Analysis and Responses to the Global Food Crisis

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Veena Jha*


(The Food and Agriculture Organization of the UN (FAO) estimates that food crisis persists in around 32 countries of the world. The number of undernourished people in the world has risen from 923 million in 2007 to 963 million in 2008.1  The UN estimates that between 109 million and 126 million people may have fallen below the $1 per day poverty line since 2006 due to the increase in food prices. South Asia and sub- Saharan Africa are identified as the most vulnerable.2 According to the FAO the majority of undernourished people live in developing countries, with about 65 percent living in India, China, the Democratic Republic of Congo, Bangladesh, Indonesia, Pakistan, and Ethiopia. The highest population of undernourished people is in sub-Saharan Africa, where 1 in 3 people are considered chronically hungry (FAO).3 Contrasting this with the real wages decline, the importance of the initial incidence of poverty becomes very important. In a number of developing countries a large proportion of the population (around 30-50 percent) hovers around the poverty line. Any strong price shock or economic shock thus pushes them below the poverty line. The best response to any shock is to install social protection measures which target this group. These social protection measures can be easily up-scaled during a crisis once the infrastructure has been created. Author).


The years 2007–2008 saw dramatic rises in world food prices, creating a global crisis and political and economical instability and social unrest in both developing and developed nations. While prices had been rising since 2001, they exploded only in 2007 and 2008. Between the start of 2006 and 2008, the average world price for rice rose by 217%, wheat by 136%, maize by 125% and soybeans by 107%.4 As of November 2008, food prices have fallen significantly from their earlier highs, although some observers believe this decrease may be temporary.5

Food riots were seen in thirty seven countries in the world.6  The price rises particularly affected parts of Asia and Africa severely with Burkina Faso7  Cameroon, Senegal, Mauritania, Cote d’Ivoire,8  Egypt9 and Morocco seeing protests and riots in late 2007 and early 2008 over the unavailability of basic food staples. Other countries which have seen food riots or were facing related unrest include: Mexico, Bolivia, Yemen, Uzbekistan, Bangladesh,10 Pakistan,11 Sri Lanka,12 and South Africa.13

Systemic causes for the worldwide increases in food prices continue to be the subject of debate. Initial causes of the late 2006 price spikes included unseasonable droughts in grain-producing nations and rising oil prices. Oil prices further heightened the costs of fertilizers, food transport, and industrial agriculture. Other causes may be the increasing use of biofuels in developed countries14   and an increasing demand for a more varied diet (especially meat) across the expanding middle- class populations of Asia. These factors, coupled with falling world- food stockpiles have all contributed to the dramatic worldwide rise in food prices. For example, in February 2008 wheat stockpiles hit a 60-year low in the United States.15Long-term causes remain a topic of debate. These may include structural changes in trade and agricultural production, agricultural price supports and subsidies in developed nations, diversions of food commodities to high input foods and fuel, commodity market speculation, and climate change. It is however important to prioritise the different factors in terms of their importance in determining food price rise. Such a prioritisation will also enhance an understanding of the prospects of future food price rises and the means for controlling it. However, specific national circumstances determine the chain of causation and hence the importance of different factors in the food crisis. An analysis of different factors and their weightage in different countries while important is beyond the scope of this paper. An analysis of the chain of causation has been carried out in Section I.

While both the developed and developing countries faced the food crisis the burden fell disproportionately on developing countries. On an average, cereal prices rose by about 50% both in Africa and Europe.16

However, food constitutes over 75% of the poor person’s budget in Africa, while expenditure on food is only about 20% of an average European budget. This would imply that other things remaining the same a 50% increase in food prices would reduce real wages in Europe by only 10 percent, but in Africa this decrease would amount to nearly 40%. Added to this is the fact that Europeans consume mostly processed foods, whereas an African consumer buys staples and processes it himself or herself. In fact, the effects on European consumers would be even lower as a 50% increase in cereal prices translates to less than 5% increase in processed food prices. Hence the real wage effects would be closer to 4% in Europe but much higher in Africa. From a production angle too, developed countries with their superior infrastructure, credit facilities, and input subsidies were able to take advantage of the food price rise much more than developing countries. In fact, according to an FAO study, producer and export responses have come largely from developed countries and a few developing countries in Latin America. These effects have been studied in Section II.

To ensure that food remains available for their domestic populations and to combat dramatic price inflation, major rice exporters, such as Thailand, India, and Viet Nam imposed strict export bans on rice.17

Several other nations, including Argentina, Ukraine, Russia, and Serbia, either imposed high tariffs or blocked the export of wheat and other foodstuffs altogether, driving up prices still further for net food importing nations while trying to isolate their internal markets. North Korea relied on food assistance to cope with the crisis.18 Several other policies such as strengthening social safety nets, conditional cash transfers etc., have been used. These responses have been examined in Section III.

However, while these responses may have helped to stabilise prices, they may distort producer incentives and be expensive to administer.

A comparative assessment of alternative approaches to handling the food price crisis is required, specially with a view to identifying short term solutions such as safety nets and long term solutions such as social protection programs. Section IV does such an analysis with a view to identifying the role that the ILO can play in dealing with a food crisis. Section V concludes with some recommendations on the ILO’s role in alleviating the effects of the food crisis.

I. Diagnosis and Prognosis of the Food Crisis

The diagnosis of the food crisis depends partly on who is carrying out this analysis. Several commentators have used a menu approach, without developing a hierarchy of causes. Identifying the proximate causes and prioritising them is only useful from the point of view of building future scenarios of possible rise or fall in food prices.

Economists believe that the factors driving current food price increases are complex. Using Grainger causality tests, economists have come to the conclusion that attempts to calculate the percentage of price changes that are attributable to the many disparate causes may be misplaced. This is because the disparate causes are inter-related and the chain of causation may work in different ways across countries and regions.19 Much of the slow run-up in food prices from 2003 to 2007 would seem to be caused by producers and consumers gradually responding (i.e., reflecting their “long-run” responses) to earlier episodes of low prices, especially from the late 1990s until about 2003.20 This could for example account for the low global food stocks, under investment in agriculture and agricultural mismanagement in general.

Declining food prices of the last decade on account of dumping of subsidised food in global markets resulted in decreased public and private investment in staple food crops in several developing countries. In addition, low prices encouraged farmers to shift to non-staple food and non-food crops, or to transfer land for conversion to non-agricultural uses, particularly urban uses. Added to the domestic agrarian crisis was the fact that 20% of ODA went to agriculture in the early 1980s, but came down to only 2.9% by 2006.21  This decline in investment, both domestic and international, contributed to a stagnant or declining yield growth in most developing countries. In a number of countries, structural adjustment programme as well as the availability of cheap food in the 1990s restricted expenditure in agriculture.

The Bio-fuel issue

The crisis while affecting all nations has been seen, in a sense, to dichotomize rich and poor nations around the bio-fuel issue. For example, filling a tank of an average car with biofuel, amounts to as much maize (Africa’s principal food staple) as an African person consumes in an entire year.22  .23  A report released by Oxfam in June 2008 says that: “Rich countries spent up to $15 billion last year supporting biofuels while blocking cheaper Brazilian ethanol, which is far less damaging for global food security.” 24   A World Bank report estimated the rise in food prices caused by biofuels to be 75%.25  Between 2003 and 2007, two-thirds of the global increase in maize production went to biofuels.26

Although the initial impact was confined to the maize market, as farmers switched land away from wheat and soybean production to grow maize, the price of these commodities also began to rise. Similar conclusions have been reached by an OECD report, though the contribution of biofuels to world price rise is estimated to be smaller.27

