Grain Price Spikes and Beggar-thy-neighbor Policy Responses: The Consequences for Uganda's Poor

Upward spikes in the international price of food in recent years led some countries to raise export barriers, thereby exacerbating both the price spike and reducing the terms of trade for food-importing countries (beggaring their neighbors). At the same time, and for similar political-economy reasons, numerous food-importing countries reduced or suspended their import tariffs, and some even provided food import subsidies -- which also exacerbated the international price spike, thus turning the terms of trade even further against food-importing countries. This issue became a major item on the agenda of various international policy fora, including the annual meetings of G20 countries in recent years. For that reason, recent studies have attempted to quantify the extent to which such policy actions contributed to the rise in food prices. A study by Jensen & Anderson (2014) uses the global AGE model GTAP and the corresponding database to quantify the global policy actions contributions to the raise in food prices by modeling the changes in distortions to agricultural incentives in the period 2006 to 2008. We link the results from this global model into a national AGE model, highlighting how global "Beggar-thy-Neighbor Policy Responses" impacted on poor households in Uganda. More specifically we examine the following research questions: What were the Ugandan economy-wide and poverty impacts of the price spikes? What was the impact of other countries "Beggar-thy-Neighbor Policy Responses" on poor households in Uganda? What was the effect of Uganda's own policy response? What possible policy responses could Uganda have undertaken to ensure poor households access to affordable food?