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Global Development Institute

WP172/2012

A right price for rice? Côte d'Ivoire insights into the welfare implications of the 'global food crisis'

Ralitza Dimova and Monnet Gbakou

Using 2008 LSMS data for Côte d'Ivoire, we study the welfare implications of the price increase of key imported staple food - rice - and consider the consumption smoothing effect of locally produced food and cash crop varieties. While middle-income households are found to be hardest hit by a price shock, the poorest appear to be immune to it. When both cash and food crop production is taken into account, the negative impact becomes negligible. We find interesting income reallocations from richer to poorer households, which can potentially be generalised across similar African countries.