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.     

Getting consumers to eat more whole-grains: The role of policy, information, and food manufacturers

The 2005 Dietary Guidelines were unique because they offered quantitative recommendations for consumption of whole-grains. This case study examines the hypothesis that the changed recommendations were responsible for the recent increase in retail sales and consumption of whole-grain food products. We find that release of the Dietary Guidelines and related media attention did increase availability and sales of whole-grain foods. A large impact on consumption occurred through reformulation of existing products, induced by competition among food suppliers. This study reveals the key role product reformulation plays in inter-firm competition and in realization of dietary changes recommended by public policy.     

Planning for market coordination in LDCs: The role of channel participants in improving food distribution systems

Many development planners have proposed food systems reforms that underscore the importance of coordination and/or integration of traditionally fragmented distributive institutions. However, attempts at nurturing market coordination schemes have been thwarted in part, because they have not gained the endorsement of channel participants. A planning model is suggested to consider the receptivity of channel participants to various market coordination arrangements and their ability to overcome barriers to coordination. This framework can be used to introduce selective market reforms.     

Green market expansion by reducing information asymmetries: Evidence for labeled organic food products

We investigate how the provision of objective information about the environmental and health impact of organic labels by policy makers can influence the willingness-to-pay of consumers for labeled organic apples in Flanders (Belgium). Using a stated choice experiment, we initially find that Flemish consumers are willing to pay a positive price premium of some 33 eurocent per kilogram for labeled organic apples. After the provision of information on the actual environmental and health effects of organic apple production, this price premium becomes even more pronounced and increases to 57 eurocent per kilogram. Using a conditional logit model with covariates and a mixed logit model, we find evidence of preference heterogeneity. Also, the effect of information provision is more pronounced for certain groups of consumers such as non-vegetarians, infrequent buyers of organic products and members of a nature protection organization. As such, this paper illustrates that there is a role for policy makers and CSR producers in providing more accurate and reliable information about socially responsible production processes. Moreover, it is important to take the observed preference heterogeneity into account and tailor policies to specific consumer groups.     

Resource flows through the multilateral system for food and agriculture : Trends of the decade

The tenth session of the World Food Council in Addis Ababa, Ethiopia, held on 11–15 June 1984, undertook an assessment of international activities in the decade since 1974 for meeting the World Food Conference objectives of improving the global food system and overcoming the blight of world hunger. One document prepared for the session looks specifically at the activities of the multilateral institutions since the 1974 conference, in terms of both resource and programme commitments. This article provides a summary of that WFC document.     

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.     

Private voluntary standards in the food system: The perspective of major food retailers in OECD countries

The paper examines the main economic and institutional incentives which have driven major OECD food retailers in their use of private voluntary standards and discusses their growing role in shaping the agri-food system. It is based on interviews with quality and safety directors of major OECD retailers and a brief survey of retailers’ actual buyer practices. Though not all retailers are included, these firms account for over 70% of retail food sales in OECD countries. We find that the growing voice of civil society, changing legal and institutional frameworks, increased market concentration and buying power as well as their integration with financial markets has provided the setting for development of private standards. While food safety and quality standards are seen as key to maintaining and improving reputation as well as against legal liabilities, additional standards such as labour, environmental and animal welfare are also gaining ground as strategies for customer loyalty and market shares. The grass-roots retailer move in the harmonization of food safety standards is seen as an initial step towards a global approach to managing the food system, with harmonization of other standards likely in the future. Given their buyer power, these developments can be viewed as a way of governing the food system and will be important for both OECD and non-OECD food and agricultural sector evolution in the coming years.     

The evolution of food aid : Towards a development first regime

The purpose of food aid has evolved over the past 30 years, shifting from surplus disposal to a ‘development first’ regime. This shift was accelerated by the World Food Conference, but even 10 years after the conference it is yet to be completed. There are inherent tensions between the older and new design principles. The author proposes a more coherent set of governing principles and norms.     

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.     

Changing food patterns in West Africa: Implications for policy research

West African consumption of wheat and rice is growing rapidly despite technological barriers to production of these cereals in the region. Soaring imports are of particular concern in view of likely consumption trends. Maize imports are also growing rapidly, as is production in the more humid countries, to the detriment of sorghum. The latter is performing relatively better in the drier countries. Possible factors underlying consumption shifts are discussed, including price policies at variance with stated objectives. Possible policies to slow down these shifts are discussed, along with research requirements for effective diagnosis and implementation.     

