Many countries pursue food price stabilization through public grain reserves (also called buffer stocks or strategic grain reserves) or trade policy. Views of the economics profession on food price stabilization have evolved over time, however, with increased skepticism about economic planning and government market interventions since the mid-1980s. Nonetheless, recent spikes in international commodity prices during the Covid-19 pandemic and at the start of the war in Ukraine have stimulated another wave of interest in establishing or expanding strategic grain reserves and food-based safety net programs.This article reviews the experience with food price stabilization, focusing on public grain reserves and trade policy. We summarize research on the theory of price stabilization and the challenges of stabilizing food prices in the face of volatile international prices, speculative attacks, imperfect information, and political interference. We also include empirical studies of how these programs function in seven countries. The review concludes with a summary of key lessons from country experiences and suggestions for further research.

The paper argues that much of the farm-nonfarm labour mobility in rural Bangladesh is, in nature, an intergenerational occupational choice-induced change rather than a sectoral shift within the current generation. Bangladesh has a large share of youth (aged 15-29 years) in the labour force, and it experienced a major structural shift in employment between 1995 and 2010 as agricultural employment fell from 51.4 per cent to 42.3 per cent. Much of this shift has been due to changes in youth employment, as youth employment in agriculture fell from 49.8 per cent to 33.1 per cent. The cohort analysis (pseudo-panel) shows that the reduction in the share of the male youth population working in agriculture is due mainly to a sharp reduction in the percentage of youth who start out in agriculture rather than a shift by individuals from agricultural to non-agricultural employment during their lifetime. Analysis of correlates of the nonfarm orientation of rural youth indicates the importance of gender, human capital, access to electricity, proximity to cities, and migration opportunities. The results suggest the importance of supporting rural industry and service activities to meet the future demand for jobs for the rural youth.

We use economywide models to examine the economic recovery from COVID-19 shocks in Bangladesh and Nepal during 2020-2026. Declining labor productivity, capital underutilization, consumption shifts, and international investment shocks had significant and differential sectoral and country-level impacts in these countries. By 2026, GDP will be 6.9% and 13.9% lower in Bangladesh and Nepal, respectively, and the two countries will have an additional 3.3 million people in poverty compared to a no-COVID baseline. Regaining economic and welfare losses will require substantial investments in key industrial, agricultural, and tourism sectors, although tough policy decisions will be required given high levels of public debt.

The Russia-Ukraine war's impact on food, fuel, and fertilizer prices is a major concern for global poverty and food insecurity. Despite numerous studies and editorials on the risks and challenges of the crisis, there is little quantitative analysis of its consequences for developing countries. We use national economywide models to measure the near-term impacts of the crisis on agrifood systems, poverty, and food insecurity in 19 countries. Despite wide variations across countries, results confirm the adverse impacts of the crisis, with a total 27.2 and 22.3 million more people pushed into poverty and hunger, respectively. Agrifood systems and poverty are more vulnerable to rising fuel and fertilizer prices, whereas hunger and diet quality are more affected by higher food prices.

In spite of substantial growth in agricultural GDP in the 1990s, rural poverty rates in Pakistan did not decline. This paper explores the reasons for this lack of correlation between increases in agricultural production and poverty reduction through an analysis of growth linkages using a 2001-02 Social Accounting Matrix (SAM)-based semi-inputoutput model. Model simulations indicate that expansion of traditional crop agriculture can significantly benefit rural poor farmers. However, because of skewed distribution of land and earnings from land, landless agricultural labourers and the rural non-farm poor (who, together, account for 61 percent of the rural poor) do not benefit directly from growth in the crop sector. In the absence of a change in the structure of rural incomes and employment, further measures will likely be needed for rapid poverty reduction in Pakistan, including greater efforts to boost the livestock sector, expansion of the rural non-farm economy (in addition to agricultural growth-induced linkage effects), and targeted interventions to the poorest rural households.

