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FSN FORUM Share specific examples of the Food Price

By Thelma Tucker,2014-06-27 10:26
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FSN FORUM Share specific examples of the Food Price ...

    SUMMARY TABLES ON IMMEDIATE POLICY AND PROGRAMMATIC ACTIONS (FAO’S

    INITIATIVE ON SOARING FOOD PRICES)

    Policy or Expected Conditions for Caution Where is it being programmatic effects recommendation implemented measure

     Trade measures

    - Reduce import taxes - lower the - Recommended, Benin, Bolivia, Brazil, on food items, price of the provided budget is Burkina Faso, Ecuador, Egypt, agricultural inputs and imported good rearranged to avoid El Salvador, EU, Guatemala, equipment (3.2) - stimulates excessive deficit Honduras, India, Indonesia,

    imports - Effect on prices must Mauritania, Mexico, Moldova,

    - negative be monitored Mongolia, Morocco,

    effect on state Nicaragua, Niger, Nigeria,

    budget Peru, Senegal, Turkey,

    revenue Vietnam - Tax breaks for - same as - same as above importers (3.2) above

    - Financial support or - same as - same as above - if many countries loans to private sector above adopt this measure

    for funding imports of could increase

    food commodities (3.2) international prices - Reduce customs - same as - care needed to avoid procedures and other above increasing health and

    formalities for food - speeds up safety risks from

    import (one stop shop) imports imported food items

    with or without

    relaxation of regulations

    (3.2)

    - Engage in forward - not effective - not contracts for food in solving high recommended as a

    imports to secure food price problem short term policy

    availability in medium option

    term (3.2)

    - Reduced, banned or - reduces - not Argentina, Bolivia, Burkina taxed exports of prices Faso, Cambodia, PR China, recommended strategic food - medium to Egypt, Ethiopia, Guinea commodities (3.2) long term Conakry, Honduras,

    implications Indonesia, Kazakhstan,

    on producers Malawi, Pakistan, Russia,

    - risk of Serbia, Ukraine, Vietnam

    smuggling and

    corrupt

    practices

    Policy or Expected effects Conditions for Caution Where is it being programmatic recommendation implemented measure

     Measure in

    favour of

    consumers

    Tax policies

    - Reduce or - lower the price of the - more effective if Afghanistan, Azerbaijan, remove Value food there is competition Bangladesh, Burkina Faso, Added Tax (VAT) - negative effect on state on the domestic Bolivia, Brazil, Burundi, and/or other taxes budget revenue market Cameroon, PR China, on food products - effect on prices Ethiopia, Honduras, India, (3.3.1) must be monitored Indonesia, Kenya, Lesotho,

    - Recommended, Madagascar, Moldova,

    provided budget is Morocco, Niger, Nigeria,

    rearranged to avoid Pakistan, Peru, Russia,

     C:\convert\temp\61553789.doc 2010-6-27

    excessive deficit South Africa, Sri Lanka,

    Sudan, Uganda, Zimbabwe

    - Removal of road - facilitates flow of - more effective if - difficult to blocks and taxes commodities there is competition apply selectively

    (3.3.1) - reduces price on the domestic for food items

    differential between market

    producers and consumers - effect on prices

    - reduced income for must be monitored

    local

    governments/authorities

    - Tax reduction on - reduces price - difficult to target - difficult to fuel for transport differential between at food or apply selectively

    (3.3.1) producers and consumers agricultural for food items

    - negative effect on state commodities: high

    budget revenue risks of leakages

     - implies that budget

    is rearranged to

    avoid excessive

    deficit

    - Targeted income - increase of disposable not

    tax reduction income for target groups recommended (3.3.1) as it will not

    benefit the poorer

    categories

    Policy or Expected effects Conditions for Caution Where is it being programmatic recommendation implemented measure

    Market management policies

    - Boosted food imports - availability of food - must be implemented - potential difficulty to financed by balance of increases in the in consultation with find sufficiently

    payments, import normal market private operators rapidly on the world

    financing, and budget channels market the amounts of

    support (3.3.2) - can undermine food needed at

    speculation reasonable prices

    - will contribute to

    raise international

    prices by boosting

    demand - Food aid in kind - availability of food - only when insufficient - will contribute to (3.3.2) increases very rapidly in-country availability raise international

    for implementing of food is confirmed prices by boosting

    immediately various and demand

    life-saving safety net - only when “normal”

    modalities channels take too much

    time for procuring

    urgently needed food.

