Elsevier

Food Policy

Volume 38, February 2013, Pages 47-58
Food Policy

Information to guide policy responses to higher global food prices: The data and analyses required

https://doi.org/10.1016/j.foodpol.2012.10.001Get rights and content

Abstract

National decision makers must understand the degree to which their country and population groups within it are exposed to the negative effects of higher global food prices or could exploit new economic opportunities offered by higher prices. This paper provides a conceptual overview of the range of data and analyses that will permit leaders and analysts serving them to assess the broad implications of higher global food prices for a country and its population groups. What we find is that there are a relatively small number of types of policy responses that governments might take in the face of a food price rise. Consequently, relatively well-defined sets of data need to be compiled and types of analyses used by government to generate the information needed to broadly guide efforts to prevent food price increases from becoming crises and to derive any possible benefits. International joint action can be employed profitably both to collect this data and to build national capacity to conduct the analyses needed to guide policy formulation and general program design in the face of the risks and the opportunities of higher food prices and to evaluate the effectiveness of those policy responses.

Highlights

► Domestic effects of higher global food prices are tricky for policymakers to gauge. ► Here we identify the information and analyses needed to do so. ► A relatively small number of policy responses can be taken by governments. ► Policy resilience in the face of future crises can be built through global action.

Introduction

Strong upward trends in global food prices in 2007–2008, in late-2010, and again in mid-2012 have led to concern that hunger and poverty will increase across the world as the access of the poor to affordable food is reduced. At the same time, higher food prices provide an incentive and opportunity for many developing countries to strengthen the contribution their farmers make to national economic growth and poverty reduction. Although a coordinated response at international and regional levels is needed to help mitigate the adverse effects of higher global food prices, national governments in particular face the challenge of responding to their citizen’s immediate food and nutritional needs, while stimulating the agricultural sector to increase food supply. The adequacy of any global response to significant increases in global food prices depends to a large degree on the policy- and program-related reactions of national-level policymakers around the world.

Policymakers in developing countries often do not, however, have sufficient information to gauge the likely effects of the higher global food prices on their country and to implement appropriate policy actions. For example, the imposition of domestic food price controls as a reaction to higher food costs can be expected to limit farmers’ incentives to increase the production of food crops in subsequent cropping seasons. It is clear that many national leaders require better information to assess the impact of higher food prices on their country, on its economy, and, in particular, any adverse effects on vulnerable population groups, as well as to design and implement national policies and programs to address the risks and opportunities these higher prices present.

This paper provides an overview of the data and analytical tools national leaders require to assess the impact of higher global food prices and to design and implement policy responses. Since the implications of high food prices differ widely across countries and across groups within each country, policy responses must be adapted to country-specific needs and conditions. However, as described in this paper, relatively consistent sets of data and analytical tools are required to guide broad policymaking in countries affected by higher global food prices.

The next section provides an overview of how higher global food prices affect national economies, the welfare of households, and the well-being of individuals within those households. We then turn to consider in more detail the specific effects of higher food prices and the factors that condition or determine the degree to which these effects operate. The types of broad policy responses to higher food prices that governments might implement and the strengths and weaknesses of specific policy actions are described in the fourth section. The final substantive section of the paper then considers the information needed to assess and respond to the impact of higher global food prices in a country and the data and analyses required to generate that information. We end the paper with brief concluding remarks to highlight that international efforts can be usefully undertaken to assist governments in effectively responding to the adverse effects brought about by higher global food prices, as well as to exploit any economic opportunities associated with the increased prices.

Section snippets

Conceptual framework for understanding the impact of higher global food prices

Fig. 1 provides a framework for understanding the context of the policy issue addressed by this paper. The key elements in tracing the effects of higher global food prices at the national level and below are presented in the top half of the figure, and the pathways for policy analysis and policy action are diagrammed in the lower half. This figure is necessarily simplified; several of the elements are described in further detail later.

The process starts at upper left with the interaction of

Assessing the impact of higher global food prices

To assess the impact of global food price changes on countries, households, and individuals, this section considers in more detail two elements of the broad conceptual framework presented in Fig. 1 – the effects and the conditioning factors that determine the significance of those effects in a particular national context.

Policy responses to higher food prices and types of impacts expected

National governments have responded to recent episodes of higher world food prices in several ways. Choices much depend upon the expectations regarding scale and time frames of the price change – is it a short term change only, or is it likely to persist – and the capacity (i.e., institutional preparedness) of a country to respond with different policy actions in the short vs. long term. We therefore distinguish potential policy responses by time frame (Table 1). In this section of the paper,

Data and analyses to assess the impact of higher global food prices

The preceding sections discussed the factors that make some countries and households more vulnerable than others to the adverse effects of higher global food prices, in particular. Table 2 provides a summary of the policy actions that governments could consider taking to mitigate any negative impacts and to exploit any economic opportunities offered by the higher prices. This section considers what sort of information is needed to assess in broad terms the likely effects of an increase in

Conclusions

National decision makers need information and analytical tools in order to assess the risks and opportunities that their country and its citizens face from current and future episodes of higher global food prices, to determine how they might respond to those risks and opportunities, and to monitor both the impact of the higher global food prices and the effects of governments’ policy responses to it. Although the implications of higher global food prices differ across countries and population

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    1

    Present address: Economic Research Service, United States Department of Agriculture, 1800 M St. NW, Washington, DC 20036, USA.

    2

    Present address: Center for Development Research (ZEF Bonn), University of Bonn, Walter-Flex-Str. 3, D-53113 Bonn, Germany.

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