Friday, August 8, 2008

Impact of rising food prices on the rural poor

Here some are key facts compiled by the IFAD:

  • The food crisis is real, and it is affecting poor rural people across the developing world.
  • In virtually all countries, food prices have increased in 2007 and early 2008. The extent to which they have increased varies considerably country by country, and indeed within countries, from 10-20 per cent to 200 per cent. Consumer prices have typically increased to a greater degree than producer prices.
  • The factors behind the increased prices include higher input costs, higher transportation costs (both a consequence of increasing fuel prices), in a few countries civil unrest, and above all, agro-climatic conditions. Floods, droughts and frosts led to substantial increases in prices in many countries.
  • Poor rural people, many of whom are absolute or net food buyers, are losing out and are becoming poorer.
  • As consumers, they are responding by reducing the quantity they eat, and are shifting to lower costs – and in some cases lower quality – foods. There are suggestions from a number of countries that malnutrition is on the rise.
  • As producers, they are responding either by withdrawing from the market and reverting to low-input low-output production, for home consumption; or, where they are able, by shifting into higher value market-oriented production, as a means to earn the income to assure their food security.
  • Others in the rural economy are reacting to increased market opportunities, and in a number of regions – above all Latin America – land ownership is becoming increasingly concentrated. The rural poor are already losing out in some cases.
  • To date, government responses to rising food prices have been principally short-term and aimed at urban consumers. A number of countries have also introduced measures aimed at stimulating increased market supply.  Yet poor rural people risk being excluded from both.