FOOD SECURITY, FOOD PRICES AND CLIMATE VARIABILITY - Food Security, Food Prices and Climate Variability - page 3

Economic analysis of market price dynamics and market functioning is a critical part of
how we understand the impact of weather extremes on food security. In many food insecure
regions, small open-air markets function poorly and are isolated from capital city and inter-
national commodity markets. Expensive and inadequate rural transportation infrastructure,
high transaction costs and inadequate legal frameworks contribute to low levels of participa-
tion in the market by many subsistence farmers. When local food production is affected by
weather shocks, lack of well-functioning local markets severely reduces the ability of farmers
to buy food from outside a weather-affected area at a reasonable cost.
Given the impact of food production and weather on the price of food, the need for integ-
rated estimates of these are compelling. It has become increasingly clear that food security
crises are far more related to market conditions than to weather shocks directly. If we can use
models to understand the impact of droughts and other weather shocks on likely future price
changes, we can amend food policies and craft better, more effective response to food security
crises that are based both on markets and on agricultural dynamics.
Economic models can be used to characterize the impact of external shocks on local food
markets and the communities that rely upon them (Kshirsagar and Brown, 2013). By charac-
terizing the interaction between agricultural production and international prices on local food
prices, our knowledge of how best to assess and respond to food security problems of com-
munities across the world will be improved. This topic explores the connection and inter-
action between climate variability, food prices and food security, using environmental
information on the past three decades from satellite remote sensing to understand changes in
food production and observations of food prices in small, local markets. Putting these datasets
together using a quantitative model that exploits past observations, we can gain insight into
the likely effect of future changes in climate and climate variability on food security in vul-
nerable regions.
Objectives
This topic focuses on synthesizing basic research that describes the linkages among climate vari-
ability, food prices and food security in developing countries. The objective is to strengthen our
understanding of the impact of climate variability on the price of food for vulnerable popula-
tions. Improved use of existing data by the early warning and humanitarian communities can
make a big difference in how international organizations respond to food security crises.
By quantitatively connecting climate variability to food prices using a modeling frame-
work, researchers and analysts can provide insights that will help early warning organizations
recommend appropriate responses to high food prices and low food production. Developing
a production-price model will allow early estimation of the impact of drought on food prices
in markets as well as the likely geographic extent of these impacts. This topic seeks to answer
the following questions:
• Howdoclimatevariabilityandweatherextremesinluencelocalpricesandaccessto
food?
• Whichfoodmarketsaremostvulnerabletoweather-relatedproductionshocks?Are
these markets in regions with food security problems?
• Howdoglobalcommoditypricesimpactlocalfoodpricesandfoodsecurityina
region?