The Impact of Food Price Shocks in Uganda: First-Order versus Long-Run Effects

Authors: 
Bjorn Van Campenhout, Karl Pauw, and Nicholas Minot 
Publisher: 
International Food Policy Research Institute 

In developing countries, all too often policies formulated in response to high food prices are inspired by ideology instead of evidence-based policy research. We look at the immediate effects of these shocks faced by households in Uganda on their poverty and well-being. In addition, we look at the economywide impact in the long run when all markets have settled at a new equilibrium. We find that in the short run, poverty has increased substantially. However, in the longer run, we find welfare levels of rural farm households in particular to rise sharply, primarily as a result of increased returns to farm labor and agricultural land coupled with improved market prices for output sold. These results call for policies that aim to protect the most vulnerable against high food prices and extreme volatility in the short run, without eliminating the incentives of steadily rising commodity prices for longer-run structural agricultural development.

Publication date: 
22 Août, 2013 
Source / Citation: 

Van Campenhout, B., K. Pauw, and N. Minot. "The Impact of Food Price Shocks in Uganda: First-Order versus Long-Run Effects," IFPRI Discussion Paper No. 01284, August 2013.