    - Requisition of private - some increased - government needs - only advised in stocks (forced immediate financial resources extreme situations, procurement) (3.3.2) availability of food otherwise not - stock owners may recommended. hide stocks

    - private sector will

    be reluctant to keep

    stock in future years

    - Progressive release - can temporarily - stocks should have - rebuilding of Burkina Faso, Niger

    of food kept in public improve availability sufficient size to have reserves/buffer stocks

    food reserve (3.3.2) on markets real impact should be planned at

    - can help to put in the same as releases

    place safety nets are programmed

    - close coordination

    needed with private

    sector - Price control on key - all consumers Benin, Cameroon, This measure is not staple food products benefit from stable recommended as it is PR China, Ecuador,

    through regulation and moderate prices bound to amplify the Haiti, Mexico,

     2

    Policy or Expected effects Conditions for Caution Where is it being programmatic recommendation implemented measure

    (3.3.2) - likely to impact food crisis immediately Russia, Senegal,

    negatively on and in the future (next Zimbabwe

    producer prices year).

    which may produce

    less in the future

    -risk of black market

    Safety nets - Cash transfers or - beneficiaries have - where markets - if vouchers are only Brazil, PR China, food vouchers (3.3.3) additional resources function accepted by dedicated Egypt, Ethiopia,

    to purchase food - where food is public shops there is a Indonesia, Mexico,

    - can contribute to available risk of undermining the Mozambique, South

    maintain diet quality - targeting effective private food marketing Africa, Sri Lanka,

    - could have through cash/vouchers and distribution system Tunisia

    inflationary effects for work

    - vouchers could - plain unconditional

    become a parallel distribution when

    currency situations are extreme.

    - subject to leakages,

    embezzlement,

    corrupt practices and

    security risks

    - cost to budget

    - Food distribution in - beneficiaries have - where markets do not Afghanistan, kind (3.3.3) direct and free access function Bangladesh,

    to a certain quantity - where food is not Burkina Faso

    (ration) of food available Cambodia, PR

    - if the food is - targeting effective China, Honduras,

    purchased locally, it through food for work, India, Kenya,

    can stimulate schoolfeeding or plain Madagascar,

    production. food distribution when Mozambique, Peru

    - in case of short situations are extreme.

    supply, local

    purchases will have

    inflationary effect

    - if the food is

    brought in it could

    reduce local prices

    - could create new

    food habits

    - subject to leakages,

    corrupt practices and

    security risks

    - cost to budget

    - Universal food - everyone has access - if food is sold through - food transit through Bangladesh, subsidy (3.3.3) to subsidised food normal marketing Ecuador, Egypt, public channels is not - targeting possible channels, agreements Indonesia?, recommended by focusing on have to be reached with - once-established, are Lebanon, Peru

    selected staple main market operators difficult to remove (considering),

    commodities - risk of cross-border Senegal, Yemen

    - extremely costly smuggling

    with potentially

    serious

    macroeconomic

    consequences

    - risk of black market

    in case of rationing

    Other measures affecting disposable

    income

    - Increasing salary in - improved welfare of - politically beneficial Burkina Faso, civil service and other civil servants (to stop urban riots), Cameroon benefits (3.3.4) - risk of inflation but risky from the

     3

    Policy or Expected effects Conditions for Caution Where is it being programmatic recommendation implemented measure

    macroeconomic point

    of view

    - Credit facilities for - benefits better off - not recommended. consumers (3.3.4) groups May contribute to fuel

    inflation

    - Reinforce capacity - stimulating Some minimum human (training and economic growth capacity and

    equipment) in income - providing jobs and infrastructure is

    generating activities income generating required

    through value addition opportunities

    on agricultural and - meeting demand of

    food products (3.3.4) urban consumers

    Policy or Expected effects Conditions for Caution Where is it programmatic recommendation being measure implemented

     Measures in

    favour of

    producers

    Market management

    measures

    - National market - economic operators are - resources - could be contracted information system better informed on - good dissemination of out by government to

    (prices opportunities existing in the information private companies (if

    observatory). market - market must be left free private capacity exists)

    (3.4.1) - limits market segmentation for operators to respond to keep costs under

    - farmers and small traders to signals control

    will be in a stronger position - takes time to be

    to negotiate prices established and to have

    - market problem areas can an effect

    be identified

    - Value chain - concerted decisions, Kazakhstan? analysis and/or actions and commitments by

    development various economic operators

    workshops (3.4.1) and the government to

    improve the functioning and

    governance of the value

    chain, and develop mutual

    trust.

    - Negotiation of - contributes to fair - requires consultations commercial distribution of value added among stakeholders

    margins with along the chain using value chain

    private sector workshops approach

    (3.4.1) above - Make/facilitate - provides a greater - most experience is for - for food crops, with contract farming assurance of a market for cash crops, particularly the multiplicity of

    arrangements farmers and thus removes for exports buyers, farmers are

    (3.4.1) some of the risk from - need good and well tempted not to respect

    farming enforced regulatory contract

    - opens possibilities for framework

    obtaining technical support

    and, on occasions, input

    supply on credit terms

    - can contribute to enhanced

    investment.

