Food Price Watch POVERTY REDUCTION AND EQUITY GROUP POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK JANUARY 2012 66769 Global food prices declined 8% between September and December 2011. Wheat, maize, and rice prices declined due to improved supply conditions, and among concerns regarding the global economy. However, global prices still remain high, with the 2011 annual food price index exceeding the 2010 annual index by 24 percent. Prospects for a decline in 2012 prices are favorable on account of increasing supplies. Yet, global prices remain high and volatile, markets tight, and oil prices uncertain. There has been strong demand from deficit areas and production losses from La Niña have already occurred. Domestic food prices also remain high and volatile, and continue to show large differences from country to country. Declining global prices should not diminish vigilant monitoring of food price movements. Because domestic food prices have remained high, households have adopted coping strategies. These strategies follow common patterns but are not universal. Coping strategies may partially offset some of the effects of crises, yet the nutritional consequences of food crises can quickly become devastating, especially in low-income countries with weak safety nets. Global Price Trends Table 1. Price Change of Key Food Commodities Global food prices declined 8% during Dec 2010– September–December, ending the year Sept – Dec Dec 2011 Feb–Dec with prices 7% below December 2010 Indices 2011 (%) (%) 2011 (%) levels. While the first quarter of 2011 Food -8 -7 -14 witnessed sharp rises in international food Fats and oil -8 -15 -19 prices, five consecutive months of decreases Grains -10 2 -8 at the end of the year drove the World Bank Other -8 -4 -10 Food Price Index to 14% below its February Fertilizer -10 19 14 2011 peak (table 1). Prices All key staples saw their prices decline. Maize -12 3 -12 Reductions in the index for grains reached Rice (Thai, 5%) -2 10 12 10%; 8% for fats and oils; and also 8% for Wheat (US HRW) -15 -12 -23 “others,� which includes sugars and meats. Declines have been significant for wheat Sugar (world) -14 -18 -22 (15%) and maize (12%) and more Soybean oil -8 -9 -12 moderate for rice, which declined only 2% Crude oil, avg. 3 16 6 in the fourth quarter of 2011. This Source: World Bank, DECPG. Food Price Watch, produced by the Poverty Reduction and Equity group at the World Bank, is a series that aims at drawing attention to trends in domestic food prices in low- and middle-income countries and their policy implications. Contact: José Cuesta (jcuesta@worldbank.org) modest variation in the price of rice is explained by Figure 1. World Bank Food Price Index different export prices behavior by origin, with a vigorous 300 export response from India and Pakistan offsetting 250 increases in the price of Thai rice exports, which were 200 caused by floods and the adoption of a mortgage price food 150 scheme in that country. fats & oils 100 grains Yet global prices remain high and volatile. The global other food 50 Food Price Index averaged 210 points in 2011, up 24 0 percent from its average in 2010 (169 points, figure 1). 2007M01 2007M05 2007M09 2008M01 2008M05 2008M09 2009M01 2009M05 2009M09 2010M01 2010M05 2010M09 2011M01 2011M05 2011M09 Average annual prices in 2011 for wheat, maize, and rice also well exceeded averages for 2010.1 Source: World Bank, DECPG. Volatility continued to be high during the fourth Note: The Global Food Price Index weighs the export prices of a variety of food commodities around the world in nominal U.S. dollar prices, 2005 = 100. quarter, as shown by the periods of price declines followed by periods of marked increases. Maize prices saw two periods of increases, one through October and the other in forecasts for 2012 supplies, global carry-over stocks are also the second half of December. Wheat prices saw four expected to build up. The U.S. Department of Agriculture periods in which prices rose: October, late November, half has recently revised upward its estimated beginning stocks of December, and mid-January.2 for 2011/12 for wheat (by 0.7%), maize, (0.8%) and rice Food price declines in the fourth quarter occurred (0.6%) from its previous estimates in December.4 Food and despite moderate oil price increases of 3%. A factor Agriculture Organization (FAO) projections indicate contributing to the nontransmission of increasing oil increases in the stock-to-use ratio for wheat, which reaches prices to food prices was the strong decline in the