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Realigning policy interventions on agricultural prices

Monitoring incentives in low- and middle-income countries during the first wave of COVID-19

Year of publication 2022

Place of publication Rome, Italy ;

Pages 44 p.

Author Consoli, S.; Egas Yerovi, J.J.; Morales Opazo, C.;

Publisher FAO ;

Product type Book (series)

ISBN 978-92-5-135891-7

Series title FAO Agricultural Development Economics Working Paper

Series number No. 22-06

To cite or share https://doi.org/10.4060/cb8992en

Synopsis (short abstract) COVID-19 has resulted in a shock to agrifood systems around the world, with the potential for low- and middle-income countries to be particularly affected. Although policy responses were more muted than during the 2007–2008 world food crisis, efforts to insulate from supply shocks and ensure local availability during COVID-19 have generally included export restrictions and import tariff reductions, among other responses. In an effort to enable rapid market monitoring and realignment, we develop a new indicator defined as a monthly nominal rate of protection “express” which seeks to isolate as much as possible the effect of trade and market policies on domestic prices in real-time in order to understand how they responded. This analysis examines changes to this indicator during the first wave of the pandemic in 27 low- and middle-income countries for the most-consumed staple cereals of the poor and food insecure. We show that agricultural price incentives declined by 12.6 percentage points compared to the same months in previous years, suggesting that retail domestic price spikes may have largely been mitigated or avoided. However, impacts varied across countries and commodities, and this indicator can serve as a tool for examining primary drivers of changes and conducting causal analysis to facilitate adequate agrifood policy responses to support economic recovery in the post-COVID-19 era.

Last updated 02/03/2023

Cite this content as:

Consoli S., Egas Yerovi, J.J. & Morales Opazo C. 2022. Realigning policy interventions on agricultural prices – Monitoring incentives in low- and middle-income countries during the first wave of COVID-19. FAO Agricultural Development Economics Working Paper 22-06. Rome, FAO.

https://doi.org/10.4060/cb8992en

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