Exploring Collective Food Security in Asia
NUS Centre for International Law series
Edited by Michael Ewing-Chow and Melanie Vilarasau Slade
Chapter 5: Managing food price volatility in Asia: Why, what and how?
What does price instability have to do with food security? It is widely agreed in the development community that, in general: 1) Price spikes hurt poor consumers; 2) Price collapses hurt farmers; and 3) Price risks reduce investments, including by smallholder farmers for agricultural modernization. But food price instability also has a deeper and more insidious impact: it slows down economic growth and the structural transformation that is the pathway out of rural poverty. Thus food price instability really hurts the poor in both the short run and the long run. Consider a very simple model of food security that focuses on the short run versus the long run, and on the macro level (of policymakers) versus the micro level (of household decisionmakers) (see Figure 5.1 below). When the global economy is reasonably stable, and when food prices are well behaved, policymakers can concentrate their political and financial capital on the process of long-run, inclusive growth. Keeping the poor from falling into irreversible poverty traps is easier and less costly in a world of stable food prices, and the poor are able to use their own resources and entrepreneurial abilities to connect (via the small horizontal arrow) to long-run, sustainable food security for themselves.
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