The political economy of food price policy

Food price volatility is one of the major challenges facing the global agricultural system today. This was most vividly illustrated during the global food crisis of 2007-2009 when price spikes occurred for key staple commodities such as wheat, rice, maize, and soybeans. Given the variety of reactions by governments of countries experiencing similar food price shocks, the crisis offers an excellent natural experiment for generating knowledge on responses to price volatility in particular and on the political economy of agricultural policy-making more generally. With its collaborating partners, this UNU-WIDER project consisted of case studies on 17 low- and middle-income countries that were highly affected by the 2007-2009 food crisis.

These case studies uncover which political economy factors, ranging from the constellation of different interest groups to the nature of political institutions, explain variations in policy responses across countries. These case studies are valuable for at least three target audiences.

First, they can inform international organizations and donors about which types of policy interventions can mitigate price volatility and whether they are feasible given a country’s political economy context.

Secondly, they can help national policymakers better understand the trade-offs of certain policy interventions.

Thirdly, they can generate knowledge about the agricultural policy-making process in developing countries, which remains incredibly scarce despite the importance of agriculture to these countries’ economies.

Context

Main subject

Theme: 2010-2013, Food security