The Renewable Fuel Association (RFA) considers the World Bank analysis highly subjective as biofuels have been treated as residual and their contribution not actually estimated.28 The World Bank’s conclusions have been disputed by some world leaders. German Chancellor Angela Merkel attributed the rise in food prices to poor agricultural policies and changing eating habits in developing nations, not biofuels.29 On April 29, 2008, U.S. President George W. Bush declared during a press conference that “85 percent of the world’s food prices are caused by weather, increased demand and energy prices,” and recognized that “15 percent has been caused by ethanol”30  The Indian Commerce Minister Mr. Kamal Nath however attributed the food crisis to: a) underinvestment in agriculture in many developing countries in the last half century, and b) distortions in international trade in agriculture which prevent the right market signals to be transmitted to expand production in developing countries.31

Expanding consumption of meat in emerging economies: the pressure on global demand for food The International Food Policy Research Institute has suggested that the gradual change in diet among newly prosperous populations is the most important factor underpinning the rise in global food prices.32 They argue that high income growth accounts for perhaps half of the recent increases in food prices.33 As middle classes grow more affluent, food consumption patterns change towards diets richer in meat and dairy products that are much more intensive in terms of grain and water use. Where food utilization has increased, it has largely been in processed (“value added”) foods, sold in developing and developed nations. This has increased demand for food grains. For example, one kilogram of beef requires seven kilograms of feed grain.34 However, overall demand for food is expected to slow over the next few decades, despite income gains. The Food and Agriculture Organization (FAO) estimates global food demand will increase by about 1.5 percent a year between 2007 and 2030, with cereals, edible oils, and meats growing at 1.2, 2.3, and 1.7 percent, respectively— somewhat slower than they did between 1990 and 2006. This could be largely attributed to a decline in the rate of population growth in most countries. 35

Financial crisis effects

The financial crisis also affected the food crisis. Indiscriminate lending and real estate speculation, led to a crisis in January 2008, and eroded investment in producing food commodities.36 However, financial speculators seeking quick returns removed trillions of dollars from equities and mortgage bonds, some of which was invested into hoarding and futures of food and raw materials.37 Thus the global supply of food was reduced because, on the one hand, food was hoarded in the expectation of selling when prices were high and, on the other hand, there was a real reduction in investment in the production of internationally traded grains. Nearly all economists and market analysts agree that financial speculation cannot drive up prices in the long run i.e.; over a decade or longer. But there is much more controversy over the role of new speculative activity on price formation in the short run, and especially the potential for such speculation to create “spikes” in prices, or bubbles, that disconnect the market price from underlying fundamentals.38 Indeed, the sharp sell-off in many commodity markets since mid-July 2008 has convinced many doubters that financial speculation played a significant role in the rapid price run-ups seen since mid-2007.

The Expectations Effect

In this context the role of price expectations or what the layman calls ‘psychological’ effects become important in generating further price hikes. The relationship between current inventories and current price helps explain price expectations, and vice versa. For example if the current inventories are low, the expectation of future price increases is likely to be high. These price expectations can then be expressed in prices on futures markets. For some commodities where the stocks are commercially held as in wheat and maize, futures markets can be expected to be deep, i.e., traders can hold stocks for a long period of time to bid up prices continuously. However, for rice where stocks are held by small producers, futures markets may be thin, i.e., traders have a lower capacity to bid up prices.39  This is evidenced by the fact that long term futures contracts in maize tripled from 2005-2008, accounting for about half the total trading in 2008. Similarly for wheat long term futures contracts doubled accounting for about 40% of total trade. The pattern for soybeans and sugar was similar. Monthly trading volumes have increased during this period by 85% for maize, 125% for wheat and 56% for soybeans, and by threefold for sugar.40

Another new development consequent to the global food price rise has been that traders operating in any one specific commodity market, such as oil, corn or wheat, will be following closely the broader price movements for all commodities.41  These broad price movements seem to be driven by basic macroeconomic forces such as rates of economic growth, the value of international currencies, especially the US dollar, and relative inflation rates. Thus by switching with ease from one market to the other, speculators now affect nearly all staples.

A spate of natural disasters

Natural disasters particularly climate related incidents have caused worldwide disruptions in crop production. The extended drought in Australia led to a fall in rice harvest by 98% and wheat by nearly 75%.42

The effects of Cyclone Nargis on Burma in May 2008 caused a spike in the price of rice. 43Stem rust led to 80% crop losses in Kenya, and spread to the Middle East and North Africa.44 In tropical developing countries over 60,000 square kilometres of land are lost every year due to soil erosion, water depletion and urbanisation.45

Low food stocks

Food stocks have also been at all time low. In the past, nations tended to keep more sizable food stockpiles, but more recently, due to the pace at which food could be grown and the ease with which it could be imported, less emphasis was placed on keeping high stockpiles. Therefore, for example, in February 2008 wheat stockpiles hit a 60- year low in the United States.46Stocks in India and China also declined significantly.47 South Africa’s corn inventories at the end of December

2007 were 21 percent lower than a year earlier.48  Cereal stocks are at their lowest level for 25 years. The world has consumed more grain than it has produced for seven of the past eight years, and supplies, at roughly only 54 days of consumption, are the lowest on record.49

Is the Crisis Over?

Overall, grain prices are projected to decline about 28 percent in 2009 and to recoup 3 percent in 2010. Fats and oil prices are anticipated to fall by 27 percent in 2009 and another 5 percent in 2010. And beverages are projected to decline 18 percent and 4 percent, respectively. Despite these developments, food prices are expected to remain much higher than during the 1990s and more than 60 percent higher than their levels in 2003.50  However, the FAO has pointed out that if farmers in key agricultural producing and exporting countries, including Australia, Argentina, Brazil, the United States, and the European Union, do not get credit for planting, the next season’s planting would go down.51 This could put pressure on prices in the next season, i.e., 2010.

The FAO’s cereal index fell 37 percent from its highs in early 2008, but food prices remain high relative to their historic levels. In December 2008, the cereal index was 67 percent above its 2005 level and 105 percent above its 2000 level, and the FAO Food Price Index was 28 percent and 61 percent above its 2005 and 2000 levels, respectively.

Food prices have been sticky on the downside and the dollar appreciation has offset some of the benefits of price declines. Cereal stocks remain low, despite the recent decline in demand. The cereal stocks-to-use ratio in 2008/2009 is at its second lowest in three decades, according to the FAO, providing support for high prices. The cost of food in many of the places where the WFP’s beneficiaries live has either remained static, or is continuing to rise: in Afghanistan, the price of wheat is three-quarters higher than this time last year and in Sudan, food price inflation remains high at 18 percent.52

Grain production in 2009 is projected to increase about 4 percent, and oilseed production is anticipated to rise by twice as much. Although this production increase will allow some rebuilding of stocks, continued growth  of  demand  for  biofuels  may  keep  pressure  on  inventories. Maize used for ethanol in the United States is expected to increase to 33 percent of the crop of 2008, accounting for nearly all of the increase in global maize consumption and causing global maize stocks to fall. In contrast, large increases in wheat and oilseed production should allow some rebuilding of stocks. Stocks will remain low by historic standards, however, and prices will remain vulnerable to supply disruptions or demand surges.53

Longer Term Price Determinants

In the longer term, several factors will determine food price trends. First, energy prices will influence food prices. The current agricultural system is predicated on the availability of cheap, readily available energy, for use in every part of the value chain: both directly (e.g., cultivation, processing, refrigeration, shipping, distribution) and indirectly (e.g., manufacture of fertilizers, pesticides – the cost of urea, a fertilizer, has almost tripled since 2003).54 Food can now be converted into fuel; there is effectively an arbitrage relationship between the two, implying an ongoing linkage between food and fuel prices. According to simulations carried out by the World Bank, at oil prices above $50 a barrel, every percentage point increase in the barrel price of oil causes maize price to rise by 0.9 percent, which means the maize market is effectively tied to the oil market (this relationship is not statistically significant when oil is below $50 a barrel).55 The long term price of oil is predicted at US$75 a barrel and maize prices are expected to affect other crop prices too as farmers move land from other crops to maize. 56

Second, water scarcity is likely to become a more pressing issue. Global demand for water has tripled in the last 50 years;57  500 million people live in countries chronically short of water, a number likely to rise to 4 billion by 2050.58  A particular worry is depletion of limited groundwater resources in the US, Egypt, Pakistan, India and China for the past two or three decades.59

Third, whereas historical increases in demand have been met through increasing yields, in future an expansion of acreage will also be required.60 This will be expensive, given the infrastructure investment involved; and there may be diminishing returns, since much of the best land is already cultivated.61 The FAO estimates that there is at most 12 percent more land available that is not already forested or subject to erosion or desertification, and that 16 percent of arable land is already degraded.62 However according to the World Bank these calculations do not include land that is currently forested but that is suitable for rain fed crop production.63

The fourth, and perhaps most fundamental, factor is climate change. The International Panel on Climate Change (IPCC) projects that global food production could rise if local average temperatures increase by between 0.1 and 0.3 degrees Celsius, but above this range, it could decrease. It assesses that ‘climate change increases the number of people at risk of hunger,’ and will lead to an increase of between 40 million and 170 million undernourished people.64In addition, climate change is likely to generate extreme weather conditions such as droughts, floods, erosion of soils etc. This could change the kinds of crops that are cultivated as well as food production in a major way.

Global temperatures are expected to rise by 0.4 degrees Celsius between now and 2030. This could lead to an overall decline in agricultural productivity of between 1 and 10 percent by 2030 (compared with a counterfactual where average global temperatures remained stable), with India, Sub-Saharan Africa, and parts of Latin America being the most affected Over the longer term, the impacts of climate change could be much more serious, with agricultural productivity in many developing regions, notably Africa, potentially declining by as much as 25 percent as compared with a baseline of temperatures remaining stable at their 2030 levels.65

All in all, the jury is still out on whether the recent food price rises will be sustained or not. Over the longer term, structural factors – a population forecast to rise to 9.2 billion by 2050, rising affluence and the trends outlined above may suggest the possibility of a structural, rather than merely cyclical, shift. Models from both IFPRI and the US Department of Agriculture show that while food prices will not rise much more over the next decade, they are also unlikely to fall significantly.66

According to World Bank projections however, demand and supply of food should grow by about 1.7 percent on average between 2008 and 2030. This would imply a continued decline in agricultural prices of about 0.7 percent a year relative to manufacturing prices and the share of the unskilled labor force working in agriculture would decline by 6 percentage points.67However, the report does point to several uncertainties surrounding climate change which make such predictions difficult. The ADB, on the other hand, points to an increasing scarcity of food, growing hunger and a period where rapid economic growth is threatened and could have further inflationary effects on food as investments in agriculture are likely to decline.68

II.  Effects of the Food Crisis

Irrespective of whether the food crisis is expected to last a short or a long time, such crises can have long term consequences in developing countries, especially on the parameters which determine decent work conditions.

Price transmission to Domestic markets

However, before estimating real wage effects it is important to note that there is generally a substantial difference between domestic and international prices of food. The magnitude of the “pass through” of international prices to domestic prices will in the first place determine the effects on developing countries. Studies conducted by the ADB and the World Bank show that in most cases the pass through was only a fraction of international price rise. This implied that while price rises had been imperfectly transmitted, so are fall in prices slower in developing countries. Thus price of food tends to be sticky downwards.

While prices of internationally traded commodities denominated in U.S. dollars increased by as much as 74 percent between January 2005 and December 2007, most developing countries had real food price increases of 12 percent or less.69    The extent of price transmission is a function of three key variables: the exchange rate; trade policy barriers at the border, which restrict (or enhance) the flow of commodities across the border; and the time horizon of adjustment. The longer there is a substantial difference between the two prices, the more pressure there is for convergence.70

Table 1: Pass through of International food prices to domestic prices

(All figures are in percentage points from 2005-2007 December)

Region Price Shock Food share in total expenditure among the poor Possible real wage changes of the poor (column 2xcolumn 3)
Rural Population
East Asia and Pacific 12.4 71.5 -8.9
Europe      and     Central


–  0.2 63.4 +0.1
Latin  America  and  the


6.9 51.2 -3.5
Middle East and North


25.9 64.5 -16.7
South Asia 5.0 65.3 -3.2
Sub Saharan Africa 6.9 68.0 -4.6
Developing World 6.7 66.1 -4.4
Urban Population
East Asia and Pacific 13.8 67.5 -9.3
Europe and         Central


– 0.5 57.9 +0.2
Latin  America  and  the


1. 6 44.1 -0.7
Middle East and North


12.5 57.1 -7.1
South Asia 4.8 64.4 -3.1
Sub Saharan Africa 4.9 53.0 -2.6
Developing World 4.1 60.4 -2.5

Source: Calculated from the  World Bank, 2009, op.cit., p.119

The extent of transmission is important for two reasons. First, domestic prices affect the welfare of poor consumers and farmers, not world prices. Second, the magnitude of price transmission will influence the extent to which adjustments by producers and consumers help stabilize world price movements. The extent of transmission also differs between different types of products. For crops such as rice, studies show that net importers transmit prices with a lag in domestic markets, while price transmission for exporters is quicker and more complete.71

The highest food price shocks were observed in net food importing countries of the Middle East and in the Pacific. The other regions which saw higher price increases were East Asia and North Africa. Surprisingly, rural food prices increased faster than urban prices indicating the better subsidized distribution networks in urban areas in comparison to rural areas. By and large European consumers actually experienced little change in their domestic prices, showing the composition of processed foods in their consumption baskets. Other things being equal, real wage declines would be highest in areas which have experienced the highest food price rises. For example, the Middle East and North Africa as well as East Asia and the Pacific experienced the largest decline in real wages because of the food price crisis.

Food Prices and the Income Component of Decent Work

Decent work is captured in four strategic objectives: fundamental principles  and  rights  at  work  and  international  labour  standards; employment and income opportunities; social protection and social security; and social dialogue and tripartism. These objectives hold for all workers, women and men, in both formal and informal economies; in wage employment or working on their own account; in the fields, factories and offices; in their home or in the community. While the effects on all these parameters of a price rise may be difficult to measure, the effects on real wages and poverty could provide an insight into decent work effects. A substantive part of the information in sections II, III, and IV has been obtained from the country offices of the ILO.

Changes in food prices on real wages and poverty are affected through consumption and income channels. On the consumption side, as food prices rise, the cost of a given basket of food increases and consumer welfare declines. However, for the segment of the population whose income depends directly or indirectly on agriculture (that is, farmers, and rural landowners), higher food prices represent an increase in income. Thus, for each household, the net welfare effect of an increase in food prices depends on the combination of a loss of purchasing power (consumption effect) and, for some households, a gain in income (income effect). According to some commentators 70 percent of the developing countries are net food consumers (though not India, nor China which accounts for over 60 percent of developing country population).72 Thus consumption effects are expected to outweigh production effects leading to lower real wages and decent work deficits as well as poverty.

