Resource information
This study uses household models based
on detailed expenditure and agricultural production data
from 31 developing countries to assess the impacts of
changes in global food prices on poverty in individual
countries and for the world as a whole. The analysis finds
that food price increases unrelated to productivity changes
in developing countries raise poverty in the short run in
all but a few countries with broadly-distributed
agricultural resources. This result is primarily because the
poor spend large shares of their incomes on food and many
poor farmers are net buyers of food. In the longer run, two
other important factors come into play: poor workers are
likely to benefit from increases in wage rates for unskilled
workers from higher food prices, and poor farmers are likely
to benefit from higher agricultural profits as they raise
their output. As a result, higher food prices appear to
lower global poverty in the long run.
