Managing Food Insecurity Risk

Analytical Framework and Application to Indonesia

image of Managing Food Insecurity Risk

Many of the recent concerns about food security relate to perceived threats to current levels of food security, such as those due to price shocks or natural disasters. These threats concern the risk of food insecurity. This publication develops a risk-management tool to examine the robustness of policy responses to managing risks and uncertainty across a variety of different threats to food security, and applies the framework to an Indonesia case study.

Five risk scenarios were selected as major threats to food security in Indonesia, following a consultation process among stakeholders and policy makers, and assessed in terms of existing and alternative agricultural and social policies. The risk assessment shows that domestic economic and natural disaster scenarios are more important than global price hikes and that a policy strategy that concentrates on addressing a single source of risk, such as a price spike in international markets, may increase vulnerability to other sources of risk such as domestic crop failure. The analysis yields a number of specific policy recommendations, including targeting of social assistance programme using food vouchers or cash transfers.



Analysis of food insecurity risk in Indonesia

The analytical framework comprises three steps: preparatory analysis, risk assessment and policy analysis. The preparatory analysis is technical in nature and involves identifying data sources, including household expenditure surveys, indicators and models. A consultation process is proposed for the second and third steps. Risk assessment draws on the perceived food security threats of experts and stakeholders and on available scientific and statistical evidence. This evidence is then transformed into a set of scenarios, each one corresponding to a specific perceived food risk, thereby allowing a rigorous assessment of its likelihood and its estimated impact on food security. The participation of experts and stakeholders is a key factor in identifying plausible food insecurity scenarios. The subsequent policy analysis focuses on existing and potentially new policy instruments, and their impacts on each scenario. A portfolio approach is then adopted to analyse policies and scenarios jointly


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