Abstract
The food price spikes have prevented millions of people from escaping extreme poverty. The record prices in 2008 kept or pushed 105 million people below the poverty line in the short run. They hit urban poor and female-headed households hardest. While food prices dropped sharply in 2009 with the financial crisis, they quickly rebounded and by early 2011 were almost back to 2008 levels. Sudden, unexpected increases in food prices impose particularly severe hardship on many households because they need time to adjust to higher prices. The large, initial impact on poverty of a rise in food prices tends to decline over time as production increases and the income of the poor in rural areas rises, but it is usually not large enough to offset the initial negative impact on poverty in the short run.
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