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Coping with Rising Food Prices: Policy Dilemmas in the Developing World

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  • Nora Lustig

    (Department of Economics, Tulane University)

Abstract

Rising food prices cause considerable policy dilemmas for developing country governments. Letting domestic prices adjust to reflect the full change in international prices generates inflationary pressures and causes severe hardship for poor households lacking access to social safety nets. Alternatively, governments can use food subsidies or export restrictions to stabilize domestic prices, yet this exacerbates global food price increases and undermines a rules-based trading system. The recent episode shows that many countries chose to shift the burden of adjustment back to international markets. Corn and oilseeds use for biofuels' production will result in a recurrence of such episodes in the foreseeable future.

Suggested Citation

  • Nora Lustig, 2009. "Coping with Rising Food Prices: Policy Dilemmas in the Developing World," Working Papers 0907, Tulane University, Department of Economics.
  • Handle: RePEc:tul:wpaper:0907
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    Cited by:

    1. Isabel Ortiz & Jingqing Chai & Matthew Cummins, 2011. "Escalating Food Prices: The threat to poor households and policies to safeguard a Recovery for All," Working papers 1101, UNICEF,Division of Policy and Strategy.
    2. Kgathi, Donald L. & Mfundisi, K.B. & Mmopelwa, G. & Mosepele, K., 2012. "Potential impacts of biofuel development on food security in Botswana: A contribution to energy policy," Energy Policy, Elsevier, vol. 43(C), pages 70-79.
    3. Berazneva, Julia & Lee, David R., 2013. "Explaining the African food riots of 2007–2008: An empirical analysis," Food Policy, Elsevier, vol. 39(C), pages 28-39.

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    More about this item

    Keywords

    food prices; inflation; poverty; Africa; Asia; Latin America and the Caribbean;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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