Food Price Policy in an Era of Market Instability

Food price volatility is one of the major challenges facing current and future global food systems. Since 2006, global food prices have fluctuated greatly around an increasing trend and price spikes were observed for key food commodities such as rice, wheat, and maize. The full or partial transmission of these global food price changes to individual developing countries, together with domestic food price changes, caused by domestic factors such as extreme weather events and market disruptions, caused governments to respond in a variety of ways. While there is ample description of the nature, content, and causes of food price fluctuations during the last 5 to 7 years, very little is known about the processes that led to policy responses or the relative power and behaviour of the participating stakeholder groups. Understanding how and why governments responded as they did is important to enhance the existing knowledge of the political economy of food price policy and to assist governments in their policy-making as they confront future food price fluctuations. This book presents results from political economy studies of food price policy in 14 developing countries as well as the United States and the European Union. The world food crisis of 2007-08 brought extraordinary increases in international agricultural commodity prices, triggering varying responses by national governments to cope. This important book documents key case study countries political motivations, policy responses, and consequences following that crisis. Synthesis chapters explore in a comparative manner the politics and economics of country responses. An important finding is the extent of differences in policy implementation success, given similar food security objectives. This book is an invaluable resource for those seeking to understand consequences for food security during crises, and why they can differ across countries. Philip Abbott, Professor, Department of Agricultural Economics, Purdue University Governments of many developing countries are vulnerable when food prices spike, yet very few have appropriate policies and strategies in place to deal with such shocks. Most respond in knee-jerk fashion with expensive or even counter-productive measures. By drawing on 14 country case studies, this book is able to expose not just how but also why responses to the 2007-08 were so varied. It provides invaluable lessons and policy implications for governments seeking to prepare themselves for subsequent price shocks. Kym Anderson, George Gollin Professor of Economics, School of Economics, University of Adelaide, CEPR Fellow; and Professor of Economics, Arndt-Corden Dept of Economics, Australian National University This comprehensive study sheds new light on the great diversity of national capabilities and political economy forces which shaped the response to food price volatility. It shows in detail that national objectives of food policy dominate when food prices become more volatile, and collective action failure is a consequence. Policy makers and researchers should note the important implication of the books findingsthe world is not well prepared to deal effectively with food price volatility, should that increase further, say in the context of climate change. Joachim von Braun, Director, Center for Development Research (ZEF) and Professor for Economic and Technological Change, University of Bonn This is a very timely and insightful book that provides the collective thinking of a generation of eminent scholars. The book opens up the black box of the political economy process, and shows us how price policy is actually formulated. Prabhu L. Pingali, Professor and Director, Tata-Cornell Agriculture and Nutrition Initiative, Cornell UniversityPART I: AN OVERVIEW ; 1. The Political Economy of Food Price Policy: An Overview ; PART II: SYNTHESES OF FINDINGS FROM COUNTRY STUDIES ; 2. International to Domestic Price Transmission in 14 Developing Countries during the 2007-08 Food Crisis ; 3. A Cacophony of Policy Responses: Evidence from 14 Countries during the 2007-08 Food Price Crisis ; 4. Policy Processes and Food Price Crises: A Framework for Analysis and Lessons from Country Studies ; 5. A Political Economy Synthesis of Food Price Policy in 14 Countries ; PART III: THE POLITICAL ECONOMY OF FOOD PRICE POLICY IN LOW-INCOME LANDLOCKED COUNTRIES ; 6. The Political Economy of Food Price Policy in Ethiopia ; 7. The Political Economy of Food Price Policy in Malawi ; 8. The Political Economy of Food Price Policy in Zambia ; PART IV: THE POLITICAL ECONOMY OF FOOD PRICE POLICY IN LOW-INCOME COUNTRIES WITH LIMITED DEPENDENCE ON FOOD IMPORTS ; 9. The Political Economy of Food Price Policy in Kenya ; 10. The Political Economy of Food Price Policy in Mozambique ; PART V: THE POLITICAL ECONOMY OF FOOD PRICE POLICY IN LOW AND MIDDLE-INCOME COUNTRIES HEAVILY DEPENDENT ON FOOD IMPORT ; 11. The Political Economy of Food Price Policy in Bangladesh ; 12. The Political Economy of Food Price Policy in Egypt ; 13. The Political Economy of Food Price Policy in Nigeria ; 14. The Political Economy of Food Price Policy in Senegal ; PART VI: THE POLITICAL ECONOMY OF FOOD PRICE POLICY IN LARGE EXPORTERS ; 15. The Political Economy of Food Price Policy in Vietnam ; 16. The Political Economy of Food Price Policy in India ; 17. The Political Economy of Food Price Policy in China ; 18. The Political Economy of Food Price Policy in Brazil ; 19. The Political Economy of Food Price Policy in South Africa ; PART VII: THE POLITICAL ECONOMY OF FOOD PRICE POLICY IN HIGH-INCOME COUNTRIES ; 20. US Policy Contributions to Agricultural Commodity Price Fluctuations 2006-12 ; 21. Food Price Volatility and EU Policies ; PART VIII: CONCLUSIONS AND RECOMMENDATIONS ; 22. The Political Economy of Food Price Policy: Key Policy-Related Lessons