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Higher food prices can reduce poverty and stimulate growth in food production.

ABSTRACT: Food prices spiked sharply in 2007-2008, in 2010-2011 and again in 2021-2022. However, the impacts of these spikes on poverty remain controversial; while food is a large expense for the poor, many poor people also earn income from producing or marketing food, and higher prices should incentivize greater food production. Short-run simulation models assume away production and wage adjustments, and probably underestimate food production by the poor. Here we analyse annual data on poverty rates, real food price changes and food production growth for 33 middle-income countries from 2000 to 2019 based on World Bank poverty measures. Panel regressions show that year-on-year increases in the real price of food predict reductions in the US$3.20-per-day poverty headcount, except in more urban or non-agrarian countries. A plausible explanation is that rising food prices stimulate short-run agricultural supply responses that induce increased demand for unskilled labour and increases in wages.

SUBMITTER: Headey D

PROVIDER: S-EPMC10444620 | biostudies-literature | 2023 Aug

REPOSITORIES: biostudies-literature

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Higher food prices can reduce poverty and stimulate growth in food production.

Headey Derek D Hirvonen Kalle K

Nature food 20230810 8

Food prices spiked sharply in 2007-2008, in 2010-2011 and again in 2021-2022. However, the impacts of these spikes on poverty remain controversial; while food is a large expense for the poor, many poor people also earn income from producing or marketing food, and higher prices should incentivize greater food production. Short-run simulation models assume away production and wage adjustments, and probably underestimate food production by the poor. Here we analyse annual data on poverty rates, rea ...[more]

PMID: 37563494

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Project description:IntroductionFood insecurity is associated with increased risk for several health conditions and with poor chronic disease management. Key determinants for household food insecurity are income and food costs. Whereas short-term household incomes are likely to remain static, increased food prices would be a significant driver of food insecurity.ObjectivesTo investigate food price drivers for household food security and its health consequences in the UK under scenarios of Deal and No-deal for Britain's exit from the European Union. To estimate the 5% and 95% quantiles of the projected price distributions.DesignStructured expert judgement elicitation, a well-established method for quantifying uncertainty, using experts. In July 2018, each expert estimated the median, 5% and 95% quantiles of changes in price for 10 food categories under Brexit Deal and No-deal to June 2020 assuming Brexit had taken place on 29 March 2019. These were aggregated based on the accuracy and informativeness of the experts on calibration questions.ParticipantsTen specialists with expertise in food procurement, retail, agriculture, economics, statistics and household food security.ResultsWhen combined in proportions used to calculate Consumer Price Index food basket costs, median food price change for Brexit with a Deal is expected to be +6.1% (90% credible interval -3% to +17%) and with No-deal +22.5% (90% credible interval +1% to +52%).ConclusionsThe number of households experiencing food insecurity and its severity is likely to increase because of expected sizeable increases in median food prices after Brexit. Higher increases are more likely than lower rises and towards the upper limits, these would entail severe impacts. Research showing a low food budget leads to increasingly poor diet suggests that demand for health services in both the short and longer terms is likely to increase due to the effects of food insecurity on the incidence and management of diet-sensitive conditions.

Dataset Information

Higher food prices can reduce poverty and stimulate growth in food production.

Publications

Higher food prices can reduce poverty and stimulate growth in food production.

Similar Datasets

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