impacts in uganda of rising global food prices the role of diversified staples and limited price transmission this study assesses the potential impact of rising world food prices on the welfare of ugandan households while uganda experienced sharply higher food prices in 2008 as a landlocked food exporting country the causes of those price changes were mainly regional and indirect rather than directly transmitted from global markets using trade volumes food prices and household survey data we describe how uganda unlike some other countries is partially shielded from direct impacts of global food price movements although the majority of ugandans are net food buyers the adverse impact at household level of rising global prices is moderated by the relatively large quantity and range of staples consumed that come from home production moreover several of these are not widely traded some population groups in uganda are vulnerable to rising food prices however primarily those for whom maize is an important staple including those dependent upon humanitarian relief and the urban poor only a relatively small group of ugandan households will benefit directly and immediately from rising food prices the significant net sellers of food crops constituting between 12 and 27 of the population in this assessment we do not estimate the level and extent of wider second round effects from these higher prices jel classification q18 r22

a model of trade credit in a capital constrained distribution channel abstract in a product market with uncertain demand we examine a distribution channel consisting of one manufacturer and one capital constrained retailer the retailer may fund its business by borrowing credit either from a competitive bank market or from the manufacturer provided it is also to the latter s benefit to extend trade credit under bank credit financing we show that the channel behaves as if the retailer is not constrained by capital in a wholesale price contract we find that trade credit makes both channel members better off and is the unique financing equilibrium trade credit better integrates the channel than bank credit by centralizing the financing of distribution at the manufacturer we further compare bank versus trade credit under a classical channel contract revenue sharing contract in addition we present a set of numerical experiments to show how product cost internal capital and demand variability impact on the market equilibrium under both bank and trade credits

agricultural dis incentives and food security is there a link using the world bank database distortions to agricultural incentives this paper analyzes the impact that agricultural dis incentives have on food security for a wide sample of countries over the 1990 2010 period we adopt a continuous treatment approach applying generalized propensity score matching to reduce potential biases stemming from differences in observed country characteristics the results provide strong evidence of self selection and heterogeneous food security impacts at different levels of policy intensity estimates of the dose response functions show that both discrimination against agriculture and large support for it lead to poor performance in the availability access and utilization dimensions of food security

information to guide policy responses to higher global food prices the data and analyses required abstract national decision makers must understand the degree to which their country and population groups within it are exposed to the negative effects of higher global food prices or could exploit new economic opportunities offered by higher prices this paper provides a conceptual overview of the range of data and analyses that will permit leaders and analysts serving them to assess the broad implications of higher global food prices for a country and its population groups what we find is that there are a relatively small number of types of policy responses that governments might take in the face of a food price rise consequently relatively well defined sets of data need to be compiled and types of analyses used by government to generate the information needed to broadly guide efforts to prevent food price increases from becoming crises and to derive any possible benefits international joint action can be employed profitably both to collect this data and to build national capacity to conduct the analyses needed to guide policy formulation and general program design in the face of the risks and the opportunities of higher food prices and to evaluate the effectiveness of those policy responses

how do stakeholder interactions influence national food security policy in the caribbean the case of saint lucia abstract increasingly multi stakeholder processes have been recognized as being necessary to the development of public policies seeking to promote systemic innovation in response to complex and multidimensional challenges such as household food security rural development and environmental change saint lucia a small island developing state located in the caribbean has been grappling with a wide range of agriculture food and nutrition security challenges with varying degrees of policy success recognizing the significance of the challenge this paper explores the nature of the stakeholder interactions surrounding the development of saint lucia s 2009 2015 national agricultural policy and considers some of the implications for food and agriculture related policy outcomes results reveal a general lack of supportive conditions for effective multi stakeholder processes including low stakeholder participation levels conflicting roles of different forms of social capital in the interactions between stakeholders and missing boundary organizations capable of facilitating a transition towards more flexible and adaptive institutions enhanced knowledge exchange and learning and greater trust among stakeholders in the policy network future avenues for research and development are subsequently identified

stochastic capacity investment and flexible vs dedicated technology choice in imperfect capital markets this paper analyzes the impact of endogenous credit terms under capital market imperfections in a capacity investment setting we model a monopolist firm that decides on its technology choice flexible versus dedicated and capacity level under demand uncertainty differing from the majority of the stochastic capacity investment literature we assume that the firm is budget constrained and can relax its budget constraint by borrowing from a creditor the creditor offers technology specific loan contracts to the firm after which the firm makes its technology choice and subsequent decisions capital market imperfections impose financing frictions on the firm our analysis contributes to the capacity investment literature by extending the theory of stochastic capacity investment and flexible versus dedicated technology choice to understand the impact of capital market imperfections and by analyzing the impact of demand uncertainty variability and correlation on the operational decisions and the performance of the firm under different capital market conditions we demonstrate that the endogenous nature of credit terms in imperfect capital markets may modify or reverse conclusions concerning capacity investment and technology choice obtained under the perfect market assumption and we explain why the theory developed in this paper suggests some rules of thumb for the strategic management of the capacity and technology choice in imperfect capital markets this paper was accepted by john birge focused issue editor

