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Cross‐countries analysis of rising food prices: policy responses and implications on emerging markets

Abiodun Elijah Obayelu (Department of Agricultural Economics, University of Ibadan, Ibadan, Nigeria)

International Journal of Emerging Markets

ISSN: 1746-8809

Article publication date: 5 July 2011

Abstract

Purpose

The purpose of this study is to create an opportunity to see what is wrong with agriculture and provide an opportunity for much needed change. It identified who benefits or bears the pains of food prices increase, examines the causes and effects of the increase and discusses policy responses by various countries and the implications of such interventions.

Design/methodology/approach

Secondary data were employed and analyzed through simple descriptive statistics.

Findings

The results of the findings showed that increase in food prices affects the nutrition of not only the poor but also the working and middle classes. It limits the food consumption of the poor and worsens the dietary quality. It revealed that foods are available in many countries but millions of people have no purchasing power. Some of the driving forces of price increase include expansion of biofuels, high demand for food, and high cost of food production, climate change, unfavorable government policy and underinvestment in agricultural innovation. Contrary to the opinion that increased food prices benefit farmers, this study observed that the marketers benefit most. High costs of inputs and inflation make it difficult or impossible to produce by smallholder farmers.

Originality/value

The recent increase in food prices around the world has raised serious concerns about food and nutrition security of people. As part of intervention, several countries have banned grain exports and tariff reductions on imported foods in others. The export restrictions and import subsidies have harmful effects on import‐dependent trading partners and give wrong incentives to farmers by reducing their potential market size. The price controls employed by some countries reduce farmers' incentives to produce more food.

Keywords

Citation

Elijah Obayelu, A. (2011), "Cross‐countries analysis of rising food prices: policy responses and implications on emerging markets", International Journal of Emerging Markets, Vol. 6 No. 3, pp. 254-275. https://doi.org/10.1108/17468801111144076

Publisher

:

Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited