Abstract/Summary

We present a model that describes features common to many famines: (i) a famine may occur without a substantial decline in aggregate food availability; (ii) famines often have a very uneven impact on different groups of population; and (iii) expectations about future food markets affect current market behaviour and result in starvation for certain groups of population. We consider an exchange economy with two types of agents, food producers and non-food producers. An agent starves if his consumption of food falls below the minimum subsistence level. We show that non-food producers are more vulnerable to starvation than food producers, and may fail to survive even when the aggregate amount of food in the economy is enough to guarantee survival of all agents. In an economy with government procurement and public distribution, we show that the government policy may become unsustainable if the food producers condition their expectations about future public sales on current public stock level.