imports in order to curtail the rise in cereal prices and to reduce fiscal costs for the government and donors.
Book Synopsis Droughts, cereal prices, and price stabilization options in Ethiopia by : Dorosh, Paul A.
Download or read book Droughts, cereal prices, and price stabilization options in Ethiopia written by Dorosh, Paul A. and published by Intl Food Policy Res Inst. This book was released on 2018-11-15 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: Increases in cereal prices can have adverse effects on poor net food buyers. This is a particular problem in Ethiopia because of frequent natural calamities – especially droughts – that lead to significant price hikes. Conversely, falling domestic prices of some cereals (especially maize), typically at harvest time, can be detrimental to producers who are net sellers. Price stabilization efforts are therefore an important consideration for Ethiopian policy makers. This paper sheds light on options for cereal price stabilization in Ethiopia drawing on experiences of other developing countries. The international experience in food price stabilization shows that while some countries have achieved success, the efforts of many others have actually destabilized market prices at great fiscal cost. We assess the extent to which price stabilization efforts in Ethiopia were effective during the major El Niño induced drought of 2015/16 and find that opportunities were missed to enhance food security and consumer welfare through permitting private sector imports in order to curtail the rise in cereal prices and to reduce fiscal costs for the government and donors.
The impact of price developments on world food markets on poor households in developing countries is an important policy question. Who gains and who loses from agricultural commodity price changes depends on the specific circumstances of households, and, at the level of nations, on the structure of production and trade. The contributions to this volume review trends in international prices and trade patterns of key food commodities, and assess the incidence of food price changes in a number of developing countries using household level data on sources of incomes and consumption patterns.
Book Synopsis Food Prices and Rural Poverty by : Centre for Economic Policy Research
Download or read book Food Prices and Rural Poverty written by Centre for Economic Policy Research and published by CEPR. This book was released on 2010-11-15 with total page 350 pages. Available in PDF, EPUB and Kindle. Book excerpt: The impact of price developments on world food markets on poor households in developing countries is an important policy question. Who gains and who loses from agricultural commodity price changes depends on the specific circumstances of households, and, at the level of nations, on the structure of production and trade. The contributions to this volume review trends in international prices and trade patterns of key food commodities, and assess the incidence of food price changes in a number of developing countries using household level data on sources of incomes and consumption patterns.
This book is devoted to the complex relationship between the global trading system and food security, focusing on two important elements: the Doha Development Agenda (DDA) and how food price volatility can be managed, or not, through trade instruments. The first section of the book is based on the premise that more trade integration can fight poverty and alleviate hunger. The second section examines whether managing price volatility is doable through more or less trade integration. This section deals in particular with policy instruments available for policy makers to cope with price volatility: food stocks, crop insurance, and export restrictions. Analysis concludes that without a strong and efficient World Trade Organization (WTO) capable of conducting ambitious trade negotiations, the food security target will be much more difficult to hit.
Book Synopsis Agriculture, development, and the global trading system: 2000– 2015 by : Bouët, Antoine
Download or read book Agriculture, development, and the global trading system: 2000– 2015 written by Bouët, Antoine and published by Intl Food Policy Res Inst. This book was released on 2017-09-07 with total page 492 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is devoted to the complex relationship between the global trading system and food security, focusing on two important elements: the Doha Development Agenda (DDA) and how food price volatility can be managed, or not, through trade instruments. The first section of the book is based on the premise that more trade integration can fight poverty and alleviate hunger. The second section examines whether managing price volatility is doable through more or less trade integration. This section deals in particular with policy instruments available for policy makers to cope with price volatility: food stocks, crop insurance, and export restrictions. Analysis concludes that without a strong and efficient World Trade Organization (WTO) capable of conducting ambitious trade negotiations, the food security target will be much more difficult to hit.
Ethiopia has experienced impressive agricultural growth and poverty reduction, stemming in part from substantial public investments in agriculture. Yet, the agriculture sector now faces increasing land and water constraints along with other challenges to growth. Ethiopia’s Agrifood System: Past Trends, Present Challenges, and Future Scenarios presents a forward-looking analysis of Ethiopia’s agrifood system in the context of a rapidly changing economy. Growth in the agriculture sector remains essential to continued poverty reduction in Ethiopia and will depend on sustained investment in the agrifood system, especially private sector investment. Many of the policies for a successful agricultural and rural development strategy for Ethiopia are relevant for other African countries, as well. Ethiopia’s Agrifood System should be a valuable resource for policymakers, development specialists, and others concerned with economic development in Africa south of the Sahara.
Book Synopsis Ethiopia's agrifood system: Past trends, present challenges, and future scenarios by : Dorosh, Paul A., ed.