optimizing inventory s contribution to profitability in a regulated utility the averch johnson effect the averch johnson effect is a well known economic phenomenon through which regulated utility companies prefer a capital resource input combination that differs from an efficient level through dynamic network data envelopment analysis ndea this paper first investigates the existence of this effect on a dynamic input that is inventory the analysis was performed for a group of public electric utilities from 2005 to 2014 the result implies that these firms procure a significant extra amount in inventory materials and supplies beyond their efficient levels in order to explore the connection of this effect to profit motives we construct an analytical model of the inventory policy controlling the extra buying of material and supplies that will be inventoried and added to the firm s rate base the model is based on maximizing the net present value of total profits in the deterministic case two results are observed i the firm could achieve a finite optimum by adding a finite amount of inventory above the normal base level which assumes no impact of inventory on the rate hearing and ii the firm could theoretically achieve infinite optimum under the unconstrained model the primary contribution of this paper is the special case of extending typical inventory replenishment models to including the impact on prices and in turn profits in a regulated supply chain

var methods for the dynamic impawn rate of steel in inventory financing under autocorrelative return abstract this paper proposes the way of setting the dynamic impawn rate by dividing the impawn periods into different risk windows in an efficient financial market the return is hypothetically independent while in a pledged inventory market where spot transactions predominate the return is auto correlative therefore the key to setting the impawn rate is to predict the long term risk in this experiment using the database of spot steel we established a model with the formula ar 1 garch 1 1 ged forecasting the var of steel during the different risk windows in the impawn period through a method of out of sample and got the impawn rate according with the risk exposure of banks the results of our experiment indicated that the introduction of coefficient k into the model can significantly improve bank risk coverage and reduce its efficiency loss besides the impawn rate obtained by the model correlates positively with the lowest price in the future risk windows

state intervention for food price stabilisation in africa can it work abstract although its arguments may have more general applicability this paper discusses the desirability and options for the stabilisation of staple food prices principally in eastern and southern africa it addresses three broad questions i why is stabilisation of food grain prices desirable ii what is technically feasible and iii can the governance and trade issues thrown up by suggested mechanisms be solved it considers a number of options for price stabilisation assessing the strengths and weaknesses of each and suggesting situations in which each may be appropriate

impawn rate optimisation in inventory financing a canonical vine copula based approach abstract in the inventory financing business an optimal impawn rate loan to value ratio can help the inventory financing providers ifps she maintain competitiveness in the inventory financing market however the literature has been silent on how ifps can optimise the business through the optimisation of the impawn rate this study examines the role of the optimal impawn rate in the inventory financing business the key to setting the optimal impawn rate is first evaluating default probability and then incorporating this into the profit function we use a data driven approach to explore the copula model in setting the optimal impawn rate through numerical analysis we find that the clayton canonical vine copula has a better performance for the prediction of default probability than the multivariate normal distribution mvn and can thus be used to evaluate default probability in addition we uncover that setting multiple impawn rates for different collaterals allows inventory financing to yield a higher profit further although the interest rate industrial impawn rate and optimal impawn rate have strong effects on inventory financing profit interestingly the relationship between them is marginally diminishing

the impact of budget constraints on flexible vs dedicated technology choice this paper studies the flexible versus dedicated technology choice and capacity investment decisions of a multiproduct firm under demand uncertainty in the presence of budget constraints the firm operates under a capital budget for financing the capacity investment and an operating budget which is uncertain in the capacity investment stage for financing the production we investigate how the tightening of the capital budget and a lower financial flexibility in the production stage the likelihood of having a sufficient operating budget shape the optimal technology choice we find that the dominant regime is one where dedicated technology should be adopted for a larger investment cost range and thus is the best response to the tighter capital budget whereas flexible technology is the best response to lower financial flexibility we identify the key roles that the capacity intensity the ratio of unit capacity cost to total unit capacity and production cost of each technology and the pooling value

the effect of payment schemes on inventory decisions the role of mental accounting does the payment scheme have an effect on inventory decisions in the newsvendor problem keeping the net profit structure constant we examine three payment schemes that can be interpreted as the newsvendor s order being financed by the newsvendor herself scheme o by the supplier through delayed order payment scheme s and by the customer through advanced revenue scheme c in a laboratory study we find that inventory quantities exhibit a consistent decreasing pattern in the order of schemes o s and c with the order quantities of scheme s being close to the expected profit maximizing solution these observations are inconsistent with the expected profit maximizing model contradict what a regular or hyperbolic time discounting model would predict and cannot be explained by the loss aversion model instead they are consistent with a model that underweights the order time payments which can be explained by the prospective accounting theory in the mental accounting literature a second study shows that the results hold even if all physical payments are conducted at the same time suggesting that the framing of the payment scheme is sufficient to induce the prospective accounting behavior we further validate the robustness of our model under different profit conditions our findings contribute to the understanding of the psychological processes involved in newsvendor decisions and have implications for supply chain financing and contract design this paper was accepted by christian terwiesch operations management

