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Coping with Rising Food Prices: Policy Dilemmas in the Developing World

Nora Lustig ()

No 907, Working Papers from Tulane University, Department of Economics

Abstract: Rising food prices cause considerable policy dilemmas for developing country governments. Letting domestic prices adjust to reflect the full change in international prices generates inflationary pressures and causes severe hardship for poor households lacking access to social safety nets. Alternatively, governments can use food subsidies or export restrictions to stabilize domestic prices, yet this exacerbates global food price increases and undermines a rules-based trading system. The recent episode shows that many countries chose to shift the burden of adjustment back to international markets. Corn and oilseeds use for biofuels' production will result in a recurrence of such episodes in the foreseeable future.

Keywords: food prices; inflation; poverty; Africa; Asia; Latin America and the Caribbean (search for similar items in EconPapers)
JEL-codes: E31 I38 Q18 O24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-dev and nep-mac
Date: 2009-05
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http://repec.tulane.edu/RePEc/pdf/tul0907.pdf First version, 2009 (application/pdf)

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Working Paper: Coping with Rising Food Prices: Policy Dilemmas in the Developing World (2009) Downloads
Working Paper: Coping with Rising Food Prices: Policy Dilemmas in the Developing World (2009) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:tul:wpaper:0907

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