Download or read book Ethiopia's agrifood system: Past trends, present challenges, and future scenarios written by Dorosh, Paul A., ed. and published by Intl Food Policy Res Inst. This book was released on 2020-09-14 with total page 520 pages. Available in PDF, EPUB and Kindle. Book excerpt: Ethiopia has experienced impressive agricultural growth and poverty reduction, stemming in part from substantial public investments in agriculture. Yet, the agriculture sector now faces increasing land and water constraints along with other challenges to growth. Ethiopia’s Agrifood System: Past Trends, Present Challenges, and Future Scenarios presents a forward-looking analysis of Ethiopia’s agrifood system in the context of a rapidly changing economy. Growth in the agriculture sector remains essential to continued poverty reduction in Ethiopia and will depend on sustained investment in the agrifood system, especially private sector investment. Many of the policies for a successful agricultural and rural development strategy for Ethiopia are relevant for other African countries, as well. Ethiopia’s Agrifood System should be a valuable resource for policymakers, development specialists, and others concerned with economic development in Africa south of the Sahara.
The perception of Ethiopia projected in the media is often one of chronic poverty and hunger, but this bleak assessment does not accurately reflect most of the country today. Ethiopia encompasses a wide variety of agroecologies and peoples. Its agriculture sector, economy, and food security status are equally complex. In fact, since 2001 the per capita income in certain rural areas has risen by more than 50 percent, and crop yields and availability have also increased. Higher investments in roads and mobile phone technology have led to improved infrastructure and thereby greater access to markets, commodities, services, and information. In Food and Agriculture in Ethiopia: Progress and Policy Challenges, Paul Dorosh and Shahidur Rashid, along with other experts, tell the story of Ethiopia's political, economic, and agricultural transformation. The book is designed to provide empirical evidence to shed light on the complexities of agricultural and food policy in today's Ethiopia, highlight major policies and interventions of the past decade, and provide insights into building resilience to natural disasters and food crises. It examines the key issues, constraints, and opportunities that are likely to shape a food-secure future in Ethiopia, focusing on land quality, crop production, adoption of high-quality seed and fertilizer, and household income. Students, researchers, policy analysts, and decisionmakers will find this book a useful overview of Ethiopia's political, economic, and agricultural transformation as well as a resource for major food policy issues in Ethiopia. Contributors: Dawit Alemu, Guush Berhane, Jordan Chamberlin, Sarah Coll-Black, Paul Dorosh, Berhanu Gebremedhin, Sinafikeh Asrat Gemessa, Daniel O. Gilligan, John Graham, Kibrom Tafere Hirfrfot, John Hoddinott, Adam Kennedy, Neha Kumar, Mehrab Malek, Linden McBride, Dawit Kelemework Mekonnen, Asfaw Negassa, Shahidur Rashid, Emily Schmidt, David Spielman, Alemayehu Seyoum Taffesse, Seneshaw Tamiru, James Thurlow, William Wiseman.
Book Synopsis Food and Agriculture in Ethiopia by : Paul Dorosh
Download or read book Food and Agriculture in Ethiopia written by Paul Dorosh and published by University of Pennsylvania Press. This book was released on 2013-02-11 with total page 377 pages. Available in PDF, EPUB and Kindle. Book excerpt: The perception of Ethiopia projected in the media is often one of chronic poverty and hunger, but this bleak assessment does not accurately reflect most of the country today. Ethiopia encompasses a wide variety of agroecologies and peoples. Its agriculture sector, economy, and food security status are equally complex. In fact, since 2001 the per capita income in certain rural areas has risen by more than 50 percent, and crop yields and availability have also increased. Higher investments in roads and mobile phone technology have led to improved infrastructure and thereby greater access to markets, commodities, services, and information. In Food and Agriculture in Ethiopia: Progress and Policy Challenges, Paul Dorosh and Shahidur Rashid, along with other experts, tell the story of Ethiopia's political, economic, and agricultural transformation. The book is designed to provide empirical evidence to shed light on the complexities of agricultural and food policy in today's Ethiopia, highlight major policies and interventions of the past decade, and provide insights into building resilience to natural disasters and food crises. It examines the key issues, constraints, and opportunities that are likely to shape a food-secure future in Ethiopia, focusing on land quality, crop production, adoption of high-quality seed and fertilizer, and household income. Students, researchers, policy analysts, and decisionmakers will find this book a useful overview of Ethiopia's political, economic, and agricultural transformation as well as a resource for major food policy issues in Ethiopia. Contributors: Dawit Alemu, Guush Berhane, Jordan Chamberlin, Sarah Coll-Black, Paul Dorosh, Berhanu Gebremedhin, Sinafikeh Asrat Gemessa, Daniel O. Gilligan, John Graham, Kibrom Tafere Hirfrfot, John Hoddinott, Adam Kennedy, Neha Kumar, Mehrab Malek, Linden McBride, Dawit Kelemework Mekonnen, Asfaw Negassa, Shahidur Rashid, Emily Schmidt, David Spielman, Alemayehu Seyoum Taffesse, Seneshaw Tamiru, James Thurlow, William Wiseman.
