Global Food Price Inflation: Implications for South Asia, Policy Reactions, and Future Challenges
AbstractThe surge in global commodity prices of the past few years has presented a tremendous development challenge for South Asian countries. The large loss of income from the terms of trade shock has worsened macroeconomic balances, fueled rapid inflation, and hurt growth. Although commodity prices have come down recently, the benefits are being clouded by the emergence of a severe global financial crisis. The adverse consequences of the food price hike for the poor are large; the global financial crisis could further worsen the situation due to falling economic opportunities and government revenues. South Asian countries need to accelerate reforms to avoid facing a serious downturn in economic activity, investment, exports, and income. Governments in South Asia have responded by stabilizing domestic food prices through a number of short-term measures, tightened monetary policy to reduce inflation, and increased spending on a range of safety net programs for the poor. Some of the policies employed, such as export bans, are not consistent with the long-term welfare of the country or the region. Safety net interventions need to be made consistent with a longer-term poverty reduction strategy and fiscal sustainability. Most importantly, policy attention now needs to shift toward efforts to increase farm productivity, improve rural infrastructure, and lower the vulnerability of the poor.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4796.
Length: 36 pages
Date of creation: 01 Dec 2008
Date of revision:
adverse consequences; adverse effect; Adverse Effects; Agricultural Productivity; Agriculture; average price; average prices; average productivity; basic needs; binding constraint; buffer stocks;
This paper has been announced in the following NEP Reports:
- NEP-AGR-2009-02-14 (Agricultural Economics)
- NEP-ALL-2009-02-14 (All new papers)
- NEP-DEV-2009-02-14 (Development)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Balagtas, Joseph Valdes & Bhandari, Humnath & Mohanty, Samarendu & Cabrera, Ellanie & Hossain, Mahabub, 2012. "Impact of a Commodity Price Spike on Poverty Dynamics: Evidence from a Panel of Rural Households in Bangladesh," 2012 Conference (56th), February 7-10, 2012, Freemantle, Australia 124225, Australian Agricultural and Resource Economics Society.
- Mohajan, Haradhan, 2013. "Ethiopia: A socio-economic study," MPRA Paper 52277, University Library of Munich, Germany, revised 10 Sep 2013.
- Alem, Yonas & Söderbom, Måns, 2012. "Household-Level Consumption in Urban Ethiopia: The Effects of a Large Food Price Shock," World Development, Elsevier, vol. 40(1), pages 146-162.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.