Agriculture Reference
In-Depth Information
MODELING THE IMPACT OF CLIMATE
VARIABILITY ON LOCAL FOOD PRICES
Chapter objectives
This chapter presents research that seeks to explain the different impacts on local food prices
of environmental seasonality, climate variability and variations in international prices. Dem-
onstrating the impact of these three elements on local food prices with a model will help us
put individual markets for different commodities into a typology, where variability from the
international price and remotely sensed information are quantified. Some markets have prices
that are not predictable using either international prices or environmental observations. This
chapter will present the economic framework, model approach and results that allow for cat-
egorization of markets and countries into those affected by international prices, local weather
shocks and both. The chapter ends with a brief discussion of the potential usefulness of an
operational model that integrates weather and price shocks on local food access.
Food markets and shocks
To make the connections between climate variability and food prices that have been
described in previous chapters into a functional tool that can used to improve identification
of food insecurity, we need to develop a model that can use observations of climate vari-
ability during the growing season together with food prices. The model needs to be able to
capture the impact of extreme events on prices, both where the event occurs locally and
further away. Since weather events impact the amount of food that is available, markets are
the mechanism for communities to access food from elsewhere to replace local shortages.
Smallholders in remote areas face high costs, low producer prices with few buyers compet-
ing for their excess production and weak access to supporting services (Chamberlin and
Jayne, 2013). When problems of access to markets are combined with problems of produc-
tion, household food security can suffer.
Food prices are generally be the best short-term indicator of food availability as they reflect
the actual market conditions and can be both easily observable and immediately analyzed,
unlike observations of household food consumption or household income. Prices incorporate
 
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