Year: 2015
Type: article
Abstract: During the Global Food Price Crisis of 2007-2011, millions of people suffered hunger because food had become too expensive.To cope with this problem, the governments of several countries implemented policies to decouple the food prices in their domestic markets from prices in the international market or, at least, to provide assistance to the most vulnerable.Two of the most usual tools employed by governments trying to control prices were the restriction of food exports and the establishment and operation of food reserves, both of them seeking to increase the domestic supply of food in times of crisis.The three essays in this dissertation investigate the potential benefits and shortcoming of these policies.I start by considering the role of food policies themselves as causes of food price volatility.In the first essay, I examine several drivers of the Global Food Price Crisis, including: i ) low grain stock levels, ii ) trade restrictions imposed by wheat exporters, and iii ) diversion of corn production to biofuel.To quantify their effects on grain prices, I develop a stochastic spatialtemporal equilibrium model of global wheat and corn markets, featuring six interdependent markets, random yields, endogenous acreage, speculative storage, and government policies on trade and stockpiling.I find that wheat export bans and increased wheat stockpiling explain significant rises in wheat prices and modest increases in corn prices in the short-run, but that the effects of these policies on wheat and corn prices are negligible in the long run.In the long run, sustained increases in wheat and corn prices are best explained by surging demand for biofuels, through its effect on permanently diverting acreage from wheat to corn.I then turn attention to whether food reserves are an effective tool to cope with price volatility.In the second essay, I develop a model to evaluate the optimal grain storage policy for a poor grain-importing country.Households are heterogeneous in their income endowment, I am especially grateful to my former advisor and committee member, Claudio Gonzalez-Vega.His dedication to his students is legendary, and I benefited greatly from his lessons.I
Author: Randall Romero-Aguilar
Institution: The Ohio State University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
SDGs: Zero hunger, No poverty
Open Access status: green
OpenAlex ID: W2236364305