World food prices and poverty incidence in a food exporting country: a multihousehold general equilibrium analysis for Thailand

A multisectoral, multihousehold general equilibrium model of the Thai economy is used to analyze the implications of recent increases in international food prices. Higher food prices, especially staple grains, worsen poverty incidence in Thailand despite the presence of large numbers of poor farmers, many of whom benefit from higher prices. The positive effect on the welfare of poor farmers is dominated by the negative effect on poor consumers. Of the recent price increases for rice, sugar, cassava, maize, soybeans, urea, and petroleum, the increases in rice prices raise poverty incidence the most, despite Thailand being the world's largest rice exporter.     

Food policy and poverty in Indonesia: a general equilibrium analysis*

Rice is Indonesia's staple food and accounts for large shares of both consumers' budgets and total employment. Until recently, Indonesia was the world's largest importer, but rice import policy is now highly protectionist. Since early 2004, rice imports have been officially banned. Advocates of this policy say it reduces poverty by assisting poor farmers. Opponents say it increases poverty, stressing negative effects on poor consumers. This paper uses a general equilibrium model of the Indonesian economy to analyse the effects of a ban on rice imports. The analysis recognises 1000 individual households, including all major socioeconomic categories, disaggregated by expenditures per person. It takes account of effects on each household's real expenditure and its income, operating through wages and returns to land and capital. The results indicate that the rice import ban raises the domestic price of rice relative to the import price by an amount equivalent to a 125 per cent tariff, six times the pre‐2004 tariff. Poverty incidence rises by a little under 1 per cent of the population and increases in both rural and urban areas. Among farmers, only the richest gain. These results are qualitatively robust to variations in key parametric assumptions.     

Implications of higher global food prices for poverty in low‐income countries1

In many poor countries, the recent increases in prices of staple foods have raised the real incomes of those selling food, many of whom are relatively poor, while hurting net food consumers, many of whom are also relatively poor. The impacts on poverty will certainly be very diverse, but the average impact on poverty depends upon the balance between these two effects, and can only be determined by looking at real‐world data. Results using household data for 10 observations on nine low‐income countries show that the short‐run impacts of higher staple food prices on poverty differ considerably by commodity and by country, but that poverty increases are much more frequent, and larger, than poverty reductions. The recent large increases in food prices appear likely to raise overall poverty in low‐income countries substantially.     

Fertilizer subsidies and food self‐sufficiency in Indonesia

Indonesia is a net importer of almost all of its staple foods. National self‐sufficiency in food, especially the main staple, rice, is a core objective of economic policy. Poverty reduction is also a core policy objective. Since the 1970s, Indonesia has used agricultural input subsidies, especially on fertilizer, to stimulate agricultural production, largely in pursuit of the goal of rice self‐sufficiency. More recently, it has also used output protection, especially in rice, for the same purpose. This article utilizes a multisectoral, multihousehold general equilibrium model of the Indonesian economy to study the trade‐offs between the goals of self‐sufficiency and poverty reduction when two alternative means are used to achieve them: a fertilizer subsidy, on the one hand, and output protection, on the other. It does this by analyzing the aggregate and distributional effects of these two sets of policies and by comparing their effects with nonintervention. The analysis shows that, in terms of its effects on poverty, a fertilizer subsidy can be a more effective instrument for achieving the goal of rice self‐sufficiency than final product import restrictions.     

The impact of food inflation on urban poverty and its monetary cost: some back‐of‐the‐envelope calculations

This article uses a sample of 72 developing countries to estimate the change in the cost of alleviating urban poverty brought about by the recent increase in food prices. This cost is approximated by the change in the poverty deficit (PD), that is, the variation in financial resources required to eliminate poverty under perfect targeting. The results show that, for most countries, the cost represents less than 0.2% of gross domestic product. However, in the most severely affected, it may exceed 3%. In all countries, the change in the PD is mostly due to the negative real income effect of those households that were poor before the price shock, while the cost attributable to new households falling into poverty is negligible. Thus, in countries where transfer mechanisms with effective targeting already exist, the most cost‐effective strategy would be to scale up such programs rather than designing tools to identify the new poor.     

