The United Nations estimates that global food demand will double by 2050, with much of that growth in developing countries. The world will have 2.3 billion more people, and given the deep transformation of growth trajectories in low-income countries, they will be increasingly affluent, with demands for more, different, and better food.
... See More + While countries in Latin America and the Caribbean (LAC) are quite heterogeneous in their production potential, overall they are well equipped to contribute to meeting this challenge. LAC has always maintained a strong comparative advantage in agricultural production, as indicated not only by its position as a net food exporter but also by its high comparative advantage. LAC is also well endowed in renewable water resources, with about a third of the 42,000 cubic kilometers worldwide. Per capita, LAC has the highest endowment of renewable water among developing regions, though some sub regions in LAC face higher than average scarcity. This report's in-depth look at Argentina and Brazil identifies looming logistics and policy issues that threaten to derail these locomotives of agricultural growth and some policy choices that have contributed to their success and that might be worth emulating. While LAC countries have substantially reduced the anti-export and anti-agricultural biases in their trade regimes, this bias remains significant in some countries. Argentina, a major food exporter, imposes export taxes and quantitative controls, with considerable adverse consequences for the sector and the global food trade system. For LAC countries' agricultural sectors to stay competitive, it is important to appropriately manage the real exchange rate to minimize Dutch disease.
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The recurrent global food price spikes in 2008 and 2010 rekindled interest in the use of national food grain stockpiles ('stocks') to enhance food security.
... See More + They were a commonly used instrument in government responses to these food prices spikes. They were also widely considered as a useful tool after the 1974 food crisis and its associated food price volatility and supply disruptions. Large stocks became a reality at the global level in the 1980s and 1990s as a side-product of farm income support policies in the developed countries. However, large 'buffer' or 'intervention' stocks, as the grain accumulations in developed countries came to be called, eventually proved to be very costly forms of producer income support and were drawn down for fiscal and other reasons starting in the late 1990s. This report, prepared for government and development partner practitioners, revisits the issues and evidence concerning grain stocks. It starts with an open mind concerning stocks as policy tools and specifically seeks to avoid the polarization of views that grew up around the topic in the 1980s and 1990s. It takes the form of an evidence-based review of developing country experience. Historically, grain stocks have been used for two main purposes. First, to stabilize domestic prices and second, to provide readily available emergency food and safety net reserves targeted at the most vulnerable. The assessment of actual experience of using grain stocks for these two purposes is summarized as follows. Using grain stocks to stabilize domestic prices has generally not been an effective instrument to improve food security outcomes. Developed countries no longer use stocks to stabilize domestic prices due to the unpredictability and often unsustainably high budget costs. In Africa and Asia, where price stabilization programs are still frequently pursued, high fiscal costs are crowding out needed public investment in agricultural productivity and rural infrastructure. The often unpredictable grain purchases and releases of stabilization programs are discouraging private investment in both grain production and storage, which are the key to lowering both the level and volatility of food prices.
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Following the world food price spike in 2008 and again in 2011, there has been increased attention on better understanding the drivers of food prices, their impacts on the poor, and policy response options.
... See More + This paper provides a simple model that closely simulates actual historical food price behavior around which the analysis of the drivers of food price levels, volatility, and the associated response options is derived. Future food prices are likely to remain higher than pre-2007 levels and recent price uncertainty is likely to continue for the foreseeable future. Accelerated use of food crops for industrial purposes (biofuels) continues to offset the slowing population growth effect on food demand. World food stocks remain at relatively low levels where the likelihood of price spikes is higher. Production gains may be harder to achieve in the future than in the past, with more limited space for area expansion, declining yield growth, and increases in weather variability. Suggested responses to reduce average food price levels are to (i) raise food crop yields, and their resilience, as the single most important action needed for an enduring solution to global food security; (ii) improve the rural investment climate to induce a private sector supply response; (iii) facilitate land markets to expand planted food crop areas and strengthen property rights to improve the use of existing cropped areas; (iv) better use price risk management tools; and (v) increase the responsiveness of the food system to price increases through better integrating markets to ensure world price signals reach more producers to induce a supply response. To reduce world food price volatility, suggested responses are to: (1) develop weather-tolerant crop varieties to reduce food production shocks; (2) improve management of food-grain stock purchases and releases to reduce, rather than amplify, local and world food price volatility; (3) shift to market-based biofuels policies (make biofuels mandates more flexible); (4) open trade across all markets to diversify short-term production shocks dissipating the associated price effects; and (5) improve market transparency to reduce market uncertainty and the associated large price corrections following revisions to market information (production, stocks, and trade). Suggested measures to reduce the negative impact of price shocks on food security are: (a) reduce taxes and tariffs (in some cases) to lower domestic prices, (b) short-term food and cash transfers to preserve purchasing power, and (c) support for agricultural production to try to prevent a next season shortfall that could add to local price increases.
