Activities related to Chapter 4



Introduction:

1. Activities 2 and 4 proposed below should refer to a specific country case. Depending on
 available data, this could be the country where the course is held or the country of origin of
 participants.

2. Template 4A-1 may be used as an analytical tool for carrying out the activities. It depicts the
 following initial food situation of a country:

 There is one main staple food grain (e.g. wheat) produced and consumed. The prevailing
 market price is determined by the equilibrium price. It is a closed economy model which
 may be changed into an open economy model by introducing world market prices and a new
 curve of total supplies (including food imports/exports) during the course of analysis.

 Policy measures or changing conditions of the economic environment bring about changes
 in economic parameters and in the economic equilibrium position as presented in the figure.
 Such changes can be show as movements of prices and volumes along the production,
 supply and/or demand curves, or as shifts of the production/supply and/or demand curves,
 and lead to changes in food prices, volumes of aggregate food production, supply and
 demand, and in the structure of aggregate food deficits. For background information see
 Annex 1.

 Template 4A-1:
 Basic Model for Analysing the Effects of Policies on Food Prices, Food Pro-
 duction, Supply, Demand and on the Structure of Aggregate Food Deficits


 price Requirements


 Demand Production /
 Domestic supply









 --------------------------- volume
 v


- 173 -