Strong upward trends and increased variability in global food prices over the past two years have led to concern that hunger and poverty will increase across the world. At the same time, rising food prices provide an incentive and opportunity for many developing countries to strengthen the contribution their farmers make to national economic growth and poverty reduction. Policymakers and opinion leaders in developing countries, however, often lack sufficient information to gauge the likely effects of global food crises on their country and to identify, design, and implement policy actions that can best avoid risks and take advantage of opportunities.The deficiencies in information and analysis can lead to over- and underreactions, resulting in policy and market failures. Experiences across countries in 2007 and 2008 show ample evidence of such outcomes.
This report seeks to support national decisionmakers, as well as their international development partners, in acquiring information and applying methods for understanding the likely effects of a global food crisis on their country and acting to alleviate the risks and exploit the opportunities brought about by such crises. It describes data and methods and suggests how to facilitate their collection and use. The report then outlines the design and implementation of an open Internet-based portal for sharing reliable, appropriate information and decision-support tools for national policymakers so they can respond quickly to changes in world food markets in an informed manner.
National decisionmakers and policy analysts must understand the degree to which their country and population groups within it are exposed to the negative effects of rising food prices or could exploit new opportunities offered by the higher prices. This requires information on
- global market developments;
- the characteristics of the country with regard to international trade in food;
- the trends in local wages, agricultural prices, and fuel prices;
- the composition of income and expenditure among different population groups in the country;
- the response of producers, consumers, and the government to rising food prices.
The actual effects of the food crisis at national level depend on
- the net trade position (exporter or importer) in agricultural commodities relative to the size of the economy;
- the degree to which changes in global prices are transmitted to local markets;
- the sensitivity of government revenue and expenditures to rising food prices;
- the political and fiscal capacity of the government to respond to the crisis.
Moreover, the effects of a crisis will differ among communities and from household to household, depending on
- the net sales (or net purchases) of food relative to household income; and
- the level of income and assets, which influence food security and vulnerability to shocks; and
- the existence and effectiveness of government programs and policies to protect vulnerable households.
Within households, members are likely to be affected by a crisis to varying degrees, with the nutritionally vulnerable members—women of childbearing age and young children—most at risk.
This report distinguishes the basic information needed to assess the broad implications of a global food crisis for a country from the more advanced information and analyses that are needed to design and implement specific responses to such crises. In considering the vulnerability of countries, households, and individuals to a global food crisis, the report points to information that national decisionmakers can use to assess the degree to which their country as a whole is likely to be affected by rising global food prices in one way or another and to determine which population groups are likely to see a change in their well-being. The most important sources of such data include nationally representative household surveys, food price series from important commodity marketplaces in a country, and trade statistics. Where such data are missing for a country, it is necessary to rely on qualitative or indicative, rather than representative, data to make the needed assessments in the short run. To undertake relatively thorough assessments of the impact of a global food crisis on a country and its citizens, however, and to determine the best course of action to follow in response, detailed data are required.
The analytical capacity required at the national level to respond to a global food crisis will vary. Some powerful initial analyses to gauge the probable impact of a crisis can be conducted without much specialized skill using relatively basic data sets. Detailed studies of the second-round and economywide effects of a global food crisis on a country, however, call for more comprehensive data, sophisticated analytical tools, and specialized skills.
A wealth of information on the world food situation and its shifts is available, but not everywhere, quickly, or at the needed level of disaggregation. In some contexts, even when information is available, access to it is not assured for all stakeholders. Frequently, government leaders and their analysts, civil society, and business actors are not sufficiently informed for sound decisionmaking. In response to these information challenges, the report outlines a global initiative by which networks of partners and individual experts would provide reliable, appropriate information and decision-support tools for national policymakers.This plan includes the creation of an Internet-based information portal to serve as a reliable information- and decision-support tool to strengthen the ability of policymakers to respond quickly to dynamic developments in world food markets. In today’s Internet world, many useful websites and portals exist, including important ones operated by FAO, the World Bank, the CGIAR, and others. The portal designed here will not duplicate them but add specific value. The portal will become a reliable information and decision-support tool to strengthen the ability of policymakers in the developing world to respond quickly to dynamic developments in the world food system, especially crises. It will include policy analysis tools that users can employ directly and detailed country-by-country data and other food policy information, assembled from a wide array of sources. Because the portal will be designed in an open Wikipedia-type fashion, access to the portal both to obtain and to add information and tools will be open to the wider public as an international public good.
The adequacy of the response to a global food crisis depends to a large degree on the policy- and program-related reactions of national-level policymakers around the globe.This report provides insight on the information and analytical tools that national-level decisionmakers need to assess the risks and opportunities posed to their country and its citizens by a global food crisis, to determine how they might respond to those risks and opportunities, and to identify ways to monitor the impact of the food crisis and the effects of policy responses.