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Bulgaria's financial integration with Europe has been essential in financing economic transition and spurring economic growth. As the sovereign debt turmoil in Europe casts a cloud over the financial sector, the development of capital markets over the medium term may offer a beneficial diversification of the financial system.
... See More + Bulgaria began aligning its regulation of securities markets to European Union (EU) standards when its EU accession process began and introduced the Markets in Financial Instruments Directive (MiFID) in November 2007 along with other EU countries. This report aims to assess the implementation of MiFID in Bulgaria, to provide an initial view on the impact it had on the Bulgarian securities markets, and to draw lessons about the experience. The report not only offers concrete suggestions for stimulating development of the capital market to the benefit of firms and investors, but it also aims to stimulate further debate about how to organize the securities market infrastructure for long-term development.
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Bulgaria's financial integration with Europe has been essential in financing economic transition and spurring economic growth. As the sovereign debt turmoil in Europe casts a cloud over the financial sector, the development of capital markets over the medium term may offer a beneficial diversification of the financial system.
... See More + Bulgaria began aligning its regulation of securities markets to European Union (EU) standards when its EU accession process began and introduced the Markets in Financial Instruments Directive (MiFID) in November 2007 along with other EU countries. This report aims to assess the implementation of MiFID in Bulgaria, to provide an initial view on the impact it had on the Bulgarian securities markets, and to draw lessons about the experience. The report not only offers concrete suggestions for stimulating development of the capital market to the benefit of firms and investors, but it also aims to stimulate further debate about how to organize the securities market infrastructure for long-term development.
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The Bangladesh stock market experienced significant volatility in late 2010 and early 2011 which took stock values high above fundamentals and threatened the stability of the financial system.
... See More + This note takes a systematic look at the capital markets underpinnings in Bangladesh, including the regulatory framework, the rule-making bodies and enforcement issues. It also addresses systemic weaknesses responsible for market instability which was observed at the end of 2010 and early 2011. The note analyses the outlines specific areas of potential vulnerabilities of securities markets, as assessed against appropriate practice guidelines for stability, sustainability, transparency, and enforcement. A plan of action going forward is also suggested. This note draws on a considerable amount of prior analytical work. Bangladesh capital markets remain ineffective. The government debt securities markets are illiquid preventing the Bangladesh financial system from relying on a market-based yield curve. Bangladesh has yet to develop an active money market. Trading of treasury bills in the secondary market is limited because these instruments, along with treasury bonds, make up the statutory liquidity reserve and are therefore generally held until maturity by commercial banks and other financial institutions. Trading is also thin in repurchase agreements, for two main reasons. First, commercial banks have a weak treasury function, and most do not actively manage liquidity. Second, there is no standard master repurchase agreement, a gap that should be addressed to support orderly development of the repo market.
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This report, based on a household survey conducted in 2006, discusses options for discouraging qat consumption in Yemen. It draws on a survey-the first representative data collection exercise aimed specifically at assessing the qat consumption phenomena-which confirms that the use of this drug is widespread.
... See More + Qat is consumed by men, women and children; its use is extremely time consuming; it drains the family budget; has adverse health effects; negatively affects work performance and thus contributes to poverty. Weaning consumers from the qat habit will be difficult, because its production accounts for some 6 percent of GDP and 14 percent of total employment. Qat consumption requires around 10 percent of the household budget of all income groups, which comes at the expense of basic food, education and health. To reduce qat consumption, this note recommends a set of economic and non-economic policy measures. These include: increasing the tax burden; building public awareness; incorporating training on the hazards of qat in the school system; enforcing public policies aimed at discouraging qat consumption (e.g., extension of working hours); closing knowledge gaps and developing viable crop diversification programs.
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There is a concern in Bangladesh that prices of essential commodities, mainly food items including rice, wheat, pulses, sugar, edible oils, ginger, garlic, onion and potato, have shown an upward trend in the past several months.
... See More + Media reports in recent weeks are full of government actions including pictures of personnel of Bangladesh rifles manning fair price shops and selling essential food items to the lower and lower-middle income classes. The government's concern of the impact of rising food prices on the welfare of the poor is quite understandable. According to the 2005 household and income expenditure data, these food items account for more than one-third of the annual household expenditure of the bottom 20 percent of the population. What is the true picture of rising food prices in Bangladesh? How much of the rise is due to changes in demand and supply in the international commodity markets? What domestic factors, particularly in the very short-run, i.e., a week to ten days, account for the price rise? What measures has the Government of Bangladesh taken to check the price rise and what other options exist to deal with the prevailing situation? This note addresses these questions.