price of a level of 28%, and in the stock-to-use ratio for rice up to the fertilizers. The 10% reduction in the price of fertilizer—a level of 32% in 2012.5 The smaller increase in the stock of critical input for agricultural production—during the maize (in a context of a weaker growth in the demand for fourth quarter put a halt to sustained increases in fertilizer animal feed and biofuels) is not expected to increase the prices throughout the year. stock-to-use ratio of rice, which is stable at a low level of Increasing supplies and an uncertain global economy 14%.6 contributed to decreasing food prices. Concerns about a Expectations remain relatively favorable for declines in prolonged deterioration in global demand combined with the price of energy, including crude oil, and minerals in an uncertain economic prospects and U.S. dollar appreciation uncertain global economy dominated by a persistent debt exerted downward pressures on global prices. A better- crisis and a slowdown in the demand growth in China.7 than-anticipated production of wheat from the Black Sea The recent elimination of biofuel subsidies in the United and winter harvests in Argentina and Australia, a good States might also contribute to a reduction in the diversion maize harvest in Ukraine, and bumper rice harvests in of agricultural production for nonfood purposes, although China and India have all more than compensated for bad the effect on food prices is not yet clear. harvests in the United States and rice production losses in Several upward price pressures still need close Thailand and other countries in that region. The vigorous monitoring. The expiry of the U.S. tax break for ethanol response from rice exporters such as India and Pakistan may have a limited impact in the short run because legal and maize exporters such as Ukraine also helped fill the requirements for the blending of renewable fuels like gap in world exports that followed the floods and the ethanol into gasoline remain in place. The elimination of mortgage price scheme in Thailand (the world largest rice U.S. duties for ethanol imports may also make biofuel exporter) and reductions in maize exports from the United imports from other countries more competitive in the States (the world largest maize exporter) due to unfavorable United States, allowing globally efficient sourcing of weather. Demand for rice imports from large Asian ethanol for biofuel use.8 Furthermore, demand for biofuels importers has been subdued following expectations of might increase if oil prices pick up again in 2012. good harvests, keeping price pressures down.3 Despite good prospects, stock-to-use levels for maize Prospects for global food prices remain favorable. With remain at their lowest level since 1974, causing markets better-than-anticipated production in 2011 and strong that are already tight to remain highly sensitive to price POVERTY REDUCTION & EQUITY GROUP • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 2 variations. Unrest in the Middle East and North Africa (106%), and South Africa (84%); and sorghum prices are may also affect the level and volatility of oil prices, which a up in Burkina Faso (57%), Ethiopia (28%) and Niger (19%), recent study confirms to be a key contributor to food price attributable in part to reduced production, increasing increases.9 Weather vagaries may also affect production; La demand, and high oil prices. Niña has already made its presence felt in the Pacific Ocean These sharp, unseasonal increases in cereal prices have and is expected to affect the growing season for maize and contributed to renewed calls for urgent action to prevent soybeans in Argentina and Brazil. Delayed harvests in the the deterioration of food security conditions in Burkina Sahel and in Kenya due to climatic conditions have also Faso, Chad, Mali, Mauritania, and Niger. Food security contributed to flat or even increasing prices.10 conditions are also expected to deteriorate in conflict- At the local level, restrictive domestic policies following affected areas of Sudan and northern areas of South Sudan upward price pressures in exporting countries may lead to during the first three months of 2012, and remain at greater volatility in markets. Stronger demand from deficit emergency and famine levels across southern Somalia.16 areas has maintained higher domestic maize prices in Uganda11 and Malawi. In Malawi, the government recently Coping Strategies of the Poor Against imposed an export ban. As increasing demand puts upward High Prices and Food