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Cap and Food Security

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  • Schmitz, Michael

Abstract

Although the food security discussion has given more emphasis to the individual (household) level as the proper unit of analysis, it still suffers from applying inappropriate indicators, which are mostly quantity oriented, instead of relying on more recent results of the literature that it is purchasing power or real income that matters. In addition, it has not been made clear so far how food security corresponds to the welfare status of agents. Since food security can more or less be associated with an uncertain world, this should at least be reflected in the value function of individuals who are generally risk averse. Therefore, it is proposed in the paper that the measurement of both food security and welfare should be based on the probability distribution of adjusted real household income over time on a daily basis. Food security can then be defined as the probability of any agent's real income exceeding a critical level, whereas the welfare status is measured as the agent's expected utility of this real income. Special formulas are developed in this context which allow one to calculate producer's and consumer's welfare under price uncertainty and risk aversion separating the risk response effect from the mean income moving effect of price fluctuations. In addition, an alternative measurement of protection in a stochastic world, the so called real protection rate, is proposed which simultaneously covers protection against low prices and volatile prices. All these indicators should be used when comparing and evaluating food security or food insecurity of any agent in whatever region. In the paper the concept is utilized to answer the raised question of how the EU contributes to worldwide food security.

Suggested Citation

  • Schmitz, Michael, 1997. "Cap and Food Security," 1997 Occasional Paper Series No. 7 198056, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaaeo7:198056
    DOI: 10.22004/ag.econ.198056
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    File URL: http://ageconsearch.umn.edu/record/198056/files/agecon-occpapers-1997-018_1_.pdf
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    References listed on IDEAS

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    1. Schmitz, P. Michael, 1991. "Do Developed Exporting Countries Contribute To Food Security? The Case Of The Ec," Staff Papers 13351, University of Minnesota, Department of Applied Economics.
    2. Sahn, David E & Sarris, Alexander H, 1991. "Structural Adjustment and the Welfare of Rural Smallholders: A Comparative Analysis from Sub-Saharan Africa," World Bank Economic Review, World Bank Group, vol. 5(2), pages 259-289, May.
    3. Koester, Ulrich, 1986. "Regional cooperation to improve food security in southern and eastern African countries:," Research reports 53, International Food Policy Research Institute (IFPRI).
    4. S. Tarditi & E. Croci Angelini, 1982. "Regional redistributive effects of common price support policies," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 9(3), pages 255-270.
    5. L. Jay Helms, 1985. "Errors in the Numerical Assessment of the Benefits of Price Stabilization," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(1), pages 93-100.
    6. Haddad, Lawrence & Kennedy, Eileen & Sullivan, Joan, 1994. "Choice of indicators for food security and nutrition monitoring," Food Policy, Elsevier, vol. 19(3), pages 329-343, June.
    7. Babu, Suresh Chandra & Quinn, Victoria J., 1994. "Food security and nutrition monitoring in Africa: Introduction and historical background," Food Policy, Elsevier, vol. 19(3), pages 211-217, June.
    8. Ravallion, Martin & Huppi, Monika, 1991. "Measuring Changes in Poverty: A Methodological Case Study of Indonesia during an Adjustment Period," World Bank Economic Review, World Bank Group, vol. 5(1), pages 57-82, January.
    9. Eele, Graham, 1994. "Indicators for food security and nutrition monitoring: A review of experience from Southern Africa," Food Policy, Elsevier, vol. 19(3), pages 314-328, June.
    10. Hartmann, Monika & Schmitz, P. Michael, 1991. "Impact Of Ec'S Rebalancing Strategy On Developing Countries: The Case Of Feed," Staff Papers 14085, University of Minnesota, Department of Applied Economics.
    11. Atkinson, Anthony B, 1991. "Comparing Poverty Rates Internationally: Lessons from Recent Studies in Developed Countries," World Bank Economic Review, World Bank Group, vol. 5(1), pages 3-21, January.
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    Cited by:

    1. Frohberg, K. & Hartmann, M., 1998. "Die „effektive“ Protektion der Landwirtschaft in den MEL," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 34.

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