Responding to High World Food Prices:
Evidence from Bangladesh, Nicaragua & Sierra Leone … and elsewhere
Power & Participation Research Centre, Dhaka Nitlapan, ManaguaCESPA, Freetown& the Hunger Alliance & Overseas Development Institute
Research Questions• What measures taken to respond higher food
prices? • Experience of implementing them? ...
cost, timeliness, capacity to reach targets? • How effective have they been?
Impacts on prices, incomes, production & consumption?
Social effects on intended beneficiaries?
Responding to:
Bangladesh• 2 floods +
Cyclone Sidr in 2007
• Indian rice export bans
Average Monthly Price of Coarse Rice per kg
10
15
20
25
30
35
2006 2007 2008 2009
Tk/k
g
Wholesale Price Retail Price
NicaraguaWorld rice prices + Huracan
Felix
0
50
100
150
200
250
300
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
1994 1996 1998 2000 2002 2004 2006 2008
Crob
obas
Cor
rient
es
Food Prices, Basic Bunde and CPI in Nicaragua 1994-2009
Alimentos básicos
Canasta Basica
IPC (1999=100)
Alimentos y Bebidas
Sierra Leone: P rice world, 30% imported
Jan-
06Fe
b-06
Mar
-06
Apr-
06M
ay-0
6Ju
n-06
Jul-0
6Au
g-06
Sep-
06O
ct-0
6No
v-06
Dec-
06Ja
n-07
Feb-
07M
ar-0
7Ap
r-07
May
-07
Jun-
07Ju
l-07
Aug-
07Se
p-07
Oct
-07
Nov-
07De
c-07
Jan-
08Fe
b-08
Mar
-08
Apr-
08M
ay-0
8Ju
n-08
Jul-0
8Au
g-08
Sep-
08O
ct-0
8No
v-08
Dec-
08Ja
n-09
Feb-
09M
ar-0
9Ap
r-09
May
-09
Jun-
09
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
Rice, Local Rice, Imported
Framework: 3 sets Public Measures +
• Trade, Border & Market interventions Aim: stabilise prices
• Food Production stimulus Aim: more supply, lower prices
• Social Safety Nets Aim: mitigate hardship for vulnerable
• Coping by individuals & households
Trade, Border & Market Measures
• Cut tariffs on cereals imports But not much to cut, low tariffs:
5% cereals Bangladesh, 15% rice Sierra Leone
• Exports banned in Bangladesh ... But no exports to ban!
• Facilitate trade: Sierra Leone & India
Market Measures
• Sell subsidised food: ENABAS Nicaragua ... limited
capacity, buying <5% cereals harvests
Mainly Managua, other cities Coverage = 151k by 2008 Run by Citizens Power
Councils• Bangladesh Rifles, open
market sales Outlets mainly Dhaka, other
cities
Stimulate production
• Nicaragua ... Seeds + Livestock ... 13k households 07, 19k
households 08• Sierra Leone ... Seeds + Tools ...
Limited coverage • Bangladesh
Seed, fertiliser + procurement P Boro rice 08: 17% on 07!
Safety Net Feasibility & Effectiveness :3 contexts
• Existing social assistance prog’s in place • Social assistance reduced in context of
liberalisation• Social assistance not in place (post-conflict)
• Expansion of Vulnerable Group Development and Vulnerable Group Feeding
• Public distribution of food grains
Safety Nets – Bangladesh
06/07 07/08 08/09VGD and VGF 0.79m MT 1.37m MT 1.57m MTTotal 2.97m MT 3.12m MT 4.26m MT
Safety Nets: Nicaragua
• Conditional Cash and Food Transfer (Red de Protección Social) from 2000. Coverage: 22k families/2.2% pop’n Effectively ended 2006
• Sistema de Atención al Crisis [SAC]
Safety Nets: Sierra Leone• Cash for Work
Coverage: 5.3k youth for up to 2m @US$2 day• School feeding • Supplementary feeding mothers & infants
Safety Nets Issues• What was in place, could be built on• Limited effects because limited (added) coverage
Oportunidades only scaled up by 25%!• Targeting: do transitory shocks obscure
chronically poor(er)?• Social Protection or social protecting?
Risk Reduction (increase food production) Risk Mitigation (reduce price volatility) Risk Coping (safety nets / social transfers)
Households & Individuals: Coping• Cut spending on non-food
items• Food intake
Cut veg, meat, pulses, etc. Switch to less preferred staples Reduce meals frequency
• Debt/borrow/beg• Seek more work• Children out of school/Cut
school expenses• But ...Rarely: sale assets
Initial Highlights: Political priorities
• What got political priority? Bias to urban areas, to consumers? But revival of interest in farming,
focus on food security• Country context so important ...
Bangladesh: rising prices raise ghosts of past famine ... ‘74 [‘43]
Nicaragua: between liberal markets & return of State
Sierra Leone: following textbook
Initial highlights: Markets• Volatility as important as levels• Consumer confidence• Short Term pressures vs Long Run wisdoms
ST: Thin & Imperfect Markets, uncertainty• Intervention hazardous, yet need to be seen to act• Distrust of private traders
LT: Develop roads, warehouses, institutions, trust private trade (within regulatory frame)
• Puzzles: ltd rise in Salone rice P, Nica rice P
Initial HighlightsResponses: feasibility & effectiveness
• What was in place, could be built on Social safety nets, but also in production Bangladesh farm support Plans for ENABAS, Hambre Cero
• Importance of being seen to act: symbols• Big question: Coping vs public response?
Slide Dump
Typical Responses across World [FAO log]