Food prices could push millions into poverty - ADB
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Surging food prices could push millions of people in Asia into extreme poverty and threaten the durability of the region's world-leading economic recovery, the Asian Development Bank said on Tuesday.
Domestic food price inflation in developing Asia averaged about 10 per cent in the first two months of 2011, while international prices were up more than 30 per cent in annual terms, the Manila-based ADB said in a report.
A sustained 10 per cent rise in domestic food prices could push an additional 64 million people - or nearly 2 per cent of Asia's 3.3 billion people - below the poverty line of $1.25 a day.
"Fast and persistent increases in the cost of many Asian food staples since the middle of last year, coupled with 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," the ADB report said.
Food and fuel prices have added to price pressures in Asian economies, and earlier this month the ADB said some emerging economies were showing signs of overheating.
The ADB said if a 30 per cent increase in global food prices persisted in 2011, growth in some food-importing countries could be cut by up to 0.6 percentage points. It also said if the level of oil and food price increases seen early this year continues, growth in developing Asia in 2011 'could be reduced by up to 1.5 percentage points'.
"Food prices have become highly volatile, and the Asian food system's vulnerability to price shocks and natural calamities has increased significantly," the report said.
While countries had taken short-term measures such as cuts in import duties or sales taxes, subsidies and aid programs, the ADB said the frequency of food price shocks highlighted the need for long-term solutions such as more investment and higher agricultural productivity to secure food supplies.
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