Publication: South Asia Economic Focus, June 2011 : Food Inflation
Date
2011-06
ISSN
Published
2011-06
Author(s)
World Bank
Abstract
This report focuses on the impact of
policies and exogenous shocks on food inflation. It deals
with four elements: 1) the pass-through of global food (and
other commodity) prices, 2) macroeconomic policies, 3)
market regulation and short-term supply shocks, and 4)
long-term structural shifts and the terms of trade between
agriculture and other sectors of the economy. This report
examines food and overall inflation trends in South Asia,
which is experiencing relatively high inflation, and is home
to a large number of poor. There are many more poor people
who are net buyers of food than there are those who benefit
from higher prices of agricultural products even in the
predominantly rural countries of South Asia. The report
examines both short-term and longer-term drivers of rising
food prices in the region, including developments in
international commodity prices, domestic supply shocks,
accommodative demand side policies, structural changes in
demand patterns, and long-term agricultural productivity
trends. The impact on poverty is examined, as is the
region's preparedness for food price shocks. The
priorities laid out in the Bank's post-crisis
directions paper (2010) and the mandates given to the Bank
by the G20 are to focus on food price volatility,
agriculture and food security, and agricultural
productivity. In line with these priorities, the report ends
with some policy directions to manage the macroeconomic
impact of food price inflation, and the potential spillover
into generalized inflation, to manage the social impact of
the food price hikes, and to hedge against risks associated
with food price volatility. The report is organized as
follows: section two discusses the anatomy and short- and
longer-run drivers of food and overall inflation in South
Asia. Section three discusses the impact of government
policies affecting agricultural marketing, inputs and trade
in South Asian countries. Section four presents an
assessment of the impact of food price increases on poverty
and an assessment of the preparedness of South Asian
countries social protection schemes to cope with this
impact. Section five concludes with some policy directions
that could be pursued by South Asia to improve agricultural
productivity and mitigate the impact of food price
volatility on its population.
Citation
“World Bank. 2011. South Asia Economic Focus, June 2011 : Food Inflation. South Asia Economic Focus;. © Washington, DC. http://openknowledge.worldbank.org/entities/publication/0d43e71a-52c5-5592-abea-b2343558de33 License: CC BY 3.0 IGO.”