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Food Prices Spikes and Poor, Small Economies: What Role for Trade Policies

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  • Anderson, Kym
  • Thennakoon, Jayanthi

Abstract

Upward spikes in international food prices lead some food-surplus countries to raise export barriers and some food-deficit countries to lower their import restrictions on staple foods – and conversely when prices slump. When many countries so respond, their actions in aggregate exacerbate the international price spike, making adjustment even more difficult for other countries. This paper reviews conceptually, and then empirically for a sample of small and poor economies, the role of trade measures for achieving the social objective of assisting those hurt by sharp changes in food prices. The data are monthly for the period of 2006 to 2012, and annually since 1990. The paper concludes by exploring the efficacy of using trade policy instruments versus domestic measures to reduce the risk of welfare losses for vulnerable households, and stresses the importance for small and poor economies of supporting multilateral efforts to outlaw beggar-thy-neighbour policy responses to food price spikes.

Suggested Citation

  • Anderson, Kym & Thennakoon, Jayanthi, 2015. "Food Prices Spikes and Poor, Small Economies: What Role for Trade Policies," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 10(1), pages 1-16, March.
    • Handle: RePEc:ags:afjare:200591
    DOI: 10.22004/ag.econ.200591
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    References listed on IDEAS

    as
    1. Hans G. Jensen & Kym Anderson, 2017. "Grain Price Spikes and Beggar-thy-Neighbor Policy Responses: A Global Economywide Analysis," The World Bank Economic Review, World Bank, vol. 31(1), pages 158-175.
    2. Brian D. Wright, 2011. "The Economics of Grain Price Volatility," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(1), pages 32-58.
    3. Eric V. Edmonds & Norbert Schady, 2012. "Poverty Alleviation and Child Labor," American Economic Journal: Economic Policy, American Economic Association, vol. 4(4), pages 100-124, November.
    4. Rao, Xudong & Hurley, Terrance M. & Pardey, Philip G., 2012. "Recalibrating the Reported Rates of Return to Food and Agricultural R&D," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124581, Agricultural and Applied Economics Association.
    5. Kym Anderson & Signe Nelgen, 2012. "Agricultural trade distortions during the global financial crisis," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 28(2), pages 235-260, SUMMER.
    6. Tyers,Rod & Anderson,Kym, 2011. "Disarray in World Food Markets," Cambridge Books, Cambridge University Press, number 9780521172318.
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    8. Kym Anderson & John Cockburn & Will Martin, 2011. "Would Freeing Up World Trade Reduce Poverty and Inequality? The Vexed Role of Agricultural Distortions," The World Economy, Wiley Blackwell, vol. 34(4), pages 487-515, April.
    9. Sabates-Wheeler, Rachel & Devereux, Stephen, 2010. "Cash transfers and high food prices: Explaining outcomes on Ethiopia's Productive Safety Net Programme," Food Policy, Elsevier, vol. 35(4), pages 274-285, August.
    10. Anderson, Kym & Jha, Shikha & Nelgen, Signe & Strutt, Anna, 2012. "Reexamining Policies for Food Security," ADB Economics Working Paper Series 301, Asian Development Bank.
    11. Kym Anderson & John Cockburn & Will Martin, 2010. "Agricultural Price Distortions, Inequality, and Poverty," World Bank Publications - Books, The World Bank Group, number 2430, December.
    12. Nerlove, Marc, 1972. "Lags in Economic Behavior," Econometrica, Econometric Society, vol. 40(2), pages 221-251, March.
    13. Paul J. Gertler & Sebastian W. Martinez & Marta Rubio-Codina, 2012. "Investing Cash Transfers to Raise Long-Term Living Standards," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 164-192, January.
    14. Jean-François Arvis & Yann Duval & Ben Shepherd & Chorthip Utoktham, 2012. "Trade Costs in the Developing World:1995 – 2010," Working Papers 12112, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    15. Skoufias, Emmanuel & Tiwari, Sailesh & Zaman, Hassan, 2011. "Can we rely on cash transfers to protect dietary diversity during food crises ? estimates from Indonesia," Policy Research Working Paper Series 5548, The World Bank.
    16. Will Martin & Kym Anderson, 2012. "Export Restrictions and Price Insulation During Commodity Price Booms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 422-427.
    17. Venables, Anthony J., 2004. "Small, remote and poor?," World Trade Review, Cambridge University Press, vol. 3(3), pages 453-457, November.
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    Cited by:

    1. Wenshou Yan & Yan Cai & Faqin Lin & Dessie Tarko Ambaw, 2021. "The Impacts of Trade Restrictions on World Agricultural Price Volatility during the COVID‐19 Pandemic," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(6), pages 139-158, November.
    2. Sun, Ting-Ting & Su, Chi-Wei & Mirza, Nawazish & Umar, Muhammad, 2021. "How does trade policy uncertainty affect agriculture commodity prices?," Pacific-Basin Finance Journal, Elsevier, vol. 66(C).
    3. Wenshou Yan, 2016. "Political Economy of Trade and Storage Policies Coordination, and the Role of Domestic Public Storage in the World Market," School of Economics and Public Policy Working Papers 2016-16, University of Adelaide, School of Economics and Public Policy.

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