    - Government re-- seeks to undermine - only in remote areas Experience shows that engagement in speculation by private where the private sector this cannot be marketing (3.4.1) traders is not active, provided it generally is accepted to subsidise recommended this activity

     4

    Policy or Expected effects Conditions for Caution Where is it programmatic recommendation being measure implemented - Forced - black market Myanmar not recommended procurement (3.4.1) - disincentive for production

    - Minimum - stability and increased - the minimum price Past experience shows PR China producer price for supply of the food should be the result of a that a government-key staple food commodity negotiation among imposed minimum commodities. - reduced risk for farmers stakeholders price will be very (3.4.1) which encourages them to difficult to implement

    grow the commodity and

    invest

    Policy or Expected effects Conditions for Caution Where is it being programmatic recommendation implemented measure

    Production support measures

    - Immediate - rapid production of short - where input markets - some risk of rent support to cycle crops including are working reasonably seeking production in vegetables in peri-urban well and inputs are - risk that this

    family gardens areas and on irrigated land available, the voucher subsidised

    and irrigated areas - supply of certain food system is programme

    (3.4.2) items will be improved on recommended becomes a regular

    some markets - where input markets activity difficult to

    - prices of certain food are not working seek to interrupt in the

    items could be reduced on make contracts with future. Need to

    some markets existing private dealers agree at start with

    - if targeting is effective, for distributing input key stakeholders on

    this can contribute to packs or make an exit strategy

    improve welfare of poor arrangements with - marketing

    small farmers NGOs, projects and arrangements government services should be planned

    - inputs must be in advance

    available - too much attention

     to targeting can

    increase the time

    needed to put

    programme in

    place. - Input vouchers - vulnerable farmers can - requires that a reliable - risk that vouchers for vulnerable decide which inputs they and well functioning become like a

    farmers (3.4.2) want to get network of input parallel currency

    - it is cheaper to distribute dealers - marketing

    input vouchers than to - need for an arrangements distribute food to the appropriate system to should be planned

    vulnerable verify input quality, in advance

    - can improve the welfare of particularly seeds - not

    the poor recommended in

    areas where there is

    high likeliness of

    drought or flood, as

    risks are too high

    which reduces the

    advantage of this

    approach - Pilot fertilizer - benefits to small farmers - benefits well shared - prices of certain Burundi, Ecuador, and seed input are potentially large among stakeholders food items are D.R. of Congo, credit schemes for - availability of certain food - initial Revolving likely to be reduced Kenya, Nigeria, small-scale items will be improved in Fund must maintain particularly in less Philippines, farmers for the households of the pilot 100 percent of its initial accessible areas Indonesia, Peru, next cropping areas and in close by purchasing power for - marketing Botswana, Lesotho, season (3.4.2) markets the scheme to be Turkey, Algeria, arrangements - with good targeting, this sustainable should be planned Brazil, Cameroon,

    can contribute to improve - this integrated in advance Ecuador, Kenya,

    welfare of small farmers. approach requires a Morocco, Nigeria,

     5

    Policy or Expected effects Conditions for Caution Where is it being programmatic recommendation implemented measure

    safe and well enforced Philippines, Tunisia,

    regulatory framework Brazil, Ecuador,

    for contracts Morocco, Ecuador,

    Ethiopia, and Syria.

    - Input trade fairs - vulnerable farmer are able - requires good - it may be difficult (3.4.2) to chose the inputs that they organization capacity to reach large

    need - offers the opportunity numbers of farmers

    - can strengthen the local for seed quality control

    seed system - ITFs should be

    organized just prior to

    planting season

    - Direct Seed - Beneficiary farmers have - procurement should - this approach Burundi, Ethiopia, Distribution access to inputs that allow be done well in often does not build Ivory Coast, DRC, (3.4.2) them to produce food advance of the the local seed Nigeria, Tanzania,

    production season system

    - good source of quality - marketing

    seed arrangements - ability to deliver it to should be planned

    the vulnerable farmers in advance

    - quality verification

    system for the seed

    - Community seed - seed supply of appropriate - source of quality seed - well planned Burkina Faso, production (3.4.2) crop varieties will be - technical supervision, marketing of the Cameroon, Ethiopia,

    improved - progressive farmers or seed produced Lesotho, Swaziland,

    farmers groups to Sudan, etc

    multiply the seed

    - Measures to - allocation of government - platform for ensure availability budget resources for a constructive dialogue

    of fertilizer (3.4.2) credit line for private sector among public and

    - organisation of national or private sector fertilizer

    subregional bulk stakeholders

    procurement

    - creation of a risk-sharing

    fund to facilitate the

    issuance of letters of credit

    - fertilizer available on

    time in appropriate

    quantities and quality

    - Universal - if input markets function, - success is more likely - amount of subsidy Mexico (intention), (untargeted) subsidies will distort in areas where rain is has to be carefully Nigeria subsidised production decisions and sufficient or reliable or determined to avoid

    fertilizers (3.4.2) encourage over-utilisation in irrigated areas over-utilisation of

