Food Price Spikes, Price Insulation and Poverty
AbstractThis paper first considers the impact on world food prices of the changes in restrictions on trade in staple foods during the 2008 world food price crisis. Those changes—reductions in import protection or increases in export restraints—were meant to partially insulate domestic markets from the spike in international prices. The authors find that this insulation added substantially to the spike in international prices for rice, wheat, maize, and oilseeds. As a result, although domestic prices rose less than they would have without insulation in some developing countries, in many other countries they rose more than they would have in the absence of such insulation. The paper’s second purpose it to estimate the combined impact of such insulating behavior on poverty in various developing countries and globally. The analysis finds that the actual poverty-reducing impact of insulation is much less than its apparent impact, and that its net effect was to increase global poverty in 2008 by 8 million people, although this increase was not significantly different from zero. The paper examines the relative efficiency and equity of trade restrictions and domestic policies, such as conditional cash transfers, than are designed to provide social protection for the poor when international food prices spike. It also examines the potential consequences of multilateral agreements to limit changes in restrictions on trade during such times.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19530.
Date of creation: Oct 2013
Date of revision:
Publication status: published as Kym Anderson, Maros Ivanic, Will Martin. "Food Price Spikes, Price Insulation and Poverty," in Jean-Paul Chavas, David Hummels, and Brian Wright, "The Economics of Food Price Volatility" University of Chicago Press (2013)
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Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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Other versions of this item:
- Anderson, Kym & Ivanic, Maros & Martin, Will, 2013. "Food Price Spikes, Price Insulation, and Poverty," CEPR Discussion Papers 9555, C.E.P.R. Discussion Papers.
- Anderson, Kym & Ivanic, Maros & Martin, Will, 2013. "Food price spikes, price insulation, and poverty," Policy Research Working Paper Series 6535, The World Bank.
- Kym Anderson & Maros Ivanic & Will Martin, 2013. "Food Price Spikes, Price Insulation, and Poverty," Departmental Working Papers 2013-11, The Australian National University, Arndt-Corden Department of Economics.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Global Commodity Market
- Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-10-25 (Agricultural Economics)
- NEP-ALL-2013-10-25 (All new papers)
- NEP-DEV-2013-10-25 (Development)
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