Has the rise in international food prices since the mid 2000s hurt the poor, or helped them? Until recently, everything we knew about this topic came from simulation analyses rather than survey data. Simulation approaches invariably predict that poverty and food insecurity increases as the result of higher food prices, but there are many reasons why these predictions might not eventuate. On the other hand, standard household surveys yield information only after long lag periods. In light of these constraints, in some of my work I use an indicator of self-assessed food security from the Gallup World Poll (GWP). Since 2005, Gallup has survey men and women in a large number of developing countries and asked them (among other things) whether they have had “any trouble affording sufficient food in the last 12 months?” I take the percentage of respondents who answer yes to this question as a measure of national food insecurity.
Inevitably, there are obvious caveats to any self-reported indicator, as well as some not-so-obvious caveats discussed at more length in my paper, "Was the global food crsis really a crisis?." Among the obvious caveats are issues related to test-retest reliability, differing definitions of “sufficient food”, biases related to political factors (such as fear of government) or cultural factors (such as the shame associated with measuring poverty), and general measurement error. But while one cannot rule out these problems, it is not obvious that these issues would bias trends in the variable of interest, except in special circumstances (such as increasing fear of a government). A second issue relates quite specifically to the GWP surveys conducted in China, which reported an unusually large decline in food insecurity. This is obviously a concern because China is large enough to have a dramatic effect on any estimates of global trends in food insecurity.
Despite these concerns, there are some important strengths with this self-reported data. The most important of these is that trends in self-reported food insecurity are robustly explained by food price inflation and per capita economic growth rates, as one would expect. In the paper I show that the elasticity of food insecurity with respect to per capita income is -2.10 in low income countries, a level commensurate with elasticities from the poverty and growth literature, while the elasticity with respect to food prices (the food CPI) is +0.74 in low income countries. Both elasticities are significant at the 1% level. However the results also show that these effects decline substantially in middle or upper income countries where there are fewer poor people, and where food is a much smaller component of household budgets. These results therefore provide some indicative evidence that the GWP measure of food insecurity is picking up the kind of effects that we wish it to.
So what does the self-reported food insecurity data show?
A striking feature of the GWP self-reported food insecurity data is that it suggests that global food insecurity went down from 2005/06 (the pre-crisis period) to 2007/08 (the food crisis period). Moreover, self-reported food insecurity appears to have gone down by a large number. In the 69 countries for which I have reliable data (with China being the most notable exclusion), self-assessed food insecurity fell by 132 million people. Most sensitivity tests yield similar qualitative conclusions. One exception is that if one only focuses on a sub-sample of countries with data for 2007 and 2008 then food security for the 48 relevant countries stayed the same. However, the lack of change over 2007-2008 (when food rose very sharply) is in large part due to a huge decline in self-assessed food insecurity in India. Without India, food insecurity rose by 43 million people over that period.
These results were somewhat controversial when I first released them, but the surprisingly modest impacts of the food “crisis” on global food security and poverty have been corroborated by other sources. Most recently, the World Bank’s new poverty estimates show that poverty fell in all regions of the world from the mid 2000s through to 2008 (see The Economist article, “A fall to cheer”). Nutrition surveys (such as the Demographic Health Surveys) also do not show any dramatic rise in malnutrition.
In addition to these corroborations, there are some fairly intuitive explanations of why the rise in global food prices did not have more substantial effects on poverty. The first is the unusually strong economic growth in developing countries over the 2000s, particularly in some of the larger developing countries like China, India, Indonesia, Nigeria and Ethiopia. If economic growth outpaces food inflation (i.e. real growth is positive), and if economic growth is sufficiently pro-poor, then one would not expect rising food insecurity. Moreover, it is now well known that most developing countries have weathered the global financial crisis surprisingly well. A second explanation may be that many large developing countries also insulated their domestic markets via restrictions on food exports, or relaxation of import barriers. Whilst these actions might also exacerbate international price volatility, there is some evidence that some trade restrictions might actually have been pro-poor.
These findings obviously need to be treated cautiously. The indicator is a relatively simple one, and the Gallup World Poll is clearly an ambitious undertaking that involves scaling a fairly steep learning curve. This very aggregated data also doesn’t offer us much insight into the mechanisms by which higher food prices influence wellbeing. Nevertheless, the Gallup approach offers the development community a new instrument for tracking human welfare that operates at scale and produces results in a relatively timely fashion. The FAO and others are therefore quite rightly starting to experiment with this approach. Given that we seem to increasingly live in volatile times, we really do need to make a bigger effort to improve the timeliness of food security measurement (for more on improving the measurement of food security, see another recent paper).