The impact of maize price shocks on household food security: Panel evidence from Tanzania

Using three waves (2008/09, 2010/11, 2012/13) of the Tanzanian National Panel Survey, this study investigates the impact of maize price shocks on household food security. Between 2008/09 and 2012/13, calorie intake stagnated for urban households, yet sharply deteriorated for rural households. The latter was driven by a significant decline in the consumption of the major staple maize which showed strongest price hikes among all major food items. Fixed-effects regressions indicate a clear negative relationship between maize prices and average household energy intake. Almost all population groups were found to be negatively affected by maize price shocks, with rural landless households being the most vulnerable group. In particular, a 50 percent rise in maize prices decreases caloric intake for rural (urban) households on average by 4.4 (5.4) percent, and for rural landless households by 12.6 percent. Results further indicate that subsistence agriculture can act as an effective strategy to insure against food price volatility.     

State intervention for food price stabilisation in Africa: Can it work?

Although its arguments may have more general applicability, this paper discusses the desirability and options for the stabilisation of staple food prices principally in Eastern and Southern Africa. It addresses three broad questions: (i) why is stabilisation of food (grain) prices desirable? (ii) what is technically feasible? and (iii) can the governance and trade issues thrown up by suggested mechanisms be solved? It considers a number of options for price stabilisation, assessing the strengths and weaknesses of each and suggesting situations in which each may be appropriate.     

Assessing the effect of food retail subsidies on the price of food in remote Indigenous communities in Canada

The Canadian government currently subsidizes food retailers in the 25 remote communities in Nunavut through the Nutrition North Canada program. The program expects each dollar of the food subsidy to be fully passed on to the consumer in the form of lower prices. Unfortunately, existing audits and reviews of the program have failed to determine the pass-through rate of the subsidy. Using regression analysis on food price data in each of the 25 communities, subsidy rates, and covariates that control for community characteristics, we overcome the limitations of past research and provide the first-ever estimate of the pass-through rate of Nutrition North in Nunavut. Our results suggest that most, if not all, of the subsidy is passed on to the consumer in lower food prices.     

Managing food price risks and instability in a liberalizing market environment: Overview and policy options

Managing food price risks and instability is a major challenge in the midst of ongoing food market reforms. Key findings from the papers in this special volume revolve around five broad areas: (i) the sources and magnitudes of food price instability in different country contexts; (ii) the economic and social costs stemming from price instability; (iii) the lessons from food market reforms to date; (iv) the design of policy reforms in ways that promote efficient and stable market development and protect the interests of the poor; and (v) potential policy responses to food price instability in a liberalizing market environment.     

Risks and spatial connectivity evidence from food price crisis in rural Indonesia

This paper examines the impact of the agricultural commodity price surge globally experienced in 2007/2008 and thereafter on income growth of agricultural producers and non-producers using recent panel data from Indonesia. First, during this period, producers experienced significantly higher earnings and total income growth than non-producers (narrowing their income gap). Second, the negative effect on non-producers’ real incomes was smaller in spatially well-connected areas, where, to mitigate the impact, private transfers (such as remittances) as well as employment incomes increased among non-producers. In contrast, government programs did not effectively cushion the income shock. Therefore, informal insurance was more effective than formal government-funded social protection programs to mitigate the crisis shock.     

Assessing the extra-commercial food needs of low-income countries

The principal US government report on the food needs of low-income countries which cannot be met through commercial trade, is World Food Needs and Availabilities, prepared by the Economic Research Service, USDA.¹ This article presents the genesis of the report, the methodology (through a case study), the 1985 findings and some implications of food needs analysis for food aid programming.     

Conflict,food price shocks,and food insecurity: The experience of Afghan households

Using nationally-representative household survey data and confidential geo-coded data on violent incidents, we examine the relationship between conflict and food insecurity in Afghanistan. Spatial mappings of the raw data reveal large variations in levels of food insecurity and conflict across the country; surprisingly, high conflict provinces are not the most food insecure. Using a simple bivariate regression model of conflict (violent incidents and persons killed or injured) on food security (calorie intake and the real value of food consumed), we find mixed associations. But once we move to a multivariate framework, accounting for household characteristics and key commodity prices, we find robust evidence that in Afghanistan levels of conflict and food security are negatively correlated. We also find that households in provinces with higher levels of conflict experience muted declines in food security due to staple food price increases relative tohouseholds in provinces with lower levels of conflict, perhaps because the former are more disconnected from markets. Gaining a better understanding of linkages between conflict and food insecurity and knowing their spatial distributions can serve to inform policymakers interested in targeting scarce resources to vulnerable populations, for example, through the placement of strategic grain reserves or targeted food assistance programs.     

