What's New

IFPRI launched the Excessive Food Price Variability Early Warning System today. This new tool measures excessive food price variability and is the only mechanism currently available to identify time spans of increased price variability. It is updated daily and forewarns policymakers and humanitarian agencies of periods of time with excessive food price variability.

Risk characterizes everyday life for many of the world’s poorest households. These households are more likely to be located in environments where livelihoods are highly susceptible to weather and price variability and where health risks are pervasive. Reducing the risks faced by poor households, and enabling poor households to better deal with adverse events when they do occur, is essential to improving their welfare in the short run and their opportunities for income growth in the long run.

When the World Trade Organization (WTO) was created in 1995, its members committed themselves to a set of disciplines for domestic support, market access, and export competition for agriculture. The Agreement on Agriculture paved the way for the pursuit of progressive reductions in world agricultural market distortions.

While agricultural trade policies are one factor affecting global food prices and price stability, they are not the only factor. Policies not directly related to trade can also have destabilizing effects if enacted by large countries and/or by a large number of small countries. Traditionally, focus has been put on agricultural policies and domestic support for developed countries’ farmers. Another strong example of this is the recent dramatic increase in pro-biofuels policies throughout both the developed and the developing world.

2006-2008 saw dramatic increases in the price of many staple food items, particularly maize, rice, and wheat. These staple commodities form the bulk of the diet of the world’s poor populations, many of whom spend over one-half of their income on food. The result in many areas of the world was worsening poverty for already poor populations due to a decline in purchasing power. While much attention has been given to the economic impacts of the rise in food prices, little empirical research has been conducted to examine the nutritional impacts of the food crisis.