Impact of food price increases on poverty in Indonesia: empirical evidence from cross-sectional data

PurposeUsing cross-sectional household survey data, this paper aims to determine the impact of food price increases on poverty in Indonesia.Design/methodology/approachThis paper uses the quadratic almost ideal demand system applied to the 2013 Indonesian household survey data. The impact of food price increase on household welfare is calculated using a welfare measure, compensating variation.FindingsThree food groups with the most outstanding price impact on poverty are rice, vegetables and fish were studied. The 20% increase in the price of each food group causes an increase in the headcount ratio by 1.360 points (rice), 0.737 points (vegetables) and 0.636 points (fish). Maintaining food price stability for these food groups is very important because the more price increases, the more impact on poverty. Food price policies in rural areas are also more critical than in urban areas because the impact of food price increases in rural areas is higher.Research limitations/implicationsThis paper does not consider the positive impact of rising food prices on food-producing households.Practical implicationsImplementing appropriate poverty alleviation policies through food policies for main food groups and social protection.Social implicationsPromoting rural development policies and agricultural growth.Originality/valueThis paper contributes to the existing literature by providing empirical results regarding the impact of domestic food prices increase on poverty in Indonesia.

Dynamics of Food Price Volatility and Households’ Welfare in Nigeria

One of the most important economic factors in food choice is the price. Food dynamics' value is a subject of controversies and opinions, especially price issues, and sensitivity is often peculiar to seasons and market forces. Price dynamics have the potential to introduce and change consumptions, thus affecting household welfare. This study examined the dynamics of food price volatility and households' welfare in Nigeria from 1990: Q1 to 2019: Q4. We sourced the study data from the Food and Agriculture Organization (FAO) and the World Bank (WB). We estimated the quadratic trend equation, Generalized Autoregressive Conditional Heteroscedasticity (GARCH), and Auto-Regressive Distributed Lag (ARDL) models. Food prices and depth of food deficit had a significant short-run impact on the households' welfare. Policymakers should focus on the short-term benefits while formulating policies aimed at households' welfare because policies aimed at the household level are impactful in the short-run compared to the long-run.

The impact of world oil and food price shocks on the interdependence of Brazil and Russia: SVAR-DCC-GARCH model

This study seeks to identify the extent to which global oil and food price volatilities affected the interdependence of the Brazilian and Russian economies in the period from 1996 to 2021. The ARCH/GARCH framework was used to model the volatility of oil and food prices. The Structural Vector Autoregressive (SVAR) approach was used to ascertain the sensitivity of key economic indicators to oil and food shocks. The Impulse Response Function (IRF) was used to trace short-term effects over a period of 12 months. Subsequently, the multivariate dynamic conditional correlation DCC-GARCH model, created by Engle & Sheppard (2001), was used to model time-varying correlations of paired macroeconomic variables. This study contributes to the empirical literature in two fundamental ways. Firstly, it pairs the two largest oil and food producers in the BRICS bloc. Secondly, unlike some earlier studies, the applied methodology ensures the effectiveness of the results by using stationary time series data. The results show that Brazil and Russia have long-run spillover effects for all macroeconomic variables in response to both oil and food price shocks. Furthermore, money supply and exchange rate variables exhibited declining positive correlation coefficients during the global financial crisis of 2008–2009, but peaked in early 2020 due to the Covid-19 pandemic. As a corollary of the main findings, the researchers recommend that investors should diversify their portfolios beyond these two economies in order to minimize the risk of contagion during severe global crises.

