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GLOBAL FOOD CRISIS:
Strong upward trends in global food prices over the past two years have led to widespread concern that hunger and poverty will increase sharply across the world. At the same time, rising food prices provide a strong incentive and opportunity for many developing countries to strengthen the contribution their farmers, and the agricultural sector as a whole, make to national economic growth and poverty reduction.
Although a coordinated response is urgently needed at international and regional levels, national governments in particular face the challenge of responding to their people’s immediate increased food and nutritional needs while stimulating the agricultural sector to increase the food supply.
The adequacy of the global response to the global food crisis depends to a large degree on the policy- and program-related reactions of national-level policymakers around the globe.
Policymakers in developing countries often do not, however, have sufficient information to gauge the likely effects of the global food crisis on their country and to implement appropriate policy actions.
For example, the imposition of domestic food price controls in many countries in reaction to the current crisis can be expected to limit farmers’ incentives to increase the production of food crops in subsequent cropping seasons.
Since the implications of high and volatile food prices differ widely across countries and across groups within each country, policy responses must be adapted to country-specific needs and conditions.
• National—balance of trade, fiscal balance, political ramifications, commodity markets, labor markets
• Household—income, expenditure
• Individual—nutrition, health, school attendance
Changes in global food prices affect the national economy, the operations of government, and commodity and labor markets. These adjustments result in some immediate short-term effects on the incomes of households, the nature of which...