Grain reserves and food security in the Middle East and North Africa.

Aggregate stocks of major grains declined to minimal feasible levels in 2007–2008, due to high global income growth and biofuel mandates. Given these minimal stocks, prices were very sensitive to shocks, such as the Australian drought, and biofuel demand boosts due to the oil price spike. The effects of these shocks were magnified by a sequence of trade restrictions by key exporters to protect vulnerable consumers. Beginning in the 'thin' global rice market in the fall of 2007, these turned market anxiety into panic. Recognizing the unreliability of imports, vulnerable countries, including some in the Middle East and North Africa (MENA), are now considering investing in strategic reserves, pursuing self sufficiency and acquiring foreign land to ensure grain supplies for domestic consumption. The associated expense and negative incentive effects on national reserves may be acceptable if they have quantitative targets related to the needs of the most vulnerable, for distribution only in emergencies. In many MENA countries, heavy subsidies on grain consumption for both rich and poor reduce the stabilizing response of consumption to price, and increase reserves needed to ensure food security. Accumulation of stocks is a more efficient strategy than pursuit of self-sufficiency in most MENA countries, as they have no comparative advantage in expanding agriculture, given restricted water supplies. Acquisition of foreign lands leaves food supplies exposed to sovereign risk and other supply chain problems beyond importers' control. MENA countries could cooperate and so smooth much of the risk posed by fluctuations in their own harvests

POLICY REFORM, MARKET STABILITY, AND FOOD SECURITY; PROCEEDINGS OF A CONFERENCE OF THE INTERNATIONAL AGRICULTURAL TRADE RESEARCH CONSORTIUM

Contact for this paper: Laura Bipes, Department of Applied Economics, University of Minnesota, 1994 Buford Avenue, 232 ClaOff, St. Paul, MN 55108. This volume contains the main papers that were presented at an IATRC symposium which focused on Policy Reform, Market Stability, and Food Security. It was held June 26-27, 1998 in Alexandria, Virginia and was co-sponsored by the Center for International Food and Agricultural Policy, Department of Applied Economics, University of Minnesota. Papers included are: Asian Economic Crisis and the Long-Term Global Food Situation, by Mark Rosegrant and Claudia Ringler; The New Policy Environment for Food Aid: The Challenge of Sub-Saharan Africa, by Cheryl Christensen; Poverty and Undernutrition in South Asia, by T.N. Srinivasan; The Macro Dimensions of Food Security: Economic Growth, Equitable Distribution, and Food Price Stability, by Peter Timmer; World Food Markets and Food Security: Uncertain Connections, by Robert Paarlberg; International Price Instability in Cereals Markets and a Market Based Scheme for Developing Country Cereal Imports, by Alexander Sarris; On Reform, Food Prices, and Poverty in India, by Martin Ravallion; The Contribution of Food Aid to Stable Food Consumption, by Christopher Barrett; A Role of Capital Markets in Natural Disasters: A Piece of the Food Security Puzzle, by Jerry SkeesAgricultural and Food Policy, Food Security and Poverty, International Relations/Trade,

Reflections on the global food crisis: How did it happen? How has it hurt? And how can we prevent the next one?

Cheap food has been taken for granted for almost 30 years. From their peak in the 1970s crisis, real food prices steadily declined in the 1980s and 1990s and eventually reached an all-time low in the early 2000s. Rich and poor governments alike therefore saw little need to invest in agricultural production, and reliance on food imports appeared to be a relatively safe and efficient means of achieving national food security. However, as the international prices of major food cereals surged upward from 2006 to 2008 these perceptions quickly collapsed. Furthermore, although food prices are now lower than their 2008 peak, real prices have remained significantly higher in 2009 and 2010 than they were prior to the crisis, and various simulation models predict that real food prices will remain high until at least the end of the next decade.food crisis, Food supply, food security, Food prices,

Transmission of world food price changes to markets in Sub-Saharan Africa:

error correction model, food crisis, Food prices, Price transmission, Staple food,

Has food price volatility risen?

