Up to 4.12 million Filipinos may slide into poverty this year with the unabated rise in food prices, according to a Asian Development Bank (ADB) study released yesterday.
The ADB report titled “Global Food Price Inflation and Developing Asia” said that a 10 percent rise in food prices this year is expected to push 1.37 million Filipinos into poverty, 2.75 million with a 20 percent food price inflation, and 3.12 million if prices rise by 30 percent this year.
The study said resurgent global food prices, which posted record increases in the first two months of this year, are again threatening to push millions of people in developing Asia into extreme poverty.
Food prices has been expected to continue a gradual ascent in the wake of the sharp spike in 2008. The report said that fast and persistent increases in the cost of many Asian food staples since the middle of last year, coupled with the price of crude oil reaching a 31-month high in March, are a serious setback for the region which has rebounded rapidly and strongly from the global economic crisis.
Domestic food inflation in many regional economies in Asia has averaged 10 percent in early 2011. The ADB study finds that a 10 percent rise in domestic food prices in developing Asia, home to 3.3 billion people, could push an additional 64 million people into extreme poverty based on the $1.25 a day poverty line.
“For poor families in developing Asia, who already spend more than 60 percent of their income on food, higher food prices further reduce their ability to pay for medical care and their children’s education,” said ADB chief economist Changyong Rhee. “Left unchecked, the food crisis will badly undermine recent gains in poverty reduction made in Asia,” he added.
The report added that if the global food and oil price hikes seen in early 2011 persist for the remainder of the year, economic growth in the region could be reduced by up to 1.5 percentage points.
In the short term, the pattern of higher and more volatile food prices is likely to continue the report says, noting that grain stocks have fallen.
Adding to this are structural and cyclical factors that were at play during the 2007 to 2008 crisis, including rising demand for food from more populous and wealthier developing countries, competing uses for food grains, shrinking available agricultural land, and stagnant or declining crop yields.
The report noted that production shortfalls caused by bad weather along with the weak US dollar, high oil prices and subsequent export bans by several key food producing countries have caused much of the upward global price pressure since last June, with double digit increases seen in the price of wheat, corn, sugar, edible oils, dairy products and meat. Rice prices are likely to continue their uptrend as the effects of La Niña persist, prompting consumers to seek less costly and less nutritious substitutes.
“To avert this looming crisis it is important for countries to refrain from imposing export bans on food items, while strengthening social safety nets,” Rhee said.
“Efforts to stabilize food production should take center stage, with greater investments in agricultural infrastructure to increase crop production and expand storage facilities, to better ensure grain produce is not wasted,” he added. –Daily Tribune
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