The Impact of Rising Food and Fuel Prices - Essay Example

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The Impact of Rising Food and Fuel Prices

The rising trend in international food prices persisted and accelerated in 2008. U.S. wheat export prices skyrocketed from $375/ton in January to $440/ton in March. Thai rice export prices chalked up from $365/ton to $562/ton.
The governments of the developed and developing countries adopted various mitigation measures. Specific policy interventions were applied in three broad categories: (i) interventions to assure household food security by establishing food safety nets; (ii) interventions to lessen domestic food prices by way of penalty or administrative action, and (iii) interventions to develop supplies and production of longer-term food supply. Given the three categories of policies there are preferred options that are more reliable and equitable. The best options to address food insecurity is the targeted cash transfers to vulnerable groups. Cash transfers increase the purchasing power of the poor without changing the chain of incentives that are available to produce more food and without reducing the incomes of poor food sellers. The depth, targeting efficiency and value of the transfer programs depends on the country's level of development.
Another set of best options to decrease domestic prices cover the lowering of tariffs and other government taxes on key staples. ...Show more

Summary

The tremendous increase in food prices has affected even resource-rich countries such as Venezuela and Russia. Venezuela had a short supply of staple food in 2008. Russia also had a food shortage prior to its parliamentary election. Both governments responded to the price increases by imposing controls on food prices…
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The Impact of Rising Food and Fuel Prices essay example
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