Food Security and Storage in the Middle East and North Africa
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 re...
| Main Authors: | , , , , |
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| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/04/16212637/food-security-storage-middle-east-north-africa http://hdl.handle.net/10986/6033 |
| Summary: | 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. |
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