Rise in prices threatens social stability in poor countries

PanARMENIAN.Net - Costs for some basic foods are nearing or beyond the peaks of 2008. The World Bank expects volatile, higher than average grain prices until at least 2015. In the poorest countries, where people spend up to two-thirds of their daily income on food, rising prices are re-emerging as a threat to global growth and social stability.

There are nearly one billion hungry people worldwide. More than 60 percent of the world’s hungry are women. When faced with high food prices, poor households eat cheaper, less nutritious food and/or stop using health and education services. Farmers will grow food instead of higher-earning crops if they think they cannot afford to buy food. Malnutrition contributes to infant, child and maternal illness; decreased learning capacity; lower productivity and higher mortality. One third of all child deaths globally are attributed to under-nutrition.

“The biggest challenge facing most developing countries is the risk of a big boost in food prices. Food accounts for a large and increasingly volatile share of family budgets for poor and urban families. When prices of staple foods soar, poor countries and poor people bear the brunt,” World Bank Group President Robert B. Zoellick said.

Global food price volatility is on the G20 agenda, and Zoellick recently called for the G20 to “put food first” and advocated for steps to ensure vulnerable people and countries are not denied access to nutritious food. Zoellick pointed to the need for: help for smallholder farmers to become a bigger part of solution to food security; better access to information on the quality and quantity of grain stocks; improved weather monitoring, especially in Africa; deeper understanding of the relationship between international prices and local prices; establishing small regional humanitarian food reserves in disaster-prone areas; a code of conduct concerning export bans; effective social safety nets; fast-disbursing support as an alternative to export bans or price-fixing; and better risk management products, the WB said in a press release.