Insecurity pressures on prices, the prices of Indian rice exports have also started to pick up, and in Vietnam, export prices for High domestic food prices demand coping strategies from rice have seen only moderate declines. households,17 but not all households under food stress are Domestic food price movements continue to show able to implement strategies to mitigate the deterioration of large differences from country to country, with significant their food security, food spending, and nutrition. A study in increases still being observed. As table 2 shows, price Indonesia found that 60% of food insecure rural households decreases in maize from September to December in East did not employ any coping strategy, while some 45% of food Africa reached 40% in Somalia (linked with increases in secure urban households did so.18 Coping mechanisms are food relief) and 30% in Ethiopia (associated with increases not universal, but they typically involve responses that are in production). The price of maize in Kenya increased 40% common across households and countries.19 Strategies because heavy rainfalls delayed harvests. In Central initially include some form of adjustment in food America, maize prices declined in Honduras (44%), consumption (eating cheaper food and reducing the size and Nicaragua (34%), and Guatemala (31%) partially due to frequency of meals) and consumption-smoothing behavior good primera harvests and favorable expectations of (borrowing money, purchasing food on credit, selling assets, secondary season harvests.12 Wheat prices increased by and looking for additional work). Children’s food is 36% in Belarus, among the collapse of the ruble and triple- frequently protected, sometimes at the cost of women’s. digit year-to-year inflation rates seen in the fourth quarter.13 Strategies like cutting spending on education and health Prices decreased by 15% in South Africa and Ethiopia. care and selling productive assets tend to be adopted when Sorghum prices are up by 24% in Burkina Faso (partially the severity of the crisis increases.20 due to reduced production) and down by 50% in Somalia The adoption of specific coping strategies is context (from continued food relief and off-season harvests).14 dependent, which is to say, it depends on the availability Because of poor rains, rice prices increased in Rwanda and cultural acceptability of alternative strategies and the (25%), Tanzania (24%), and Uganda (19%) in the fourth nature of the crisis. Evidence for South Africa shows that quarter, while inundations in Cambodia contributed to strategies differ by season. Poor rural farm workers rely on increases in domestic rice prices (18%). Prices declined in less preferred food and wild food through all seasons, but Somalia (19%) and in Bangladesh (12%) where crops were consume seed stocks during winter when food is less better than expected.15 available and buy food on credit in spring when crops For some countries, domestic prices of staples remain cannot be harvested.21 In Indonesia, strategies differ by at levels higher than those of a year ago (that is, December the household’s level of food insecurity. Among urban 2010–December 2011, table 2). Wheat prices are up in households characterized as “not hungry,�22 borrowing Belarus (88%), Ethiopia (23%), and Bolivia (13%); rice money from family to buy food, eating less, and having an prices are up in Uganda (81%), Malawi (56%), and Rwanda additional job were the most common strategies. In rural (39%); maize prices are up in Kenya (117%), Mexico households with severe hunger, borrowing money from POVERTY REDUCTION & EQUITY GROUP • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 3 Table 2. Largest Domestic Price Movements (through December 2011) Quarterly Price Movements: September–December 2011 % % Wheat change Maize change Belarus, natl. avg., wheat (flour), retail (Belarussian ruble/kg) 36 Malawi, Mzuzu, maize, retail (kwacha/kg) 63 Pakistan, Karachi, wheat (flour), retail (Pakistan rupee/kg) 6 Kenya, Kisumu, maize, wholesale (US$/ton) 23 Georgia, natl. avg., wheat (flour), retail (lari/kg) -4 South Africa, Randfontein, maize (yellow), wholesale (rand/ton) 16 Tajikistan, natl. avg., wheat flour (1st grade), retail (somoni/kg) -8 Ethiopia, Addis Ababa, maize, wholesale (Ethiopian birr/local) -30 Ethiopia, Addis Ababa, wheat (white), wholesale (Ethiopian -15 Guatemala, Guatemala City, maize (yellow), wholesale -31 birr/local) (quetzal/local) South Africa, Randfontein, wheat, wholesale (rand/ton) -15 Nicaragua, natl. avg., maize (white), wholesale (córdoba oro/ -34 kg) % Somalia, Mogadishu, maize (white), retail (Somali shilling/kg) -40 Rice change Rwanda, Kigali, rice, wholesale (US$/ton) 25 Honduras, San Pedro Sula, maize (white), wholesale (US$/kg) -44 United Rep. of Tanzania, Dar es Salaam, rice, wholesale (US$/ 24 ton) Uganda, Kampala, rice, wholesale (US$/ton) 19 Sorghum % change Cambodia, Phnom Penh, rice (mix), wholesale (riel/kg) 18 Burkina Faso, Ouagadougou, sorghum (local), wholesale 24 (CFA franc/local) Madagascar, natl. avg., rice (local), retail (Malagasy ariary/kg) 15 Niger, Niamey, sorghum (local), wholesale (CFA franc/local) 9 Nicaragua, Managua, rice (3rd quality), retail (córdoba oro/kg) -5 Somalia, Mogadishu, sorghum (red), retail (Somali shilling/ -50 kg) Bangladesh, Dhaka, rice (coarse), retail (taka/kg) -12 Somalia, Baidoa, sorghum (red), retail (Somali shilling/kg) -57 Somalia, Mogadishu, rice (imported), retail (Somali shilling/kg) -19 Annual Price Movements: December 2010–December 2011 % % Wheat change Maize change Belarus, natl. avg., wheat (flour), (Belarussian ruble/kg) 88 Kenya, Nakuru, maize, wholesale (US$/ton) 117 Ethiopia, Addis Ababa, wheat (white), wholesale (Ethiopian 23 Mexico, Culiacán, maize (white), wholesale (peso/kg) 106 birr/local) Bolivia, La Paz, wheat (flour), wholesale (boliviano/kg) 13 South Africa, Randfontein, maize (white), wholesale (rand/ton) 84 China, average of 50 main cities, wheat (flour), retail (yuan 10 Ethiopia, Addis Ababa, maize, wholesale (Ethiopian birr/local) 76 renminbi/kg) Afghanistan, Kabul, wheat, retail (afghani/kg) -7 Rwanda, Kigali, maize, wholesale (US$/ton) 58 Bangladesh, Dhaka, wheat (flour), retail (taka/kg) -10 Panama, Panama City, maize, retail (balboa/kg) 54 Malawi, Mzimba, maize, retail (kwacha/kg) -21 % Bolivia, La Paz, maize (hard yellow; boliviano/kg) -32 Rice change Uganda, Kampala, rice, wholesale (US$/ton) 81 Malawi, Lilongwe, rice, retail (kwacha/kg) 56 % Sorghum change Rwanda, Kigali, rice, wholesale (US$/ton) 39 Burkina Faso, Ouagadougou, sorghum (local), wholesale 57 (CFA franc/local) Pakistan, Karachi, rice (irri), retail (Pakistan rupee/kg) 33 Ethiopia, Addis Ababa, sorghum (white), wholesale 28 (Ethiopian birr/local) Cambodia, Phnom Penh, rice (mix), wholesale (riel/kg) 24 Niger, Niamey, sorghum (local), wholesale (CFA franc/local) 19 Lao People’s Dem. Rep., Vientiane Capital, rice (ordinary) -11 Somalia, Mogadishu, sorghum (red), retail (Somali shilling/kg) -11 Bolivia, Cochabamba, rice (grando de oro cubano), wholesale -11 Somalia, Baidoa, sorghum (red), retail (Somali shilling/kg) -46 (boliviano/kg) Bangladesh, Dhaka, rice (coarse), retail (taka/kg) -16 Mozambique, Maputo, rice, retail (metical/kg) -16 Source: FAO, GIEWS. POVERTY REDUCTION & EQUITY GROUP • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 4 family to buy food, eating whatever food is available, and A better understanding of coping strategies is eating less were found to be the top three strategies (figure important for informing nutritional and social protection 2). Eating less and buying cheaper brands were the top policies.25 First, the nutritional consequences of food price coping strategies during the late 1990s financial crisis.23 increases can quickly become devastating.26 Save the In Sri Lanka, coping strategies vary by location and type Children recently estimated that an additional 400,000 of shock, and these are closely related.24 Food insecure children’s lives may be at risk following the food price households rely on less preferred and cheaper food; fewer increases in 2011.27 Coping strategies may mitigate some meals; and buying food on credit in the Northern Region, of these risks, with the strategies having significant positive where civil war has been the main source of food welfare impacts (box 1), but also contribute to others. insecurity. In the eastern and north central provinces, Reduced consumption of basic foods and being unable to following the monsoon floods in November 2010, afford a diversified diet both lead to a lower intake of households’ most frequent strategies were fewer meals micronutrients.28 Reducing meal sizes and skipping meals per day, buying food on credit, and consumption of less may also have effects on macronutrients and calories. preferred foods (figure 2). Evidence in Sri Lanka also These deficiencies are connected to increased risk of shows that strategies varied within each region: eating less malnutrition, increased susceptibility to infections, slow preferred food was practiced by between 20% and 90% of