Policy Seminar presentation by Per Pinstrup-Andersen, Cornell University at IFPRI Policy Seminar on "Policymakers’ Responses to Food Price Crises" May 3, 2013
Driving Behavioral Change for Information Management through Data-Driven Gree...
IFPRI Policy Seminar: Policymakers’ Responses to Food Price Crises
1. Policy-Makers Responses to Food Price
Crises: Results from a 14-Country
Political Economy Study
Per Pinstrup-Andersen
IFPRI
May 2, 2013
2. 14 Participating Countries (Bangladesh, Brazil, China, Egypt, Ethiopia, India, Kenya,
Malawi, Mozambique, Nigeria, Senegal, South Africa, Vietnam, Zambia)
European Union
United States
Collaborating Institutions: Cornell University,
UNU-WIDER, and University of Copenhagen
Bill & Melinda Gates Foundation
3. Project OverviewProject Overview
Food Price Trend and Volatility in the World Market
Price Transmission
Domestic Price Trend
and Volatility
Policy Response
Impact
Domestic
Price-Related
Factors
Policy
Process
Political
Economy
4. Project OverviewProject Overview
Food Price Trend and Volatility in the World Market
Price Transmission
Domestic Price Trend
and Volatility
Policy Response
Impact
Domestic
Price-Related
Factors
Policy
Process
Political
Economy
6. Wheat Weekly Price MinusWheat Weekly Price Minus
12-Month Moving Average12-Month Moving Average
7. Project OverviewProject Overview
Food Price Trend and Volatility in the World Market
Price Transmission
Domestic Price Trend
and Volatility
Policy Response
Impact
Domestic
Price-Related
Factors
Policy
Process
Political
Economy
8. Wheat Prices in the World Market,
South Africa and Bangladesh, 2005-2012
Source: Baltzer (2013)
9. Rice Prices in the World Market,
China and India, 2005-2012
Source: Baltzer (2013)
10. Maize Prices in the World Market,
Malawi and Zambia, 2005-2012
Source: Baltzer (2013)
11. Increase in the Domestic Food
Price as a Percent of the Increase
in World Prices, June 2007-2008
Source: Minot, N. 2010. Transmission of World Food Price Changes to
African Markets and its Effect on Household Welfare. Paper presented at
the Comesa policy seminar, 25-26 January, Maputo, Mozambique.
12. Estimates and Projections of UndernourishedEstimates and Projections of Undernourished
People Worldwide, 1990-2015People Worldwide, 1990-2015
Source: 2012 Global Food Policy Report, IFPRI.
13. Real Food Price Indices in the EU and
the World Market 2005-2012 (2005=100)
Source: Swinnen, Knops, and Herck (2013)
14. Cereal Prices in the EU andCereal Prices in the EU and
World Market 2005-2012World Market 2005-2012
Source: Swinnen, Knops, and Herck (2013)
15. Coefficients of Variation for Selected
Food Price Indices (2005-2012)
Source: Swinnen, Knops, and Herck (2013)
16. U.S. Ethanol and Maize Prices, 2004-2006
Source: Rausser and de Gorter (2013)
MaizeEthanol
17. U.S. Maize and Ethanol Prices, 2007-2012
Source: Rausser and de Gorter (2013)
Maize price Ethanol price
18. Project OverviewProject Overview
Food Price Trend and Volatility in the World Market
Price Transmission
Domestic Price Trend
and Volatility
Policy Response
Impact
Domestic
Price-Related
Factors
Policy
Process
Political
Economy
19. The Policy Response (1)The Policy Response (1)
1. Slow down domestic food price increases
and volatility
Trade policies to reduce price transmission
Direct price control
Removal of VAT on food
Short term supply management
Production expansions
20. The Policy Response (2)The Policy Response (2)
2. Reduce negative impact on select groups
Targeted cash transfers
Targeted and untargeted food subsidies
Increasing public sector wages
21. Process andProcess and
Implementation Issues (1)Implementation Issues (1)
1. Ad hoc, delayed action
2. High fiscal costs
Revenue losses
Export bans
Import tariffs
Elimination of VAT
Program costs
1. Interference with price signal
22. Process andProcess and
Implementation Issues (2)Implementation Issues (2)
4. Poor targeting (intentional or not)
Transfers, safety nets
Food and fertilizer subsidies
4. Corruption
5. Cross-border trading
6. Selective enforcement of export bans
7. Untimely government procurement
23. Project OverviewProject Overview
Food Price Trend and Volatility in the World Market
Price Transmission
Domestic Price Trend
and Volatility
Policy Response
Impact
Domestic
Price-Related
Factors
Policy
Process
Political
Economy
24. Political Economy Lessons (1)Political Economy Lessons (1)
1. Protecting government legitimacy
2. Pursuing domestic policies irrespective of
international consequences
3. Unitary government decision-making is
unusual
4. Repeating past or expanding current
policies
5. Relative power of stakeholder group varied
25. Political Economy Lessons (2)Political Economy Lessons (2)
6. Increasing urban bias
7. Smallholders versus larger farms
8. Mutual mistrust between government and
the private sector
9. Foreign agencies had little influence
26. Lessons for Development AssistanceLessons for Development Assistance
1. Do not assume unitary government
decision-making process
2. Expect strong urban bias
3. Expect strong bias in favor of large-scale
farming
4. Rhetoric and priority action may differ wrt
smallholders
5. Mutual mistrust between public and private
sector may be an important hindrance to
broad-based economic growth
27. Full papers and research briefs available at:
http://www.wider.unu.edu/research/current-
programme/en_GB/Political-Economy-of-
Food/
Research briefs also available at:
www.foodpolicy.dyson.cornell.edu