Fluctuating staple prices and household poverty in India

Shutes, Lindsay and Ganesh-Kumar, Anand and Meijerink, Gerdien W. (2012): Fluctuating staple prices and household poverty in India.

Abstract

The general perception is that high food prices in India have increased poverty and that trade reforms will further worsen poverty. We compare Foster-Greer-Thorbecke poverty measures for various scenarios of grain price swings with and without trade reform, using price and income effects for 32 representative households computed from a global economic model and a model of India's economy. The results suggest that a rise in the global rice price actually provides strong opportunities for poverty alleviation. Global trade reform reinforces this effect for all rural population groups. An increase in urban poverty partly offsets the overall poverty reduction. While India's trade measures effectively isolate sectors from swings in global markets, they also cause India to miss opportunities to benefit from buoyant global prices.

• Item Type: MPRA Paper
• Language: English
• Keywords: Poverty; food prices; trade; CGE analysis; India; household analysis
• Subjects: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C68 - Computable General Equilibrium Models; O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O24 - Trade Policy ; Factor Movement Policy ; Foreign Exchange Policy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q11 - Aggregate Supply and Demand Analysis ; Prices; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q18 - Agricultural Policy ; Food Policy; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I32 - Measurement and Analysis of Poverty

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