Implications of high food prices for poverty in Pakistan

The study estimates the impacts of rising world food prices on poverty in rural and urban areas of Pakistan. Household income and expenditure data for 2004/2005 is used to estimate compensated and uncompensated price and expenditure elasticities using the linear approximation of the almost ideal demand system. Taking the unexpected component of higher domestic food prices in 2007/2008, own and cross price compensated elasticities are used to derive the changes in the quantity consumed, food expenditure and impacts on poverty assuming the food crisis happened in 2004/2005. The results indicate that poverty increased by 34.8%, severely affecting the urban areas where poverty increased by 44.6% as compared to 32.5% in rural areas. The estimates show that 2.3 million people are unable to reach even one‐half of poverty line expenditures while another 13.7 million are just below and 23.9 million are just above the poverty line. In the short run, it is important to ensure food availability to these people. In the long run, the policy environment of subsidizing urban food consumers by keeping wheat prices lower than the international price, needs to be reconsidered to provide the right incentives to increase food availability.     

The effects of rising food prices on poverty in Mexico

We evaluate the impact of the rise in food prices during 2006–2008 on the poverty and extreme poverty rates in Mexico. We concentrate on the poor's consumption of staple foods, and analyze the change in their consumption brought about by changed prices. We also allow households receiving income from the farming and livestock sector to benefit from increases in prices of food products. We find a modest increase in poverty using 2006–2007 prices; however, there is a daunting effect on the poor once the 2008 prices are taken into account. After considering the positive effects of public policies announced in 2008, such as reduced taxes and tariffs on food products and greater subsidies to the extremely poor, the poverty rate measured through consumption increases from 25% to 33.5%, and the extreme poverty rate from 10.58% to 15.95%, given the increase in food prices. Further analysis using the theory of optimal taxes suggests policies oriented towards relieving the food price pressure on the Mexican poor should aim at lowering the prices of eggs, vegetable oil, milk, and chicken.     

Payoffs from research and development along the Australian food value chain: a general equilibrium analysis

The payoffs and distribution of payoffs from research and development (R&D) along the food value chain depend on many interacting economic factors. To quantify these, we have developed a general equilibrium model of the Australian economy with detailed farming, processing and marketing information. We use the model to assess potential payoffs and distributions from various R&D scenarios that lead to demand expansion and productivity improvement. We find that productivity improvement caused by R&D is unambiguously beneficial to the whole economy while the benefits of export or domestic market demand expansion mainly accrue to the primary producers and processing industry, when the economy is at full employment. Also, productivity improvement from R&D on‐farm may benefit processors while improvements postfarm may benefit farmers.     

Impact of treadle pump irrigation technology on smallholder poverty and food security in Malawi: a case study of Blantyre and Mchinji districts

The Malawi Government has intensified the use of treadle pump irrigation technology in an attempt to increase agricultural production and also to enrich the livelihoods of resource-poor farmers. As a result, the treadle pump is gaining in popularity among smallholder farmers throughout the country. This study was conducted in the districts of Blantyre in the Southern Region and Mchinji in the Central Region of Malawi. A total of 50 treadle pump and 50 non-treadle pump farmers were interviewed in each district to assess the impact of treadle pump irrigation technology with regard to food security and poverty. Gross margin analysis showed that adopters of the technology had higher net farm incomes per hectare (NFIs/ha) than non-adopters per year. In Blantyre, NFI/ha value for adopters was MK122,855 (US$1007) compared with MK15,987 (US$131) for non-adopters under irrigation conditions. Similar results were found in Mchinji with MK51,858 (US$425) and MK16,090 (US$132) for adopters and non-adopters, respectively. Likewise, under rain-fed conditions, adopters had higher NFIs/ha than non-adopters: in Blantyre, the respective NFIs were MK19,497 (US$152) and MK3344 (US$27), whereas in Mchinji the respective values were MK16,896 (US$138) and MK10,084 (US$83). Furthermore, the well-being measurements and analyses of poverty revealed a higher poverty level among non-adopters compared with adopters. The former also had a greater relative risk of falling into deeper poverty than the latter. Transition matrices depicting movement in and out of poverty showed that from 2004 to 2005, some poor adopters moved out of poverty while some non-adopters dropped from being non-poor to poor. No adopter moved from non-poor to poor. From the results, it is concluded that the Government of Malawi should be urged to increase the availability of this kind of technology to the market at a reduced cost by offering tax incentives to local manufacturers and by using an input voucher system to subsidize qualified poor smallholder farmers.     