changing food prices and rural welfare a nonparametric examination of the cote d ivoire changes in and absolute levels of agricultural pricing and food production may affect consumer food prices producer incentives income distribution and government revenue the nature of these relationships and effects are of especial policy concern in developing countries nonparametric estimation techniques are applied to 1985 living standards household survey data of the cote divoire to estimate the impact of a food price change on income distribution this study examines how food prices are related to agricultural income across rural income in the country in examining a different country considering a wider variety of crops estimating engel curves and applying confidence bands the analysis extends work of a s deaton analysis indicates that while food grown for home consumption is important net food sales and a percentage of total expenditure seem inconsequential at any level of welfare agricultural households grow crops to meet their consumption needs and sell the surplus only when harvests are especially bountiful income elasticities with respect to prices are therefore small these findings suggest that no simple set of small price changes will significantly increase the marketed surplus of food and that structural adjustment policies may be pursued without concern for devastating poor households research is needed into ways of increasing food production through methods other than price changes results also indicate that price increases do not necessarily benefit only large well off farms and that a wide range of issues may be considered with nonparametric estimation techniques

evidence and implications of non tradability of food staples in tanzania 1983 1998 economic reform programmes assume that major goods are tradable such that depreciation of the real exchange rate raises the value of output compared to factor costs in domestic currency in tanzania major food staples that account for most real income are non tradables in at least one quarter of the country this conclusion is demonstrated and the implications are assessed for the constraints imposed on macroeconomic led adjustment strategies

a joint economic lot size model with financial collaboration and uncertain investment opportunity establishing long term relationships among the members of a supply chain has become necessary to enhance the supply chain s competitiveness in a globalized environment besides coordinating operational decisions such as how much and when to produce or to order the members of a supply chain may also share financial resources or act jointly on the capital market this is important especially when companies have unequal access to capital for example because they are located in countries with different economic conditions and banking policies and or they have different credit ratings the joint financing of investments across the supply chain may thus ensure the stability of production and of the flow of products to the customers in addition it strengthens the established relationships among the supply chain members the paper at hand takes up these issues and presents a joint economic lot size model that allows investments financed cooperatively by the members of the supply chain in particular it considers a two stage single vendor single buyer supply chain and assumes that the vendor has the option to invest in increasing its production rate the outcome of these attempts to improve production capabilities however is uncertain and subject to an investment success probability due to different access to capital the vendor and the buyer may also share the investment and the outcome uncertainty which can be beneficial to both parties

a partial credit guarantee contract in a capital constrained supply chain financing equilibrium and coordinating strategy abstract in this study we first design a supply chain finance scf system comprising a capital constrained retailer a manufacturer and a commercial bank and formulate a bilevel stackelberg game model in which the bank acts as a leader second we design a partial credit guarantee pcg contract for scf incorporating the bank credit financing bcf and manufacturer s trade credit guarantee to analyze its equilibrium financing strategies third we explore the interdependencies between the operational and financial decisions and analyze the coordination conditions for the pcg contract fourth we perform a comparative analysis of the optimal strategies among the various financing scenarios including a traditional supply chain without capital constraint and scf without credit guarantee as well as one with full credit guarantee to examine the impact of the credit guarantee coefficient finally we perform a numerical sensitivity analysis in terms of the manufacturer s guarantee coefficient and the retailer s initial capital and verify the manufacturer s willingness to provide pcg for scf the findings of this study reveal that based on a suitable guarantee coefficient the pcg contract may realize profit maximization and channel coordination in the scf system as well as achieve the super coordination effect

capacity decisions with debt financing the effects of agency problem abstract this paper studies the capacity management problem for a firm that uses debt financing this is done by analyzing the effect of the associated agency problem when making capacity decisions the agency problem arises when there are potential conflicts of interest between the firm owner and the lender we show that this agency problem can constrain the firm s optimal capacity decision because the borrowing rate will increase as the risk of default increases with capacity level chosen the firm will therefore try to optimally choose the level so as to reduce the risk of bankruptcy which the lender will take into account and as a consequence the firm will try to control the risk associated with potentially high borrowing costs however even when the expected bankruptcy cost is carefully controlled the optimal capacity decision is still made at the risk of incurring considerable agency costs in addition the corporate tax level can also play a significant role in capacity choice we show that although a higher tax rate leads to bigger tax benefit of debt and lower agency cost it also gives rise to a higher tax liability after balancing the tax benefit of debt with the agency cost the firm can make an optimal decision on the capacity level required the efficacy of financial hedging for mitigating the agency cost is also analyzed finally we compare and contrast our analysis with existing studies and it appears that we have been able to obtain a deeper insight into the problem