Consumer valuation of information about food safety achieved using biotechnology: Evidence from new potato products

This study focuses on the role of food labels and information for affecting consumers’ valuation of food safety achieved through application of biotechnological (biotech) methods. In 2002, potato products cooked to a high temperature were first reported to contain the human carcinogen acrylamide. Research discoveries using genetic engineering can substantially reduce carcinogenic-forming potential, and thereby increase food safety of potato products. Adult consumers from three distant regions of the U.S. were the subjects in lab auctions of potato products. They engaged in distinct rounds of bidding, first without packaged information and again after receiving information about the food safety risks and benefits of new biotech potato products. The study finds that willingness-to-pay (WTP) for these new potato products are not significantly different from conventional potato products under no information. However, exposure to a scientific perspective and scientific plus industry perspectives increases participants’ willingness-to-pay for the new potato products and reduces willingness-to-pay for conventional products. Exposure to the negative perspective on the new technology significantly reduces willingness-to-pay. Consumer valuation of the new potato products is affected by food labels, information, and consumer attributes. A consumer information program could be needed to gain consumer acceptance of these potato products or other foods that have been genetically modified to increase certain food safety dimensions.     

Tackling the new materialities: Modern food and counter-movements in Ecuador

Faced with rising non-communicable diseases (NCDs), the Ecuadorian Government has proposed a model health program targeting individual and environmental level determinants. Drawing on cosmopolitan social theory, the experiences of counter-movements and concerns over food policy, the authors explore how mass pesticide poisoning and obesity can be viewed as the product of the ‘success’ of the modernization policy as well as a specific range of global phenomena configuring civic activity and policy situations. Through the study of NCDs as an emergent social field, the authors examine historical developments and heterogeneity in peoples’ practices for insights on more practical and effective public policy responses. The rise of the consumer–citizen in counter-movements represents a paradoxical, but promising dynamic capable of reconstituting economies, culture, and society. In Ecuador, social action appears to be a largely neglected and under-utilized resource for tackling NCDs and perhaps other highly pressing and seemingly intractable food policy concerns.     

Regional trade,government policy and food security: Recent evidence from Zambia

Given heavy dependence on rainfed maize production, countries in East and Southern Africa must routinely cope with pronounced production and consumption volatility in their primary food staple. Typical policy responses include increased food aid flows, government commercial imports and stock releases, and tight controls on private sector trade. This paper examines recent evidence from Zambia, using a simple economic model to assess the likely impact of maize production shocks on the domestic maize price and on staple food consumption under alternative policy regimes. In addition to an array of public policy instruments, the analysis evaluates the impact of two key private sector responses in moderating food consumption volatility – private cross-border maize trade and consumer substitution of an alternate food staple (cassava) for maize. The analysis suggests that, given a favorable policy environment, private imports and increased cassava consumption together could fill roughly two-thirds of the maize consumption shortfall facing vulnerable households during drought years.     

Changing household characteristics and the away-from-home food market: a censored equation system approach

The American consumer is obtaining more-and-more of his or her food at a restaurant, and that worries some people concerned with the Nation’s dietary health. To date, much of this concern seems to be directed at the fast food segment of the restaurant industry. This paper asks whether targeting one segment of the industry, such as fast food restaurants, is justified, or whether a more balanced view of eating away from home is required. To answer this question, we look to the future and ask whether Americans can be expected to purchase increasingly more fast food or more-and-more of the foods typically associated with full-service dining. One view is that sales at full-service restaurants will now grow relatively faster than sales of fast food. The argument supporting this position rests on rising incomes, the aging of the population, smaller household sizes, and other changes taking place in the population. Using a new full-information maximum likelihood procedure for estimating a system of censored expenditure equations, we find evidence to support this argument.     

Urban food policies in German city regions: An overview of key players and policy instruments

