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Long-Term Impacts of Global Food Crisis on Production Decisions : Evidence from Farm Investments in Indonesia / Manabu Nose
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Nose, Manabu
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Anticipated shock.
- Emerging Markets.
- Expectation.
- Food & Beverage Industry.
- Investment effect.
- Liquidity constraint.
- Macroeconomics and Economic Growth.
- Markets and Market Access.
- Regional Economic Development.
- Rural Poverty Reduction.
- Local Subjects:
- Anticipated shock.
- Emerging Markets.
- Expectation.
- Food & Beverage Industry.
- Investment effect.
- Liquidity constraint.
- Macroeconomics and Economic Growth.
- Markets and Market Access.
- Regional Economic Development.
- Rural Poverty Reduction.
- Physical Description:
- 1 online resource (42 pages)
- Other Title:
- Long-Term Impacts of Global Food Crisis on Production Decisions
- Place of Publication:
- Washington, D.C., The World Bank, 2012
- System Details:
- data file
- Summary:
- Did the rise in food prices have a long-term impact on agricultural production? Using household-level panel data from seven provinces of Indonesia, this paper finds that the price shock created a forward-looking incentive to invest, which can dynamically enhance productivity in agriculture. It also finds that the impact of the price shock on investment behavior differs by initial wealth. In response to price increases, wealthy farmers invested more in productive assets, while poor farmers increased their financial savings as well as consumption. Price spikes relax liquidity constraints, which increases investments among the richer while do so savings and consumptions among the poor, possibly leading to diverging income inequality in the long run.
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