ANALISIS FORMULASI KEBIJAKAN PEMERINTAH DALAM MENJAGA STABILITAS HARGA PANGAN DI KABUPATEN PANGKEP

Tujuan dalam penelitian ini yaitu 1) untuk menganalisis formulasi kebijakan pemerintah dalam menjaga stabilitas harga pangan beras Kabupaten Pangkep. 2) Untuk menganalisis faktor penghambat dan pendukung dalam membuat formulasi kebijakan stabilitas harga pangan beras Kabupaten Pangkep. Metode penelitian ini menggunakan metode penelitian kualitatif dimaksudkan dapat menggali informasi sebanyak mungkin dari masalah penelitian. Hasil penelitian menunjukan bahwa 1) Formulasi kebijakan pemerintah dalam menjaga stabilitas harga pangan beras Kabupaten Pangkep bahwa ada kebijakan pemerintah dalam menjaga stabilitas harga pangan beras Kabupaten Pangkep, karena pihak dinas ketahanan pangan daerah kabupaten pangkep selalu mengkoordinasi dengan dinas ketahanan pangan provinsi dan juga selalu ada pengawasan dari dinas ketahanan pangan kabupaten pangkep terhadap pihak produsen atau penjual beras di pasar sentral pangkep dalam menjaga harga beras agar masyarakat tidak keberatan membeli beras, dan untuk sampai sekarang ini pihak produsen atau penjual mengikuti Pasal 56 UU No. 18 Tahun 2012 dan Peraturan Menteri Perdagangan Republik Indonesia Nomor 24 Tahun 2020 Tentang Penetapan Harga Pembelian Pemerintah Untuk Gabah Atau Beras pada pasal 3 ayat 1 poin c. 2) Faktor penghambat dan pendukung dalam membuat formulasi kebijakan stabilitas harga pangan beras Kabupaten Pangkep bahwa dari faktor penghambat pihak pemerintah masih berupayah agar gapoptan yang ada di kabupaten pangkep memiliki mesin penggiling yang menghasilkan beras premium untuk mengurangi dan membatasi pembeli gabah dari luar kabupaten pangkep faktor cuaca dan pupuk, karena cuaca sangat berpengaruh dalam mengeringkan gabah dan pada saat selesai menggiling gabah. faktor pendukung dalam penetapan harga pada tingkat produsen sebagai pedoman pembelian pemerintah sebesar Rp 8.300,00 yaitu operasional terhadap harga beras dan gabah meningkan maka pihak Dinas Bulog dan denas ketahanan panagan selalu melakukan pasar murah agar harga beras dan gabah turun, dengan cara mensterilkan harga beras dan gabah di kabupaten pangkep. The objectives of this study are 1) to analyze the formulation of government policies in maintaining the stability of food prices for rice in Pangkep Regency. 2) To analyze the inhibiting and supporting factors in formulating a policy for food price stability in Pangkep Regency. This research method using qualitative research methods is intended to be able to dig up as much information as possible from the research problem. The results showed that 1) The formulation of government policies in maintaining the stability of rice food prices in Pangkep Regency that there was a government policy in maintaining the stability of rice food prices in Pangkep Regency, because the Pangkep Regency regional food security service always coordinated with the provincial food security service and there was always supervision. from the Pangkep district food security service to rice producers or sellers in the Pangkep central market in maintaining rice prices so that people do not mind buying rice, and so far the producers or sellers have followed Article 56 of Law no. 18 of 2012 and Regulation of the Minister of Trade of the Republic of Indonesia Number 24 of 2020 concerning Determination of Government Purchase Prices for Grain or Rice in article 3 paragraph 1 point c. 2) The inhibiting and supporting factors in formulating the policy for food price stability in Pangkep Regency are that of the inhibiting factors, the government is still trying to ensure that Gapoptan in Pangkep Regency has a grinding machine that produces premium rice to reduce and limit unhulled buyers from outside Pangkep Regency. and fertilizers, because the weather is very influential in drying the grain and when finished grinding the grain. the supporting factor in determining the price at the producer level as a guide for government purchases of Rp. 8,300.00, namely the operation of increasing the price of rice and unhulled rice, the Bureau of Logistics and Food Security Denas always conduct a low-cost market so that the price of rice and unhulled rice decreases, by sterilizing the price of rice and rice. grain in Pangkep district.

The Impacts of Extreme Weather Events on Inflation and the Implications for Monetary Policy in Africa

Economic debates around mitigating climate change and weather-related events have long centred on fiscal policy tools than those of monetary policy. However, recent discussions point out that monetary policy formulation could also be affected and hence the need to deploy monetary policy tools as well. Our article seeks to investigate the impacts of climate change, particularly extreme weather events, on headline inflation and food price inflation and their apparent implications for monetary policy in Africa over the period 1990–2017. Using a two-step dynamic system Generalized Method of Moments estimation strategy with robust standard errors, we find that weather-related events may need to be large and consequential to cause a significant price hike in Africa. We also find the incidence of droughts and floods to have a bearing on food price inflation. Furthermore, our empirical evidence using mediation analysis, reveals agricultural production to be the critical mechanism whereby extreme weather events affect headline inflation. As central banks are charged with the mandate of ensuring a stable monetary environment, we suggest that monetary policy authorities consider the short and long run impacts of supply shocks caused by extreme weather events on general price levels in their policy formulation.

2007–2012 Food Price Spikes and Crisis—A Decade and a Half Later

The food price crisis, which intermittently lasted from 2006 to about 2012–13, raised a number of issues about the roles of markets and states in ensuring food security at home and globally. This issue has arisen once again in 2020, as a result of COVID-19, undoing years of progress, but it is being resolved differently than the earlier crisis. There are fewer trade restrictions. Among the issues that the food price crisis raised was the domino effect of the US biofuel policies on maize, wheat, and rice prices in 2007–8, leading to a “perfect storm,” and policy responses of large exporters, leading to key debates about global interdependence, national vs. global objectives, and policy measures adopted by some countries—some of these debates have remained unresolved. Implications for the COVID-19 pandemic and the post-COVID-19 world are drawn in the chapter, regarding trade vs. stabilization, information systems, safety nets, and investment strategies.