Food Price Crisis,Poverty, and Inequality

This paper simulates how a doubling of food prices affects absolute poverty and the food‐price‐adjusted real income distribution. We assume unsubsidized world food prices in order to derive the cost of poverty deepening and poverty expansion. We also estimate the degree to which inequality increases if no measures are put in place to offset rising food prices. Both measures are vulnerability indicators useful for social policy planning. Our results show that low‐income countries experience dramatic increases in absolute poverty as a result of doubling food prices. Middle‐income countries experience the greatest decrease in absolute income, which contributes most to an increase in world income inequality. The paper estimates that the global dollar value of the absolute poverty gap ($1.25/day) has the potential to increase by 400%, with poverty deepening accounting for two thirds of the increase.     

The Political Economy of Urban Food Security in Sub-Saharan Africa

Sub-Saharan African cities in the late 1990s face a daunting set of problems including rapid growth, increasing poverty, deteriorating infrastructure, and inadequate capacity for service provision. Even as a renewed debate is shaping up around issues of urban development, there is little attention given to the question of urban food security. Whereas in the 1970s and 1980s, urban food problems in Africa commanded political attention, the nature of urban food insecurity in the 1990s is such that it has tended to lose political importance. This is largely because in the 1970s, the problem was one of outright food shortages and rapid price changes that affected large portions of the urban population simultaneously. The impact of structural adjustment, continued rapid growth, and an increase in poverty make urban food insecurity in the 1990s primarily a problem of access by the urban poor. Under circumstances where the urban poor spend a very large portion of their total income on food, urban poverty rapidly translates into food insecurity. The lack of formal safety nets, and the shifting of responsibility for coping with food insecurity away from the state towards the individual and household level has tended to atomize and muffle any political response to this new urban food insecurity. This paper briefly reviews urban food insecurity and generates a set of empirical questions for an analysis of food and livelihood security in contemporary urban sub-Saharan Africa, and then examines historical and contemporary evidence from Kampala, Uganda, and Accra, Ghana, to suggest some tentative conclusions.     

Dietary Diversity,Food Security and Undernourishment: The Vietnamese Evidence*

As is widely known, Vietnam experienced a rise in living standards and a decline in expenditure poverty during the first half of the 1990s. This paper extends this knowledge by providing evidence on the Vietnamese experience of food security, undernourishment and poverty from the late 1990s to the early part of the new millennium. The results suggest that poor households did not experience increases in food consumption, calorie intake and dietary diversity of the same magnitude as non‐poor households. Nevertheless, Vietnam experienced impressive reductions in both calorie deprivation and expenditure poverty at the turn of the century. Non‐poor households, in particular, experienced spectacular increases in calorie intake and dietary diversity during the period 1997/1998–2004. This paper also reports regression results which point to the role of urbanization and improvement in education levels in promoting dietary diversity and nutrient intake. The present study finds evidence of sharp regional differences in calorie intake and calorie costs, which suggests that the authorities should set provincial poverty lines, contrary to the current practice adopted by Vietnam's General Statistical Office.     

Trade Liberalization and National Food Security: Rice Trade between Bangladesh and India

Following a poor harvest in late 1997 and a massive flood in 1998, private sector traders in Bangladesh imported several million metric tons of rice from India. This paper presents evidence that this trade, made possible by separate trade liberalizations in India and Bangladesh in the early 1990s, augmented domestic supplies and stabilized prices in Bangladesh at import parity levels. Letters of credit data indicating the participation of hundreds of importers, and a close correlation of price movements across the two countries suggest that the trade was competitive. A risk of co-incident crop shortfalls in the two countries remains, though these have occurred rarely in the past two decades. Bangladesh imports from alternative sources would also enhance food availability if another production shortfall occurs, but these imports face higher transport costs and would involve far fewer importing firms given the economies of scale of shipments by sea.The positive contribution of trade liberalization to short-run food security in Bangladesh in recent years does not minimize the importance of increased agricultural productivity and rural economic growth to provide rural poor households with sufficient incomes to acquire food. Nonetheless, the Bangladesh experience shows that trade liberalization offers potential benefits for national food security by enabling a rapid increase of food supplies following domestic production shortfalls.     

Food poverty,hunger and household production in rural Eastern Cape households

More than two decades since the advent of democracy in South Africa, the place of small-scale agriculture in rural development, poverty alleviation and food security remains ambiguous and highly contested. However, there is now some new evidence that official income poverty estimates in South Africa may be underestimating the contribution of rural, land-based livelihoods when measuring household well-being. This paper aims to explore this possibility further by identifying how household production activities are associated with improved food security among rural Eastern Cape households in the former homelands. The analysis is based on data from Statistics South Africa’s 2008/9 Living Conditions Survey and its annual General Household Surveys. In adopting a food poverty lens, the findings suggest that hunger levels are lower among farming households in the Eastern Cape even though a higher percentage of these households (relative to non-farming households) live below the national food poverty line. The paper concludes by discussing some implications for policy.     