value of information in capacitated supply chains we incorporate information flow between a supplier and a retailer in a two echelon model that captures the capacitated setting of a typical supply chain we consider three situations 1 a traditional model where there is no information to the supplier prior to a demand to him except for past data 2 the supplier knows the s s policy used by the retailer as well as the end item demand distribution and 3 the supplier has full information about the state of the retailer order up to policies continue to be optimal for models with information flow for the finite horizon the infinite horizon discounted and the infinite horizon average cost cases study of these three models enables us to understand the relationships between capacity inventory and information at the supplier level as well as how they are affected by the retailer s s s values and end item demand distribution we estimate the savings at the supplier due to information flow and study when information is most beneficial

the effect of food price changes on child labour evidence from uganda abstractmost people in developing countries spend up to 60 per cent of their income on food even though the majority of them are farmers hence a change in food prices affects both their revenue

information distortion in a supply chain the bullwhip effect this article originally appeared in management science april 1997 volume 43 number 4 pp 546 558 published by the institute of management sciences consider a series of companies in a supply chain each of whom orders from its immediate upstream member in this setting inbound orders from a downstream member serve as a valuable informational input to upstream production and inventory decisions this paper claims that the information transferred in the form of orders tends to be distorted and can misguide upstream members in their inventory and production decisions in particular the variance of orders may be larger than that of sales and distortion tends to increase as one moves upstream a phenomenon termed bullwhip effect this paper analyzes four sources of the bullwhip effect demand signal processing rationing game order batching and price variations actions that can be taken to mitigate the detrimental impact of this distortion are also discussed

focusing the financial flow of supply chains an empirical investigation of financial supply chain management the objective of this paper is to establish a theoretical foundation for financial supply chain management fscm in order to strengthen managerial decisions concerning financial flows in supply chains although such decisions are made frequently and partial aspects of fscm are already understood in business practice empirical knowledge about fscm is in its early stages the study provides fundamental information derived from eight case studies based on 40 interviews the analysis extends previous studies of the interface between operations management and finance by i contributing to a mid range theory of fscm by exploring two distinct but not exclusive fscm categories their antecedents and performance effects ii empirically deriving a testable framework for fscm iii relating fscm to established theories in the field of scm and iv basing the analysis on transaction cost economics managerial insights reveal that weak working capital causes firms to focus on fscm more specifically the study identifies two fscm categories pre shipment fscm before invoice release and post shipment fscm after invoice release managers can improve upstream supply chain working capital with pre shipment fscm whereas post shipment fscm strengthens the buying firm s working capital position based on transaction cost economics we analyze how these improvements stem from risk reductions which are more effective if firms are integrated internally and externally

rescheduling of sovereign debt forgiveness precommitment and new money to meet contractual obligations on their external debt lenders generally responded by rescheduling these debts rather than declaring them to be in default but further commercial lending to these sovereigns has virtually ceased these borrowers now face an enormous debt overhang while their lenders face substantial losses on their international loan portfolios among the many proposals for addressing this crisis the relative desirability of debt forgiveness and new lending has been the focus of considerable debate the baker plan of 1985 emphasized additional funding coupled with growth oriented domestic policies rather than debt reduction lenders were encouraged to provide additional funds new money to help the impaired and indebted economies grow their way back to creditworthiness however lenders were reluctant to offer new funds that would increase the sovereign s debt burden without some assurance that future repayment would be likely with debt generally recognized as providing borrowers with a disincentive for investment 1 the emphasis has now shifted to the need for debt forgiveness on the part of the lenders and a commitment to internal adjustment by the borrowers both parties are viewed as benefitting by a reduction of the inherited debt and possibly the provision of additional funds if the sovereign borrower can commit itself to adopting policies that reduce internal consumption and

batch size and stocking levels in multi echelon repairable systems in multi echelon repairable inventory systems with high set up cost for order and or high demand rates the use of batch ordering may be more cost effective than the common s 1 s ordering policy this paper addresses the issue of determining the optimal order batch size and stocking levels at the stocking locations in such a system a power approximation is used to estimate the total system stock and backorder levels from which the optimal batch size can be readily determined a search routine involving one pass searches are then followed to obtain the stocking levels at the depot and the local sites of the system this procedure has been evaluated using 900 test cases and has been found to be very effective the power approximation approach also results in a simple analytical relationship to test whether or not s 1 s is an optimal ordering policy for repairable items in a multi echelon environment

