Global Food Price Inflation : Implications for South Asia, Policy Reactions, and Future Challenges

The surge in global commodity prices of the past few years has presented a tremendous development challenge for South Asian countries. The large loss of income from the terms of trade shock has worsened macroeconomic balances, fueled rapid inflatio...

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Bibliographic Details
Main Author:	Ahmed, Sadiq
Format:	Policy Research Working Paper
Language:	English
Published:	Washington, DC: World Bank 2012
Subjects:	ADVERSE CONSEQUENCES ADVERSE EFFECT ADVERSE EFFECTS AGRICULTURAL PRODUCTIVITY AGRICULTURE AVERAGE PRICE AVERAGE PRICES AVERAGE PRODUCTIVITY BASIC NEEDS BINDING CONSTRAINT BUFFER STOCKS BUTTER CALORIE INTAKE CAPITAL INFLOWS CASH CROPS CASH TRANSFER PROGRAMS CASH TRANSFERS CEREALS CHRONIC POVERTY CIVIL WAR CLIMATE CHANGE COMMODITIES COMMODITY COMMODITY PRICE COMMODITY PRICES COMPARATIVE ADVANTAGE COMPREHENSIVE STRATEGY CONSUMERS CONSUMPTION BEHAVIOR COST INCREASE CROP INSURANCE CROP LOSSES CURRENCY CURRENT ACCOUNT BALANCE DEBT DEMAND MANAGEMENT DEVELOPING COUNTRIES DOMESTIC MARKET DOMESTIC PRICE DOMESTIC PRICES DROUGHT ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC SHOCKS EDIBLE OILS EGS ELASTICITY EMERGING MARKETS EMPLOYMENT GUARANTEE SCHEME EMPLOYMENT GUARANTEE SCHEMES EMPLOYMENT RATIONING ENERGY PRICES EXPENDITURE EXPENDITURES FAIR FARM HOUSEHOLDS FARM PRODUCTION FARM PRODUCTIVITY FARM TECHNOLOGY FARMERS FINANCIAL CRISIS FISCAL DEFICIT FISCAL DEFICITS FISCAL POLICY FLOUR MILLS FOOD AVAILABILITY FOOD CONSUMPTION FOOD CROP FOOD CROPS FOOD DISTRIBUTION FOOD EXPORTS FOOD FOR WORK FOOD GRAINS FOOD ITEMS FOOD MARKETS FOOD POLICY FOOD PRICE FOOD PRICE INFLATION FOOD PRICES FOOD PRODUCTION FOOD PRODUCTS FOOD RATIONS FOOD SECURITY FOOD SHORTAGES FOOD STOCKS FOOD-FOR-EDUCATION GDP GLOBAL ECONOMY GLOBAL MARKET GLOBAL PUBLIC GOODS GLOBAL STANDARDS GOVERNMENT BUDGET GOVERNMENT INTERVENTION GRAIN PRODUCTION GROWTH RATE GROWTH RATES HEDGE FUND IFPRI INCOME INCOME GROUP INCOME INEQUALITY INCOMES INEFFICIENCY INFLATION RATE INFLATION RATES INFLATIONARY PRESSURE INFLATIONARY PRESSURES INPUT PRICES IRRIGATION LAND PRODUCTIVITY LANDHOLDINGS MACROECONOMIC POLICIES MAIZE MARKET EXPECTATIONS MARKET PRICE MARKET PRICES MONETARY POLICIES MONETARY POLICY NATIONAL POVERTY NATURAL DISASTERS OUTPUT OUTPUTS PADDY PER CAPITA CONSUMPTION PETROLEUM PRICES POLITICAL ECONOMY POOR POOR COUNTRIES POOR HOUSEHOLD POOR PEOPLE POVERTY ASSESSMENT POVERTY ESTIMATES POVERTY HEAD POVERTY HEADCOUNT RATE POVERTY IMPACT POVERTY LINE POVERTY RATES POVERTY REDUCTION POVERTY REDUCTION STRATEGIES POVERTY REDUCTION STRATEGY PRICE CAP PRICE CONTROLS PRICE EFFECT PRICE INCREASE PRICE INCREASES PRICE INDEX PRICE STABILIZATION PRICE SUPPORT PRICE TREND PRICE TRENDS PRICE VOLATILITY PRICING POLICIES PRICING POLICY PRODUCER PRICE PRODUCTION OF WHEAT PRODUCTIVITY PUBLIC POLICY PUBLIC SAFETY NET PUBLIC SPENDING PURCHASING PURCHASING POWER RAPID ECONOMIC GROWTH RAPID GROWTH RATE OF GROWTH RENT SEEKING RETAIL RETAIL PRICE RICE RISK REDUCTION RURAL RURAL EMPLOYMENT RURAL HOUSEHOLDS RURAL INFRASTRUCTURE RURAL POOR RURAL POOR HOUSEHOLDS RURAL ROADS SAFETY NET SAFETY NET MEASURES SAFETY NET PROGRAMS SAFETY NET SYSTEMS SAFETY NETS SALE SALES SCHOOL FEEDING SCHOOL FEEDING PROGRAMS SEAFOOD SECURITY CONCERNS SELF TARGETING SOCIAL IMPACTS SOCIAL PROTECTION SOCIAL SAFETY NET STABILIZATION POLICIES STAPLE FOODS STOCK MANAGEMENT SUPPLIERS SURPLUS TARGETING TRADE BALANCE TRADE BARRIERS TRADE OPPORTUNITIES TRADE POLICIES TRADE POLICY TRADE REFORMS VALUE ADDED WAGES WFP WHEAT WHEAT FLOUR WORLD DEVELOPMENT INDICATORS WORLD FOOD PROGRAM WORLD MARKET
Online Access:	http://documents.worldbank.org/curated/en/2008/12/10115780/global-food-price-inflation-implications-south-asia-policy-reactions-future-challenges http://hdl.handle.net/10986/6338

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Summary:	The surge in global commodity prices of the past few years has presented a tremendous development challenge for South Asian countries. The large loss of income from the terms of trade shock has worsened macroeconomic balances, fueled rapid inflation, and hurt growth. Although commodity prices have come down recently, the benefits are being clouded by the emergence of a severe global financial crisis. The adverse consequences of the food price hike for the poor are large; the global financial crisis could further worsen the situation due to falling economic opportunities and government revenues. South Asian countries need to accelerate reforms to avoid facing a serious downturn in economic activity, investment, exports, and income. Governments in South Asia have responded by stabilizing domestic food prices through a number of short-term measures, tightened monetary policy to reduce inflation, and increased spending on a range of safety net programs for the poor. Some of the policies employed, such as export bans, are not consistent with the long-term welfare of the country or the region. Safety net interventions need to be made consistent with a longer-term poverty reduction strategy and fiscal sustainability. Most importantly, policy attention now needs to shift toward efforts to increase farm productivity, improve rural infrastructure, and lower the vulnerability of the poor.

Global Food Price Inflation : Implications for South Asia, Policy Reactions, and Future Challenges

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