Entry for April 13, 2008

Precious grains

Within developing countries, some do badly and some do well from higher prices. City-dwellers who consume but do not produce food tend to do particularly badly, but they are not the only ones.

There is a popular perception that, since most poverty in the developing world is concentrated in rural areas, higher food prices are good for the poor. But this varies considerably from country to country, depending on how many smallholders sell more staple food than they buy. The poor in Bangladesh, for example, on average tend to lose: 22 per cent of the income of net food buyers goes on staples, while only 4 per cent of the income of net sellers of food comes from selling staples. In Vietnam, on the other hand, there are more competitive small producers who tend to benefit from high rice prices.