cereal price shocks and volatility in sub saharan africa what really matters for farmers welfare the lack of information as well as some misperceptions about the distinction between the welfare consequences of higher versus more volatile cereal prices has limited the effectiveness of policy interventions during the recent food crises in many developing countries this article proposes an integrated empirical strategy to investigate and compare the different effects of these two phenomena and tests it using nationally representative household survey data from four sub saharan countries results show that the negative impacts of a cereal price increase substantially outweigh the effects of price volatility on household welfare across the entire income distribution the amplitude and the distribution of those effects depend heavily on specific factors such as the weight of food consumption over total expenditure the budget share devoted to cereals the substitution effect among food groups and the relative number of net sellers versus net buyers accessing the market we also show that volatility mainly harms the poorest quintile of the population

supply chain contract design under financial constraints and bankruptcy costs we study contract design and coordination of a supply chain with one supplier and one retailer both of which are capital constrained and in need of short term financing for their operations competitively priced bank loans are available and the failure of loan repayment leads to bankruptcy where default costs may include variable proportional to the firm s sales and fixed costs without default costs it is known that simple contracts e g revenue sharing buyback and quantity discount can coordinate and allocate profits arbitrarily in the chain with only variable default costs buyback contracts remain coordinating and equivalent to revenue sharing contracts but are pareto dominated by revenue sharing contracts when fixed default costs are present thus for general bankruptcy costs contracts without buyback terms are of most interest quantity discount contracts fail to coordinate the supply chain since a necessary condition for coordination is to proportionally reallocate debt obligations w

food price changes and household welfare what do we learn from two different approaches the use of a marginal approach can significantly distort the predicted effects of large price variations on monetary welfare over the medium to longer term this paper aims at shedding some light

a microcredit contract model with a black scholes model under default risk microfinance has emerged as a new promise for alleviating poverty and improving the limited access to financial services by offering small loans with no pledged collateral requirement to the poor due to the unique features of microfinance the credit relationship between the lender and the borrower is considered to be the foundation of the business based on the concept of supply chain microfinance this paper develops scenario based stochastic microcredit contract models for a group case in order to obtain a minimum interest rate a black scholes debt model estimates volatility directly from market observable returns on a borrower s equity next incorporating the minimum interest rate the stochastic microcredit models are developed to calculate a proper interest rate while maintaining the financial sustainability of a corporation the stochastic microcredit models also include financial statement analysis through financial ratios to reflect the microfinance business environment through the comparison of the effect of cash flow bullwhip this study illustrates that the proposed model has the potential to decrease the bullwhip effect by determining a proper interest rate in microcredit the proposed models could be used by microfinance institutions as an effective credit risk tool

supply contracts with financial hedging we study the performance of a stylized supply chain where two firms a retailer and a producer compete in a stackelberg game the retailer purchases a single product from the producer and afterward sells it in the retail market at a stochastic clearance price the retailer however is budget constrained and is therefore limited in the number of units that he may purchase from the producer we also assume that the retailer s profit depends in part on the realized path or terminal value of some observable stochastic process we interpret this process as a financial process such as a foreign exchange rate or interest rate more generally the process can be interpreted as any relevant economic index we consider a variation the flexible contract of the traditional wholesale price contract that is offered by the producer to the retailer under this flexible contract at t 0 the producer offers a menu of wholesale prices to the retailer one for each realization of the financial process up to a future time the retailer then commits to purchasing at time a variable number of units with the specific quantity depending on the realization of the process up to time because of the retailer s budget constraint the supply chain might be more profitable if the retailer was able to shift some of the budget from states where the constraint is not binding to states where it is binding we therefore consider a variation of the flexible contract where we assume that the retailer is able to trade dynamically between zero and in the financial market we refer to this variation as the flexible contract with hedging we compare the decentralized competitive solution for the two contracts with the solutions obtained by a central planner we also compare the supply chain s performance across the two contracts we find for example that the producer always prefers the flexible contract with hedging to the flexible contract without hedging depending on model parameters however the retailer might or might not prefer the flexible contract with hedging

a roller coaster ride an empirical investigation of the main drivers of the international wheat price over the last decade commodity prices have registered substantial booms and busts marked by extreme volatility wheat in particular one of the main nonoil commodities has registered a roller coaster in price levels which seems to be inconsistent with supply and demand fundamentals to acutely investigate the drivers of wheat prices and quantify their impact a vector error correction model vecm has been used the exogenous variables have been distinguished into four groups market specific factors broad macroeconomic determinants speculative components and weather variables the quadriangulation of the determinants will enable us to better understand the movements in wheat price and identify the specific role of each component the results show that a mix of factors are contributing to wheat price movements including speculation global demand and real effective exchange rate

