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

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  • Nora Lustig

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. The use of corn and oilseed for the production of biofuel will result in a recurrence of such episodes in the foreseeable future. [WP No. 164]

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  • Nora Lustig, 2009. "Coping with Rising Food Prices: Policy Dilemmas in the Developing World," Working Papers id:2241, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:2241
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    Cited by:

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    2. Mai, Nhat Chi, 2013. "Essays on Farm Household Decision-Making: Evidence from Vietnam," OSF Preprints 96azx, Center for Open Science.
    3. Aswin Rivai, 2022. "The monetary policy impact on agricultural growth and food prices," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(9), pages 158-165, December.
    4. Zulfiqar Ali WAGAN & Zhang CHEN & Hakimzadi SEELRO & Muhammad Sanaullah SHAH, 2018. "Assessing the effect of monetary policy on agricultural growth and food prices," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 64(11), pages 499-507.
    5. World Bank & Guyana Ministry of Education, 2012. "Guyana's Hinterland and Community-Based School Feeding Programme," World Bank Publications - Reports 20176, The World Bank Group.
    6. 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.
    7. Nora Lustig, 2012. "Rising Food Prices and Children’s Welfare," Working briefs 1201, UNICEF, Division of Policy and Strategy.
    8. 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.
    9. 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.

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    More about this item

    Keywords

    Food Prices; Inflation; Poverty; Africa; Asia; Latin America; Caribbean; domestic prices; trading system; export; households; social safety nets; inflationalry pressures; governments; households; global food prices; international markets;
    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; Animal Welfare Policy
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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