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This document presents innovations in agricultural risk management for natural disaster risk, with the focus on defining practical roles for governments of developing countries and the World Bank in developing risk management strategies.
... See More + The paper includes the following content: introduction; risk and risk management in agriculture, including informal and formal mechanisms; approaches to agricultural risk in developed countries; innovation in managing production risk - index insurance; new approaches to agricultural risk management in developing countries; from theory to practice: pilot projects for agricultural risk transfer in developing countries; and potential roles for governments and the World Bank.
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Vietnam has experienced three sets of direct impacts as a result of the coffee crisis: Some regional economic shocks, socio-economic impacts in the primary coffee-producing regions that have resulted in the partial dismantling of services like health-care and education; and post-crisis changes in the business environment.
... See More + This study of the Vietnamese coffee sector is divided into seven parts. Part 1 provides an overview of the macroeconomic and agricultural context for the sector. It provides a brief historic background to coffee's development and presents the basic data on acreage, yields, and exports. Part 2 offers an assessment of the institutional structures that affect the coffee sector, particularly government's influence in the form of policies and public enterprise involvement. It reviews what is working as well as what is distorting the sector's development and presents a view of the private sector's emerging role. This section explores structures needed for the sector's optimal function, including property rights, information, and research and extension services. Part 3 provides an overview of the current structure of supply and demand by examining the supply chain, farm sizes, production costs, and the emerging trends for coffee varieties. It evaluates the prominent challenges that face the sector in both the domestic and export markets. It also covers the financial instruments available to the sector for credit and financing. Part 4 looks at the risks throughout the trade chain, highlighting the serious problem of a lack of facilities to manage price risk in particular, but also default and climate risks. The importance of informal risk management systems, such as diversification, is also examined. Part 5 investigates the social and environmental impacts of coffee production, including effects on the ethnic minorities that represent a considerable proportion of coffee growers. Part 6 concludes with a summary and recommendations for further action and possible investment opportunities.
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Vietnam has experienced three sets of direct impacts as a result of the coffee crisis: Some regional economic shocks, socio-economic impacts in the primary coffee-producing regions that have resulted in the partial dismantling of services like health-care and education; and post-crisis changes in the business environment.
... See More + This study of the Vietnamese coffee sector is divided into seven parts. Part 1 provides an overview of the macroeconomic and agricultural context for the sector. It provides a brief historic background to coffee's development and presents the basic data on acreage, yields, and exports. Part 2 offers an assessment of the institutional structures that affect the coffee sector, particularly government's influence in the form of policies and public enterprise involvement. It reviews what is working as well as what is distorting the sector's development and presents a view of the private sector's emerging role. This section explores structures needed for the sector's optimal function, including property rights, information, and research and extension services. Part 3 provides an overview of the current structure of supply and demand by examining the supply chain, farm sizes, production costs, and the emerging trends for coffee varieties. It evaluates the prominent challenges that face the sector in both the domestic and export markets. It also covers the financial instruments available to the sector for credit and financing. Part 4 looks at the risks throughout the trade chain, highlighting the serious problem of a lack of facilities to manage price risk in particular, but also default and climate risks. The importance of informal risk management systems, such as diversification, is also examined. Part 5 investigates the social and environmental impacts of coffee production, including effects on the ethnic minorities that represent a considerable proportion of coffee growers. Part 6 concludes with a summary and recommendations for further action and possible investment opportunities.
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Colombia is the world's third-largest producer of coffee and by far the largest single producer of washed arabica coffee. This introduction outlines the global situation in brief and sets the context with a synopsis of Colombia's coffee history and its unique coffee culture.
... See More + Chapters 2 and 3 assess the impact of the current coffee situation in both economic and social terms. Chapters 4 and 5 address the current situation and the relevant issues in its production and post-harvest processes. Chapters 6 assesses the marketing chain from the grower to the exporter and considers some of the competitive options that are available. It also considers Colombia's domestic and international promotions. Chapter 7 takes a look at the relevant institutions at the local, regional, and national levels; it describes their roles and evolution and discusses issues relevant to their future. Chapters 8 and 9 review the situation of credit and the risk management options that are currently available. The policies currently selected by the government to resolve this crisis are considered in chapter 10 and compared to the lessons learned in other countries. The current production systems and their regional differences are considered in chapter 11 and some conclusions drawn about the profitability of diverse production systems in different regions. Chapter 12 discusses some of the options for the sector to capture more value for its products. The last chapter reviews some of the rationale and the required parameters for any successful diversification and reflects on the inherent challenges that a diversification efforts would present.
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