Despite reforms in early 2021, including a devaluation of the currency and a liberalization of imports, there remain significant distortions in Sudan’s wheat value chain, especially related to subsidized sales prices of flatbread. This flatbread subsidy, a key component of wheat policy, is not well-targeted. Calculations based on 2009 national household survey data and current 2021 prices and wheat supply show that urban poor households annually receive slightly less from this subsidy than urban non-poor households (18,900 and 20,800 SDG/capita). Rural poor households receive only 2,700 SDG/capita. This paper presents the results of several simulations of a partial equilibrium model of Sudan’s wheat economy that are designed to analyze the impacts of recent shocks and various policy options. Model simulations show that increased wheat imports, such as those financed by food aid, add to supplies for processing into wheat flour, flatbread, and other wheat products, resulting in lower prices for consumers and increased consumption, but also disincentives for production. A 300,000 ton increase in wheat imports, as occurred in early 2021, results in an 8 percent increase in wheat consumption and a 35 percent decline in the market price of non-flatbread wheat products. Production falls by 12 percent. Since flatbread prices are unchanged, wheat consumption of the urban poor, for whom flatbread is the major wheat product consumed, increases by only 4 percent. Raising flatbread prices by 30 percent to reduce the size of the fiscal subsidy reduces total consumption of flatbread by 17 percent and sharply reduces wheat consumption and real incomes of the urban poor. All households suffer a loss of 41 to 45 percent in the value of flatbread subsidies received. The urban poor experience the largest decline in total consumption of wheat (14 percent) and in total income (11 percent). (The average total income loss for all households is only 3 percent.) Reducing the flatbread subsidy without a compensating income transfer would significantly reduce the welfare of the urban poor and likely threaten political stability. Our results suggest that a combination of key wheat policies involving high levels of imports – including injection of food aid wheat into the economy in late 2020 – and subsidized flatbread will significantly benefit urban poor households. Nonetheless, the are important data gaps on several aspects of the wheat sector, including no recent nationally representative household expenditure survey data. In addition, greater transparency, including publication of quantities and prices of government purchases, sales of wheat and wheat flour, and quantities and prices of subsidized flatbread across the country has the potential to significantly increase the efficiency of the entire wheat sector. As shown in this paper, Sudan’s wheat policies in recent years, such as increased wheat imports, price subsidies in the wheat value chain, and low prices of flatbread, have in general favored consumers, to the detriment of producers. These interventions in the wheat value chain, especially those related to subsidies on flatbread, have especially large effects on the welfare of urban households, making these policies particularly politically sensitive. However, they have entailed high fiscal costs, threatening macro-economic stability and crowding out other possible investments to promote growth and poverty reduction. Careful policy analysis and ongoing monitoring of outcomes and new developments will be needed to help guide the important choices ahead.
Book Synopsis Distributional consequences of wheat policy in Sudan: A simulation model analysis by : Dorosh, Paul A.
