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Country responses to the food security crisis: nature and preliminary implicatio |
Dec 2008
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A number of factors have contributed to raising food prices. On the demand side, food consumption expanded rapidly in developing countries as a result of strong global economic growth in 2004-07. A dietary transition from cereals toward more animal protein has also increased demand for feed crops, such as maize, in emerging economies. Demand for non-food agricultural products, such as timber and fiber, has also increased sharply. By contrast, the supply of food and agricultural products slowed due to stagnation in area under cultivation and yield, as well as low investment. Bad weather reduced production levels in many important exporting countries, notably Australia (one of the major wheat exporters), over the last two years. World cereals stocks as a proportion of production also declined to one of their lowest levels in recent years, exacerbating the crisis. Besides the high oil prices, which resulted in higher food production and transport (including freight) costs, the weak dollar, speculative activities and trade policies also contributed to high food prices.
Policies in response to rising food prices have included a series of immediate short-term measures. These can be grouped into three main groups:
• Trade-oriented policy responses that use policy instruments, such as reducing tariffs and restricting exports to reduce prices and/or increase domestic supply;
• Consumer-oriented policy responses that provide direct support to consumers and vulnerable groups in the form of food subsidies, social safety nets, tax reductions and price controls, among others; and
• Producer-oriented policy responses intended to support farmers to increase production, using measures such as input subsidies and producer price support.
The objective of this paper is to examine the short-term measures adopted by some 81 countries from Asia, Africa and Latin America and the Caribbean and assess their implications for food security and poverty alleviation. Section 2 reviews market and trade measures aimed at reducing food prices for consumers. Safety net and production support measures are discussed in sections 3 and 4, while section 5 discusses the impact of the different measures. Finally, concluding remarks are given in section 6.
By: M. Demeke, G. Pancrazio, M. Maetz (FAO)
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