The combined effects of a food and financial crisis could lead to “double jeopardy’’ for the poor.73        Household income levels will be impaired as a result of the financial crisis, which is expected to significantly hurt employment. Lower income levels, along with still high food prices, reduces access to food for many households. The financial crisis will likely also impact government social services, trade, investment, aid, remittances, and exchange rates, making food less accessible and imports more expensive. The global financial credit crunch, along with commodity price volatility discourages new investment in agricultural infrastructure. 74On a macroeconomic level, an estimated 50 countries are facing a weakening in their balance of payments. To date, net food importers in Africa, Central America and Mexico, the Caribbean and Western Asia have been the most affected by high prices, suffering deterioration in their terms-of-trade and current-account balances. The recent run-up in food prices has already caused damage to nutrition, education, and food stocks, hurting the capabilities of many countries to cope. This has impacted the other components of decent work such as social protection schemes and safety nets. The financial crisis is likely to exacerbate the impact on these countries.75

More Losers than Winners

In addition, increases in input prices, especially for fertilizer, fuel, and seeds (prices of seeds are likely to follow the same trend as output prices)  may  overwhelm  a  price  response.  However,  evidence  from some Asian countries shows that even if fuel and fertilizer prices have doubled, it seems likely that incentives for farmers have improved on balance. Unfortunately, up-to-date data on prices for labor and land are not easily available. Early evidence from Asian rice harvests through August 2008 – especially in India, Indonesia, Thailand, and Viet Nam – suggests that farmers responded quite enthusiastically to higher rice prices.76 However, the FAO has reported that supply responses have been much stronger in developed rather than developing countries.77 The main gainers have however been farmers in rich and emerging market nations like the US, Brazil, Argentina, Canada and Australia, who are getting record prices for their harvests. Some poor farmers have also benefited from higher prices.78

However, while there is scattered evidence on the beneficial production effects, consumption effects dominate resulting in decent work deficits and increased poverty. on:

At the country level, the poverty effect of higher food prices depends

  • The initial incidence and depth of poverty.
  • The proportion of the poor that have little or no direct income from agriculture, such as the urban poor
  • The importance of food in the budgets of the poor
  • Households’ ability to substitute between food items

increase, all regions except Europe, Central Asia, Latin America and the Caribbean experience a significant increase in the incidence and depth of poverty. At the global level, the headcount ratio increases by 1.3 percentage points, representing an additional 130 million individuals falling below the poverty line.79  This is based on poverty figure of US dollar 1.5 per capita per day. The largest increases in the absolute number of poor are in Asia and Sub-Saharan Africa, reflecting the high initial incidence and depth of poverty. The share of the urban population in extreme poverty is estimated to double from 2.7 to 5.2 percent in the Middle East and North Africa and to increase by almost

50 percent in the East Asia and Pacific region. Hence these regions found an increase in their poverty levels. It is to be noted that while decreases in real wages were lower in Sub-Saharan Africa and South Asia in comparison to other regions, poverty in South Asia and Sub- Saharan Africa increased by much more than other regions. This could be attributed to the fact that a large proportion of the poor just hover around the poverty line income range in these countries. Thus people on the margin of poverty are pushed below the poverty line when any crisis be it financial, economic or food occurs. In around 40 percent of the countries analyzed, higher food prices raised the headcount ratio by at least 0.2 percentage points; and in 6 countries, the change in relative prices reduces the incidence of poverty by at least 0.2 percentage points. In some countries, the measured impact of higher food prices on poverty is small, or even negative, because nonfood prices rose more quickly than food prices.

Table 2: Poverty Effects of the Food Crisis

Region Change in poverty head count ratios on account of the food Crisis
Urban  Population Poverty headcount change in percentage points
East Asia and Pacific 2.9
Europe and Central Asia 0.6
Latin America and the Caribbean 0.3
Middle East and North Africa 0.6
South Asia 4.4
Sub-Saharan Africa 2.8
Rural Population
East Asia and Pacific 1.8
Europe and Central Asia 0.3
Latin America and the Caribbean -0.2
Middle East and North Africa 0.3
South Asia 1.7
Sub Saharan Africa -0.2
Regional distribution of net food consumers and producers varies.

Source: Computation from the World Bank’s GIDD.

Over time, however, the impact on poverty becomes less clear. The increased incomes of food sellers will raise incomes in rural areas (where the majority of poor live). The poverty effects derived above do not reflect the multiplier effects of higher food prices on incomes in the agricultural sector nor any long-term dynamic effects that may arise because agriculture has strong links to the rest of the economy.80

These include backward links, when farmers purchase inputs such as chemicals, fertilizers, and farm equipment for agriculture, and forward links, when agricultural production provides raw materials to food and fiber processing in the nonfarm sector. Moreover, increases in agricultural incomes are usually spent on locally produced goods and services, which generate local employment. In many African countries, for example, on average for every $1 of additional farm income, an additional $1.47 in net income is generated in the wider economy, some of which accrues to the poor.81To the extent that agricultural sectors do sustain more rapid growth because of higher food prices, rural poverty will be reduced, especially where the concentration of land ownership is low and labor- intensive technologies are used.82  On the flip side, agricultural policy particularly for smallholders in developing countries is ad hoc at best. favourable outcomes from food price rise. Investment in agricultural extension services, grain storage, market, provision of inputs, and credit are required in a timely manner. Most developing countries have neither the resources nor the institutional infrastructure required for the delivery of all these agricultural services.

Concerns over Food Security

The Food and Agriculture Organization of the UN (FAO) estimates that food crisis persists in around 32 countries of the world. The number of undernourished people in the world has risen to 963 million in 2008, compared to 923 million in 2007. 83  The UN estimates that between 109 million and 126 million people may have fallen below the $1 per day poverty line since 2006 due to the increase in food prices. South Asia and sub-Saharan Africa are identified as the most vulnerable.84 The majority of undernourished people live in developing countries, with about 65 percent living in India, China, the Democratic Republic of Congo, Bangladesh, Indonesia, Pakistan, and Ethiopia, according to the FAO. The highest population of undernourished people is in sub-Saharan Africa, where 1 in 3 people are considered chronically hungry (FAO).85

Contrasting this with the real wages decline, the importance of the initial incidence of poverty becomes very important. In a number of developing countries a large proportion of the population (around 30-50 percent) hovers around the poverty line. Any strong price shock or economic shock thus pushes them below the poverty line. The best response to any shock is to install social protection measures which target this group. These social protection measures can be easily upscaled during a crisis once the infrastructure has been created.

Factors determining impacts of the food crisis-Evidence gathered by the country offices of the ILO

The impacts also vary according to several other factors. The impact is less for households in countries where diet is largely composed of food staples that are not internationally traded. For example, Ghanaian households were relatively insulated from swings in international food prices because a large share of their diet is based on local staples such as cassava and sorghum. 86In the case of Viet Nam, the household welfare of most rural households improved, and in relative terms these gains were larger for the poorest.  Across all income groups, landless households are on average worse affected by high food prices. For example Bangladesh with a more unequal distribution of land has turned from a net food exporting country in 2003 to a net food importer, whereas Viet Nam with a more equal distribution of land showed positive effects from the food price rise on the whole. Households that specialize in agriculture (those that derive more than 75 percent of their income from farming) stand to gain from the increase in prices, or at least lose less, depending on the extent of staple crop production. In some countries like Bangladesh, Pakistan, and Viet Nam, even the poorer households specializing in agriculture tend to gain from higher food prices. 87

Female-headed households suffer more from rising food prices in terms of declining food consumption, and tend to benefit less from potential gains from staple food crop production. This is because on an average female headed households spend a higher proportion of their income on food, hence enhanced consumption effects. On the other hand, they have lower access than male headed households to credit and other agricultural inputs and hence reduced production effects.88

The more important and immediate effects of food price rise was the distributive distortions in the pattern of consumption. The Food and Agriculture Organization maintained that while food consumption of grains has gone up one percent since 2006, most of this increase has gone to developed countries.89 Total food import bills rose by an estimated 25 percent for developing countries in both 2007 and 2008. Researchers from the Overseas Development Institute have suggested this problem was worsened by a likely fall in food aid. As food aid is programmed by budget rather than volume, rising food prices mean that the World Food Programme (WFP) needed an extra $500 million just to sustain the same level of operations as in 2006.90 In actual fact it should have increased its operations to meet the hunger needs of the world.

Box 1: Impact on NFICs in the Caribbean

  • World food inflation rate of 40% on the import bills would be three percentage points of GDP in Guyana, Anguilla, Dominica, 1.8 (Belize) and 2.6 percentage points of output (St. Kitts and Nevis) in all others.
  • Trade deficits as a share of GDP in 2007 were in the 30%-35% range in the Bahamas, Barbados, Guyana and Jamaica.
  • In ECCU countries the trade gap was even more pronounced, above 35% of GDP in all cases, with a maximum as high as 96% of output recorded by Anguilla.
  • The poverty rate would have increased from 16.7% to 18.1% in the same period.
  • Indeed, the per capita consumption ratio of the richest quintile vis-à-vis  the  poorest  quintile  increased  in  Jamaica  (6.3%), Anguilla (5.6%) and Trinidad and Tobago (4.8%).