joint inventory and cash management for multidivisional supply chains this paper develops a centralized supply chain model that integrates material flows with cash flows the supply chain is owned by a single firm with two divisions the downstream division headquarters facing random customer demand replenishes materials from the upstream division the firm installs a financial services platform that pools the divisions cash into a master account managed by the headquarters in each period cash is received from customers and paid to the outside vendor after materials are delivered the headquarters determines how much cash to retain for inventory replenishment the objective is to determine an optimal joint inventory replenishment and cash retention policy for the entire supply chain we prove that the optimal policy has a surprisingly simple structure both divisions implement a base stock policy for inventory replenishment the headquarters monitors the corporate working capital and implements a two threshold policy for cash retention this result is obtained by exte

short term financial planning under uncertainty this paper presents a stochastic linear programming formulation of a firm s short term financial planning problem this framework allows a more realistic representation of the uncertainties fundamental to this problem than previous models in addition using wets s algorithm for linear simple recourse problems this formulation has approximately the same computational complexity as the mean approximation i e the deterministic program obtained by replacing all random elements by their means using this formulation we empirically investigate the effects of differing distributions and penalty costs we conclude that even with symmetric penalty costs and distributions the mean model is significantly inferior to the stochastic linear programming formulation thus we are able to demonstrate that ignoring the stochastic components in linear programming formulations can be very costly without having significant computational savings

are we overestimating the negative impact of higher food prices evidence from ghana most studies of the welfare impact of higher food prices adopt deaton s approach based on the first order effect of prices changes using income and expenditure survey data this paper explores the impact of higher maize and food prices in ghana and considers the sensitivity of results to changes in several assumptions if second order effects are included incorporating household response to price changes the welfare impact of food price increases is more positive but only modestly so however if we assume that marketing margins are constant in real terms rather than proportional to prices the welfare impact is substantially more positive these findings highlight the need for more research on the behavior of marketing margins under volatile prices

rising food prices and coping strategies household level evidence from afghanistan this paper investigates the impact of rising wheat prices on household food security in afghanistan exploiting a unique nationally representative household survey the authors find evidence of large declines in the real value of per capita food consumption smaller price elasticities with respect to calories than with respect to food consumption suggest that households trade off quality for quantity as they move away from nutrient rich foods such as meat and vegetables toward staple foods the authors work improves upon country level simulation studies by providing estimates of actual household food security during a price shock in one of the world s poorest most food insecure countries

optimal financing mode selection for a capital constrained retailer under an implicit bankruptcy cost abstract in the context of the capital constrained newsvendor problem under an implicit bankruptcy cost we explore how such a cost affects a capital constrained retailer s financing mode selection decision between bank credit financing bcf and trade credit financing tcf we first study the problem in a single credit channel where the retailer can choose only one of the two financing modes we find that the retailer prefers tcf to bcf only when the tcf interest rate tcf ir is lower than a threshold and the dominant area of tcf expands with increasing bankruptcy cost we then study the problem in a dual credit channel where the retailer can choose a portfolio comprising bcf and tcf and examine two repayment sequences i e repaying bcf first and vice versa we propose two approaches to solve the problems we find that if bcf is repaid first as the tcf ir increases from zero the retailer first chooses only tcf then a portfolio comprising bcf and tcf and finally only bcf on the other hand if tcf is repaid first the retailer always chooses the single credit channel bcf or tcf if the tcf ir is not greater than a threshold or the bankruptcy cost is higher than a threshold otherwise a portfolio comprising bcf and tcf or only bcf finally we conduct numerical experiments to verify our main theoretical findings and examine the effects of the retailer s internal capital endowment on its financing mode selection decision showing that a wealthier retailer is more likely to prefer bcf to tcf

rice prices and income distribution in thailand a non parametric analysis rice is a staple crop in thailand significantly entering both household production and consumption this paper examines the effect of rice prices on the distribution of real income across households taking into account household characteristics and geographical location the data set is a large scale survey of 11 893 households simple nonparametric techniques for regression and density estimation are used these methods depend on few assumptions and generate flexible graphical results that are directly informative about the problem at hand the main results are that higher rice prices should benefit all rural households but the largest benefits accrue to rural households in the middle of the income distribution copyright 1989 by royal economic society

farmers welfare and changing food prices nonparametric evidence from rice in madagascar this paper uses nonparametric density estimation and kernel smoothing techniques to examine the instantaneous distributional implications of rice price changes in madagascar while many farmers do not participate in product markets as either buyers or sellers and net sales or marketable surplus are fairly small for many others the roughly one third of rice farmers who fall below the poverty line face significant negative first order welfare effects from increases in the mean or variance of rice prices conversely the first order gains from rice price increases are highly concentrated among the largest rice farmers and particular regions in madagascar

export liberalization and household welfare the case of rice in vietnam vietnam has rapidly become one of the three largest rice exporters in the world in spite of a binding export quota this article uses a multimarket spatial equilibrium model to examine the effect of further liberalization on regional rice prices household data are then used to calculate the welfare impact of these price changes on different household groups the results suggest that although rice export liberalization would raise food prices and exacerbate regional inequality it would also increase average real income and reduce slightly the incidence and severity of poverty we explore several explanations of these apparently paradoxical results

