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Impact of increasing prices of agricultural commodities on poverty

Author

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  • Karfakis, Panagiotis
  • Velazco, Jackeline
  • Moreno, Esteban
  • Covarrubias, Katia

Abstract

The present paper attempts to identify the groups of households that most likely will facepositive or negative welfare consequences as a result of food price increases. Using data from household surveys and differentiating urban from rural areas as well as food buyers from food sellers, the analysis presents preliminary evidence, showing that when the short run effects on consumption are considered, household welfare is expected to decrease, threatening initiallyfood security. Real benefits are expected to occur for selected household groups, as soon as some second round effects, that transform the production structure, are considered. Marketparticipation is critical for small land holders to capitalize potential benefits. Irregular wageearners may also gain from the price increases as long as expansion of the food producingsectors takes place in the parts of the developing countries that agriculture is the dominant source of income. Nevertheless it cannot be neglected that appropriation of the benefits, requires sufficient transmission of the price increases to the farm gate. On the other hand, and unless substantive action is taken, urban poverty is expected to increase given that almost uniformly, populations in such areas are net buyers of food.

Suggested Citation

  • Karfakis, Panagiotis & Velazco, Jackeline & Moreno, Esteban & Covarrubias, Katia, 2011. "Impact of increasing prices of agricultural commodities on poverty," ESA Working Papers 289007, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
  • Handle: RePEc:ags:faoaes:289007
    DOI: 10.22004/ag.econ.289007
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    Citations

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    Cited by:

    1. Soumya Dasgupta & Ruchi Badola, 2020. "Indicator-Based Assessment of Resilience and Vulnerability in the Indian Himalayan Region: A Case Study on Socio-Economy under Different Scenarios," Sustainability, MDPI, vol. 12(17), pages 1-20, August.
    2. Dayal Talukder, 2014. "Agricultural Trade Liberalization and Poverty in Rural Bangladesh," Poverty & Public Policy, John Wiley & Sons, vol. 6(3), pages 282-307, September.
    3. Etian Ngobeni & Chiedza L. Muchopa, 2022. "The Impact of Government Expenditure in Agriculture and Other Selected Variables on the Value of Agricultural Production in South Africa (1983–2019): Vector Autoregressive Approach," Economies, MDPI, vol. 10(9), pages 1-17, August.
    4. Talukder, Dayal & Chile, Love, 2014. "Characteristics of Rice Cultivation and Rural Rice Market in Bangladesh: Evidence from a Survey," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 15(2), pages 1-17.

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