The effects of China's growth on the food prices and the food exports of other developing countries

This article explores the impacts of China's growth in the international markets of agricultural products along two dimensions: food price inflation and export growth in other developing countries. China's food imports of vegetable oils have grown dramatically over the last decade, linking China's economic growth to the recent increases in global food prices. If China is a source of global food price inflation, exporting countries will benefit whether they sell directly to China or not. These direct and indirect linkages are explored using a short‐run, partial‐equilibrium model of international trade in agricultural products in which consumer prices and trade costs are derived from bilateral trade flows. China's effects on food prices and exports are estimated by reducing Chinese food expenditures in 2007 by half, roughly China's level of expenditures in 1995. Results indicate that food prices as measured by CES price indexes in developing Asia, Africa, and Latin America would have been reduced by 1.27%, 0.32%, and 0.22%, respectively. China has been an important source of growth for exporters selling directly to China. There is no evidence of export growth due to an overall increase in food prices caused by China's growth.     

Agrarian movements and rural populism in Indonesia

In this article, we reflect on the changing trajectories of agrarian movements in Indonesia. In the two decades after independence, a left-populist alliance of peasants, plantation workers, and other affiliate organizations achieved a mass following and were embraced by President Sukarno. In the aftermath of their violent destruction, the Suharto regime reordered agrarian movements into a single corporatist model. Suharto's downfall opened the way for the re-emergence of agrarian organizations and movements. But two decades later, they remain small and fragmented, with little influence at the national level. In the changing conditions of rural life, and the increasingly authoritarian political context, progressive rural movements face dilemmas on questions both of their focus and goals and of tactical alliances with other progressive movements and political elites. A broader, more inclusive progressive populist alliance is a possibility, but with the continuing danger of co-optation by forces of the populist right.     

Rising Food Prices and Household Welfare: Evidence from Brazil in 2008

Food price inflation in Brazil in the 12 months to June 2008 was 18%, whereas overall inflation was 7%. Using spatially disaggregated monthly data on consumer prices and two different household surveys, we estimate the welfare consequences of these food price increases, and their distribution across households. Because Brazil is a large food producer, with a predominantly wage‐earning agricultural labour force, our estimates include general equilibrium effects on market and transfer incomes, as well as the standard estimates of changes in consumer surplus. Although the expenditure (or consumer surplus) effects were large, negative and markedly regressive everywhere, estimates of the market‐income effect were positive and progressive, particularly in rural areas. Because of this effect on the rural poor, and of the partial protection afforded by increases in two large social assistance benefits, the overall impact of higher food prices in Brazil was U‐shaped, with middle‐income groups suffering larger proportional losses than the very poor. Nevertheless, as Brazil is 80% urban, higher food prices still led to a greater incidence and depth of poverty at the national level.     

