Poverty to Increase from Food Price Hikes
Poverty is expected to increase as food prices climbed to 36 percent since last year due to problems in the Middle East and North Africa.
The price hike pushed 44 million people into poverty starting June last year and is expected to push people deeper if it continues to rise in the next months.
Food prices increased due to severe weather events in key grain exporting countries like Russia, Canada, Australia and Argentina, export restrictions, the increasing use for biofuel production, and low global stocks. The food price hike is also linked to surging fuel prices, of which crude oil increased by 21 percent ($110.44 a barrel) in the first quarter this year because of unrest in the Middle East and North Africa.
According to the World Bank, the prices of basic commodities today remain close to their 2008 peak, with maize, wheat, palm oil, soybeans and beef increasing by 74%, 69%, 55%, 36% and 30%, respectively, except for rice which fell by 2% in the past year.
The World Bank suggested a number of measures to alleviate the impact of high food prices, especially for the poor. These were targeting social assistance and nutritional programs to the poorest, removing grain export restrictions, relaxing biofuel mandates when food prices exceed threshold levels, improving country capacity to manage volatility through financial market instruments, better weather forecasting, more investments and the adoption of new technologies in agriculture and making efforts to address climate change.
There are 1.2 billion people living on the extreme poverty line of $1.25 a day today. Another 10% rise in food prices will push 10 million people more and another 30% rise will push 34 million people more.
World Bank President Robert Zoellick suggested that people should put food first and protect the poor and vulnerable who spend most of their money on food.