Food Demand Characteristics in Uganda: Estimation and Policy Relevance

Uganda was highly successful in reducing poverty over the past two decades but made little progress towards household food security. This underlines the need for designing food security interventions customised for household‐specific needs and behaviours. This study estimates Ugandan household demand behaviour with a focus on food consumption paying particular attention to household‐specific characteristics. The results show that preferences to increase calorie‐dense staple consumption, likely associated with food energy deficiency, extend far beyond the percentage of rural Ugandans officially deemed poor. Price elasticities indicate that poor rural households are largely well positioned to compensate staple price increases by substitution as long as they are not already concentrated on the cheapest foods. This flexibility applies less to urban households. The estimated demand elasticities generally vary widely between rural and urban households and depend on expenditure levels. Household‐specific characteristics have significant, sometimes pronounced, influences on demand, as do seasons and regions. The results reflect highly differentiated demand behaviour, which can be utilised to improve the design and evaluation of food security interventions.     

THE DEMAND FOR FOOD IN SOUTH AFRICA1

Food consumption is an important issue in South Africa, given its relation to poverty and deprivation. With the pressing need to increase food security, understanding the determinants of the demand for food and having some estimates of the likely impact of price and income changes has become a vital task. There is, however, surprisingly little economic research on this topic and almost none in recent times. This paper provides a comprehensive empirical analysis of the demand for food in South Africa for the years 1970‐2002. It moves beyond the usual static modelling approach in using a general dynamic log‐linear demand equation and a dynamic version of the almost ideal demand system, to provide estimates of the short‐ and long‐run price and expenditure demand elasticities.     

Urban–Rural Differences in Costs of Living and Their Impact on Poverty Measures

This note demonstrates empirically the importance of urban-rural price differences and inflation figures in poverty analysis. Using data from the National Socio-Economic Survey (Survei Sosial Ekonomi Nasional, widely known as Susenas), it shows that the urban-rural food price differential during the period 1987–96 was 13–16%, not 28–52% as impli by the ‘official’ food poverty lines. The urban–rural poverty comparisons and the components of change in simulated poverty estimates presented here therefore differ from those based on the ‘official’ figures. They indicate that migration to urban areas between 1987 and 1996 accounts for a significant part of the observed decline in poverty. The paper concludes that it is essential to use accurate urban–rural cost of living differences in deriving aggregate, urban and rural poverty estimates.     

Food Security and Agricultural Changes in the Course of China＇s Urbanization

China's small farmers face increasing challenges because of land and water resource constraints and the effects of climate change. With the strengthened agricultural stimulus policies, poverty reduction and social protection programs, as well as the expanding international food trade, up to now China has achieved food security through small farm agriculture. During intensive economic restructuring, smallholders still coexist with large‐sized farms and industrialized agricultural businesses, but are in a vulnerable position in market transactions. Oriented to 2050, China's agricultural development and food security policies should work to improve domestic market structure, to further release international trade control and to empower smallholders.     

Food poverty profile and decomposition applied to Ghana

A new procedure for deriving a food poverty line and estimating a decomposable poverty measure is applied to the 1974–1975 Ghana Household Budget Survey. A food poverty profile is constructed which estimates the relative contributions of regional and socioeconomic variables to overall food poverty. The incidence of food poverty is found to be more prevalent in: (1) rural areas and locations close to the Sahel; and (2) households with many members and illiterate, female, or self-employed heads. Comparisons of least-cost diets and observed diets incorporating tastes suggest that households exercise food preferences which have relatively high costs.     

Does Bulog Stabilise Rice Prices in Indonesia? Should It Try?

The intuition of economists is likely to be a poor guide to the social value of food price stabilisation, because of problems in modelling the impact of stabilisation on consumer behaviour, producer behaviour, and the macro economy, including the impact on economic growth. The potential for stable food prices to contribute to economic growth is especially relevant to the poor countries of Asia, where rice is important in macroeconomic terms. Indonesia's experience since 1959 presents an opportunity to test hypotheses about the design, implementation, and impact on social welfare of food price stabilisation. The model presented here explains Bulog's activities, and confirms that its interventions stabilise rice prices. Should Bulog try to stabilise rice prices? The answer is a clear yes in the 1970s and 1980s, but is less clear in the 1990s as Bulog's costs have risen and the share of rice in the economy has fallen.     

Food Security in Asia

Rapid economic and agricultural sector growth have enhanced greatly food security in Asia during the past three decades. Most studies suggest this positive trend will continue into the next century. This paper reviews past trends and future prospects in access and availability of food in Asia at the national level. The paper concludes that the positive overall trend in increased food security relies on the capacity of Asian economies to address several key policy issues, including sustained economic growth, population pressure, structural changes in domestic economies, shifts in international comparative advantage, technological changes, developments in the domestic and international food markets, and environmental sustainability. The paper identifies cost-effective ways to increase food security in light of these issues and suggests that Asia's food security can be maintained only if international and domestic policies, institutional frameworks, and public expenditure patterns are conducive to cost–effective and sustainable agriculture development.     

