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Short- and long-run impacts of food price changes on poverty, Volume 1
 
Author:Ivanic, Maros; Martin, Will; Collection Title:Policy Research working paper ; no. WPS 7011
Country:World; Date Stored:2014/08/20
Document Date:2014/08/01Document Type:Policy Research Working Paper
SubTopics:Regional Economic Development; Rural Poverty Reduction; Emerging Markets; Food & Beverage IndustryLanguage:English
Major Sector:Industry and tradeRel. Proj ID:1W-Agricultural Trade Reform -- -- P116383;
Region:The World RegionReport Number:WPS7011
Sub Sectors:Other domestic and international tradeTF No/Name:TF012828-Agricultural Trade and Food Security; TF013936-Agricultural Trade Reform; TF013713-PHRD STAFF GRANT SUPPORT FOR EMIKO FUKASE
Volume No:1  

Summary: This study uses household models based on detailed expenditure and agricultural production data from 31 developing countries to assess the impacts of changes in global food prices on poverty in individual countries and for the world as a whole. The analysis finds that food price increases unrelated to productivity changes in developing countries raise poverty in the short run in all but a few countries with broadly-distributed agricultural resources. This result is primarily because the poor spend large shares of their incomes on food and many poor farmers are net buyers of food. In the longer run, two other important factors come into play: poor workers are likely to benefit from increases in wage rates for unskilled workers from higher food prices, and poor farmers are likely to benefit from higher agricultural profits as they raise their output. As a result, higher food prices appear to lower global poverty in the long run.

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