Market integration and price transmission in consumer markets of developing countries

World prices for agricultural commodities surged in 2006–08, and then again in 2011–12. In many developing countries, consumer prices for staple foods, such as bread and rice, mirrored these movements. This paper examines whether prices in urban consumer markets within developing countries are co-integrated with prices in world agricultural commodity markets. Using a single equation error correction model, we examine the response of consumer prices for wheat, rice, maize, and sorghum to changes in world market prices and exchange rates in urban centers of the developing world. Analyzing over 60 country/commodity pairings, we find that developing countries’ consumer markets are co-integrated with world markets. Yet, we also find that the transmission of changes in both world prices and real exchange rates to domestic consumer prices is not high, and that the movement of domestic consumer prices to new equilibrium with world prices after a shock to the latter is relatively slow.     

International trade and world food security : The role of developed countries since the World Food Conference

No mechanism is in place for the international coordination of grain stocks. World market stability is largely dependent upon the actions of major grain trading countries. These countries have avoided the exportation of their domestic supply variations onto world markets over the past decade, but have been reluctant to allow domestic consumption to respond to world shortages and surpluses. Improvement in the sensitivity of domestic storage and consumption to world conditions could increase their contribution to world food security.     

Wheat markets,food aid and food security in Afghanistan

In Afghanistan, after two decades of civil strife and successive droughts from 1998 to 2002, large inflows of food aid, distributed mainly to returning refugees and through food for work programs, have helped offset production shortfalls of wheat, the country’s major staple. At the same time, private international trade from neighboring countries, especially Pakistan, has also played a major role in augmenting wheat supply and stabilizing prices.     

On food security and the economic valuation of food

The paper presents an economic evaluation of food and the cost of food insecurity. Building on behavioral regularities of consumer behavior, the analysis estimates the benefit of food at the individual level and at the world level. It finds an inverted-U relationship between food benefit and income. At the individual level, the “food benefit/income” ratio starts at 0 under extreme poverty, increases with income to reach a maximum of 4.4 when income per capita is around $13,000, and then declines slowly as income rises. The paper shows very large aggregate net benefit of food. The analysis also evaluates the cost of food insecurity. It shows that aversion to food insecurity is pervasive, the coefficient of relative risk aversion to food insecurity being around 2.7. The analysis evaluates empirically the cost of food insecurity. We report the cost of food insecurity under alternative scenarios, documenting that it can be large in situations of exposure to significant downside risk.     

Rice market integration and food security in Nepal: The role of cross-border trade with India

Coarse rice market integration between Nepal and India is analyzed applying a threshold autoregressive model. The price response behaviour of traders is found to be consistent with an asymmetric price adjustment mechanism, indicating coarse rice prices in Nepal respond to shocks originating in India. The results show that adjustments to negative price deviations from long-run stable equilibrium are faster than adjustments to the positive ones given a null threshold. Given that trade flows mainly from India to Nepal, Nepali traders would adjust their prices upward to align with the long-run equilibrium value relatively more quickly in the case of negative price deviations, than if the price deviations were positive. Such a high speed of adjustment to negative price deviations could be detrimental to net food buyers’ food security status in the absence of a price stabilization mechanism. However, a price stabilization policy in Nepal, a food deficit and import dependent country, would hardly have any effect on prices unless further effort is made to build up the level of national food reserves for short-term food security interventions. In the current context of structurally low levels of national food reserves, an alternative short-term policy such as foreign aid, in the form of food or income transfers, targeting the most vulnerable households to price increases is necessary through social safety net programmes. In the long-run, an improvement of transportation infrastructure between market hubs (other than the Biratnagar trade basin) in the Terai (Nepal) and India would contribute to the reduction of transaction costs and create incentives for more competition in formal cross-border trade with India. In times of negative shocks such as the high food price crisis in 2008, restrictive food trade policies in India will continue to undermine household food security in Nepal.     

Poverty effects of food price escalation: The importance of substitution effects in Mexican households

Recent food price increases reportedly caused significant numbers of households to fall into poverty, particularly in the developing world. Most research into the welfare effects of these food price changes assumes constant demand or approximates second order substitution effects. Poverty forecasts with these assumptions may overestimate or underestimate the effect of food price increases in a nation where most households consume diverse food baskets. We account for full substitution by calculating a theoretically consistent food demand system, accounting for household responses to food price changes by decreasing some food purchases and increasing other food purchases. We use Mexican data to confirm the mitigation of adverse welfare effects from food price increases after accounting for country-specific dietary preferences in modeling demand. In comparison to previous literature, our welfare measures predict theoretically consistent numbers of Mexican households entering poverty due to recent food price changes.     

