The effects of price explosion and compensatory policies on food security: The Case of chicken meat consumers in Iran

Rising food prices have raised concerns about declining food security and increasing food poverty, thereby increasing the vulnerability of the poor to food insecurity. Chicken meat is highly consumed in Iran and plays a key role in the Iranian food basket. Therefore, the explosion in its price in 2020 has posed a threat to the country's food security. Iran's chicken industry is highly dependent on imported inputs, so any increase in exchange rates, global prices, and import restrictions will increase the final price of chicken. In this context, the current study examined the impact of the chicken price explosion and compensation strategies on the amount of calories consumed by consumers. For this purpose, a multi-market equilibrium simulation model was used. The chicken market is linked to the red meat market (beef and sheep). The results showed that an 84% increase in the price of chicken in 2020 would lead to a 41%, 6%, and 14% decrease in the consumption of chicken, beef, and sheep, respectively. In addition, an increase in the price of chicken meat led to a decrease in per capita calorie intake by around 27%. These results indicate that beef and sheep products are not considered viable alternatives to chicken in Iran. Comparing policies that increase nominal income with policies that increase products on the market, the results show that policies that increase products on the market through increased production or imports have more favorable effects on food security. The results also revealed that improving policies related to the import of products will lead to favorable effects on food security compared to nominal income enhancement policies. The results of this study provide policy and decision makers with appropriate adaptation strategies to deal with price shocks in the food sector of the countries.