FOOD SECURITY, FOOD PRICES AND CLIMATE VARIABILITY - Food Security, Food Prices and Climate Variability - page 5

the system. It is one of the best known and most influential of the early warning systems, and
it works to move research from theory to practice rapidly when it has been shown to be of
use (Brown et al ., 2007; Funk et al ., 2007; Husak et al ., 2013). The system and its partners are
also the focus for potential adoption of the relationships and models explained here. If a better
integration of biophysical and socio-economic drivers of food insecurity can be achieved,
then more effective and timely information on the causes and appropriate responses to food
security crises can be provided for decision makers seeking to respond to crises before they
harm human welfare and development.
Income and food prices
Food prices are relevant to food security through their impact on constraining household
food consumption when prices rise but incomes do not (Benin and Randriamamonjy, 2008;
Brown, 2008b; Dangour et al ., 2012). Household incomes in developing countries are affected
by many factors, including family size, number of employed or economically active family
members, returns on investments and savings, and other factors. In many developing coun-
tries, rural household incomes are made up of many entitlements and assets that are not mon-
etized, such as loans and gifts of food from relatives and friends, productive resources such as
land, farm implements and seed stock, livestock, and natural resources in the public domain.
Purchasing food on the market, however, requires cash, which is problematic to obtain if
most of the household's assets are non-monetary. Households that grow food for their own
consumption may have substantial assets such as land, farming equipment, livestock and
housing, but converting these assets to cash will require a market or purchaser that is within
the area where the farmer lives. During times of drought or crisis, farming households may
grow only a fraction of the food they need for the year. If many farmers in a region are in
need of cash because their crops also failed, the value of assets that can be sold to buy food
will be affected because of a lack of demand (Sen, 1981). Simultaneously, the cost of purchas-
ing food can increase substantially, reducing access to food across wide areas. This widespread,
geographically coherent effect of weather on market prices can be anticipated with appropri-
ate observations and models.
Food prices matter for food security outcomes since large proportions of households
acquire some or all of their food from the market, even in good agricultural years (Godfrey et
al ., 2010; Pinstrup-Andersen, 2009). Figure 1.1 shows estimates of average monthly house-
hold income in Burkina Faso derived from household surveys and expressed in 1993 dollars
(Benin and Randriamamonjy, 2008), plotted with the average monthly price of 100 kg of
millet for two cities, also expressed in 1993 dollars. The study showed that incomes were
declining in Burkina Faso during the 1988 to 2007 period, while food prices were rising.
Because the poorest segments of developing countries derive most of their income from the
agricultural sector their incomes change only slowly, whereas the cost of purchasing food on
the market changes rapidly. While land and water resources in Burkina are fairly static, the
population is growing. Higher food prices have a short-term impact on national poverty, but
have significant impacts on urban poor and rural households reliant on the market for their
food (Minot and Dewina, 2013). These households are also significantly more likely to be
food insecure in times of crisis.