The food situation in developing countries : Two decades in review

This article presents an overview of the general changes in the food situation in developing countries over the past two decades, and especially since the 1974 World Food Conference. Following an examination of trends in production, consumption and trade in basic food staples of Third World countries, the article looks at possible strategies for improving their food situation.     

Food scare crises and price volatility: The case of the BSE in Spain

Recent incidents of contaminated food products coupled with the widespread diffusion of news by mass media and the growing social concerns about food safety, have resulted in significant food market crises. One of the most highly publicized recent food scares involved Bovine Spongiform Encephalopathy (BSE). In our analysis, we evaluate the impacts from a BSE outbreak on the price volatility transmission along the Spanish food marketing chain by using a smooth transition conditional correlation (STCC) GARCH model. Our work is the first to assess price volatility responses to food scares. Results suggest that two distinct regimes involving different price volatility behavior can be distinguished, one characterized by turbulent markets and another where markets are calming down.     

The Thrifty Food Plan and low-income households in the United States: What food groups are being neglected?

Food assistance programs in the United States provide low-income households with the resources to purchase a healthy, nutritious, and palatable diet, if they buy the market baskets of food outlined in the Thrifty Food Plan. This study compares the cost of these baskets with actual spending on food at home by low-income households. Simulations reveal at-home food spending by low-income households to represent only 86% of what is needed to follow the Thrifty Food Plan. Married couples with children and female-headed households with children spend only 73% and 82%, respectively, and just 43% and 50% for at-home fruits and vegetables.     

Urban agriculture,poverty, and food security: Empirical evidence from a sample of developing countries

Urban agriculture may have a role to play in addressing urban food insecurity problems, which are bound to become increasingly important with the secular trend towards the urbanization of poverty and of population in developing regions. Our understanding of the importance, nature and food security implications of urban agriculture is however plagued by a lack of good quality, reliable data. While studies based on survey data do exist for several major cities, much of the evidence is still qualitative if not anecdotal. Using a recently created dataset bringing together comparable, nationally representative household survey data for 15 developing or transition countries, this paper analyzes in a comparative international perspective the importance of urban agriculture for the urban poor and food insecure. Some clear hints do come from our analysis. On the one hand, the potential for urban agriculture to play a substantial role in urban poverty and food insecurity reduction should not be overemphasised, as its share in income and overall agricultural production is often quite limited. On the other hand, though, its role should also not be too easily dismissed, particularly in much of Africa and in all those countries in which agriculture provides a substantial share of income for the urban poor, and for those groups of households to which it constitutes an important source of livelihoods. We also find fairly consistent evidence of a positive statistical association between engagement in urban agriculture and dietary adequacy indicators.     

Food insecurity,gender, and international migration in low- and middle-income countries

The determinants of migration have been widely studied but research has rarely addressed the roles of food insecurity and gender in the migration decision process. To address these gaps, we examine these relationships for 135,078 individuals across 94 low- and middle-income countries. We use a series of binary-choice models with sample selection and data from the 2014–2015 waves of the Gallup World Poll Survey, which includes the first global measure of individual-level food insecurity. Results, which are robust, indicate that food insecurity is an important determinant of both migration intentions and preparations, and the probability of migration intentions increase monotonically with the severity of food insecurity, and the probability of migration preparations decrease. These relationships also differ significantly by gender and level of gross national income. Evidence suggests a need for increased coordination between the international food security and migration policy agendas.     

Postmodern conceptualizations,modernist applications: Rethinking the role of society in food security

Food security studies, while giving ever more attention to issues of perception and local knowledge in food outcomes, have yet to engage in a systematic discussion of the role played by society in food outcomes. While contemporary studies of food outcomes address issues of the social, especially as social structures relate to access to and production of food, this literature lacks an accompanying theory of the social that might lend it broad, cross-contextual coherence.     

Benefits and costs of food safety regulation

This paper begins with a review of the concepts and methods that can be used to quantify the benefits and costs of food safety regulations. On the cost side, where research is only beginning to emerge, this paper also provides an analytical framework for measurement of the costs of statutory regulations in the form of design and performance standards. This paper also discusses the use and limitations of currently available benefit and cost information for quantitative regulatory impact assessment, using the assessment of the mandatory HACCP and pathogen reduction regulations in the United States as an example. The paper concludes with suggestions for future research on quantifying benefits and costs of food safety regulations.