Although food is an emerging topic on municipal policy and planning agendas, a systematic examination of policy development, its implementation and the instruments used at the urban level is lacking. This study was carried out with the aim of gaining new insights into the prevalence of certain food policy instruments and capacity of policy action. In order to do so, we developed an analytical framework to investigate urban policy and planning approaches related to food issues and applied it in ten large German cities. First, we identified different actor groups and analysed their role in urban food policy (level of involvement in municipal food projects). We then studied the variety of policy and planning instruments and their application for different elements in the food system. For the empirical study, we employed a case study approach and utilised data gathering methods of qualitative research, i.e. expert interviews and document analysis. Our empirical findings in the studied cities reveal that urban food policy activities are still very fragmented and often based on individual initiatives within the administration. Integrated urban food policies and their implementation through urban food strategies are still an exception in major cities in Germany. We found that municipal actors follow mainly sectoral approaches, using a wide array of steering instruments, i.e. informational instruments and public procurement policies. However, their capacities for policy implementation remain limited due to missing financial and staffing resources. Accordingly, the potential the urban food system offers for sustainable development through multifunctionality and sectoral integration, is still underexploited.The systematic approach developed in this study may contribute to a better understanding of different policy approaches taken. The applied typology of policy instruments might also be useful for identifying effective ways to implement urban food strategies, to understand mismatches between instruments and different policy domains, levels and administrative units, e.g. at the urban-rural interface, and to design of new policy instruments.     

Sustainability labels on food products: Consumer motivation,understanding and use

This study investigates the relationship between consumer motivation, understanding and use of sustainability labels on food products (both environmental and ethical labels), which are increasingly appearing on food products. Data was collected by means of an online survey implemented in the UK, France, Germany, Spain, Sweden, and Poland, with a total sample size of 4408 respondents. Respondents expressed medium high to high levels of concern with sustainability issues at the general level, but lower levels of concern in the context of concrete food product choices. Understanding of the concept of sustainability was limited, but understanding of four selected labels (Fair Trade, Rainforest Alliance, Carbon Footprint, and Animal Welfare) was better, as some of them seem to be self-explanatory. The results indicated a low level of use, no matter whether use was measured as self-reported use of different types of information available on food labels or as use inferred from the results of a choice-based conjoint analysis. Hierarchical regression indicated that use is related to both motivation and understanding, and that both motivation, understanding and use are affected by demographic characteristics, human values as measured by the Schwartz value domains, and country differences. The results imply that sustainability labels currently do not play a major role in consumers’ food choices, and future use of these labels will depend on the extent to which consumers’ general concern about sustainability can be turned into actual behaviour.     

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.     

Trade and food policy: Case studies from three Pacific Island countries

There is growing interest in the use of trade policy to create a healthier food supply. Eighty percent of chronic disease deaths occur in low and middle income countries, and a responsive food policy is an absolute necessity. In this paper we analysed three trade-related food policy initiatives to reduce the supply of fatty meat in the Pacific, in order to help public health workers understand how to effect policy change in sectors beyond the health portfolio. We found that policy uptake and implementation were easier with advocacy, tailoring the policy to the political context, the selection of policy tools that align with Government priorities (e.g. trade commitments) – ideally tools that are already used by trade policy makers in other contexts – and a broad justification for the policy initiative. Barriers to policy success included a focus only on health concerns (not taking into account policy issues of other sectors), limited engagement from other sectors in proposing and developing these cross-sectoral policies, and lack of a clear enforcement mechanism.     

Smallholder market participation: Concepts and evidence from eastern and southern Africa

This paper reviews the evidence on smallholder market participation, with a focus on staple foodgrains (i.e., cereals) in eastern and southern Africa, in an effort to help better identify what interventions are most likely to break smallholders out of the semi-subsistence poverty trap that appears to ensnare much of rural Africa. The conceptual and empirical evidence suggests that interventions aimed at facilitating smallholder organization, at reducing the costs of intermarket commerce, and, perhaps especially, at improving poorer households’ access to improved technologies and productive assets are central to stimulating smallholder market participation and escape from semi-subsistence poverty traps. Macroeconomic and trade policy tools appear less useful in inducing market participation by poor smallholders in the region.     

Social imaginary and dilemmas of policy practice: The food safety arena in Japan

Through the string of food safety scares that has rocked Japanese society since the early 2000s, conflicts between the traditional notion of socially acceptable risk and the idea of a science-based risk analysis approach have surfaced in the food safety arena. Elites, including government officials and those members of scientific communities who support the science-based risk analysis approach, have become responsible for communicating seemingly contradictory ideas such as “food in Japan is safe” and “there is no such thing as zero risk with food.” This communication logjam has resulted in confusion and created public distrust of both government and scientific experts. Against this backdrop, this paper aims to examine the struggles and challenges faced by government officials in explaining and practicing policies that pertain to highly controversial food safety issues. The primary data used for illuminating the discourses is the official minutes of governmental committees including the Agriculture, Forestry and Fisheries Committee and the Consumer Commission.