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.     

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.     

Three bubbles and a panic: An explanatory review of recent food commodity price events

This paper is a summary of the behaviour of food commodity prices in 2007–2008 and a review of the causes of the price increases, extracted from a report to the Chief Scientific Advisor to Her Majesty’s Government [Thirtle, C., Piesse, J., 2008. An Explanatory Review of the World Food Commodity Price Events of 2007–2008. A Report to the Chief Scientific Advisor. Department for Innovation, Universities and Skills, London]. The historical background shows that the price spike was much less severe than in the 1970s. The conventional wisdom that prices of the main food commodities were falling prior to 2006 is questioned. Most ceased falling and were quite stable from the 1980s. The paper separates the causes of the spike from the underlying changes driving the long run trends. The literature on the causes of the spike is critically reviewed and summarised. There is a reasonably broad consensus on most of the causes, but much less on the impact of the depreciation of the US Dollar. There are also concluding speculations on the future.     

On the costs of food price fluctuations in low-income countries

Conventional welfare measures of the costs of food price fluctuations in low-income countries are extended to allow for both economic growth and food security effects. The analysis reveals that growth and food security effects may dominate more conventional welfare costs of food price fluctuations, although estimating the empirical magnitude of the effects is hampered by the lack of consensus on the extent to which food price fluctuations actually reduce economic growth and food security. Even if the welfare costs of food price fluctuations are high there are many challenges to the design and successful implementation of price stabilization schemes.     

Local impacts of a global crisis: Food price transmission,consumer welfare and poverty in Ghana

This paper takes a local perspective on global food price shocks by analyzing food price transmission between regional markets in Ghana. It also assesses the impacts of food price increases on various household groups. Taking the 2007–2008 global food crisis as an example, we show that prices for domestic grain products are highly correlated with world market prices. This is true both for products for which Ghana is highly import-dependent (e.g., rice) and the products for which Ghana is self-sufficient (e.g., maize). The econometric results also show that price transmission is high between regional producer markets and markets located in the country’s largest cities, and the distance between producer and consumer markets and the size of consumer markets matter in explaining the price transmission. The welfare analysis for households as consumers shows that the effect of world food prices appears relatively modest for the country as a whole due to relatively diverse consumption patterns within country. However, the national average hides important regional differences, both between regions and within different income groups. We find that the poorest of the poor—particularly those living in the urban areas—are hardest hit by high food prices. The negative effect of the food crisis is particularly strong in northern Ghana. The main explanations for this regional variation in the price effect is the different consumption patterns and much lower per capita income levels in the North of Ghana compared to other regions in the country.     

The rising disparity in the price of healthful foods: 2004–2008

Nutrient-dense foods that are associated with better health outcomes tend to cost more per kilocalorie (kcal) than do refined grains, sweets and fats. The price disparity between healthful and less healthful foods appears to be growing.This study demonstrates a new method for linking longitudinal retail price data with objective, nutrient-based ratings of the nutritional quality of foods and beverages. Retail prices for 378 foods and beverages were obtained from major supermarket chains in the Seattle, WA for 2004–2008. Nutritional quality was based on energy density (kcal/g) and two measures of nutrient density, calculated using the Naturally Nutrient Rich (NNR) score and the Nutrient Rich Foods index (NRF_9.3). Food prices were expressed as $/100 g edible portion and as $/1000 kcal. Foods were stratified by quintiles of energy and nutrient density for analyses.Both measures of nutrient density were negatively associated with energy density and positively associated with cost per 1000 kcal. The mean cost of foods in the top quintile of nutrient density was $27.20/1000 kcal and the 4-year price increase was 29.2%. Foods in the bottom quintile cost a mean of $3.32/1000 kcal and the 4-year price increase was 16.1%.There is a growing price disparity between nutrient-dense foods and less nutritious options. Cost may pose a barrier to the adoption of healthier diets and so limit the impact of dietary guidance. Nutrient profiling methods provide objective criteria for tracking retail prices of foods in relation to their nutritional quality and for guiding food and nutrition policy.     

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.     

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.     

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.     

Combined price support and fertilizer subsidy policies for food self-sufficiency: A case study of rice in Bangladesh

Output price support and input subsidies, particularly fertilizer subsidies, are used in many developing countries as short-term policies for stimulating food production. This paper presents a method of evaluating combined price support and fertilizer subsidy policies, allowing for differences in emphasis on each. Bangladesh is taken as a case study. The paper also indicates the likely distributional consequences of the various combined policies and formulates policy suggestions based on the results. The guiding hypothesis for the study is that some combination of price support and fertilizer subsidies is preferable to a price support or fertilizer subsidy monopolicy in achieving rice self sufficiency in Bangladesh.     

The energy efficiency of local food systems: A comparison between different modes of distribution

The possible contribution of local sales chains to the reduction of energy consumption has been hotly debated in recent years. Some authors establish a link between the reduction of distances traveled by food and lower energy consumption due to transportation, while others hold that local supply chains have a poor energy performance. This article engages this debate by comparing the rates of energy consumption attributable to different modes of distribution of fruits and vegetables in a region of France.     

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.     

The quality of food risk management in Europe: Perspectives and priorities

In this paper, we address the issue of food risk management as practised in Western Europe. We begin by considering how food risks are managed, and then go on to consider how well they are managed. There are multiple answers to the ‘how well’ question, which are related to the varied perspectives of the different key stakeholders – from the food risk managers and producers, to the general public and the media. Consequently, there is no clear answer to the question of quality. What our review does identify is two priorities relevant to our understanding of effective food risk management: first, a need for further research to determine the source and nature of the different evaluative perspectives, and second, a need for the key stakeholders to appreciate and understand the alternative perspectives in order to enhance the effectiveness of the food risk management process.     

Food scare crises and developing countries: The impact of avian influenza on vertical price transmission in the Egyptian poultry sector

A bivariate smooth transition vector error correction model is applied to monthly poultry price data to analyze the effects that avian influenza has had on price transmission along the Egyptian poultry marketing chain. In order to reflect consumer awareness of the crisis, an avian influenza food scare information index is developed and used within the model as a transition variable. Our results suggest that price adjustments to deviations from the market equilibrium parity depend on the magnitude of the avian influenza crisis. Further these adjustments are found to have very different implications for market equilibrium: during the crisis retailers use their market power to increase marketing margins. In contrast, wholesaler margins are found to decline. Results also suggest that food safety information indices contribute to understanding the economic effects of food scare crises in developing countries.