Consumers' willingness to pay for organic rice: Insights from a non-hypothetical experiment in Indonesia

As in many high-income countries, there is increasing awareness towards organic farming in many low- and middle-income countries. Sustained local demand is an essential requirement for further adoption of organic farming by smallholders, who typically have only limited access to export markets. Until now, only few studies have explored the local willingness to pay (WTP) for organic products in low- and middle-income countries in real purchase situations. This paper analyses the consumers' WTP for organic rice in urban and suburban Indonesia using an incentive-compatible auction based on the Becker–DeGroot–Marschak (BDM) approach. We further study the effect of income and a randomised information treatment about the benefits of organic food on respondents' WTP. Estimates suggest that respondents are willing to pay an average price premium of 20% compared with what they paid for conventional rice outside our experiment. However, our results also indicate that raising consumers' WTP further is complex. Showing participants a video about health or, alternatively, environmental benefits of organic food was not effective in further raising WTP. The results can be used as a basis for the design of alternative awareness measures to increase knowledge, interest and demand for organic food.     

Air pollution and food prices: evidence from China

Air pollution is one of the top environmental concerns in China. On days with severe air pollution, people (both consumers and producers) often reduce outdoor economic activities in order to avoid possible health damages. This impacts the market trade of fresh food products, at least in a short run. This empirical study sheds light on the impact of air pollution on the short run prices of three major fresh food products (Chinese cabbage, tomatoes and pork) using daily data from the largest outdoor wholesale market in Beijing. With an increase in AQI (Air Quality Index) by 100 units, prices for Chinese cabbage and tomatoes decrease by 1.19 and 0.89 per cent. With an increase in PM2.5 concentration by 100 μg/m³, prices for Chinese cabbage and tomatoes decrease by 0.64 and 0.55 per cent. Air pollution affects vegetable prices, but has no significant impact on prices of pork products.     

非自愿移民致贫机理与减贫路径研究综述

非自愿移民贫困已成为深刻影响家庭生计、社区重建、社会稳定的特殊问题。以制度结构论、文化心理论、网络资源论为分析框架,对非自愿移民致贫根源与脱贫路径的相关成果进行系统归纳和梳理,识别出政策设计及执行、心理调适及融入、资源动员及整合等3项影响移民贫困的关键要素,指出应当构建起政府、移民、社区及其他社会组织协同参与的贫困治理体系。进一步研究的主要挑战在于非自愿移民贫困的测度困难和治理滞后,因此加强跨学科比较的理论研究和精准化治理的实践探索是未来重点方向。     

Economic development,food demand and the consequences for agricultural resource requirements: an application to Indonesia

We analyse food demand patterns of Indonesian households from a resource intensity perspective and quantify the impact of changed demand patterns on the use of three major resource inputs: fossil fuel; land; and water in agricultural production. Using Indonesian Family Life Survey data, 13 major food items (which constitute 70 per cent of food expenditure) are categorised into low, moderate and high resource intensity, and income elasticity and Engel curves are estimated for the period from 1997 to 2007. Our results show that income growth in Indonesia is associated with demand patterns that are more resource intensive. By 2007, per capita requirements of fossil fuel, land and water increased by 42.7 per cent (3.13 MJ), 44.9 per cent (1.24 m²) and 50.4 per cent (2.1 kL), respectively, relative to 1997. The results imply that, at least for Indonesia, changed food demand patterns resulting from economic development will increase the demand for natural resources substantially.     

Exploiting comparative advantage in agriculture and resources: the way forward for Small Island States

Using Papua New Guinea as a case study, this paper investigates the macroeconomic and sectoral impacts of various developments in its agricultural and resource sector. It was found that commodity booms from 2004 to 2009 and the proposed large liquefied natural gas project increase output growth substantially but with Dutch disease consequences. The output expansion of the agricultural and fishery sectors on the other hand has limited positive impacts and the challenge lies in raising the productivity growth in these sectors and the better use of foreign aid. Lastly, the optimal policy strategy for sustainable development in the agricultural, fishery and resource sectors lies in the packaging of appropriate complementary policies (both institutional and economic) that support one another and the coherent implementation of these policies in a timely manner.