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Food Calorie Intake under Grain Price Uncertainty in Rural Nepal

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Abstract

This study evaluated the effects of grain output price uncertainty on the farm income of rural households and, consequently, how this uncertainty influenced caloric intake through changes in farm income. Using a national rural household survey data set in Nepal, augmented with output price uncertainty measures calculated from historical time-series data, we found that grain output price uncertainty (especially for rice and wheat) tends to decrease crop production income of rural households. In addition, we found that lower crop income from production decreases calorie intake of rural households. Taken together, these results suggest that output price uncertainty during the production process tends to reduce caloric intake of rural Nepalese households. The price uncertainty seemed to reduce the crop income households need to buy calorie-rich staple foods.

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Notes

  1. Governments in Nepal tend to be very unstable. Since 1990, governments collapsed either through internal political conflicts or though parliamentary dissolution by the monarch. Note that Nepal was a parliamentary monarchy from 1990 until 2008 (see, e.g., Ruff 2008).

  2. In this specification, we implicitly assume that most of the calories consumed by farm households are from staple foods. This makes sense in our case given that most of the calories consumed by rural farm households in Nepal are from the staple food crops. One can easily change this to reflect calories from all food products and have the same qualitative insights.

  3. We were not able to find reliable time-series data for maize prices. Thus, maize price uncertainty was not calculated and not included in the income and caloric intake equations (See Table 5).

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Authors and Affiliations

  1. Department of Agricultural and Applied Economics, Texas Tech University, P.O. Box 2132, Lubbock, TX, 79409-2132, USA

    Suwen Pan

  2. Food and Agriculture Organization (FAO), Rome, Italy

    Cheng Fang

  3. Department of Agricultural and Resource Economics, North Carolina State University, NCSU Box 8109, Raleigh, NC, 27695-8109, USA

    Roderick M. Rejesus

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  1. Suwen Pan
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  2. Cheng Fang
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Correspondence to Suwen Pan.

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Pan, S., Fang, C. & Rejesus, R.M. Food Calorie Intake under Grain Price Uncertainty in Rural Nepal. J Fam Econ Iss 30, 137–148 (2009). https://doi.org/10.1007/s10834-009-9149-8

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