World Bank2013-03-122013-03-122011-06https://hdl.handle.net/10986/12662This 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.en-USCC BY 3.0 IGOACCESS TO MARKETSADJUSTMENT MECHANISMADVANCED COUNTRIESAGGREGATE DEMANDAGRICULTURAL ACTIVITIESAGRICULTURAL GROWTHAGRICULTURAL OUTPUTAGRICULTURAL POLICIESAGRICULTURAL PRODUCTIONAGRICULTUREAUDITSBENCHMARKBENCHMARK INTEREST RATEBEVERAGESBINDING CONSTRAINTBIOMETRIC SYSTEMSBROAD MONEYCENTRAL BANKCEREAL PRICECEREAL PRICESCEREAL PRODUCTIONCEREALSCLIENT COUNTRIESCOMMODITIESCOMMODITYCOMMODITY FUTURESCOMMODITY MARKETSCOMMODITY PRICECOMMODITY PRICE BOOMCOMMODITY PRICESCONSUMER BASKETSCONSUMER PRICECONSUMER PRICE INDEXCONSUMER PRICE INFLATIONCONSUMER PRICESCONSUMERSCONSUMPTION GROWTHCONTAINERSCONTROLLED PRICESCORE INFLATIONCURRENCYDAIRYDEBTDEMAND FOR FOODDEMAND MANAGEMENTDEPRECIATIONDEVELOPING COUNTRIESDIRECT MARKETINGDOMESTIC MARKETDOMESTIC PRICESDRUG INDUSTRYECONOMIC DEVELOPMENTSECONOMIC GROWTHECONOMIC RENTSECONOMIC SLOWDOWNSEDIBLE OILSEGGEGGSEMERGING MARKETEMERGING MARKET ECONOMIESEMERGING-MARKETENERGY PRICESEXCHANGE MARKETEXCHANGE RATEEXHIBITIONSEXOGENOUS SHOCKSEXPENDITUREEXPENDITURESEXPORTSEXPOSUREEXPOSURE TO RISKSEXTERNAL TRADEFARMERS MARKETSFATSFINANCIAL CRISISFISCAL BALANCEFISCAL BALANCESFISCAL CONSOLIDATIONFISCAL DEFICITFISCAL DEFICITSFISCAL POLICIESFOOD AVAILABILITYFOOD CROPSFOOD DEMANDFOOD GRAINSFOOD HANDLINGFOOD IMPORTSFOOD INSECURITYFOOD MARKETSFOOD POLICIESFOOD POLICYFOOD POLICY RESEARCHFOOD PRICEFOOD PRICE INFLATIONFOOD PRICESFOOD PRODUCERSFOOD PRODUCTIONFOOD PRODUCTSFOOD RATIONINGFOOD SECURITYFOOD STOCKSFOOD SUBSIDIESFOOD SUPPLYFRUITFRUITSFUTURESGDPGLOBAL MARKETSGOVERNMENT BUDGETSGOVERNMENT DEBTGOVERNMENT INTERVENTIONGOVERNMENT INVOLVEMENTGRAINSGROWTH RATEGROWTH RATESHIGH INFLATIONHONEYIFPRIIMBALANCESINCOME GROWTHINCOMESINDUSTRIAL WORKERSINFLATION EPISODEINFLATION EXPECTATIONSINFLATION RATEINFLATION RATESINTEREST RATESINTERNATIONAL FOOD POLICY RESEARCH INSTITUTEINTERNATIONAL PRICESINTERNATIONAL TRADEITCLABOR MARKETSLAW ENFORCEMENTLIBERALIZATIONLIQUIDITYM1M3MACROECONOMIC POLICIESMACROECONOMIC POLICYMACROECONOMIC STABILITYMAIZEMARKET CONDITIONSMARKET ECONOMIESMARKET INFRASTRUCTUREMARKET PRICESMARKET REGULATIONMARKET RISKSMEALMEATMONETARY AGGREGATESMONETARY CONDITIONSMONETARY POLICYMONEY SUPPLYMORTGAGENATIONAL INCOMEOIL PRICEOIL PRICESOPEN ECONOMIESOPEN MARKET OPERATIONSOUTPUT GAPSPALM OILPERISHABLE GOODSPOLITICAL CONSIDERATIONSPOTENTIAL OUTPUTPRICE ADJUSTMENTPRICE CAPSPRICE CHANGEPRICE DISTORTIONSPRICE FLUCTUATIONPRICE HIKEPRICE HIKESPRICE INCREASEPRICE INCREASESPRICE INDEXPRICE TRENDSPRICE VOLATILITYPRIVATE INVESTMENTPRIVATE MARKETSPRIVATE SECTOR INVESTMENTPRODUCE MARKETSPRODUCTION INCREASESPRODUCTIVITYPRODUCTIVITY GROWTHPROTEINPUBLIC DEBTPUBLIC SPENDINGPUBLIC-PRIVATE PARTNERSHIPSPULSESPURCHASINGPURCHASING POWERRAPID GROWTHREAL INTEREST RATERED TAPEREGISTRATION REQUIREMENTSREMITTANCESREMOTE REGIONSRESERVE BANKRESERVE REQUIREMENTRETAILRETAIL PRICERETAIL PRICESRICERICE MARKETINGRISK MANAGEMENTRURAL INFRASTRUCTURESAFETY NETSAFETY NETSSALESALESSHORT-TERM VOLATILITYSIDE EFFECTSSMALL ENTERPRISESSOCIAL PROTECTIONSOYBEANSOYBEANSSPICESSPREADSTAPLE FOODSSTATE BANKSTOCK MANAGEMENTSTORAGE CAPACITYSUBSIDIZATIONSUBSTITUTESSUBSTITUTIONSUGARSUPPLY CHAINSUPPLY RESPONSESUPPLY SHOCKSSUPPLY SIDESURPLUSTAXTOTAL FACTOR PRODUCTIVITYTRADE AGREEMENTTRADE POLICYTRADE RELATIONSTRADING PARTNERTRANSPARENCYTUBERSVEGETABLESVITAMINSWAGE RATESWAGESWHEATWHOLESALE MARKETSWorld Bank10.1596/12662