cognitive development, poorer school performance, and food insecure households across analyzed districts in the reduced work productivity. Young children, pregnant and Northern Region. lactating women, and the chronically ill require more diverse diets and have fewer coping mechanisms.29 Second, public interventions need to consider Figure 2. Top Coping Strategies Employed by coping behaviors, complement their positive Households in Indonesia and Sri Lanka (% of households) effects, and mitigate their deficiencies. For Indonesia example, school food programs may reduce the 69% 69% incentive for parents to take children out of school to work, as can conditional cash transfers. Cash 45% 42% transfers may reduce the need to skip meals, and 21% well-targeted nutritional programs may reduce 19% micronutrient deficiencies from skipped meals. Food-for-work programs may be a better alternative borrow eat less get borrow eat whatever eat less than a precarious additional job in the informal money from additional money from food sector. A safety net may prevent reductions in family to buy job family to buy available food food households’ health or educational spending. urban without hunger rural with severe hunger However, these public interventions are far from being universally available in many countries. Source: Usfar, U. Fahmida and J. Februhartanty (2007) “Household Food Security Status Measured by the US-Household Food Security/Hunger Survey Module (US-FSSM) Is in Line with Coping Strategy Indicators Countries commonly use food assistance to Found in Urban and Rural Indonesia.� Asia Pacific Journal of Clinical Nutrition 16(2): 368–74. mitigate the impact of price shocks, but safety net systems remain weak. In a review of policies Sri Lanka adopted in response to rising prices during 2007 54% 51% 39% and 2009, UNICEF found that 75 countries used 32% some measure to enhance consumption: food 20% 19% assistance—school feeding, food transfers, and voucher/stamps—was the most popular, food for cheaper and fewer meals buy food on fewer meals buy food on cheaper and less preferred per day credit per day credit less preferred work was the least used.30 Yet a recent World Bank food food update on social safety nets shows that between Northern Region Eastern and North Central Regions 2008 and 2011, some 80 countries out of 137 Source: A. Petersson, L. Nanayakkara, R. H. W. A. Kumarasiri, and R. Liyanapathirana, Food Security in the reviewed had weak or no safety net capacity (two- Northern, Eastern and North Central Provinces: A Food Security Assessment Report, Hector Kobbekaduwa Agrarian Research and Training Institute, Ministry of Economic Development and United Nations World Food thirds of these were low-income countries). Only Programme (2011), http://documents.wfp.org/stellent/groups/public/documents/ena/wfp243519 pdf. 9 of those 80 countries undertook strong POVERTY REDUCTION & EQUITY GROUP • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 5 Box 1. Substituting Behavior during the Food Crisis in Uganda Following a period of relatively stable prices from 2005 to early 2008, Uganda experienced a noticeable increase in food prices (relative to the overall consumer price level) that peaked in September 2009 and November 2010. A recent analysis tracked the adjustments made by individual households in consumption and farm production to assess the impacts of these adjustments on Uganda’s poverty rate. In this analysis, a sample of 2,428 households was interviewed before the food crisis (May 2005–April 2006) and then again after prices had peaked (September 2009–December 2010). Consumers’ adjustments to food price increases were faster and more effective in terms of mitigating poverty than producers’ responses. This may reflect farmers’ difficulties in forecasting and responding to 2009/10 prices, particularly given the increase in their volatility. Also it may reflect constraints in a declining sector of the economy: the share of agriculture in the economy went from 26.7% to 24.2% during the period of analysis. Consumers responded by moving away from commodities whose prices had risen the most, as seen elsewhere. The consumption of matooke (plantains), the most commonly consumed food in Uganda, fell by 1.7% following its price rising 1% over the food price index for the period analyzed (figure 3). Similarly, the consumed quantity of sweet potatoes fell by 5.6%, with its price rising 6.2% more than that of all foods. On the other hand, the consumption of fresh cassava rose 3.1%, while its relative