Surging Costs Hit Food Security in Poorer Nations

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by
Associated Press

Surging Costs Hit Food Security in Poorer Nations

by
Joe MacDonald

In this picture taken on May 26, 2010, Pakistani workers stitch sacks of rice at a factory on the outskirts of Karachi, Pakistan. Across the developing world, families from Pakistan to Argentina to Congo are being battered by a double-digit surge in food costs that is fueling political tensions and forcing some to give up eating meat, fruit and even basics such as tomatoes. (AP Photo/Shakil Adil)

Families from Pakistan to Argentina to Congo are being battered by
surging food prices that are dragging more people into poverty, fueling
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 U.S. and
other rich countries.

With food costing up to 70 percent 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 U.S.
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
U.N. Food and Agriculture Organization's food price index — which
includes grains, meat, dairy and other items in 90 countries — was up
22 percent in March from a year earlier though still below 2008 levels.
In some Asian markets, rice and wheat prices are 20 to 70 percent 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 cropping up 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 percent in
Zimbabwe and 57 percent in neighboring Mozambique.

In Kinshasa in
the Democratic Republic of Congo, Mami Monga pays $25 for a box of fish
that cost $10 a year ago. The price of a 25-kilogram bag of rice has
doubled to $30.

"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
U.S. 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 organized protests in Pakistan. In Egypt, a 50 percent
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 6,000-rupee ($135) 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 percent in April over a year ago — a modest
rate for a country that suffered 20 percent-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 32 million acres (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 percent 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 percent 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 percent 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 percent 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 percent 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 1 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."

McDonald reported from Beijing. AP Business Writer Erika Kinetz
in Mumbai, researcher Bonnie Cao in Beijing and Associated Press
Writers Debora Rey in Buenos Aires, Salah Nasrawi in Cairo, Sebastian
Abbot in Islamabad, Fabiola Sanchez in Caracas, Patrice Chitera in
Kinshasa and Tran Van Minh in Hanoi contributed to this report.

 

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