Journal of Agriculture and Food Research

Vulnerability to external shocks such as supply shortages, price increases, disasters and political discord has severe implications for Caribbean food and nutrition security and the scale of economic loss. This study assessed the welfare impacts of rising imported food prices on Caribbean consumers using the Almost Ideal Demand System (AIDS). The welfare implications of rising prices was assessed using three price shock scenarios: 2006-2008, 2010-2011, and 2020-2021. There is a need to understand how food price shocks impact Caribbean consumers, who are particularly vulnerable due to their heavy reliance on imported food. There were significant welfare losses in 2006-2008 and 2010-2011, when food prices drastically rose, as well as during the first year of the COVID-19 pandemic (2020-2021). Between 2006-2008 and 2010-2011, welfare losses were approximately US$1,543.64 million and US$692.52 million, respectively, while food price inflation during the first year of the COVID-19 pandemic resulted in losses of approximately US$1,094.07 million. This research highlights the need for policies to minimize welfare losses from rising food prices, including social safety nets for vulnerable households and investments in domestic agriculture and supply chain resilience.