World price shocks and disruptions in international cereal trade in 2007 and 2008 caused considerable anxiety and hardship for food importing countries throughout the world. In many countries, high international food prices raised import costs, reduced total supplies for consumers and ultimately led to lower real incomes and food consumption for poor households. In South Asia, Pakistan, Afghanistan, Bangladesh and India were all affected by these movements in international prices, though the effects on domestic prices in each case was mitigated or exacerbated by each country’s own trade policies, as well as the trade policies of its neighbours. Prior to 2007, the general consensus among most economists and food policy analysts was that openness to international trade, particularly private sector trade, was the most efficient mechanism for stabilising domestic food prices and supplies. In light of the 2007-08 experience, however, many observers have concluded that international markets cannot be trusted and that countries should rely on their own domestic production to ensure national and household food security. This paper argues that liberalised international trade still provides the best mechanism for stabilising prices and food supplies in most years, but that appropriate contingency policies are needed for years in which international prices are extraordinarily high.1 More explicit commitments to cereal trade liberalisation within South Asia would also promote region-wide food security and help avoid a repetition of supply disruptions that raised food prices sharply in Afghanistan and Bangladesh. Section II of this paper briefly

The 2010 floods in Pakistan had a devastating effect on the Pakistani population. This paper summarises recovery experiences from previous natural disasters in South Asia, including the 2005 earthquake in Pakistan and the 1998 flood in Bangladesh, and suggests several lessons relevant for recovery efforts following the 2010 Pakistan flood. First, market and trade policies should maintain adequate price incentives so that private trade and imports can contribute to postdisaster recovery. Second, a strong institutional framework is needed to coordinate the large-scale disaster response. Third, recovery efforts should also include support for livelihood security and restoration, ensuring inclusion of the stakeholders. Fourth, restoring and upgrading infrastructure facilities can lead to enhanced flood resistance as well as a reduction in future disaster loss. Two alternative institutions may be possible vehicles for poverty-alleviation—the Pakistan Poverty Alleviation Fund (PPAF) and the Benazir Income Support Programme (BISP). To address future disasters, however, it is important to establish and strengthen disaster response capability, including applying lessons learned from the relief and rehabilitation response to the 2010 floods.

Understanding how the Papua New Guinea (PNG) agricultural economy and associated household consumption is affected by climate, market and other shocks requires attention to linkages and substitution effects across various products and the markets in which they are traded. In this study, we use a multi-market simulation model of the PNG food economy that explicitly includes production, consumption, external trade and prices of key agricultural commodities to quantify the likely impacts of a set of potential shocks on household welfare and food security in PNG.In this study, we use a multi-market simulation model of the PNG food economy that explicitly includes production, consumption, external trade and prices of key agricultural commodities to quantify the likely impacts of a set of potential shocks on household welfare and food security in PNG. We have built the model to be flexible in order to explore different potential scenarios and then identify where and how households are most affected by an unexpected shock. The model is designed using region and country-level data sources that inform the structure of the PNG food economy, allowing for a data-driven evaluation of potential impacts on agricultural production, food prices, and food consumption. Thus, as PNG confronts different unexpected challenges within its agricultural economy, the model presented in this paper can be adapted to evaluate the potential impact and necessary response by geographic region of an unexpected economic shock on the food economy of the country.We present ten simulations modeling the effects of various shocks on PNG’s economy. The first group of scenarios consider the effects of shocks to production of specific agricultural commodities including: 1) a decrease on maize and sorghum output due to Fall Armyworm; 2) reduction in pig production due to a potential outbreak of African Swine Fever; 3) decline in sweet potato production similar to the 2015/16 El Niño Southern Oscillation (ENSO) climate shock; and 4) a decline in poultry production due to COVID-19 restrictions on domestic mobility and trade. A synopsis of this report, which focuses on the COVID-19 related shocks on the PNG economy is also available online (Diao et al., 2020).The second group of simulations focus on COVID-19-related changes in international prices, increased marketing costs in international and domestic trade, and reductions in urban incomes. We simulate a 1) 30 percent increase in the price of imported rice, 2) a 30 percent decrease in world prices for major PNG agricultural exports, 3) higher trade transaction costs due to restrictions on the movement of people (traders) and goods given social distancing measures of COVID-19, and 4) potential economic recession causing urban household income to fall by 10 percent. Finally, the last simulation considers the combined effect of all COVID-19 related shocks combining the above scenarios into a single simulation.A key result of the analysis is that urban households, especially the urban poor, are particularly vulnerable to shocks related to the COVID-19 pandemic. Lower economic activity in urban areas (assumed to reduce urban non-agricultural incomes by 10 percent), increases in marketing costs due to domestic trade disruptions, and 30 percent higher imported rice prices combine to lower urban incomes by almost 15 percent for both poor and non-poor urban households. Urban poor households, however, suffer the largest drop in calorie consumption - 19.8 percent, compared to a 15.8 percent decline for urban non-poor households. Rural households are much less affected by the COVID-19 related shocks modeled in these simulations. Rural household incomes, affected mainly by reduced urban demand and market disruptions, fall by only about four percent. Nonetheless, calorie consumption for the rural poor and non-poor falls by 5.5 and 4.2 percent, respectively.