World Food Policy Volume/Issue 2-2/3-1 Fall 2015/Spring 2016 | Page 146

Food Security in an Age of Falling Commodity and Food Prices

individual households, the situation in
only a few selected individual countries
can be presented here (Figure 11, based
on findings in Filipski and Covarrubias
2012). What is shown in this figure are
the shares of urban respectively rural
households that are a net buyers or a net
sellers of staple food. We can see that in
most developing countries among those
shown here there is a good share of urban
households that are net buyers.

What may be more surprising,
though, is the finding that even among
rural households there is a large share
of net buyers. Where this is the case, the
resources available to these households do
not allow them to produce as much food
as the family needs. So these households
have to go out to the market. The data
used in the analysis cited here includes not
only grain but also staple food overall, and
hence also covers the output generated in

urban gardening and similar activities.
Thus, even if many rural households
are obviously net sellers of food, among
the countries in the particular group
shown here their share among all rural
households is less than the share of rural
net buyers, the only exception among the
countries covered here being Vietnam.

What does all that mean? If food
prices increase, how does that affect the
welfare of individual households? This
is shown, for the same set of selected
developing countries in Figure 12. Five
income quintiles are distinguished in this
analysis. To the left, the blue bar represents
the impact on the poorest people in the
respective country. When food prices
rise by 20%, their welfare declines by a
rate in the order of magnitude of 4%–6%.
Rising food prices also depress welfare
among households with higher incomes,
though the rate of welfare loss tends

Figure 12: Welfare Impact of a 20% Increase in Price of Staple Food for Alternative
Income Quintiles
Source: Filipski and Covarrubias (2012)

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