Many of the potential consequences of crises (financial, food and commodity, social etc.,) fall within the International Labour Organisation’s mandate – poverty, child labour, migration, unemployment, forced labour and/or trafficking. 91 The impact on children in the Pacific islands, particularly high school female dropouts was reported by the ILO office in Fiji.92 The impact of external food inflation on poverty and indigence in Trinidad and Tobago was significant. The indigence rate climbed from 3.2% in 2007 to 5% in 2008 and the poverty rate from 18.1% to 19.5% in the same period. Last but not least, food inflation would also have adverse distributional effects, increasing the ratio of the richest quintile per capita consumption to the poorest quintile in 2008 relative to 2007 in the six Caribbean countries where data were available. 93  Thailand has reported both positive and negative effects on poverty. Rice-surplus households tend to be mostly in the lower deciles. For example, in 2007 there were three million poor people who were net rice surplus, making them benefit from the increase in rice price. At the same time, almost 2.5 million poor people who were net rice buyers, so price increase would make them worse off. 94

Rising food prices present an obvious impediment to achieving the Millennium development Goal of halving hunger by 2015. The FAO has already announced that 32 countries are in crisis in terms of food security, and need external assistance, 21 in Africa (although not all of them have been affected equally).95

The list of countries requiring external assistance is organized into three broad, not mutually exclusive, categories:

Countries facing an exceptional shortfall in aggregate food production/supplies as a result of crop failure, natural disasters, interruption of imports, disruption of distribution, excessive post- harvest losses, or other supply bottlenecks.

Countries with widespread lack of access, where a majority of the population is considered to be unable to procure food from local markets, due to very low incomes, exceptionally high food prices, or the inability to circulate within the country.

Countries with severe localized food insecurity due to the influx of refugees, a concentration of internally displaced persons, or areas with combinations of crop failure and deep poverty.96

Most poor people are rural, and most rural poor people are net food buyers unlikely to be compensated fully by additional employment as agriculture grows, or by higher wages.97 However, the extent and rapidity of current rises mean that urban populations are also being hit, as World Food Programme head Josette Sheeran recently noted: ‘There is food on shelves but people are priced out of the market. There is vulnerability in urban areas we have not seen before.’98

III. Responses to the Food Crisis

Numerous countries have reacted to rising food prices with a broad range of policy interventions to address the situation. Most countries so far have reduced or eliminated import tariffs.99 However, at least some of these reductions have been offset by the imposition of additional export tariffs or quotas by other countries – some of them major producers

– to reduce domestic prices (Argentina – where the move has led to major unrest among farmers; China, India, Kazakhstan, the Ukraine and Vietnam). Other approaches were making purchases to establish or replenish stockpiles and strategic reserves – which in turn increased pressure on prices (Iraq, Malaysia, Turkey and the UAE); increasing subsidy levels (Egypt, India and Oman); capping prices (China, Russia and Thailand); and examining the possibility of introducing rationing (Malaysia and Pakistan). As these lists show, rising food prices are of concern in every part of the world, and governments have used a mix of policy measures to deal with this crisis.

Table 3 :Government Responses To the food crisis
Country Trade restriction Trade Lib- eralization Consumer




Increase Supply (including input subsidies)
Afghanistan x x x
Algeria x x
Angola x
Argentina x x x x
Armenia x
Azerbaijan x
Bahrain x x x x
Bangladesh x x x x
Benin x x x
Bolivia x x x x
Brazil x x x
Burkina Faso x x x
Burundi x
Cambodia x x x
Cameroon x x x
China x x x x
Comoros x
Congo, Rep. x x
Côte d’Ivoire x x x
Cuba x
Dominican Republic x
Ecuador x x x
Egypt x x x x
El Salvador x
Ethiopia x x x x
The Gambia x
Ghana x x
Guatemala x x
Guinea x
Guinea-Bissau x
Haiti x x x
Honduras x x
India x x x x x
Indonesia x x x
Iran x x
Jordan x x x
Kazakhstan x x x x
Kenya x
Kuwait x
Lebanon x
Liberia x x x
Madagascar x x
Malawi x x
Malaysia x x x
Mali x x x x
Mexico x x x
Mongolia x x
Morocco x x
Namibia x x
Nepal x
Nicaragua x x
Niger x x x x
Nigeria x x x
Oman x x x
Pakistan x x x x
Panama x x
Paraguay x x
Peru x x x
Philippines x x
Qatar x
Russia x x x x
Rwanda x
Saint Lucia x
Saudi Arabia x x x x
Senegal x x x
Sierra Leone x x x x x
Somalia x
South Africa x x
South Korea x x
Sri Lanka x x
Sudan x
Suriname x
Syria x
Tajikistan x x x
Tanzania x x x
Thailand x x x
Timor-Leste x
Togo x x
Trinidad and Tobago x
Tunisia x x
Turkey x x x
Turkmenistan x
Uganda x x
Ukraine x x
United Arab


x x
Uruguay x x
Uzbekistan x x
Venezuela x x x x
Vietnam x x x
Yemen x x
Zambia x x
Zimbabwe x x

Source: IFPRI, 2008 Report100

Of the 100 odd countries surveyed by IFPRI, about 29 used trade restrictions such as export bans or export taxes in order to stabilise domestic prices. Not all countries were however able to stabilise prices. The two large economies which did stabilise prices were India and China, but they also benefitted from limited dependence on imports. Both countries only import 1-1.5% of their total grain requirements. Their export restrictions however did have an inflationary effect on global prices, especially because India is the third largest exporter of rice.101 Nearly half (47) removed import restrictions and reduced tariffs in a bid to ease supply. Over half (51) countries increased government procurement in a bid to provide more stocks in the food market and as many governments used consumer subsidies. Nearly 36 governments used social protection measures, particularly conditional cash transfers, and mid-day meals to ensure that their population was not starved.

Strict laws to prevent hoarding and in some cases curbing financial speculation were also put in place. For example, Cameroon reached an agreement with retailers by which prices would be lowered in exchange for the reduced import taxes. Prices had not eased and in some cases had even increased. 102On 24 April 2008, the government of Cameroon announced   a   two-year   emergency   program   designed   to   double Cameroon’s food production and achieve food self-sufficiency.103 India banned futures trading in four staple commodities.104

Negotiated settlements were also reached between importers and exporters. On 15 April   2008, the Philippines, the world’s largest rice importer, urged China, Japan, and other key Asian nations, to convene an emergency meeting, especially taking issue with those countries’ rice export bans. “Free trade should be flowing,” the Philippine Agriculture Secretary Arthur Yap stated.105  Japan released its rice stocks to the Philippines following a WTO waver.106

Several countries like China, Indonesia, Malaysia, the Philippines and Senegal have declared food self-sufficiency as their strategic response to high food prices. The Philippines is targeting 98 percent self- sufficiency in rice by 2010. Indonesia is also targeting food sufficiency. The food crisis has also brought a renewed emphasis on domestic food production in many Latin American and Caribbean countries. 107

Although countries’ food security concerns are legitimate, a widespread return to policies of food self-sufficiency could be very costly. Although the rate of return on investments in Agricultural R&D and infrastructure is high, it can take many years to raise production enough to achieve self-sufficiency. The supply response of the agricultural sector as a whole is low.108Raising total agricultural production as opposed to production of a single crop takes many years. Moreover, using a price subsidy or import restrictions to boost domestic prices and induce additional production is often a costly alternative to importing. For example, to increase domestic rice output by 10 percent, a country would have to increase domestic prices by as much as 50 percent.109

IV. Comparative Assessment of national responses to the food crisis

Overall, the additional fiscal costs of measures aimed at offsetting higher fuel and food costs varies from zero to a maximum of 4.8 percent of GDP, with food subsidies the most costly measures implemented.110

While expensive and generally poorly targeted, all these policies (price subsidies, price floors, and export bans) do succeed in limiting the immediate domestic impact of rising international prices. However, they do so at a cost. The problem with export bans is even more severe. Although they are domestically appealing, these bans decrease confidence of net importers in the international trading system as a reliable source of food.

