FOOD PRICE VOLATILITY AND ITS EFFECTS ON LOW-INCOME HOUSEHOLDS

Abstract

This article analyzes how food price volatility affects low-income households and why such
households experience stronger welfare losses than middle- and high-income groups. The study uses an
IMRAD structure and combines conceptual analysis with selected empirical evidence from FAO, the World
Bank, USDA, Eurostat, and Canada.ca/Statistics Canada-based estimates. The results show that low-income
households are highly exposed to food price volatility because food constitutes a larger share of their budgets,
their savings are limited, and they have less flexibility to substitute toward higher-quality goods. Recent evidence
confirms that food insecurity persists even in developed economies: in 2024, 13.7 percent of U.S. households
were food insecure; in the European Union, 8.5 percent of the population could not afford a proper meal every
second day; and in Canada, 25.5 percent of people in the provinces and 37.4 percent in the territories lived in
food-insecure households. The article argues that food price stability is not only a macroeconomic objective but
also a social-protection priority. The most effective response combines inflation monitoring, targeted transfers,
competition policy, resilient supply chains, and nutrition-sensitive public policy.