Who Wins and Who Loses from Staple Food Price Spikes? : Welfare Implications for Mozambique

Changes in food prices – triggered frequently by natural disasters, macroeconomic shocks or regional market disruptions– can lead to large household welfare effects. At over 60 and 40 percent, food budget shares remain high in rural and urban Mozam...

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Main Authors:	Baez, Javier E., Caruso, German, Pullabhotla, Hemant
Format:	Brief
Language:	English
Published:	World Bank, Washington, DC 2019
Subjects:	FOOD PRICES HOUSEHOLD WELFARE CONSUMPTION POVERTY FOOD SECURITY MAIZE PRICE DISTRIBUTIONAL IMPACT
Online Access:	http://documents.worldbank.org/curated/en/142931560187776814/Who-Wins-and-Who-Loses-from-Staple-Food-Price-Spikes-Welfare-Implications-for-Mozambique http://hdl.handle.net/10986/31842

id	okr-10986-31842
recordtype	oai_dc
spelling	okr-10986-318422021-05-25T10:54:39Z Who Wins and Who Loses from Staple Food Price Spikes? : Welfare Implications for Mozambique Baez, Javier E. Caruso, German Pullabhotla, Hemant FOOD PRICES HOUSEHOLD WELFARE CONSUMPTION POVERTY FOOD SECURITY MAIZE PRICE DISTRIBUTIONAL IMPACT Changes in food prices – triggered frequently by natural disasters, macroeconomic shocks or regional market disruptions– can lead to large household welfare effects. At over 60 and 40 percent, food budget shares remain high in rural and urban Mozambique, respectively. Furthermore, nearly 70 percent of the population depends on agriculture for their livelihoods. To determine the net impact of food price changes on consumption and poverty, we performed incidence analysis combining household and farmer survey data with disaggregated, market-level price data on major staples (maize, rice, and cassava). Overall, we find evidence for a large net negative welfare effect of price rises in rural areas, and a small, negative effect in the urban areas. For instance, A 10 percent increase in maize prices is associated with an average reduction of 1.2 percent in consumption per capita in rural areas and 0.2 percent in urban areas. Not all households are affected equally. Overall, the negative impacts are larger for the bottom half of the distribution. As a result, the sharp food price spike observed in 2016–17 may have translated into a poverty increase of 4-6 percentage points, with some of the poorest provinces bearing much of the brunt. These findings underscore the importance of improving the functioning of agricultural input and output markets, developing early food security warning systems, and increasing the availability of rapidly scalable safety nets. 2019-06-12T21:01:29Z 2019-06-12T21:01:29Z 2019-06 Brief http://documents.worldbank.org/curated/en/142931560187776814/Who-Wins-and-Who-Loses-from-Staple-Food-Price-Spikes-Welfare-Implications-for-Mozambique http://hdl.handle.net/10986/31842 English Poverty and Equity Notes;No. 15 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Brief Africa Mozambique
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	FOOD PRICES HOUSEHOLD WELFARE CONSUMPTION POVERTY FOOD SECURITY MAIZE PRICE DISTRIBUTIONAL IMPACT
spellingShingle	FOOD PRICES HOUSEHOLD WELFARE CONSUMPTION POVERTY FOOD SECURITY MAIZE PRICE DISTRIBUTIONAL IMPACT Baez, Javier E. Caruso, German Pullabhotla, Hemant Who Wins and Who Loses from Staple Food Price Spikes? : Welfare Implications for Mozambique
geographic_facet	Africa Mozambique
relation	Poverty and Equity Notes;No. 15
description	Changes in food prices – triggered frequently by natural disasters, macroeconomic shocks or regional market disruptions– can lead to large household welfare effects. At over 60 and 40 percent, food budget shares remain high in rural and urban Mozambique, respectively. Furthermore, nearly 70 percent of the population depends on agriculture for their livelihoods. To determine the net impact of food price changes on consumption and poverty, we performed incidence analysis combining household and farmer survey data with disaggregated, market-level price data on major staples (maize, rice, and cassava). Overall, we find evidence for a large net negative welfare effect of price rises in rural areas, and a small, negative effect in the urban areas. For instance, A 10 percent increase in maize prices is associated with an average reduction of 1.2 percent in consumption per capita in rural areas and 0.2 percent in urban areas. Not all households are affected equally. Overall, the negative impacts are larger for the bottom half of the distribution. As a result, the sharp food price spike observed in 2016–17 may have translated into a poverty increase of 4-6 percentage points, with some of the poorest provinces bearing much of the brunt. These findings underscore the importance of improving the functioning of agricultural input and output markets, developing early food security warning systems, and increasing the availability of rapidly scalable safety nets.
format	Brief
author	Baez, Javier E. Caruso, German Pullabhotla, Hemant
author_facet	Baez, Javier E. Caruso, German Pullabhotla, Hemant
author_sort	Baez, Javier E.
title	Who Wins and Who Loses from Staple Food Price Spikes? : Welfare Implications for Mozambique
title_short	Who Wins and Who Loses from Staple Food Price Spikes? : Welfare Implications for Mozambique
title_full	Who Wins and Who Loses from Staple Food Price Spikes? : Welfare Implications for Mozambique
title_fullStr	Who Wins and Who Loses from Staple Food Price Spikes? : Welfare Implications for Mozambique
title_full_unstemmed	Who Wins and Who Loses from Staple Food Price Spikes? : Welfare Implications for Mozambique
title_sort	who wins and who loses from staple food price spikes? : welfare implications for mozambique
publisher	World Bank, Washington, DC
publishDate	2019
url	http://documents.worldbank.org/curated/en/142931560187776814/Who-Wins-and-Who-Loses-from-Staple-Food-Price-Spikes-Welfare-Implications-for-Mozambique http://hdl.handle.net/10986/31842
_version_	1764475216645324800

Who Wins and Who Loses from Staple Food Price Spikes? : Welfare Implications for Mozambique

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