Regional Responses to High Food Prices

Synthesis Presentation of Africa Regional Meeting on World Food Crisis and Appropriate Policy Responses at Country Level
Suresh Babu. IFPRI. 2010

The International Food Policy Research Institute organized an Africa Regional Meeting from June 22nd to June 24th, 2010 on "World Food Crisis and Appropriate Policy Responses at Country Level." 9 countries that are also included in the Food Security Portal participated in the Meeting. The synthesis presentation summarizes key lessons and outcomes from the Africa Regional Meeting.
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Sustaining and Accelerating Africa's Agricultural Growth Recovery in the Context of Changing Global Food Prices
Ousmane Badiane. IFPRI. 2008

Starting in the mid-1990s, Africa embarked upon its longest period of sustained, positive per capita income growth since the 1960s. This growth recovery has made a dent in poverty and holds out hope that a number of African countries may reach the Millennium Development Goal targets for poverty and food security (MDG 1), if not by 2015, then within the following few years. Agricultural growth has been, and will remain, key to reducing poverty and hunger in Africa. To significantly reduce poverty, Africa needs to sustain, broaden, and accelerate its recent growth performance and boost its investments in agriculture. The recent spike in global food prices represents an opportunity that could support further agricultural sector growth in Africa. The unfolding financial crisis, on the other hand, could have the reverse effect, especially if it leads to lower investments in the sector….READ FULL REPORT

Accelerating Africa’s Food Production in Response to Rising Food Prices: Impacts and Requisite Actions
Xinshen Diao, Shenggen Fan, Derek Headey, Michael Johnson, Alejandro Nin Pratt, Bingxin Yu. IFPRI. 2008.

In Africa the global food crisis threatens the livelihoods of millions of people who because of high rates of poverty, hunger, malnutrition, and food dependency are already exceptionally vulnerable. In better circumstances, Africa’s agricultural sector would respond to rising prices by increasing food supply. But such a response is impossible without significant new policy actions on both the production and marketing of African agriculture. This paper assesses the likely impacts of two strategic policy options: doubling African staples production, and improving “market access” through regional integration and lowering transaction costs. Using an economy wide multimarket model for 17 African economies and econometrically estimated parameters describing the relationships between growth and poverty and between public spending and growth, we assess the impacts of these two strategic options on Africa’s food markets and its broader economic development. Doubling staples production significantly increases food security, reduces consumer food prices by roughly 25 percent, reduces producer prices by 10 percent (thus raising farm revenue), accelerates agricultural growth rates, facilitates broader economic growth through new agro processing and export opportunities, and lifts more than 100 million Africans out of poverty. Key policy actions are needed to move from this strategic vision to implementation. The first set of actions requires investing $38 billion from 2009 to 2013, or $7.5 billion per year, in a well-designed package of modern agricultural inputs and provisions. The second requires improving and extending transport infrastructure, especially major transport corridors and rural feeder roads. The third requires reducing trade barriers, which still remain much higher in agriculture than in other sectors.
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Potential Impact of Higher Food Prices on Poverty: Summary Estimates for a Dozen West and Central African Countries
Quentin Wodon, Clarence Tsimpo, Prospere Backiny-Yetna, George Joseph, Franck Adoho, and Harold Coulombe. World Bank. 2008.

To assess the impact of rising food prices in any particular country it is necessary to look at both the impact on food producers who are poor or near-poor and could benefit from an increase in prices and food consumers who are poor or near-poor and would lose out when the price increases. In most West and Central African countries, the sign (positive or negative) of the impact is not ambiguous because a substantial share of food consumption is imported, so that the negative impact for consumers is larger than the positive impact for net sellers of locally produced foods. Yet even if the sign of the impact is clear, its magnitude is not. Using a set of recent and comprehensive household surveys, this paper summarizes findings from an assessment of the potential impact of higher food prices on the poor in a dozen countries. Rising food prices for rice, wheat, maize, and other cereals as well as for milk, sugar and vegetable oils could lead to a substantial increase in poverty in many of the countries. At the same time, the data suggest that the magnitude of the increase in poverty between different countries is likely to be different. Finally, the data suggest that a large share of the increase in poverty will consist of deeper levels of poverty among households who are already poor, even if there will also be a larger number of poor households in the various countries.DOWNLOAD PDF

Rising Food Prices in Sub-Saharan Africa: Poverty Impact and Policy Responses
Quentin Wodon and Hassan Zaman. World Bank. 2008.

