Responding to High World Food Prices:

Evidence from Bangladesh, Nicaragua & Sierra Leone … and elsewhere

Power & Participation Research Centre, Dhaka Nitlapan, ManaguaCESPA, Freetown& the Hunger Alliance & Overseas Development Institute

Research Questions• What measures taken to respond higher food

prices? • Experience of implementing them? ...

cost, timeliness, capacity to reach targets? • How effective have they been?

Impacts on prices, incomes, production & consumption?

Social effects on intended beneficiaries?

Responding to:

Bangladesh• 2 floods +

Cyclone Sidr in 2007

• Indian rice export bans

Average Monthly Price of Coarse Rice per kg

10

15

20

25

30

35

2006 2007 2008 2009

Tk/k

g

Wholesale Price Retail Price

NicaraguaWorld rice prices + Huracan

Felix

0

50

100

150

200

250

300

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

1994 1996 1998 2000 2002 2004 2006 2008

Crob

obas

Cor

rient

es

Food Prices, Basic Bunde and CPI in Nicaragua 1994-2009

Alimentos básicos

Canasta Basica

IPC (1999=100)

Alimentos y Bebidas

Sierra Leone: P rice world, 30% imported

Jan-

06Fe

b-06

Mar

-06

Apr-

06M

ay-0

6Ju

n-06

Jul-0

6Au

g-06

Sep-

06O

ct-0

6No

v-06

Dec-

06Ja

n-07

Feb-

07M

ar-0

7Ap

r-07

May

-07

Jun-

07Ju

l-07

Aug-

07Se

p-07

Oct

-07

Nov-

07De

c-07

Jan-

08Fe

b-08

Mar

-08

Apr-

08M

ay-0

8Ju

n-08

Jul-0

8Au

g-08

Sep-

08O

ct-0

8No

v-08

Dec-

08Ja

n-09

Feb-

09M

ar-0

9Ap

r-09

May

-09

Jun-

09

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

Rice, Local Rice, Imported

Framework: 3 sets Public Measures +

• Trade, Border & Market interventions Aim: stabilise prices

• Food Production stimulus Aim: more supply, lower prices

• Social Safety Nets Aim: mitigate hardship for vulnerable

• Coping by individuals & households

Trade, Border & Market Measures

• Cut tariffs on cereals imports But not much to cut, low tariffs:

5% cereals Bangladesh, 15% rice Sierra Leone

• Exports banned in Bangladesh ... But no exports to ban!

• Facilitate trade: Sierra Leone & India

Market Measures

• Sell subsidised food: ENABAS Nicaragua ... limited

capacity, buying <5% cereals harvests

Mainly Managua, other cities Coverage = 151k by 2008 Run by Citizens Power

Councils• Bangladesh Rifles, open

market sales Outlets mainly Dhaka, other

cities

Stimulate production

• Nicaragua ... Seeds + Livestock ... 13k households 07, 19k

households 08• Sierra Leone ... Seeds + Tools ...

Limited coverage • Bangladesh

Seed, fertiliser + procurement P Boro rice 08: 17% on 07!

Safety Net Feasibility & Effectiveness :3 contexts

• Existing social assistance prog’s in place • Social assistance reduced in context of

liberalisation• Social assistance not in place (post-conflict)

• Expansion of Vulnerable Group Development and Vulnerable Group Feeding

• Public distribution of food grains

Safety Nets – Bangladesh

06/07 07/08 08/09VGD and VGF 0.79m MT 1.37m MT 1.57m MTTotal 2.97m MT 3.12m MT 4.26m MT

Safety Nets: Nicaragua

• Conditional Cash and Food Transfer (Red de Protección Social) from 2000. Coverage: 22k families/2.2% pop’n Effectively ended 2006

• Sistema de Atención al Crisis [SAC]

Safety Nets: Sierra Leone• Cash for Work

Coverage: 5.3k youth for up to 2m @US$2 day• School feeding • Supplementary feeding mothers & infants

Safety Nets Issues• What was in place, could be built on• Limited effects because limited (added) coverage

Oportunidades only scaled up by 25%!• Targeting: do transitory shocks obscure

chronically poor(er)?• Social Protection or social protecting?

Risk Reduction (increase food production) Risk Mitigation (reduce price volatility) Risk Coping (safety nets / social transfers)

Households & Individuals: Coping• Cut spending on non-food

items• Food intake

Cut veg, meat, pulses, etc. Switch to less preferred staples Reduce meals frequency

• Debt/borrow/beg• Seek more work• Children out of school/Cut

school expenses• But ...Rarely: sale assets

Initial Highlights: Political priorities

• What got political priority? Bias to urban areas, to consumers? But revival of interest in farming,

focus on food security• Country context so important ...

Bangladesh: rising prices raise ghosts of past famine ... ‘74 [‘43]

Nicaragua: between liberal markets & return of State

Sierra Leone: following textbook

Initial highlights: Markets• Volatility as important as levels• Consumer confidence• Short Term pressures vs Long Run wisdoms

ST: Thin & Imperfect Markets, uncertainty• Intervention hazardous, yet need to be seen to act• Distrust of private traders

LT: Develop roads, warehouses, institutions, trust private trade (within regulatory frame)

• Puzzles: ltd rise in Salone rice P, Nica rice P

Initial HighlightsResponses: feasibility & effectiveness

• What was in place, could be built on Social safety nets, but also in production Bangladesh farm support Plans for ENABAS, Hambre Cero

• Importance of being seen to act: symbols• Big question: Coping vs public response?

Slide Dump

Typical Responses across World [FAO log]