International Trade and Food Security
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International Trade and Food Security

Exploring Collective Food Security in Asia

Edited by Michael Ewing-Chow and Melanie Vilarasau Slade

Food security is one of the greatest challenges of our time. Through a collection of commissioned studies, which draw upon the experience of leading experts and scholars in trade, investment, law, economics, and food policy, this book assesses whether self-sufficiency is an adequate response to the food security challenges we face
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Chapter 5: Managing food price volatility in Asia: Why, what and how?

C. Peter Timmer


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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