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.



Analytical basis for the transitory food insecurity framework

This chapter presents the theoretical basis for analysing the stability dimension of food security at government level. First, the target variables defining food security are identified using the distribution of individuals or households. The food-insecure segment of the population is defined as those below a given threshold, and the instability of food security is analysed based on the distribution of prevalence of food security across different scenarios and risks. Second, the type of information required to define a scenario is discussed using stylised examples. The risk assessment process should lead to estimates of the likelihood of the threat and its impact on the prevalence of food security. Finally, a portfolio approach to policy decisions is explained with stylised examples. As part of the process, the effectiveness and efficiency of different policy measures in different scenarios need to be analysed and reconciled with the government’s attitude towards avoiding the risk of lower food security in different scenarios.


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