Food prices keep millions poor: UN

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Report Cites Pressure On Farm Sector
Dipak Kumar Dash TNN

New Delhi: Rising food prices during 2010-11 may have pushed 3 million Bangladeshis into poverty, and kept 8 million Indians from getting out of the poverty bracket, finds a UN report. In the Asia-Pacific region, food inflation pushed nearly 4 million people into poverty.
The UN Economic and Social Commission for Asia and the Pacific report on regional cooperation for inclusive and sustainable development says food prices are up primarily due to pressure on a shrinking and neglected farm sector, while consumption has risen significantly.
It cites supply-side factors more than demand as the key that drove food prices. Increasing fertilizer cost, competition for arable land, water resource and high oil prices are all responsible for the spike. Commodity market speculation has been a growing factor behind high and volatile commodity prices.
The report says rising food prices, which contributed to food insecurity, adversely impacted household budgets. Recent estimates by UN’s Food and Agriculture Organization show over 65% of the household income of the poor across the world is spent on food. “In Bangladesh, Nepal and Sri Lanka, for example, common responses to food price rises have been to switch to less expensive food items, reduce savings to spend on food and sell assets to buy food,” it says.
Raising concern over the poor’s access to food in the region, it says children are the first to feel the impact of hunger. In Bangladesh and India, over 40% children are undernourished. It says the root cause of hunger across the sub-region is not lack of food; rather, the socio-economic and social distribution is responsible for this.
Times View
The UN body’s report is only underlining what should be obvious — the most anti-poor measure that any government can take is to allow inflation to go out of control. This is particularly true of food inflation, which hits the poor much worse than it hits those who are better off. When we try to judge reform measures — like allowing FDI in retail or curtailing the subsidy bill through better targeting and a more efficient delivery mechanism — this should be taken into account. If these indeed help keep prices in check, through cutting out the middleman in one case or reining in the fiscal deficit in the other, they can hardly be termed anti-poor as critics of the reforms are prone to do.