TY - JOUR

T1 - Higher fuel and food prices

T2 - impacts and responses for Mozambique

AU - Arndt, Channing

AU - Benfica, Rui

AU - Maximiano, Nelson

AU - Nucifora, Antonio M. D.

AU - Thurlow, James T.

N1 - JEL Classification: O13, Q18

PY - 2008

Y1 - 2008

N2 - Rising world prices for fuel and food represent a negative terms-of-trade shock for Mozambique. The impacts of these price rises are analyzed using various approaches. Detailed price data show that the world price increases are being transmitted to domestic prices. Short-run net benefit ratio analysis indicates that urban households and households in the southern region are more vulnerable to food price increases. Rural households, particularly in the North and Center, often benefit from being in a net seller position. Longer-term analysis using a computable general equilibrium (CGE) model of Mozambique indicates that the fuel price shock dominates rising food prices from both macroeconomic and poverty perspectives. Again, negative impacts are larger in urban areas. The importance of agricultural production response in general and export response in particular is highlighted. Policy analysis reveals difficult trade-offs between short-run mitigation and long-run growth. Improved agricultural productivity has powerful positive impacts, but remains difficult to achieve and may not address the immediate impacts of higher prices.

AB - Rising world prices for fuel and food represent a negative terms-of-trade shock for Mozambique. The impacts of these price rises are analyzed using various approaches. Detailed price data show that the world price increases are being transmitted to domestic prices. Short-run net benefit ratio analysis indicates that urban households and households in the southern region are more vulnerable to food price increases. Rural households, particularly in the North and Center, often benefit from being in a net seller position. Longer-term analysis using a computable general equilibrium (CGE) model of Mozambique indicates that the fuel price shock dominates rising food prices from both macroeconomic and poverty perspectives. Again, negative impacts are larger in urban areas. The importance of agricultural production response in general and export response in particular is highlighted. Policy analysis reveals difficult trade-offs between short-run mitigation and long-run growth. Improved agricultural productivity has powerful positive impacts, but remains difficult to achieve and may not address the immediate impacts of higher prices.

U2 - 10.1111/j.1574-0862.2008.00355.x

DO - 10.1111/j.1574-0862.2008.00355.x

M3 - Journal article

VL - 39

SP - 497

EP - 511

JO - Agricultural Economics

JF - Agricultural Economics

SN - 0169-5150

IS - s1

ER -