    - if input markets are - existence of reliable fertilizer

    imperfect subsidies can delivery systems - universal fertilizer

    increase economic subsidy benefits

    efficiency more large farmers

    - small farmers have easier who use large

    access to fertilizer and can quantities of

    increase yields fertilizer and few

    politically powerful

    individuals

    - a large share of

    the fertilizer

    subsidy goes to the

    industry (if there is

    one in the country)

    - smuggling of

    fertilizer from

    border areas to

    neighbouring

    countries

    - not

    recommended if

     6

    Policy or Expected effects Conditions for Caution Where is it being programmatic recommendation implemented

    measure

    markets function

    well or in

    drought/flood

    prone areas - marketing

    arrangements are

    indispensable to

    ensure that any

    surplus production

    will find its way to

    the market at

    remunerative prices - A lift of - Farmers, particularly - it should be clear for Risk of low loan collateral and the small farmers, will have the farmers that they repayments that the establishment of a some access to credit for are getting some money guarantee fund is government purchasing inputs and small on credit and that they rapidly exhausted guarantee fund equipment, and for will have to repay it (3.4.2) engaging in rehabilitation of - Loans provided will

    productive assets. need to be well

    - Increased production monitored.

     - some cost sharing

    between government

    and banks for

    monitoring the loans

    could be envisaged

    - Provide support - Area cropped, production - mechanical means for - possibility of Liberia? (mechanic) and and food availability in the increasing cropped area intensifying financial support next season will increase are available and existing cropping for increasing currently underutilised. systems beyond cropped area - farmers will have the sustainability, by (3.4.2) capacity to properly encroaching on

    manage the additional fallow

    area cropped to ensure - increased cropped

    successful crops and area could be at the

    avoid wastage of cost of forests,

    resources. pastures or other

     land categories,

    with associated

    risks and

    consequences

    - marketing

    arrangements should be planned

    in advance - Pilot scale farm - vulnerable farmers have - requires a reliable and - vouchers, they power vouchers access to farm power and well functioning could become a (3.4.2) equipment for preparing network of farm power parallel currency

    land, cultivation and and equipment - marketing

    transport of produce providers with which arrangements - in case of limited the government (or should be planned

    availability of power NGOs or projects) can in advance

    services and equipment, make contractual

    vouchers system can arrangements

    contribute to make them

    more expensive

    - improve the welfare of the

    poor

    - Stop any subsidy - reduction in economically - will take some or encouragement unsustainable animal time to have a for animal production with the sizeable impact on production (3.4.2) consequence of reduced food availability:

    supply of animal products the time for animal

    and higher prices for these feed producers to

     7

    Policy or Expected effects Conditions for Caution Where is it being programmatic recommendation implemented measure

    food products switch back to grain

    - increased availability of production for

    certain grains for human humans

    consumption

    - Increase - more efficient use of - research needed extension and fertiliser, taking into

    advisory services account it higher price

    on food

    production (3.4.2)

    - Conservation - improve soil structure and - works best were - requires some Zimbabwe, Zambia, agriculture (3.4.2) reduce the hard work of competition for technical training Lesotho and

    digging/ploughing the fields residues with livestock and initial attention Swaziland, South

    - fertiliser efficiency is not a serious problem to weed Africa and others

    increased - needs to be used for management.

    some time for full - specific

    benefit to be felt equipment required

    - marketing

    arrangements should be planned

    in advance

    - Encourage the - better extraction rates and - needs to be discussed production of therefore greater and agreed with

    lesser processed availability (less loss of by processors.

    cereals by products). - campaign to inform

    processors (3.4.2) - higher nutrition quality of the population of

    the product. higher nutrition quality

    of the product obtained

    - Inform private - in the immediate, identify sector on impact accompanying measures

    of increased prices that can increase investment

    on profitability of in agriculture and food

    investments in chains. - in the medium

    agriculture and term, increased investment

    food chains (3.4.2) flows into the sector that

    will boost production,

    stabilise markets, increase

    the diversity of food

    products available on the

    market and create jobs.

    - Moratorium on - limits expansion of Philippines construction constructions on

    licence in agricultural land

    cultivable lands - will create tension in

    (3.4.2) urban areas as supply of

    housing will be reduced and

    may become more

    expensive.

    - could create opportunities

    for rent seeking and corrupt

    practices.

     8

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