Heterogeneous responses to heterogeneous food price shocks in Senegal: insights from a CGE

In the wake of the 2008 food crisis, prices of food staples in Senegal rose, with a new wave driven by international price shocks and a decline in productivity; these effects caused sub-optimal performance in the agricultural sector. This paper attempts to identify the implications of these recent price movements on the economy and on the welfare of general households. Our results show that non-agricultural households in rural areas are hurt the most by changes in the prices of staple foods; in urban areas, it appears that higher food prices may substantially affect agricultural households. The simulated low-magnitude changes in transaction costs in the agricultural sector have an impact on poverty.