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Food security and storage in the Middle East and North Africa

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  • Larson, Donald F.
  • Lampietti, Julian
  • Gouel, Christophe
  • Cafiero, Carlo
  • Roberts, John

Abstract

In times of highly volatile commodity markets, governments often try to protect their populations from rapidly-rising food prices, which can be particularly harsh for the poor. A potential solution for food-deficit countries is to hold strategic reserves, which can be called on when international prices spike. But how large should strategic stockpiles be? This paper develops a dynamic storage model for wheat in the Middle East and North Africa (MENA) region, where imported wheat dominates the average diet. The paper uses the model to analyze a strategy that sets aside wheat stockpiles, which can be used when needed to keep domestic prices below a targeted price. This paper shows that if the target is set high and reserves are adequate, the strategy can be effective and robust. Contrary to most interventions, strategic storage policies are counter-cyclical and, when the importing region is sufficiently large, a regional policy can smooth global prices. This paper shows that this is the case for the MENA region. Nevertheless, the policy is more costly than the pro-cyclical policy of a targeted intervention that directly offsets high prices with a subsidy similar to food stamps.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6031.

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Date of creation: 01 Apr 2012
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Handle: RePEc:wbk:wbrwps:6031

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Keywords: Markets and Market Access; Access to Markets; Economic Theory&Research; Emerging Markets; Food&Beverage Industry;

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References

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Citations

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Cited by:
  1. Christophe Gouel, 2013. "Food Price Volatility and Domestic Stabilization Policies in Developing Countries," NBER Chapters, in: The Economics of Food Price Volatility National Bureau of Economic Research, Inc.
  2. Akramov, Kamiljon T. & Shreedhar, Ganga, 2012. "Economic development, external shocks, and food security in Tajikistan:," IFPRI discussion papers 1163, International Food Policy Research Institute (IFPRI).
  3. Maystadt, Jean-François & Trinh Tan, Jean-François & Breisinger, Clemens, 2012. "Does Food Security Matter for Transition in Arab Countries?:," IFPRI discussion papers 1196, International Food Policy Research Institute (IFPRI).
  4. Ansgar Belke & Christian Dreger, 2013. "The Transmission of Oil and Food Prices to Consumer Prices: Evidence for the MENA Countries," Discussion Papers of DIW Berlin 1332, DIW Berlin, German Institute for Economic Research.
  5. Liu, Xianglin & Romero-Aguilar, Randall S. & Chen, Shu-Ling & Miranda, Mario J., 2013. "The Global Food Price Crisis and China-World Rice Market Integration: A Spatial-Temporal Rational Expectations Equilibrium Model," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149965, Agricultural and Applied Economics Association.
  6. Ntsama, Mireille, 2012. "La relation de prix entre le Cameroun et le Gabon
    [Is there a food price transmission between Cameroon and Gabon?]
    ," MPRA Paper 53771, University Library of Munich, Germany, revised 03 May 2013.
  7. Miranda, Mario J. & Farrin, Kathleen M. & Larson, Donald F. & Chen, Shu-Ling, 2013. "Differential Effects of Food Security Policies on Subsistence Farmers and the Urban Poor," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149736, Agricultural and Applied Economics Association.

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