price declined 13.3%, and the consumption of milk rose 3.6%, while its relative price dropped 16.2%. These adjustments are estimated to have lowered the adverse poverty impact of increasing food prices by 2.8 percentage points (figure 4). Observed adjustments in farmers’ output mixes made a much smaller difference in terms of poverty reduction. Source: M. Ivanic and W. Martin, “Examination of Short and Long-Run Impacts of Food Price Changes in Poverty,� Working Paper, World Bank (forthcoming). Figure 3. Changes in Food Prices in Uganda, Figure 4. Changes in Poverty Rates Due to 2005–10, Monthly Variation of Food Price Index Household Adjustments over CPI 25 52 51.4 20 51 50.8 2005/6 survey 15 50 percent 10 percent 2009/10 49 survey 5 48.0 48 0 47 -5 poverty rate without poverty rate after poverty rate after adjustments production production and -10 adjustments consumption Jan 2005 Jun 2005 Nov 2005 Apr 2006 Sept 2006 Feb 2007 Jul 2007 Dec 2007 May 2008 Oct 2008 Mar 2009 Aug 2009 Jan 2010 Jun 2010 Nov 2010 adjustments Source: Ivanic and Martin, “Examination of Short and Long-Run Impacts of Food Price Changes in Poverty,� Working Paper, World Bank (forthcoming). Source: FAOSTAT. measures to improve their safety nets during the crisis per metric ton of rice, Thai 5%; and from US$223.58 up to period.31 US$316.26 in the case of wheat, U.S. HRW (World Bank, Commodity Price Data [Pink Sheet], updated January 5, 2012). Notes Substantive increases are also observed in real terms. 2. CME Group, Agricultural Commodity Prices. 1. From 2010 to 2011, annual price averages rose from US$185.91 to US$291.68 per metric ton; from US$488.91 up to US$543.03 3. USAID, WASDE Report, January 12, 2012. POVERTY REDUCTION & EQUITY GROUP • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 6 4. USAID, WASDE Report, December 9, 2011. Evidence on coping strategies refers to 14 countries: Bangladesh, 5. The stock-to-use ratio for wheat in 2010/2011 was 26.7%, well Burkina Faso, Burundi, Cambodia, China, Côte d’Ivoire, Haiti, above the 2007/8 ratio of 21.6%. For rice, the stock-to-use ratio Nepal, Nigeria, Pakistan, the Philippines, Sierra Leone, Swaziland, was 30% in 2010/2011 (FAO, Food Outlook, Global Market and the Republic of Yemen. Analysis, November 2011). 21. The study was conducted in a community located on Oranje 6. FAO, Food Outlook, November 2011. Farm in the Fouriesburg District, Free State Province. The sample consisted of 21 adult women (from 17 households) 18 to 57 years 7. World Bank, “Global Economic Prospects,� Commodity Market of age responsible for provision, preparation, and distribution of Outlook, January 18, 2012, Washington, DC, www.worldbank. food in the households of Oranje Farm (R. Kruger, H. Schöenfeldt, org/prospects/commodities. and J. Owen, “Food-Coping Strategy Index Applied to a 8. In any case, the diversion of maize production into biofuels in Community of Farm-Worker Households in South Africa,� Food the United States has grown from 11% in 2004 to 40% in Nutrition Bulletin 29[1]: 3–14 [2008]). 2010/2011, although at declining rates of growth since 2007/8. 22. Sample consisted of 3,704 households (45%) in urban and The annual growth for ethanol use in 2011/12 is forecasted at 1%, rural (55%) areas between February 2004 and August 2005, with down from 9% last year (FAO, Food Outlook, Global Market children under the age of five in six provinces: two rural provinces Analysis, April 2011). in the eastern part of the country, two urban provinces in the 9. World Bank, Global Economic Prospects, 2012. The study West, and Jakarta and Surabaya as urban cities (Usfar, Fahmida, concludes that oil price variations contributed to about two-thirds and Februhartanty, “Household Food Security Status�). of the price increases of key food commodities between 2000 and 23. M. Mardiharini, “Family-Coping Strategies in Maintaining 2005 and between 2006 and 2010. Welfare during the Economic Crisis in Indonesia: A Case Study in 10. USAID, Price Watch, December 21, 2011. Urban and Rural Areas in Bogor, West Java, Indonesia,� Journal 11. USAID, Price Watch, p. 3 Agro Ekonomi 23(1): 54–70 (2005). In 2011, seeking alternative jobs and limiting meal sizes are reported as the top two strategies 12. USAID, Price Watch. used in rural areas (Indonesia Food and Nutrition Security 13. UNDP (United Nations Development Programme), Office of Monitoring System [FNSMS], Food and Nutrition Security the Chief Economist, “Has Belarus’s Currency Crisis Bottomed Bulletin in Four Selected Provinces [East Java, NTT, West Out?