Food‐aid dependency in Lesotho: Issues and policy implications

This article analyses food‐aid dependency in Lesotho and how it can be reduced. The study uses primary data on food aid, statistics collected from various food‐aid agencies and institutions, and secondary data obtained from government sources. Food‐aid de pendency is likely to continue in the long term, as food aid enhances food security in Le sotho by supplementing commercial imports to meet the shortfall in local cereal produc tion. Food aid improves the nutritional and consumption levels of vulnerable Lesotho households but shows no correlation with producer and consumer prices. If the level of food‐aid dependence is to be reduced, measures to alleviate poverty and generate income must be implemented.     

Food security and structural adjustment: Empirical evidence on the food price dilemma in Southern Africa

This article considers effects of price on food security and the food equation in the developing areas of South Africa. Firstly, the food (or hunger) equation is examined in more detail. Secondly, thefood price dilemma is analysed using empirical data obtained elsewhere in sub‐Saharan Africa. Thirdly, the situation in the developing areas of South Africa is examined. Empirical evidence in sub‐Saharan and Southern Africa accentuates the skewness and concentration in the market participation profile of rural households with respect to especially staples. Supply response to higher prices in these areas is also limited. These findings place the food price dilemma on centre stage in Southern Africa.     

Beyond Income: What Else Predicts Very Low Food Security Among Children?

We examine characteristics and correlates of households in the United States that are most likely to have children at risk of inadequate nutrition—those that report very low food security (VLFS) among their children. Using 11 years of the Current Population Survey, plus data from the National Health and Nutrition Examination Survey (NHANES), we describe these households in great detail with the goal of trying to understand how these households differ from households without such severe food insecurity. While household income certainly plays an important role in determining VLFS among children, we find that even after flexibly controlling for income‐to‐poverty rates some household characteristics and patterns of program participation have important additional explanatory power. Finally, our examination of the NHANES data suggests an important role for both mental and physical health of adults in the household in determining the food security status of children.     

The 2008 Food Summit: A political response to the food price crisis in Gauteng province,South Africa

In responding to food price riots and other unrest in 2008, Gauteng province in South Africa hosted a two-day Food Summit attended by 4000 delegates. Summit invitees expected to be consulted on issues of concern about food prices, but the government instead responded with the message that the poor must be self-sufficient and grow their own food (via the Ilima/Letsema campaign launch), an impractical suggestion in a crisis. The timing of the 2008 Summit in relation to major changes within the African National Congress and the looming 2009 national election in South Africa leads to a conclusion that the Summit was a political event designed to build political capital ahead of the elections, rather than a genuine stakeholder consultation event linked to food security. Findings of this study indicated that food security planning in Gauteng is exclusionary through its rural bias and excludes, for example, urban dwellers and foreign migrants. Also, at that time, Gauteng would have been underprepared for a genuine food emergency as there was no working provincial strategy to deal with urban food security or a severe food crisis.     

Food insecurity: Magnitude and remedies

Food insecurity is given an operational definition: the probability of foodgrain consumption in developing countries falling below a desired level due to a fixed upper limit on the food import bill they can afford and an unfavourable combination of poor harvests and world foodgrain prices.The author argues that food security should not be made contingent upon arrangements for worldwide foodgrain supply stabilization. Rather, it is suggested that food security could be attained through a food import bill insurance (FIBI) scheme. Alternatively, food security could be attained by a combination of a financial scheme and a grain buffer stock in or on behalf of the developing countries. The paper discusses the specific measures required to implement these proposals and shows that the resource capacity of the international community is sufficient to carry them out.     

Review of the South African Agricultural Legislative Framework: Food security implications

Although South Africa has reported national food security for decades, current production patterns, land uncertainty and consumer preferences put future national household food insecurity in question. Household food insecurity in South Africa is at unacceptable levels. This paper reviews the country's agricultural legislative framework in terms of food security and the right to food. The review found that South African agricultural policies do not actively promote food security and the lack of enforceable food security policy makes it difficult to coordinate existing policies. The lack of food security legislation means that the right to food has no enforceable framework. A comprehensive food security policy, legislative framework and implementation strategy are urgently needed to address hunger poverty to progressively achieve the targets set out for national growth and development and realise the right to food enshrined in the Constitution.     

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.     

A conceptualisation of poverty in rural India

This paper investigates the different aspects of poverty in rural India. Based largely on data from a region of Bihar, the various characteristics and sources of poverty are enumerated and discussed, including food intake, other consumption, health, security, education and status as characteristics; and occupation, employment, wages, assets, organization and demographic factors as sources. It is argued that poverty must be seen as a multivariate phenomenon; policy to affect any one aspect of poverty is likely to be rendered ineffective by negative feedback from other variables in the poverty complex. Only a simultaneous attack on all aspects of poverty can be successful.