Implication of Production Shocks and Prices of Selected Cereal Products with and without Income Compensation Policy for Food Security of Households in Iran

Today, rapid changes in climate, trade policies and technology have led to production, price and income shocks in the grain market. This study aimed at investigating the food security of different groups of society due to production, price and income shocks using the multiple market equilibrium model. Due to the importance of cereal products, especially bread, rice and pasta in the food basket of Iranian households, production, price and income shocks for this group of food and their effects on food security of the households by urban and rural income groups as well as government and freelance jobs were surveyed. The required information was extracted from the raw cost and income data of urban and rural households from 2008 to 2018 through the Statistics Center of Iran (SCI). The results showed that the food security of the society is mostly influenced by the production shocks of grain products, so that with a twenty percent decrease in the production of grain products, the poor and middle rural households, respectively, with an average percentage of calorie changes of -15.6 and -10.9 were among the most sensitive groups; on the other hand, poor households with government jobs would suffer the most from the increase in the price of cereal products, with an average percentage change of 7.9 calories. Also, increasing the income of poor households might play an effective role in improving their food security, while increasing the income of middle-income households would change the consumption pattern of these households. Therefore, it is necessary to adopt appropriate price and income support policies in order to maintain the welfare of poor households.