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Food Security and Storage in the Middle East and North Africa

AGRICULTURAL ECONOMICS AGRICULTURE ARBITRAGE AVERAGE COSTS AVERAGE PRICE BANKRUPTCY BENCHMARK BONDS COCOA COMMODITIES COMMODITY COMMODITY PRICE COMMODITY PRICES CONSUMERS CONSUMPTION LEVELS CONSUMPTION RATES CORN COST OF CAPITAL COST OF LIVING COUPONS CURRENCY DELIVERY MECHANISMS DEMAND CURVE DEMAND ELASTICITY DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISCOUNT RATE DOMESTIC MARKETS DOMESTIC PRICE DOMESTIC PRICES DUMPING ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC RESEARCH EDIBLE OILS EQUILIBRIUM PRICE EXCHANGE RATE EXPENDITURES EXPORTS FINANCIAL INSTRUMENTS FINANCIAL MARKETS FINANCIAL RISK FINANCING FACILITY FISCAL DEFICITS FOOD AID FOOD COUPONS FOOD DELIVERY FOOD DELIVERY SYSTEMS FOOD FOR WORK FOOD INSECURITY FOOD MARKETS FOOD POLICY FOOD POLICY RESEARCH FOOD PRICE FOOD PRICES FOOD PRODUCT FOOD RELIEF FOOD RESERVES FOOD SAFETY FOOD SECURITY FOOD STAMPS FOOD STOCKS FOOD SUBSIDIES FOOD TRANSFERS FREE MARKETS FUTURE PRICES FUTURES GAME THEORY GDP GLOBAL ECONOMIC PROSPECTS GLOBAL MARKET GLOBAL MARKETS GOVERNMENT INTERVENTIONS GRAIN RESERVES GRAINS HOUSEHOLD FOOD INSECURITY IFPRI INCOME INCOMES INFLATION INPUT PRICES INSURANCE INTEREST RATE INTEREST RATES INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE INTERNATIONAL MARKETS INVENTORIES INVENTORY LIQUIDITY MARGINAL COST MARGINAL COSTS MARKET EQUILIBRIUM MARKET FAILURE MARKET PRICE MARKET REFORMS MARKET VOLATILITY MARKETING MEAT MILLS NATURAL DISASTER OUTPUT POLITICAL ECONOMY PRICE CEILING PRICE CHANGES PRICE INCREASES PRICE LEVELS PRICE RISK PRICE RISKS PRICE STABILITY PRICE STABILIZATION PRICE SUPPORT PRICE VOLATILITY PRIVATE MARKETS PROTEIN PURCHASE PRICE REMOTE AREAS RESERVE RISK AVERSION RISK MANAGEMENT RISK PREMIUMS RUBBER SAFETY NETS SINGLE MARKET SOCIAL PROTECTION SOCIAL SAFETY NET SPREAD STABILIZATION POLICY STOCKS STORAGE CAPACITY SUBSTITUTES SUGAR SUPPLY CHAIN SUPPLY CHAIN MANAGEMENT SUPPLY CHAINS SUPPLY ELASTICITY SUPPLY SHOCKS SURPLUSES SUSTAINABLE DEVELOPMENT TECHNOLOGICAL ADVANCES TIME VALUE OF MONEY TRADE POLICIES TRANSACTION COST TRANSACTION COSTS WHEAT WORLD MARKET WORLD MARKETS
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World Bank, Washington, DC
Middle East and North Africa | Middle East | North Africa
2012-04-27T07:44:07Z | 2012-04-27T07:44:07Z | 2012-04

In times of highly volatile commodity markets, governments often try to protect their populations from rapidly-rising food prices, which can be particularly harsh for the poor. A potential solution for food-deficit countries is to hold strategic reserves, which can be called on when international prices spike. But how large should strategic stockpiles be? This paper develops a dynamic storage model for wheat in the Middle East and North Africa (MENA) region, where imported wheat dominates the average diet. The paper uses the model to analyze a strategy that sets aside wheat stockpiles, which can be used when needed to keep domestic prices below a targeted price. This paper shows that if the target is set high and reserves are adequate, the strategy can be effective and robust. Contrary to most interventions, strategic storage policies are counter-cyclical and, when the importing region is sufficiently large, a regional policy can smooth global prices. This paper shows that this is the case for the MENA region. Nevertheless, the policy is more costly than the pro-cyclical policy of a targeted intervention that directly offsets high prices with a subsidy similar to food stamps.

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