Evaluating Alternative Policy Responses to Higher World Food Prices: The Case of Increasing Rice Prices in Madagascar

Posted: 9 Jun 2009

See all articles by David P. Coady

David P. Coady

International Monetary Fund (IMF)

Paul Dorosh

International Food Policy Research Institute (IFPRI)

Bart Minten

Cornell University - Food and Nutrition Policy Program; Catholic University of Leuven (KUL) - Department of Agro-Engineering and Economics

Date Written: 2008-12

Abstract

Higher world food prices have led many developing countries to adopt policies to mitigate the impact on low-income households. This article sets out a partial equilibrium framework to evaluate the efficiency, distributional, and revenue implications of alternative policy responses. The model is applied to evaluate tariff reductions and targeted transfers in Madagascar. Although lowering tariffs generates substantial efficiency gains, these accrue mainly to the top half of the welfare distribution, and poor net sellers are actually worse off. Developing a system of targeted direct transfers to poor households is likely to be a substantially more cost-effective approach to poverty alleviation.

Suggested Citation

Coady, David P. and Dorosh, Paul and Minten, Bart, Evaluating Alternative Policy Responses to Higher World Food Prices: The Case of Increasing Rice Prices in Madagascar (2008-12). American Journal of Agricultural Economics, Vol. 91, Issue 3, pp. 711-722, August 2009, Available at SSRN: https://ssrn.com/abstract=1416333 or http://dx.doi.org/10.1111/j.1467-8276.2009.01266.x

David P. Coady

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Paul Dorosh

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States
+1 202-862-5600 (Phone)
+1 202-467-4439 (Fax)

HOME PAGE: http://www.ifpri.org/

Bart Minten

Cornell University - Food and Nutrition Policy Program ( email )

BP 6313
Antananarivo 101
Madagascar
033 11 38520 (Phone)
261 20 2222198 (Fax)

Catholic University of Leuven (KUL) - Department of Agro-Engineering and Economics ( email )

Kardinaal Mercierlaan 92
Heverlee, B-3001
Belgium

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