Economists argue that targeted cash transfers are the best response to dealing with the food crisis and could include increasing pensions and unemployment benefits when they target the poor.111  These social protection measures may be non-existent in poor countries. Table III showed that social protection measures were used by 29 countries during the food crisis. This evidence argues for the fact that the infrastructure for  social  protection  delivery  exists  in  a  number  of  countries  and during a crisis these could be used to target the poor. Emergency food aid distribution, used in places like Afghanistan and Angola, often in partnership with agencies such as the World Food Programme (WFP), is also needed.112 School feeding programs can be used for a quick response, but these do not typically address child malnutrition at its most critical point – when children are in their infancy.113  Conditional cash transfer programs can help foster increased use of health and education services and are generally most efficient, but they are not always a feasible option in low-income countries with weak administrative capacity.114

Administrative costs of social protection programs are relatively low, averaging about 5 percent of total program costs after start-up. In comparison food-based programs, such as mid-day meals and ration shops may have high administrative costs, averaging at 36 percent of total program costs.115  Finally, public works programs, in food or cash (such as in Cambodia and Mozambique), can be effective only for a few areas and for people who are currently unemployed.116

Household targeting systems – such as proxy means tests or means tests, sometimes community-based decision making, or hybrids among these – can be effective in directing resources to the poor. Sometimes a combination of geographic targeting, self-targeting, or demographic targeting can produce at least moderately good results, reducing the cost of administrative targeting.117  For example, school feeding programs targeted geographically to poor rural areas may have relatively low errors of inclusion. 118Self-targeting can be achieved by setting low wages for labor-intensive public works. Open market operations for food sales can be geographically targeted to slum areas, with a limitation on quantity and provision of an inferior staple commodity inducing some degree of self-targeting. Fees for networked electricity can be differentiated by use level or neighborhood. Thus an electricity bill from a poor neighborhood can be used as proof of relative poverty and hence food distribution could be targeted using electricity bills. Provision of fortified weaning foods that are culturally acceptable for only very young children is a good use of demographic targeting.

For a large share of developing countries, spending on overall safety nets has been on the order of 1 – 2 percent of GDP in recent years. However, the costs of the responses differ according to the scope, generosity, and degree of targeting: ranging from a mere 0.04 percent of GDP in Chile (for a well-targeted response) to more than 1 percent of GDP in Ethiopia (for lifting the value added tax on food grains, raising the wage on the cash-for-work program, and distributing wheat to the urban poor at a subsidized price).119 A careful fiscal-planning exercise will be needed in each country. ILO’s expertise in the design of such programmes would be of critical importance.

V. Conclusions and Recommendations

The recent food price rise in 2007-2008 exposed the vulnerability of several developing countries, pushing over 100 million additional people into poverty. Not surprisingly, concerns over the achievement of millennium development goals especially relating to hunger became important in international debates. Questions about whether the food price rise was a flash in the pan or could have longer term implications are being raised. In other words is the food crisis behind us or do we expect food prices to rise again to their historic highs. The paper points to the fact that there are different views on the importance of different causes of the price rise and long term price of food would depend on several uncertain effects of a number of causal factors, such as climate change, energy prices and water scarcity. While the magnitude of these effects is uncertain, the direction of the effects would be adverse if likely developments and policy initiatives do not increase food supply relative to demand.

However, whether the price rise is a short term or long term phenomena, it has left lasting effects on poverty and created decent work deficits which need to be addressed. People who were at the margin of poverty have been pushed below the poverty line. Market based interventions, such as export restrictions, consumer subsidies or import liberalization have had only limited success in controlling domestic price rise. A comparative assessment of different policies used by developing countries shows that perhaps the best means of addressing such crises is through medium and long term measures such as increasing agricultural productivity,  improving  social  protection  programmes  and  creating a social dialogue between government, employers and employees/ producers. All these lie within the core competence of the ILO and need strengthening, especially in rural areas. These measures are required both to deal with the immediate but lasting impact of the crisis, and to build institutions over time which will be able to mitigate the impact of future such crises.

While safety nets will be crucial to deal with temporary crises such as sudden food price rise, there are nevertheless other programmes and policies which can build the long term capacities of countries to deal with the food crisis.

Employment generation

Employment promotion is the main path to improved livelihoods, higher income and poverty reduction. Devising employment strategies to ensure that rural employment strategies form an integral part of national employment and development strategies becomes a key objective of poverty alleviation and poverty reduction programmes. Simulations carried out by UNCTAD reveal that agricultural price rises with the right supply responses would increase both agricultural output, employment and exports from developing countries. If these price rises take place simultaneously with a reduction in subsidies in developed countries, the impact on unskilled employment and wages in developing countries would be substantial.120

A sustainable solution for poor and vulnerable households is inclusive, or pro-poor, economic growth that provides reliable real incomes and stable access to food from home production or in local markets. The appropriate policy response to high food prices, then, is to find ways to stimulate such growth. Much of this growth is likely to be in the agriculture sector, especially in investments to raise productivity of basic food crops. 121Inclusive growth possibilities depend in part on public investments in roads, markets, irrigation, infrastructure, education, and health as well as on investments in the main factors of agricultural production – land, labor, and capital – all of which take a long time to adjust. Over time, increases in agricultural prices relative to other sectors slow migration out of agriculture and increase capital investment, which results in increased agricultural output. To the extent that agricultural sectors do sustain more rapid growth because of higher food prices, rural poverty will be reduced, especially where the concentration of land ownership is low and labor-intensive technologies are used.

Social protection policies

The effectiveness of the policy response to the recent rise in food and fuel prices will, in the main, depend on the ability of individual governments to put in place well targeted programs to ameliorate real income losses and the increase in poverty. This requires targeted social protection programmes which can be upscaled during a crisis. There is now a body of research from both ILO and elsewhere on the best practices and delivery mechanisms for providing social protection. With a view to better targeting it may be useful to develop a taxonomy of vulnerable countries and vulnerable groups within countries. For the poorest countries, some form of additional assistance will be required, while for other countries international coordination may be required to help restore confidence in global food markets and provide emergency assistance for poor consumers.

Several approaches to targeting the vulnerable groups have been tried. For example in Thailand, although targeting at household or individual level faces many implementation difficulties, targeting at geographic and community level might be a second-best solution. Since about half of Thailand’s poor live in the rural Northeast, and a quarter in the rural North, poverty in Thailand is very concentrated.  Targeting these two areas alone will account for three-quarters of the poor. The concentration is also evident at provincial level. For example, many Northeast provinces have more poor families than their neighboring provinces.  ILO’s role in helping target the vulnerable groups and best practices on social protection could be crucial.122

In  addition,  the  absence  of  an  information  feedback  system makes it difficult for the existing social protection agencies to allocate resources proportionately amongst regions and areas. Similarly, there is no coordinated system to forewarn about the falling food security and its impact on other health and education related social indicators. ILO could help in setting up such feedback systems for social protection programmes.123

There is no magic prescription for effective social safety nets, especially among developing countries where both fiscal and administrative resources are often in short supply. Successful systems usually consist of several individual programs that complement each other as well as other public or social policies. Ultimately, the particular policy mix put into place will depend on the country context.

