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Estimating the short-run poverty impacts of the 2010-11 surge in food prices

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  • Ivanic, Maros
  • Martin, Will
  • Zaman, Hassan

Abstract

Global food prices have increased substantially since mid-2010, as have prices in many developing countries. In this study we assess the poverty impact of the price changes between June and December 2010 in twenty-eight low and middle income countries. This is done by gathering detailed information on individual households'food production and consumption levels for thirty-eight agricultural and food commodities to assess the impacts on household welfare. This study estimates that this sudden food price surge increased the number of poor people globally, but with considerably different impacts in different countries. The heterogeneity of these impacts is partly related to the wide variation in the transmission of global prices to local prices and partly to differences in households'patterns of production and consumption. On balance, the adverse welfare impact on net buyers outweighs the benefits to net sellers resulting in an increase in the number of poor and in the depth of poverty. We estimate that the average poverty change was 1.1 percentage points in low income countries and 0.7 percentage points in middle income countries with a net increase of 44 million people falling below the $1.25 per day extreme poverty line.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5633.

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Date of creation: 01 Apr 2011
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Handle: RePEc:wbk:wbrwps:5633

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Keywords: Food&Beverage Industry; Rural Poverty Reduction; Markets and Market Access; Regional Economic Development;

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Citations

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Cited by:
  1. Donald F. Larson & Keijiro Otsuka & Tomoya Matsumoto & Talip Kilic, 2014. "Should African rural development strategies depend on smallholder farms? An exploration of the inverse-productivity hypothesis," Agricultural Economics, International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 45(3), pages 355-367, 05.
  2. Combes, Jean-Louis & Ebeke, Christian Hubert & Etoundi, Sabine Mireille Ntsama & Yogo, Thierry Urbain, 2014. "Are Remittances and Foreign Aid a Hedge Against Food Price Shocks in Developing Countries?," World Development, Elsevier, Elsevier, vol. 54(C), pages 81-98.
  3. Kym Anderson & Maros Ivanic & Will Martin, 2013. "Food Price Spikes, Price Insulation, and Poverty," Departmental Working Papers, The Australian National University, Arndt-Corden Department of Economics 2013-11, The Australian National University, Arndt-Corden Department of Economics.
  4. Quy-Toan Do & Andrei A. Levchenko & Martin Ravallion, 2013. "Trade Insulation as Social Protection," NBER Chapters, in: The Economics of Food Price Volatility National Bureau of Economic Research, Inc.
  5. de Nicola, Francesca & De Pace, Pierangelo & Hernandez, Manuel A., 2014. "Co-movement of major commodity price returns : time-series assessment," Policy Research Working Paper Series 6845, The World Bank.
  6. Ivanic, Maros & Martin, Will, 2014. "Poverty impacts of the volume-based special safeguard mechanism," Policy Research Working Paper Series 7006, The World Bank.
  7. Laura Kiku Rodriguez-Takeuchi & Katsushi S. Imai, 2011. "Food Price Surges and Poverty in Urban Colombia: New Evidence from Household Survey Data," Discussion Paper Series, Research Institute for Economics & Business Administration, Kobe University DP2011-33, Research Institute for Economics & Business Administration, Kobe University.
  8. Nicole Condon & Heather Klemick & Ann Wolverton, 2013. "Impacts of Ethanol Policy on Corn Prices: A Review and Meta-Analysis of Recent Evidence," NCEE Working Paper Series, National Center for Environmental Economics, U.S. Environmental Protection Agency 201305, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Oct 2013.
  9. von Braun, Joachim & Tadesse, Getaw, 2012. "Global Food Price Volatility and Spikes: An Overview of Costs, Causes, and Solutions," Discussion Papers, University of Bonn, Center for Development Research (ZEF) 120021, University of Bonn, Center for Development Research (ZEF).
  10. Tefera, Nigussie, 2012. "Welfare Impacts of Rising Food Prices in Rural Ethiopia: a Quadratic Almost Ideal Demand System Approach," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil, International Association of Agricultural Economists 126698, International Association of Agricultural Economists.
  11. Larson, Donald F., 2013. "Blue water and the consequences of alternative food security policies in the Middle East and North Africa for water security," Policy Research Working Paper Series 6464, The World Bank.

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