Perilous Times
Surging food prices hit world's poor hard
AP REPORTERS
June 7, 2010 - 9:49PM
AP
Families from Pakistan to Argentina to Congo are being battered by
surging food prices that are dragging more people into poverty,
fuelling political tensions and forcing some to give up eating meat,
fruit and even tomatoes.
Scraping to afford the next meal is still a grim daily reality in the
developing world even though the global food crisis that dominated
headlines in 2008 quickly faded in the US and other rich countries.
With food costing up to 70 per cent of family income in the poorest
countries, rising prices are squeezing household budgets and
threatening to worsen malnutrition, while inflation stays moderate in
the United States and Europe.
Compounding the problem in many countries: prices hardly fell from
their peaks in 2008, when global food prices jumped in part due to a
smaller US wheat harvest and demand for crops to use in biofuels.
Majeedan Begum, a Pakistani mother of five, said a bag of flour for
bread, the staple of her family's diet, costs three times what it did
two years ago in her hometown of Multan. She can no longer afford meat
or fruit.
"My domestic budget has been ruined," said Begum, 35.
The UN Food and Agriculture Organisation's food price index - which
includes grains, meat, dairy and other items in 90 countries - was up
22 per cent in March from a year earlier though still below 2008 levels.
In some Asian markets, rice and wheat prices are 20 to 70 per cent
above 2008 levels, it says.
Many governments blame dry weather and high fuel costs but critics in
countries such as India, Argentina and Egypt say misguided policies are
making shortages worse and collusion by suppliers might be pushing up
prices.
No single factor explains the inflation gap between developing and
developed countries but poorer economies are more vulnerable to an
array of problems that can push up prices, and many are occurring this
year.
Farmers with less land and irrigation are hit harder by drought and
floods.
Civil war and other conflicts can disrupt supplies.
Prices in import-dependent economies spike up when the local currency
weakens, as Pakistan's rupee has this year.
Costs also have been pushed up by a rebound in global commodity prices,
especially for soy destined for Asian consumption.
That has prompted a shift in Argentina and elsewhere to produce more
for export, which has led to local shortages of beef and other food.
The global financial crisis hurt food production in some countries by
making it harder for farmers to get credit for seed and supplies.
In Mauritania in West Africa, rice prices doubled over the first three
months of the year, according to the World Food Program. Over the same
period, the price of corn rose 59 per cent in Zimbabwe and 57 per cent
in neighbouring Mozambique.
In Kinshasa in the Democratic Republic of Congo, Mami Monga pays $US25
($A30.45) for a box of fish that cost $US10 ($A12) a year ago. The
price of a 25-kilogram bag of rice has doubled to $US30.
"Today I am obliged to buy half the food I used to buy mid-last year,"
said Mami, a mother of five.
Kinshasa shopkeeper Abedi Patelli said prices rise when the exchange
rate of Congo's currency falls.
"But when our currency improves against the US dollar, prices don't
fall," he said. "They remain steady."
WFP spokesman Greg Barrow said poorer countries can suffer a "ratchet
effect" that locks in price rises due to high transportation costs and
limited competition.
"Prices dropped fairly dramatically toward the end of 2008 on
international markets but we found prices remained relatively high in
many local markets in developing countries," said Barrow.
After the cost of food rises, "it tends to take a long time to go
down," he said.
The FAO said the double blow of the global recession and high food
prices has pushed 100 million people into poverty.
Opposition parties have organised protests in Pakistan. In Egypt, a 50
per cent jump in meat prices in recent weeks has helped to fuel
demonstrations outside parliament over wages and other economic issues.
"I am afraid that I will wake up one day and not able to get enough
bread for my 12-member family," said Aboulella Moussa, a doorman at a
Cairo apartment building.
People interviewed in a number of countries said they are coping not
just by cutting out expensive items but by eating less - a trend that
has stirred concern about malnutrition.
In the 2008 inflation spike, WFP found families in some countries
skipped meals or switched to eating corn husks or other low-quality
produce.
"Over the long term, this would lead to the effects of chronic
malnutrition," Barrow said.
"It's expensive, so we eat less," said Seema Valmiki, 35, who is
raising three children in New Delhi with her husband on his 6000-rupee
($A164) monthly income as a driver.
Valmiki can no longer afford meat, fruit or fish and has put off buying
her children new school uniforms, toys and a bicycle.
"If we buy them fruit, we can't buy them food" like rice, dal and
vegetables, she said.
In China, food costs rose 5.9 per cent in April over a year ago - a
modest rate for a country that suffered 20 per cent-plus inflation in
2008. But it was enough to prompt the communist government to try to
reassure the public with pledges that prices will ease as the spring
harvest comes in. It also threatened to punish price gouging in a new
effort to cool inflation.
Even in moderately prosperous nations such as Venezuela, shoppers say
they can no longer afford meat and scour markets for bargains.
In Argentina, soy production has taken over more than 13 million
hectares of grassland once used to raise cattle and replaced less
profitable wheat and corn as well, driving up prices in supermarkets.
Argentina's government has responded with higher taxes, export limits,
controls on supermarket prices of meat, wheat and corn, subsidies to
food producers and pay hikes of 30 per cent for union workers. The
moves have temporarily eased the pain but beef producers have thinned
their herds in response to government intervention and the price of
meat has doubled in the last year.
"Before, we would eat meat three times a week. Now it's once, with
luck," said Marta Esposito, a 45-year-old mother of two in Buenos Aires.
"Tomatoes, don't even talk about it. We eat whatever is the cheapest."
Venezuela's 30.4 per cent inflation is among the world's highest. The
oil-rich country is a major food importer and its bolivar has tumbled
against the dollar, forcing up prices in local markets. In April, food
prices rose 11 per cent over the previous month.
The Venezuelan government has imposed price controls and arrested some
shopkeepers for violating them. But the controls have led to shortages
of beef, sugar, corn meal and butter, forcing the government to allow
some prices to rise by 20 per cent this year.
Elsewhere, rising prices highlight a more basic problem: making sure
farm productivity keeps pace with burgeoning populations.
India's food prices were up 17 per cent in April over a year earlier
but the government hopes normal rainfall this growing season will
increase supplies.
The rise has been driven in part by growing demand from the rural poor,
who can afford to spend more on food thanks to government debt-relief
and job-creation programs.
Longer term, experts say India, with more than one billion people, has
to speed up growth in farm production if it is to keep up with demand.
"Our capacity to feed every Indian is systematically declining with
time," said Harsh Mander, who was appointed by India's Supreme Court to
monitor hunger.
"World markets can't bail us out."