Download or read book Distributional consequences of wheat policy in Sudan: A simulation model analysis written by Dorosh, Paul A. and published by Intl Food Policy Res Inst. This book was released on 2021-12-15 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: Despite reforms in early 2021, including a devaluation of the currency and a liberalization of imports, there remain significant distortions in Sudan’s wheat value chain, especially related to subsidized sales prices of flatbread. This flatbread subsidy, a key component of wheat policy, is not well-targeted. Calculations based on 2009 national household survey data and current 2021 prices and wheat supply show that urban poor households annually receive slightly less from this subsidy than urban non-poor households (18,900 and 20,800 SDG/capita). Rural poor households receive only 2,700 SDG/capita. This paper presents the results of several simulations of a partial equilibrium model of Sudan’s wheat economy that are designed to analyze the impacts of recent shocks and various policy options. Model simulations show that increased wheat imports, such as those financed by food aid, add to supplies for processing into wheat flour, flatbread, and other wheat products, resulting in lower prices for consumers and increased consumption, but also disincentives for production. A 300,000 ton increase in wheat imports, as occurred in early 2021, results in an 8 percent increase in wheat consumption and a 35 percent decline in the market price of non-flatbread wheat products. Production falls by 12 percent. Since flatbread prices are unchanged, wheat consumption of the urban poor, for whom flatbread is the major wheat product consumed, increases by only 4 percent. Raising flatbread prices by 30 percent to reduce the size of the fiscal subsidy reduces total consumption of flatbread by 17 percent and sharply reduces wheat consumption and real incomes of the urban poor. All households suffer a loss of 41 to 45 percent in the value of flatbread subsidies received. The urban poor experience the largest decline in total consumption of wheat (14 percent) and in total income (11 percent). (The average total income loss for all households is only 3 percent.) Reducing the flatbread subsidy without a compensating income transfer would significantly reduce the welfare of the urban poor and likely threaten political stability. Our results suggest that a combination of key wheat policies involving high levels of imports – including injection of food aid wheat into the economy in late 2020 – and subsidized flatbread will significantly benefit urban poor households. Nonetheless, the are important data gaps on several aspects of the wheat sector, including no recent nationally representative household expenditure survey data. In addition, greater transparency, including publication of quantities and prices of government purchases, sales of wheat and wheat flour, and quantities and prices of subsidized flatbread across the country has the potential to significantly increase the efficiency of the entire wheat sector. As shown in this paper, Sudan’s wheat policies in recent years, such as increased wheat imports, price subsidies in the wheat value chain, and low prices of flatbread, have in general favored consumers, to the detriment of producers. These interventions in the wheat value chain, especially those related to subsidies on flatbread, have especially large effects on the welfare of urban households, making these policies particularly politically sensitive. However, they have entailed high fiscal costs, threatening macro-economic stability and crowding out other possible investments to promote growth and poverty reduction. Careful policy analysis and ongoing monitoring of outcomes and new developments will be needed to help guide the important choices ahead.
It is widely agreed that reducing poverty in Africa south of the Sahara (SSA) depends largely on stimulating growth in agriculture. To this end, heads of state in Africa rallied to form the pan-African Comprehensive African Agriculture Development Programme (CAADP) with the goal of raising investments and improving strategy implementation. However, while implementing an agricultural agenda under the CAADP framework, more and more countries have realized that increasing public investment in agriculture alone is not enough. Policy can play an important role not only to make public investment more efficient, but also is crucial for incentivizing private sector and farmer investment in agriculture. Against this backdrop this paper takes stock of current agricultural policies in SSA with a view to identifying policies that are working as well as areas for improvement. The paper examines policies to encourage the adoption of agricultural inputs, initiate greater private-sector investment in agriculture and agro-industries, and manage price volatility while encouraging openness. The paper further reviews successful land tenure policies and property rights systems, reviews the evidence on the synergies between agriculture and nutrition, and examines how CAADP is laying the institutional architecture for improved policy formulation in Africa. In general, the paper finds that although substantial progress has been made, there is considerable scope for improvement. This is not surprising given the relatively primitive and deeply rooted nature of smallholder farming in Africa. Evidence synthesized in the paper supports the view that most policies cannot be implemented in isolation. Rather, policies tend to be most effective when implemented along with complementary policies and public investments.
Book Synopsis Evidence on Key Policies for African Agricultural Growth by : Xinshen Diao
Download or read book Evidence on Key Policies for African Agricultural Growth written by Xinshen Diao and published by Intl Food Policy Res Inst. This book was released on 2013-02-12 with total page 84 pages. Available in PDF, EPUB and Kindle. Book excerpt: It is widely agreed that reducing poverty in Africa south of the Sahara (SSA) depends largely on stimulating growth in agriculture. To this end, heads of state in Africa rallied to form the pan-African Comprehensive African Agriculture Development Programme (CAADP) with the goal of raising investments and improving strategy implementation. However, while implementing an agricultural agenda under the CAADP framework, more and more countries have realized that increasing public investment in agriculture alone is not enough. Policy can play an important role not only to make public investment more efficient, but also is crucial for incentivizing private sector and farmer investment in agriculture. Against this backdrop this paper takes stock of current agricultural policies in SSA with a view to identifying policies that are working as well as areas for improvement. The paper examines policies to encourage the adoption of agricultural inputs, initiate greater private-sector investment in agriculture and agro-industries, and manage price volatility while encouraging openness. The paper further reviews successful land tenure policies and property rights systems, reviews the evidence on the synergies between agriculture and nutrition, and examines how CAADP is laying the institutional architecture for improved policy formulation in Africa. In general, the paper finds that although substantial progress has been made, there is considerable scope for improvement. This is not surprising given the relatively primitive and deeply rooted nature of smallholder farming in Africa. Evidence synthesized in the paper supports the view that most policies cannot be implemented in isolation. Rather, policies tend to be most effective when implemented along with complementary policies and public investments.