commodity options purchasing and credit financing under capital constraint abstract this paper investigates a purchasing contract with options under capital constraint and credit support from a financial institution the buyer who has limited capital can buy commodity options and a fixed order and choose to exercise all or part of the options at a later time we characterize the buyer s optimal ordering strategy with limited capital there is one critical value for the capital that is the buyer will only purchase a fixed order when the capital is less than the value with more capital the buyer will reduce the fixed order quantity and increase the option orders until the capital is used up or the global optimization is reached this result implies that the option is a risk hedging tool only for easy finance companies furthermore we find that when the buyer obtains funding from a financial institution such as a bank the buyer s profit will be increased with bank financing and the buyer s optimal purchasing decision will follow the similar policy and order less options and more fixed orders compared with the case when there is sufficient capital numerical examples are provided to demonstrate the theoretical results

unravelling zimbabwe s food insecurity paradox implications for grain market reform in southern africa abstract the organization of zimbabwe s grain market while stimulating production and incomes in high potential smallholder areas since independence has actually contributed to food insecurity among grain deficit households in semi arid areas results of an econometric model indicate that over 100 000 tonnes of expensive commercial maize meal flow annually into rural areas while grain flows out through the state marketing channel this circuitous movement of grain a symptom of poorly functioning intrarural grain trade has effectively reduced incomes among poor rural consumers by as much as 30 the promotion of intrarural trade will require the removal of government restrictions and other critical barriers to private investment in grain trading

debt buybacks debt reduction and debt rescheduling under asymmetric information in the early nineties there was a significant recovery of many debtridden economies after the shift in debt policy implicit in the socalled brady plan yet the use of scarce resources from debtor countries to buy back part of their debts remains a controversial feature of this plan we use a multiperiod model of debt overhang to show that under asymmetric information this transfer of resources emerges naturally as part of the shift from a strategy of debt rescheduling to one of debt reduction after nearly a decade of suffering from debt ridden economies in the early nineties many countries with large external debts finally reduced their debt service ratios regained access to spontaneous private financing and achieved higher growth and lower inflation imf 1993 many analysts have since attributed at least part of this success to the shift in the international debt strategy in 1989 which took a new direction with the so called brady initiative l a rather controversial feature of this initiative was the use of scarce resources from the debtor countries to buy back part of their debt there are two reasons why this use of a country s resources seems unwise first capital has more value in the debtor country than abroad thus transferring additional current resources from the country to its creditors at fair prices would appear to be welfare reducing second contrary to the idea that by repurchasing its debt in the open market a debtor country benefits from the discount price bulow and rogoff 1988 1991 prove under assumptions that include symmetric information that these buybacks hurt the country since the purchase price2 incorporates and transfers to the seller all the benefits caused by a reduced debt 3

sources of food price volatility and child malnutrition in niger and malawi in recent times considerable attention has been paid to the nutritional impact of the sharp hikes in the international food prices which took place in 2007 8 and 2010 11 while understandable this growing focus has perhaps obscured the impact of other variables affecting malnutrition in sub saharan africa i e the long term impact of agricultural policies on food supply and prices large and persistent seasonal variations in food prices and the impact of famines which still affect parts of the continent this paper focuses on the relative impact of these factors on child malnutrition measured by the number of child admissions to feeding centres in malawi and niger two countries which closely represent the situation of other small landlocked subsistence agricultural economies facing severe food security problems our analysis shows that in these countries the drivers of changes in domestic staple prices and child malnutrition are related not only or not primarily to variations of international food prices but also to the impact of agricultural policies on food production and prices in a persistent food price seasonality and in recurrent and poorly managed famines these factors can exert a strong upward pressure on food prices and child malnutrition even during years of falling international prices

interrelating operational and financial performance measurements in inventory control financial supply chain management and working capital management are increasingly receiving attention as important avenues to increase profitability in supply chains by actively managing payment terms and working capital requirements managers can influence financial performance and achieve significant cost savings however measures to improve financial performance implicitly restrict and influence operational performance in our research we elaborate on the benefits of equally considering both operational and financial aspects in decision making for the physical and financial supply chain we develop a mathematical model that determines the optimal purchasing order quantity under working capital restrictions and payment delays we analyze the trade offs between the most commonly used financial and operational measurements such as service level return on investment profit margin and inventory level our results demonstrate the significance of payment delays increases decreases in the upstream downstream payment delays favor the system s operations by decreasing operational costs moreover increases in the working capital employed in the system decrease the total operational cost increase the total financial cost and lower the return on working capital investment c 2009 elsevier b v all rights reserved

