Ethiopia : Explaining Food Price Inflation
This study sheds some light on the challenges facing policy makers in Ethiopia, but much remains to be better understood. Over the past three years, food price inflation in Ethiopia has been persistently high, and overall inflation has been in doub...
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| Format: | Policy Note |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2007/12/16768814/ethiopia-explaining-food-price-inflation-policy-note http://hdl.handle.net/10986/19539 |
| Summary: | This study sheds some light on the
challenges facing policy makers in Ethiopia, but much
remains to be better understood. Over the past three years,
food price inflation in Ethiopia has been persistently high,
and overall inflation has been in double. While the spike in
2002 can be broadly explained by the drought-induced output
shock that year, over the period as a whole, food price -
and in particular grain price - trends present a puzzle in
several respects. This is a serious concern for
policy-makers, not least because the poor spend most of
their income on food, and are adversely affected by rising
prices. Even in rural areas, it is estimated that about half
the population are net buyers of food. The issue of food
price inflation has attracted rising concern in the national
media and among policy makers, academics and of course the
public at large, as well as among development partners. The
structure of this note is as: authors review the key
features of Ethiopian grain markets, before laying out a
basic methodological approach to analyze the drivers of
inflation, followed by a review of the relative importance
of different explanatory factors on the demand, supply and
marketing sides. Authors then turn to explore the impacts of
food price changes on households, drawing on the most recent
household data available. The final section highlights
emerging policy conclusions. |
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