“Fluctuating
Staple Prices and Household Poverty in India”
Citation: Schutes, L.,
A. Ganesh-Kumar, and G.W. Meijerink. 2012. “Fluctuating Staple Prices and
Household Poverty in India”. MPRA Paper No. 40982.
Abstract: The general perception is that high
food prices in India have increased poverty and that trade reforms will further
worsen poverty. We compare Foster-Greer-Thorbecke poverty measures for various
scenarios of grain price swings with and without trade reform, using price and
income effects for 32 representative households computed from a global economic
model and a model of India's economy. The results suggest that a rise in the
global rice price actually provides strong opportunities for poverty alleviation.
Global trade reform reinforces this effect for all rural population groups. An
increase in urban poverty partly offsets the overall poverty reduction. While
India's trade measures effectively isolate sectors from swings in global
markets, they also cause India to miss opportunities to benefit from buoyant
global prices.