Role of Markets in Navigating Consumption Choices Amid Maize Price Shocks
DOWNLOADMay 14, 2024 - Edward Martey, Justina Adwoa Onumah, Frank Adusah-Poku
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EmailThe world has witnessed food price increases over the past two decades, notably in 2007-2008, 2010-2011 and 2021-2022. These price increases can occur seasonally, caused by the production cycles observed in agricultural farming (Kaminski et al., 2014). These food price incidences are no different from Ghana as seen in Figure 1. They can also be due to unexpected situations such as climate change, war, drought, political instability, supply chain disruptions and pandemics. These expected and unexpected variations in food prices (also called shocks) disproportionately affect staple crops, such as maize, cereals, wheat, and rice (World Bank, 2019), which in turn causes significant impact on household welfare outcomes (Amolegbe et al., 2021).
The effect of food prices is not uniform across households as the effect may differ depending on whether a household is poor or rich (Amolegbe et al., 2021); lives in a rural or urban area (Swinnen and Squicciarini, 2012); is a net seller or net buyer (Stephens and Barrett, 2011)[1]; or has access to markets (World Bank, 2012). Market access improves farm incomes which enables agricultural households to not only purchase a sufficient amount of food but also purchase variety of foods (Usman and Haile, 2019; Abay and Hirvonen, 2017).
