Food security and storage in the Middle East and North Africa

Donald Larson (), Julian Lampietti, Christophe Gouel, Carlo Cafiero and John Roberts

No 6031, Policy Research Working Paper Series from The World Bank

Abstract: In times of highly volatile commodity markets, governments often try to protect their populations from rapidly-rising food prices, which can be particularly harsh for the poor. A potential solution for food-deficit countries is to hold strategic reserves, which can be called on when international prices spike. But how large should strategic stockpiles be? This paper develops a dynamic storage model for wheat in the Middle East and North Africa (MENA) region, where imported wheat dominates the average diet. The paper uses the model to analyze a strategy that sets aside wheat stockpiles, which can be used when needed to keep domestic prices below a targeted price. This paper shows that if the target is set high and reserves are adequate, the strategy can be effective and robust. Contrary to most interventions, strategic storage policies are counter-cyclical and, when the importing region is sufficiently large, a regional policy can smooth global prices. This paper shows that this is the case for the MENA region. Nevertheless, the policy is more costly than the pro-cyclical policy of a targeted intervention that directly offsets high prices with a subsidy similar to food stamps.

Keywords: Markets and Market Access; Access to Markets; Economic Theory&Research; Emerging Markets; Food&Beverage Industry (search for similar items in EconPapers)
Date: 2012-04-01
New Economics Papers: this item is included in nep-agr, nep-ara and nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Related works:
Journal Article: Food Security and Storage in the Middle East and North Africa (2014)
Working Paper: Food security and storage in the Middle East and North Africa (2014)
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