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Coping with Rising Food Prices: Policy Dilemmas in the Developing World

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  • Nora Lustig

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Abstract

Rising food prices cause considerable policy dilemmas for developing country governments. Letting domestic prices adjust to reflect the full change in international prices generates inflationary pressures and causes severe hardship for poor households lacking access to social safety nets. Alternatively, governments can use food subsidies or export restrictions to stabilize domestic prices, yet this exacerbates global food price increases and undermines a rules-based trading system. The recent episode shows that many countries chose to shift the burden of adjustment back to international markets. The use of corn and oilseed for the production of biofuel will result in a recurrence of such episodes in the foreseeable future.

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Bibliographic Info

Paper provided by Center for Global Development in its series Working Papers with number 164.

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Length: 31 pages
Date of creation: Mar 2009
Date of revision:
Handle: RePEc:cgd:wpaper:164

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Web page: http://www.cgdev.org

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Keywords: Food Prices; Inflation; Poverty; Africa; Asia; Latin America and the Caribbean;

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Cited by:
  1. Berazneva, Julia & Lee, David R., 2013. "Explaining the African food riots of 2007–2008: An empirical analysis," Food Policy, Elsevier, vol. 39(C), pages 28-39.
  2. Isabel Ortiz & Jingqing Chai & Matthew Cummins, 2011. "Escalating Food Prices: The threat to poor households and policies to safeguard a Recovery for All," Working papers 1101, UNICEF,Division of Policy and Strategy.

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