Social dialogue

Third, and very important, the ILO is tripartite in nature, with equal representation in all its policy-making structures of representatives of Governments, and Employers’ and Workers’ organizations. Hence ILO can play a crucial role in improving governance and institutions, and in the formulation and implementation of policy reforms in the world of work. Participation, voice and organization are, unfortunately, particularly weak in rural areas, and empowerment is a major challenge. This effort also needs increased involvement of representatives of cooperatives and producer organizations, in the national planning processes to enhance food security.124

To sum up, ILO’s role in the current food crisis spans both short term measures and long term responses. These recommendations could focus on both immediate “emergency responses” and medium to longer term measures to limit future vulnerability to crises.125

Immediate Emergency Short Term Responses:

Action 1: Strengthen systems of social dialogue, as a means to better devise crisis response and prevention measures.

Action 2: Identify the groups most vulnerable to the adverse effects of the crisis (to determine where best to target safety nets and other responses. Also identify nations most vulnerable to the adverse effects of the crisis.

Action 3: Strengthen  mechanisms  for  rapid  re-employment  during social crises.

Action 4: Increase the minimum wage to protect the purchasing power of poor workers and reduce wage inequalities.

Medium to Long Term Responses:

Action 5: Introduce / strengthen unemployment insurance provisions. Action 6: Recognize  the  limitations  of  classical  social  protection measures, and develop frameworks to extend such protection to vulnerable and excluded groups especially in the informal sector.

Action 7: Invest in measures to improve longer term agricultural output and productivity. Invest in the Green Jobs programme and producer cooperatives.


The author is grateful for the support extended by the ILO for the preparation of this paper.


1     FAO, 2009, Crop Prospects and Food Situation, Rome

2              CFA High Level Task Force, Background Paper prepared for January 2009 Madrid summit.


4     1 Corcoran, Katherine (2008-03-24). “Food Prices Soaring Worldwide”, Associated Press.

5              Crop prospects and food situation – No. 5, Dec 2008, Source: Food and Agriculture Organization of the United Nations (FAO),  18 Dec 2008

6              FAO, 2008, Crop Prospects and Food Situation, April 2008

7              Burkina general strike starts over cost of living Mathieu Bonkoungou: Reuters, April 8, 2008

8              Riots prompt Ivory Coast tax cuts, BBC, 2 April 2008. COTE D’IVOIRE: Food price hikes spark riots, 1 March 2008 (IRIN)

9              Egyptians hit by rising food prices, BBC, 11 March 2008. Two die after clashes in Egypt industrial town Gamal: Reuters, April 8, 2008.

10   “Soaring Food Prices Spark Unrest”, The Philadelphia Trumpet, April 11, 2008

11   “Pakistan heading for yet another wheat crisis”, The Independent, April 1, 2008

12   “Anger grows over rising prices in Sri Lanka”, World Socialist Web Site, April 11, 2008

13   “SA must grow food on all arable land, says Manuel”, The Times, April 13, 2008

14 Second- and third-generation biofuels (such as cellulosic ethanol and algae fuel, respectively) may someday ease the competition with food crops, as non food energy crops can grow on marginal lands unsuited for food crops.

15   “How the cupboard went bare”, Globe & Mail, April 12, 2008

16   Cereal prices hit poor countries, BBC, February 14, 2008. UN warns on soaring food prices, 17 December, 2007.

17   “The global food crisis and the Indian situation”, Navhind Times, April 14, 2008

18   Rising Food Prices: A Global Crisis, Overseas Development Institute, 22 April 2008.

19   Abbott, P. C., C. Hurt, and W. E. Tyner. 2008. “What’s Driving Food Prices?” Farm Foundation Issue Report (FFIR), Oak Brook, IL. Available: articlefiles/404-FINAL WDFP REPORT 7-28-08.pdf.

20   C. Peter Timmer, October 2008, Causes of High Food Prices, ADB Economic Working Paper series, No.128.

21   World Bank, 2008, World Development Report

22   “Biofuels major cause of global food riots”, Kazinform (Kazakhstan National Information Agency), April 11, 2008

23   “Biofuels major cause of global food riots”, Kazinform (Kazakhstan National Information Agency), April 11, 2008

24   Oxfam (2008-06-25). “Another Inconvenient Truth: Biofuels are not the answer to climate or fuel crisis” (PDF). Oxfam web site

25   Donald Mitchell (July 2008). “A note on Rising Food Crisis” (PDF). The World Bank. Policy Research Working Paper No. 4682.

26   World Bank, 2009, Global Economic Prospects-Commodities at the Crossraods, p43

27   Directorate for Trade and Agriculture, OECD (2008-07-16). “Biofuel policies in OECD countries costly and ineffective”. OECD web site

28   John M. Urbanchuk (2008-07-11). “Critique of World Bank Working Paper “A Note of Rising Food Prices”” (PDF). Renewable Fuel Association.

29   Gernot  Heller  (2008-04-17).  “Bad  policy,  not  biofuel,  drive  food  prices:  Merkel”. Reuters.

30   “Press Conference by the President”. The White House (2008-04-29)

31   Statement of the Minister of Commerce and Industry, Mr. Kamal Nath, FAO June 3, 2008 at the High-Level Conference on World Food Security: the Challenges of Climate Change and Bioenergy

32   Von Brun, `High and Rising Food Prices’,2008, p5 slide 14, IFAD web site

33   Julian Borger, ‘Feed the world? We are fighting a losing battle, UN admits’, The Guardian, 26 February 2008

34   Are We Approaching a Global Food Crisis? Between Soaring Food Prices and Food Aid Shortage. Katarina Wahlberg Global Policy Forum: World Economy & Development in Brief. 2008-03-03.

35   FAO (Food and Agriculture Organization). 2006, World’s Agriculture towards 2030/2050. Interim Report. Rome: FAO. FAO,. 2008. Current World Fertilizer Trends and Outlook to 2012. Rome: FAO.

36   ‘Financial  Speculators  seek  profit  from  Global  Hunger’,  Financial  Times,  March 10,2008

37   The trading frenzy that sent prices soaring”, New Statesman. Retrieved on 28 April 2008.

38   OECD, 2008. “The Relative Impact Changes in Agricultural Markets: A Note on the Role of Investment Capital in the US Agricultural Futures Markets and the Possible Effect on Cash Prices.” TAD/CA/APM/CFS/MD(2008)6. Trade and Agriculture Directorate, Committee for Agriculture. Paris.

39   Timmer, 2008, op.cit

40   How the food and financial markets are interconnected, Eric Toussaint, president of the Committee for the Cancellation of Third World Debt–Belgium, Also see IFPRI Report, 2008, op.cit.

41   Sanders, D. H., and S. H. Irwin. 2008. “Futures Imperfect.” New York Times. 20 July. Page 12wk.


42   Drought in Australia reduces Australia’s rice crop by 98 percent. The New York Times, April 17, 2008. “Australia’s food bowl lies empty”, BBC News, March 11, 2008

43   Scant Aid reaching Burma’s Delta, by Amy Kazmin and Colum Lynch, The Washington Post, May 8, 2008

44  An assessment of race UG99 in Kenya and Ethiopia and the potential for impact in neighbouring regions and beyond. By expert panel on the stem-rust outbreak in Eastern Africa. 29 May 2005.

45   “Soils and Croplands Degradation”.

46   “How the cupboard went bare”, Globe & Mail, April 12, 2008

47   C. Peter Timmer, October 2008, Causes of High Food Prices, ADB Economic Working Paper series, No.128.

48   South Africa’s Grain Stockpiles Declined in December, Bloom berg News 23rd  January 2008.

49   Crop Prospects and Food Situation, No. 2, April 2008: Global cereal supply and demand brief, Growth in cereal utilization in 2007/08. Food and Agriculture Organization. United Nations. April 2008.