This paper aims to review the evidence on the potential impact of higher food prices on poverty in sub-Saharan Africa, and examines the extent to which policy responses will benefit the poor. The paper shows that rising food prices are likely to lead to higher poverty in sub-Saharan Africa as the negative impact on net poor consumers outweighs the benefits to poor producers. A recent survey shows that the most common policy response in sub-Saharan African countries is reducing taxes on food while outside the region price controls or targeted consumer subsidies are the most popular measure. Sub-Saharan African countries also have a higher prevalence of food-based safety net programs which are being scaled up to respond to rising prices. The review suggests that the benefits from reducing import tariffs on staples may accrue largely to the non-poor. Social protection programs show more promise, but geographic targeting is likely to be crucial in ensuring that benefits reach the neediest. The paper also argues that anti-poverty interventions ought to retain their focus on rural areas where poverty remains highest even after taking into account the adverse impact on the urban poor due to the rise in food prices.
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Global Food Price Inflation: Implications for South Asia, Policy Reactions, and Future Challenges.
Sadiq Ahmed. World Bank. 2009.

The surge in global commodity prices of the past few years has presented a tremendous development challenge for South Asian countries. The large loss of income from the terms of trade shock has worsened macroeconomic balances, fueled rapid inflation, and hurt growth. Although commodity prices have come down recently, the benefits are being clouded by the emergence of a severe global financial crisis. The adverse consequences of the food price hike for the poor are large; the global financial crisis could further worsen the situation due to falling economic opportunities and government revenues. South Asian countries need to accelerate reforms to avoid facing a serious downturn in economic activity, investment, exports, and income. Governments in South Asia have responded by stabilizing domestic food prices through a number of short-term measures, tightened monetary policy to reduce inflation, and increased spending on a range of safety net programs for the poor. Some of the policies employed, such as export bans, are not consistent with the long-term welfare of the country or the region. Safety net interventions need to be made consistent with a longer-term poverty reduction strategy and fiscal sustainability. Most importantly, policy attention now needs to shift toward efforts to increase farm productivity, improve rural infrastructure, and lower the vulnerability of the poor.DOWNLOAD PDF

Sustainable Agriculture and Food Security in Asia and the Pacific
UNESCAP. 2009.

The impact of food insecurity on the Asia-Pacific region and how to deal with it is the focus of an ESCAP study entitled Sustainable Agriculture and Food Security in Asia and the Pacific. The study examines the environmental, economic and social challenges that are the roots of the region’s food insecurity and suggests a regional framework of action to be taken by governments and the international community in order to create greater food security.
Access to food and not the supply of food is central to food security. Thus, over the short term, Governments need to develop and strengthen social protection programmes. Governments also need to improve the availability of food at the national and local levels. In the medium term, it is critical to support the revitalization of small-scale sustainable food production. This involves ensuring that soils retain vital nutrients and farmers and others protect biodiversity and regenerate natural resources of soil and water. Climate change holds the potential to radically alter agroecosystems in the coming decades and there is already evidence of devastating crop failures. Predictions concerning food production vary. However, even if overall production were to remain high, declines in certain parts of the Asia-Pacific region may be expected. Over the long term, adapting and mitigating impacts from climate change will have to be a top priority for all countries in the region.
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High Food Prices and the Impacts on the Poor in Latin America
Joachim von Braun. Presentation at Inter-American Dialogue. IFPRI. 2008
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