implications of higher global food prices for poverty in low income countries in many poor countries the recent increases in prices of staple foods raise the real incomes of those selling food many of whom are relatively poor while hurting net food consumers many of whom are also relatively poor the impacts on poverty will certainly be very diverse but the average impact on poverty depends upon the balance between these two effects and can only be determined by looking at real world data results using household data for ten observations on nine low income countries show that the short run impacts of higher staple food prices on poverty differ considerably by commodity and by country but that poverty increases are much more frequent and larger than poverty reductions the recent large increases in food prices appear likely to raise overall poverty in low income countries substantially

performance drivers of shipping loans an empirical investigation credit risk is a major issue for lenders and borrowers threatening the reliability of global logistics operations enhanced mechanisms of credit risk analysis are needed to safeguard banks and the flow of goods in supply chains little emphasis has been given to the contextual examination of such factors either in terms of market conditions or the particular characteristics of different industries this paper investigates the varying importance of a number of factors connected with the performance of corporate bank loans during times of financial turbulence in the shipping industry little extant literature exists on default risk drivers for loans made to shipping companies for new build vessels or second hand ship purchases a binary logit model is used to examine the criteria for assessing the security of shipping loans issued by banks thirty shipping loans made during the period 2005 2009 are examined results suggest that financial factors non financial factors shipowners experience and employability and market risk indicators are the best criteria for evaluating the performance of shipping loans during turbulent market conditions and periods when financing options are restricted the paper makes a specific contribution to the literature on risk management with regard to credit risk analysis by highlighting shipping specific factors and their importance for risk measurement the results are of interest to banks seeking to accurately assess the credibility of shipping loans shipowners who can identify credit risk factors on which to focus and supply chain participants where unfulfilled bank financing can cause disruptions to their logistics operations

compounding food and income insecurity in yemen challenges from climate change this paper provides a model based assessment of local and global climate change impacts for the case of yemen focusing on agricultural production household incomes and food security global climate change is mainly transmitted through rising world food prices our simulation results suggest that climate change induced price increases for food will raise agricultural gdp while decreasing real household incomes and food security rural non farm households are hit hardest as they tend to be net food consumers with high food budget shares but farm households also experience real income losses given that many of them are net buyers of food the impacts of local climate change are less clear given the ambiguous predictions of global climate models gcms with respect to future rainfall patterns in yemen local climate change impacts manifest itself in long term yield changes which differ between two alternative climate scenarios considered under the mir scenario agricultural gdp is somewhat higher than with perfect mitigation and rural incomes rise due to higher yields and lower prices for sorghum and millet under the csi scenario positive and negative yield changes cancel each other out as a result agricultural gdp and household incomes hardly change compared to perfect mitigation

dynamic spillovers among major energy and cereal commodity prices abstract over the past decade the sharp increases in the prices of oil and agricultural commodities have raised serious concerns about the heightened volatility of these markets and the possible negative interactions between them this article deals with the dynamic return and volatility spillovers across international energy and cereal commodity markets it also examines the impacts of three types of opec news announcements on the volatility spillovers and persistence in these markets for this purpose we make use of the var bekk garch and var dcc garch models for the daily spot prices of eight major commodities including wti oil europe brent oil gasoline heating oil barley corn sorghum and wheat our results provide evidence of significant linkages between these energy and cereal markets moreover the opec news announcements are found to exert influence on the oil markets as well as on the oil cereal relationships finally we show that the persistence of volatility decreases increases for the crude oil and heating oil gasoline returns after accounting for the opec announcements in these multivariate garch models however the results are more mixed for the cereal markets overall our results can be used to improve the risk adjusted performance by having more diversified portfolios and also serve to hedge the oil risk more effectively

agricultural technology productivity and poverty in madagascar summary this paper uses a unique spatially explicit dataset to study the link between agricultural performance and rural poverty in madagascar we show that controlling for geographical and physical characteristics communes that have higher rates of adoption of improved agricultural technologies and consequently higher crop yields enjoy lower food prices higher real wages for unskilled workers and better welfare indicators the empirical evidence strongly favors support for improved agricultural production as an important part of any strategy to reduce the high poverty and food insecurity rates currently prevalent in rural madagascar

inventory management with asset based financing most of the traditional models in production and inventory control ignore the financial states of an organization and can lead to infeasible practices in real systems this paper is the first attempt to incorporate asset based financing into production decisions instead of setting a known exogenously determined budgetary constraint as most existing models suggest we model the available cash in each period as a function of assets and liabilities that may be updated periodically according to the dynamics of the production activities furthermore our models allow different interest rates on cash balance and outstanding loans which is an enhancement over most traditional models in that inventory financed by a loan may be more expensive than that by out of pocket cash we demonstrate the importance of joint consideration of production and financing decisions in a start up setting in which the ability to grow the firm is mainly constrained by its limited capital and dependence on bank financing we then explain the motivation for asset based financing by examining the decision making at a bank and a set of retailers in a newsvendor setting