50   World Bank, 2009, op.cit

51   CFA paper prepared for Madrid meeting, January 2009.

52   ibid

53   Ibid

54   Lex column, ‘Flying fertiliser’, Financial Times, 10 April 2008

55   World Bank, 2009, Global Economic Prospects-Commodities at the Crossraods, p43

56   Ibid.

57  Ashbindu Singh, A Tale of Two Trends: providing information and knowledge for decision-making in water-scarce regions through water assessments, UNEP: see http://

58   Robin Clarke and Jannet King, The Atlas of Water (London: Earthscan, 2004)

59   Ibid.

60   Jeffrey Currie, Food, Feed and Fuels: an outlook on the agriculture, livestock and biofuels markets, Goldman Sachs presentation, March 2007 – see

61   Bidwells, The bull run in soft commodities: commodity cycle or structural shift in food and farming?, briefing note:

62   Ibid.

63   World Bank, 2009, op.cit

64   IPCC (Fourth Assessment Report, Working Group 2, Chapter 5: Food, fibre and forest products), 2007, pp. 275 and 299.

65  Cline, w., 2007, Global Warming and Agriculture: Impact estimates by country, Washington, D:C., Centre for Global Development and Peterson Institute for International Economics.

66   Simon Maxwell, “Will rising food prices derail development efforts?”, ODI blog, 29 February 2008, at

67   World Bank, 2009, op.cit

68   Asian Development Bank, 2008, “Special Report: Food Prices and Inflation in Developing Asia: Is Poverty Reduction Coming to an End?” Economics and Research  Department Bank, Manila. Available: inflation.pdf.

69   De Hoyos, R., and R. Lessem, 2008, “Food shares in Consumption : New Evidence using Engel Curves for Developing countries”World Bank, Washington D.C

70   Dawe, D. 2008. “Have Recent Increases in International Cereal Prices been Transmitted to Domestic Economies? The Experience in Seven Large Asian Countries.” Paper presented at the Food and Agriculture Organization Asian Agricultural Economics Association 6th Annual Meetings, 28 August, Manila.

71   Imai, K., R. Gaiha, and G. Thapa. 2008. Transmission of World Commodity Prices to Domestic Commodity Prices in India and China. BWPI Working Paper 45, Brooks World Poverty Institute, School of Social Sciences (Economics), University of Manchester, United Kingdom.

72   Katerina Cocoran, 2008, op.cit

73   World Bankm G8 Hokkaido-Toyako Summit Double Jeopardy: Responding to high Food and Fuel Prices, July 2, 2008.

74   World Economic Situation and Prospects 2009, UN DESA

75   ibid.

76   Timmer, 2008, op.cit.

77   FAO Policy brief, January 2009

78   BBC News, Wednesday, 15 October 2008

79   World Bank, 2009, op.cit, and Ivanic, M., and W. Martin, 2008, “Implications of Higher Global Food Prices for Poverty in Low Income Countires” Policy Research Working Paper 4594, World Bank, Washington, D.C

80   ILO, World Employment Report, 2005-2005

81   Delgado, Hopkins, and Kelly 1998, “Agricultural Growth linkages in Sub Saharan

Africa”, Research Report 107, IFPRI, Washington, D.C.

82   Gaiha 1993, “Design Of Poverty Alleviation Strategy in Rural Areas”;   FAO social and Economic Development Paper 115, FAO Rome, Datt and Ravillion 1998, “Farm Productivity and Rural Poverty in India”, Journal of Development Studies 34/4: 58-62.

83   FAO, 2009, Crop Prospects and Food Situation, Rome

84  CFA High Level Task Force, Background Paper prepared for January 2009 Madrid summit.


86   Christiansen, L., and L.Demery, 2007, Down to Earth: Agriculture and Poverty Reduction in Africa. Directions in Development Series, Washington, D.C, World Bank.

87   De Hoyos, R., and D. Medvedev, 2008, Poverty Effects of Higher food prices: A Global Perspective- World Bank.

88   FAO, 2008, op.cit

89   “World cereal supply could improve in 2008/09”, FAO: Global cereal supply and demand brief, Crop Prospects and Food Situation, No. 2., April 2008.

90   Rising Food Prices: A Global Crisis, Overseas Development Institute, 22 April 2008.

91   ILO Practical policy recommendations to mitigate the social impacts of food price crisis – A validation study in Lao PDR .  Report sent by ILO country office in Lao, PDR and Cambodia.

92   ILO submission from the Pacific, 2009


94   Thailand country submission by the ILO.

95   The full list is Afghanistan, Bangladesh, Bolivia, Burundi, Central African Republic, Chad, DRC, Republic of Congo, Côte d’Ivoire, Dominican Republic, Ethiopia, Eritrea, Ghana, Guinea, Guinea-Bissau, Haiti, Indonesia, Iraq, Kenya, DPR Korea, Lesotho, Liberia, Mauritania, Moldova, Nepal, Nicaragua, Pakistan, Russia (Chechnya), Sierra Leone, Somalia, Sri Lanka, Sudan, Swaziland, Timor Leste, Uganda and Zimbabwe. FAO, Crop Prospects and World Food Situation, February 2009

96   Ibid

97   World            Food      Programme        briefing                note      at  ; Julian Borger, ‘Feed the world?’

98   ibid

99   Mulat Demeke, Guendalina Panagrazio and Materne Maetz of the Agricultural Policy Support Service, FAO, 2009, Country Responses to the food security crisis: Nature and Preliminary implications of the policies pursued.

100 Todd Benson, Nicholas Minot, John Pender, Miguel Robles, Joachim von Braun, 2008, Global Food Crises: Monitoring and Assessing Impact to Inform Policy Responses, published by the International Food Policy Research Institute.

101 FAO, 2009, Op.cit

102 IRIN 2008, ‘CAMEROON: Lifting of import taxes fails to reduce food prices’, 29 April.

103 IRIN 2008, ‘Cameroon: Food self-sufficient in two years?’, IRIN, 25 April.

104 Timmer, 2008, op.cit

105 “Manila calls for Asian summit over food crisis”, The Standard, April 15, 2008

106 Timmer, 2008, op.cit.

107 International Rice Research Institute, May 15 2008, Countries make plans to ramp up food output.

108 Cavallo, D., 1988, “Agriculture and Economic Growth: The Experience of Argentina

1913-84” paper presented at the 20th conference of Agricultural Economists, Buenos Aires, Argentina.

109 World Bank, 2009, op.cit

110 World Bank, 2009, Op.cit.

111 Countries which use cash transfer programmes include Bangladesh, Brazil, China, Costa Rica, Egypt, Ethiopia, Haiti, India, Indonesia, Mexico, Mozambique and South Africa. See FAO, 2009, op.cit

112 Countries such as Afghanistan, Angola, Bangladesh and Cambodia have used these. See

FAO policy database.

113 African countries such as Kenya, Burkina Faso, Cape Verde and Mozambique have used these. World Bank, 2008, Rising Food Prices: Policy Options and Policy Response

114 The Thailand country office of ILO reported the high administrative cost of establishing the  infrastructure required for making conditional transfers. See Somchai Jitsuchon and Ammar Siamwalla, Jan 2009, Economic Shocks and Vulnerable in Thailand: A Case Study of Rising Food and Fuel Prices, Paper prepared for the United Nations. Large-scale conditional cash transfer programs were developed in Mexico (Progresa, Oportunidades) and in Brazil (Bolsa familia) and later spread to other countries in Latin America and the Caribbean and to the rest of the world.

115 FAO Policy Database.

116 FAO, 2009, op.cit

117 Somchai Jitsuchon and A. Siamwalla, 2009, op.cit.

118 See India’s programme on mid day meals under Sarva Siksha Abhayan, Ministry of Education, Government of India, 2006.

119 World Bank, 2009, Op.cit.

120 Green Box Subsidies- An empirical and theoretical Assessment, UNCTAD India office, 2007

121 Brahmbhatt, M., and L. Christiaensen. 2008. “Rising Food Prices in East Asia: Challenges and Policy Options.” World Bank, Washington, DC.

122 Submission by the ILO country office in Thailand, 2009.

123 Country Submission by Pakistan’s ILO office, 2009.

124 Speech  delivered  by  Mr.  Jose  Manual  Salazar  at  Madrid  conference  of  the  UN’s comprehensive Framework for action, 26-27 January, 2009.

125 ILO’s country office in Thailand for the East Asian region.