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Impact of Rising World Rice Prices on Poverty and Inequality in Burkina Faso

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  • Félix Badolo
  • Fousseini Traoré

Abstract

type="main"> Between January 2006 and April 2008, the prices of most agricultural products rose considerably in international markets. Empirical studies show that this spike in world food prices increased the number of poor households in developing countries, but the extent was not the same in all countries. This article assesses the impact of rising rice prices on poverty and income inequality in Burkina Faso, using a methodology based on the concept of compensating variation combined with the net benefit ratio (NBR) developed by Deaton (1989) and a living standard survey (QUIBB, 2003). The results show that higher prices have a negative impact on income and poverty in the regions with a large proportion of households that are net buyers of rice. The poverty rate increases by 2.2 to 2.9 percentage points depending on the assumptions, the increase being higher in urban areas than in rural areas. Rising rice prices also increase income inequality, which increases particularly in urban areas and in relatively rich regions, but decreases in poor regions with a large proportion of rice producers.

Suggested Citation

  • Félix Badolo & Fousseini Traoré, 2015. "Impact of Rising World Rice Prices on Poverty and Inequality in Burkina Faso," Development Policy Review, Overseas Development Institute, vol. 33(2), pages 221-244, March.
    • Handle: RePEc:bla:devpol:v:33:y:2015:i:2:p:221-244
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    References listed on IDEAS

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    1. Ulimwengu, John M. & Ramadan, Racha, 2009. "How does food price increase affect Ugandan households?: An augmented multimarket approach," IFPRI discussion papers 884, International Food Policy Research Institute (IFPRI).
    2. David Dawe & Irini Maltsoglou, 2009. "Analyzing the Impact of Food Price Increases: Assumptions about Marketing Margins can be Crucial," Working Papers 09-02, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    3. Minot, Nicholas, 2010. "Transmission of World Food Price Changes to African Markets and its Effect on Household Welfare," Food Security Collaborative Working Papers 58563, Michigan State University, Department of Agricultural, Food, and Resource Economics.
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    2. Md Zabid Iqbal, 2019. "The Effects of a Large Rice Price Increase on Household Welfare and Poverty in Rural Bangladesh," Economics Bulletin, AccessEcon, vol. 39(1), pages 295-309.
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    6. Balié, Jean & Minot, Nicholas & Valera, Harold Glenn A., 2021. "Distributional impacts of the rice tariffication policy in the Philippines," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 289-306.
    7. Schneider, Julia M. & Zabel, Florian & Schünemann, Franziska & Delzeit, Ruth & Mauser, Wolfram, 2022. "Global cropland could be almost halved: Assessment of land saving potentials under different strategies and implications for agricultural markets," Open Access Publications from Kiel Institute for the World Economy 253265, Kiel Institute for the World Economy.
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    9. Hoang, Hoa T.K. & Thompson, Wyatt & Kwon, Sanguk, 2021. "Low-Income Household Food Consumption Consequences of Rice Policy and Pandemic Impacts on Income and Price in Thailand," Journal of Food Distribution Research, Food Distribution Research Society, vol. 52(2), July.

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