Impact of Rising World Rice Prices on Poverty and Inequality in Burkina Faso

Abstract

Between January 2006 and April 2008, the prices of most agricultural products rose considerably in international markets. Empirical studies show that this spike in world food prices increased the number of poor households in developing countries, but the extent was not the same in all countries. This article assesses the impact of rising rice prices on poverty and income inequality in Burkina Faso, using a methodology based on the concept of compensating variation combined with the net benefit ratio (NBR) developed by Deaton (1989) and a living standard survey (QUIBB, 2003). The results show that higher prices have a negative impact on income and poverty in the regions with a large proportion of households that are net buyers of rice. The poverty rate increases by 2.2 to 2.9 percentage points depending on the assumptions, the increase being higher in urban areas than in rural areas. Rising rice prices also increase income inequality, which increases particularly in urban areas and in relatively rich regions, but decreases in poor regions with a large proportion of rice producers.

The Impact of Food Price Volatility on Consumer Welfare in Cameroon

“…However results reveal some heterogeneity in the welfare impact of food price volatility. Poor households in both urban and rural areas are the most affected as suggested in the literature (Ackah and Appleton 2007;Badolo and Traore 2012;Attanasio et al 2013). For example, on average, poor households need to be reimbursed by about 15.68 per cent of their expenditure as the result of a 40 per cent change in the price of roots and tubers.…”

“…The effect of food price volatility on consumer welfare is evaluated using the compensating variation (CV) concept as is usual in the literature (Minot and Goletti 2000;Leyaro 2009;Tafere et al 2010;Badolo and Traore 2012). Price volatility is taken into account by the induced change in price.…”

“…As stated earlier, compensating variation can be defined as the amount of money required to compensate a household for a change in prices and to restore the pre-change utility level (Tafere et al 2010;Badolo and Traore 2012).…”

The Vulnerability of Rice Value Chains in Sub-Saharan Africa: A Review

“…These modifications are needed to tailor the intrinsic and extrinsic attributes of local rice to consumer preferences and to enhance its competitive ability in a market segmented between local and imported rice [1]. For example, in Burkina Faso, Badolo and Traoré [74] suggest that investment in local rice industries will reduce the vulnerability of rice to the pressures of markets, whereas evidence from the Central African Republic shows that access to marketing along with agricultural extension services has increased the incomes of female households and their livelihoods [75]. In Nigeria, Tiamiyu et al [53] and Awoyemi [76] suggest that the implementation of policies directed at the promotion of quality-enhancing technologies and investment in storage and processing will increase the quantity of locally processed rice and its ability to compete with imported rice in the Nigerian market.…”

The impact of food price volatility on consumer welfare in Cameroon

“…The effect of food price volatility on consumer welfare is evaluated using the compensating variation (CV) concept as is usual in the literature (Minot and Goletti 2000;Leyaro 2009;Tafere et al 2010;Badolo and Traore 2012). Price volatility is taken into account by the induced change in price.…”