The high food prices experienced over recent years have led to the widespread view that food price volatility has increased. However, volatility has generally been lower over the two most recent decades than previously. Variability over the most recent period has been high but, with the important exception of rice, not out of line with historical experience. There is weak evidence that the volatility of grains and vegetable oils prices may be increasing but it is too early to make a definite statement. Important open issues remain with respect to biofuels, climate change and the possible effects of the financialization of agricultural food markets

Are Staple Food Markets in Africa Efficient? Spatial Price Analyses and Beyond

Paper to be presented at the Comesa policy seminar “Food price variability: Causes, consequences, and policy options" on 25-26 January 2010 in Maputo, Mozambique under the Comesa-MSU-IFPRI African Agricultural Markets Project (AAMP)Sub saharan Africa, food security, food prices, markets, efficiency, Agricultural and Food Policy, Community/Rural/Urban Development, Demand and Price Analysis, Food Security and Poverty, International Development, International Relations/Trade, q11, q13, q18, q17,

An econometric investigation of impacts of sustainable land management practices on soil carbon and yield risk: A potential for climate change mitigation

We investigate the impacts of sustainable land management practices on soil carbon stocks and also impacts of soil carbon on the mean and variance of crop production using econometric tools. Using a cross-sectional plot-level dataset collected from three agroecological zones of Uganda with soil carbon measured at a depth of 0 to 15 centimeters, our results have robustly shown that irrigation, fertilizers, improved fallow, crop residues, mulching, and trash lines are positively and significantly associated with higher soil carbon, corroborating results from agronomic experiments. However, we found crop rotation associated with lower soil carbon, which has also been observed in some agronomic experiments. Soil carbon has shown a significant nonlinear effect on crop production with the threshold occurring at 29.96 milligrams of carbon per hectare, above which farmers start to see significant positive effects on crop production. Furthermore, we found soil carbon to be associated with lower variance of crop production; hence, soil carbon is an indicator of crop yield loss risk (soil carbon has a risk-reducing effect). These empirical results have demonstrated strong evidence for developing countries of the potential of sustainable land management practices to enhance carbon sequestration and also the potential of soil carbon to reduce production risk. The results have implications for the role that soil carbon can play in adaptation to climate change and provision of ecosystem services.Land management, Climate change, soil carbon, Production risk, Carbon sequestration, Just and Pope stochastic production function,

Impediments to agricultural growth in Zambia:

This paper has been prepared as part of the Zambia country study of the Macroeconomic and Regional Integration in Southern Africa (MERRISA) project and serves as a background paper for modeling exercises. The paper focuses on analyzing institutional constraints on the development of the agricultural sector in Zambia. It argues that by changing some of the rules and neglecting to integrate these changes into the complete institutional setting, policymakers have been unable to achieve their goals. Other constraints on Zambia's agricultural development are of a more technical nature. There are problems with Zambia's infrastructure. This paper argues that these are problems of the provision of public and merit goods mainly occurring in rural areas. Farmers emphasize their limited access to resources like credit, fertilizer, and draft animals. Although these problems could indicate market failures, it is the view of the authors that they are mainly due to transition uncertainties.Resource management., Infrastructure (Economics) Rural areas Zambia., Agricultural development., Agricultural resources.,

Thought for Food: The Challenges of Coping with Soaring Food Prices

World food commodities prices increased 130 percent from January 2002 to July 2008. Individual agricultural commodities show even more pronounced increases: corn, wheat, rice and soybeans rose by 190, 162, 318 and 246 percent, respectively. Since July, food commodities prices began to fall. While this decline comes as a relief, prices are likely to stay high in the foreseeable future. Available evidence suggests that the decline in living standards of net consumers caused by higher food prices outweighs the benefits accruing to poor net sellers in the majority of countries that have been analyzed so far. The time to implement measures to help the poor net consumers cope with higher food prices is now. However, too many developing countries lack the instruments, administrative capacity and fiscal space to implement safety nets fast enough and in the required scale. This is one of the most pressing policy challenges that we face. For the poor who are net sellers, governments should seize the opportunity to convert the short-run windfall into longer-term gains. Multilateral financial institutions can play a key role in providing financial resources to countries facing negative terms of trade shocks, technical assistance in the design of safety nets and resources to add fiscal space to countries to fund safety net programs. International organizations can also help countries design the appropriate macroeconomic policy response. This will call for greater flexibility in the menu of policy options traditionally deployed by the Bretton Woods institutions.Food Prices, Poverty, Inflation, Multilateral Financial Institutions