April 15: Price and Access Gap Policies Flashcards
(31 cards)
Define availability
ensuring adequate food supply to provide for nutritional needs of population
Access
ensuring that incomes and food prices tgt maintain real purchasing power sufficient to ensure ability to obtain a nutritionally satisfactory diet
- including unearned income from transfers and loans
Define utilization
ensure that food within household is used effectively to maintain
health of all members
Food Assistance Programs (AKA food-related transfers)
any intervention to address hunger and undernutrition
- food stamps, WIC, food stabilities, …
Food Aid
International concessional flows in he form of food/cash to buy food in support of food assistance programs
Key distinction of ‘Food Assistance Programs’ versus ‘Food Aid’
Draw the Recasting Food Aid chart
Effects of Trump admin eliminating USAID
- Ended all food aid programs,
stranding $340 million in food
(507,000 tons) - All future contracts with farmers stopped ~$2 billion/yr in grain
contracts (41% of USAID food
purchases - Contracts with “Plumpynut” food
supplement stopped. - Each small bag
of Plumynut contains 500 calories’ worth
of the special peanut butter — which does
not require refrigeration or additional
preparation — and is labeled “RUTF” for
“Ready-to-Use Therapeutic Food.”
What is plumynot food supplements?
Each small bag
of Plumynut contains 500 calories’ worth
of the special peanut butter — which does
not require refrigeration or additional
preparation — and is labeled “RUTF” for
“Ready-to-Use Therapeutic Food.”
What do our food policies do to markets?
- Changing supply with food aid or new
agricultural technologies - What do subsidized (artificially low)
prices do to food supply and demand? - Using income elasticities to target
undernutrition
Increase price so that farmers produce more: this would do what?
- Increase inworld prices
- Artificially set higher price (subsidized farmgate prices)
Increase quantity supplied/available for the same price: how would this happen?
- New technology in agriculture
- Food aid or subsidized imports on market
Draw graphs of ‘Difference Between an Increase in Quantity Suppied and an Increase (or Outward Shift) in Supply Curve’ (s.9)
Explain “INcreasing Supply with Inelastic Demand”
Draw graph (s.10)
- Price downs down a lot, but not much increase in demand
- Examples of suppy increase: food aid, new technology
Explain “Increasing Supply with Inelastic Demand”
Draw graph (s.11)
- Small decrease in price, but huge increase in quantity demanded
Baguette Econs in France “Le Baguettonomics”
1789: French revolution is fought over the price/lack of bread (“let
them eat cake!”)
- Louis XVI loses his head over the price of
bread
- May 10, 1792, first rules instituted to
regulate bread prices
1900s: French gov sets a max price for a loaf of bread “la baguette” to help the poor,
stave off revolution
1980’s baguettes are $0.50 a piece, French eat ~200g/person/day of baguettes
1987: EU mandates an end to the
baguette subsidy (artificially low
price)
1987 → present: France finds ways to subsidize bread, but not as much. French eat ~150g/person/day of
baguettes
What happens when set an artificially low price for baguettes?
- Increases the demand for bread/baguettes
- Reduces the cost of nutrition for all people in France
- Distorts the supply and demand equilibrium for
baguettes
Affects the bakery and flour milling sector
Affects the farm sector: wheat producers, other types of farmers too - How does the government set this artificially low
price?
Spends a lot of money on subsidies for bakeries and the flour
milling sector
How does the government set this artificially low
price of baguettes?
Spends a lot of money on subsidies for bakeries and the flour
milling sector
Baguettonomics in a graph: How does Gov Subsidize the Price?
Draw graph (s.16)
- Quantity demanded»_space; quantity supplied
- Gov needs to provide produces with an incentive to produce quantity demanded
- Raise price they receive to p_subsidized - Gov has to pay p_subsidized on total amount of bread sold (Q_demanded)
- Cost is huge: shaded box
Baguettonomics in a graph: What does an Artificially Low Price Do?
Draw grpah (s.17)
Quantity demaded»_space; Quantity supplied
Gov needs to subsidized producers so they produce the amount demanded by consumers
- Can be very expensive $$$!!!
- in 1980 subsidies = about 1M euro/day -> 365M Euro/year
Egypt’s exmpale of Bread subsidies being popular throughout the world
High consumption of baldi bread makes wheat an essential crop for Egyptian diet
Still accounts for about 35% of total daily calories while Egyptian per capita wheat consumption have declined in recent years
Higher whea prices have pushed Egypt to do what fir the first time since 1989?
Caused by what?
2024: Egyptian go raised price of subsidized tranditoinal baladi brad to $0.004 per loaf (4x original)
Caused by:
- Heavy reliance on wheat imports (limited arable crop base, growing population)
- High global wheat prices (Ru-Ukr war, USD>EGP)
- Gov efforts to reduce public spending
Income elasticity of demand for food: eat less of what when income goes up?
- Income elasticity is how much?
Eat less inferior goods (Sapm, Mac&Cheese)
Income elasticity < 0
Income elasticity of demand for food: Buy more of what when income goes up?
Income elasticity is how much?
More normal goods
Income elasticity > 0
Income elasticity of demand for food: Buy disproportionately more of what when income goes up?
Income elasticity is how much?
Disproportionately more of Luxury goods
Income elasticity > 1