� January 3, 2012, http://europeandcis.undp.org/ Kalimantan, and Central Sulawesi]). senioreconomist/show/E4AFB654-F203-1EE9- 24. A. Petersson, L. Nanayakkara, R. H. W. A. Kumarasiri, and R. B19A83640A301CD2. Liyanapathirana, Food Security in the Northern, Eastern and North 14. FAO, Global Food Price Monitor, December 9, 2011. Central Provinces: A Food Security Assessment Report, Hector Ko- 15. FAO, Food Outlook, Global Market Analysis, November 2011. bbekaduwa Agrarian Research and Training Institute, Ministry of Economic Development and United Nations World Food 16. USAID, GIEWS Country Briefs, 2012. Programme (2011), http://documents.wfp.org/stellent/groups/ 17. It is important to note, however, that households do not public/documents/ena/wfp243519.pdf . become food insecure simply because food prices soar or remain 25. Additional understanding of these strategies is needed in the volatile after floods or droughts or harvest failures; they become context of food crises. Some knowledge gaps remain regarding insecure when they are unable to cope with such changes. how coping strategies differ between soaring prices perceived to 18. In effect, households do not engage in coping strategies only be permanent versus those perceived to be transitory, and be- when there are food crises or when they are food insecure; they tween food price increases and volatile prices. Also, it is not clear also use coping strategies in more favorable conditions to when households start implementing these strategies to cope improve their diets. Results for Indonesia come from a study with food price crises, that is, what information (levels of prices covering household behavior from February 2004 to August or shortages) triggers the adoption of a coping mechanism. 2005 (A. Usfar, U. Fahmida, and J. Februhartanty, “Household 26. See evidence in S. Horton and J. Ross (“The Economics of Food Security Status Measured by the US-Household Food Iron Deficiency,� Food Policy 28[1]: 51–75 [2003]); C. Victoria, Security/Hunger Survey Module [US-FSSM] Is in Line with L. Adair, C. Fall, P. Hallal, R. Martorell, L. Ritcher, and H. Sa- Coping Strategy Indicators Found in Urban and Rural chdev (“Maternal and Child Undernutrition: Consequences for Indonesia,� Asia Pacific Journal of Clinical Nutrition 16[2]: Adult Health and Human Capital,� Lancet 371 [9609]: 340–57 368–74 [2008]). [2003]); and M. Ruel, J. Garnett, C. Hawkes, and M. Cohen 19. D. Maxwell and R. Caldwell, “The Coping Strategy Index,� (“The Food, Fuel and Financial Crises Affect the Urban and Ru- Field Methods Manual, Second Edition, 2008. ral Poor Disproportionately: A Review of Evidence,� Journal of 20. J. Compton, S. Wiggins, and S. Keats, “Impact of Global Food Nutrition 140 [1]: 170S–76S [2010]). Crisis on the Poor: What Is the Evidence?,� ODI, London, 2010. 27. Save the Children, “Costing Lives: The Devastating Impact POVERTY REDUCTION & EQUITY GROUP • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 7 of Rising and Volatile Food Prices,� Media Brief, October 2011. nutritious pulses (R. Jensen and N. Miller, “The Impact of the Studies on the impact of food price increases on nutrition after World Food Price Crisis in Nutrition in China,� Faculty Research 2006 estimate annual increases in hunger for 63–91 million Working Papers RWP08-039, Harvard Kennedy School of Gov- people, depending on the period analyzed (S. Tiwari and H. Za- ernment, Harvard University [2008]). man, “The Impacts of Economic Shocks on Global Undernour- 29. Save the Children, “Costing Lives.� ishment,� Policy Research Working Paper 5215, World Bank; H. Brinkman, S. de Pee, I. Sanogo, L. Subran, and M. Bloem, “High 30. I. Ortiz, J. Chai, and M. Cummins, “Escalating Food Prices: Food Prices and the Global Financial Crisis Have Reduced Ac- The Threat to Poor Households and Policies to Safeguard Recov- cess to Nutritious Food and Worsened Nutritional Status and ery for All,� Policy and Practice, UNICEF Working Paper. The Health,� Journal of Nutrition 140: 153S–61S [2010]). study samples 98 countries. 28. There are documented cases, however, such as in parts of 31. Arup Banerji, “Update on World Bank Work on Social Safety China, where a rise in the prices of rice and wheat led to lower Nets, and Country Assessment of the Readiness of Safety Net consumption of these cereals and increased consumption of Systems,� World Bank brief, December 6, 2011. POVERTY REDUCTION & EQUITY GROUP • WWW.WORLDBANK.ORG/POVERTY POVERTY REDUCTION AND ECONOMIC MANAGEMENT (PREM) NETWORK THE WORLD BANK GROUP 8