ADB that released a report ´Food Price Escalation in South Asia - A Serious and Growing Concern´ has tagged the region as one of the most vulnerable regions in the world to food price shocks, particularly as South Asia has one of the highest population growth rates and the number of people living on or close to the extreme poverty line of $1.25 a day is already high.[break]
Presently, spending on food accounts for half of the total budget of low-income households in the region. “Hence, subsidizing the cost of a basic meal for the poorest and most vulnerable in places like India means the help goes to those who need it the most,” a statement quotes Hiranya Mukhopadhyay, an economist who authored the report as saying.
The study says that a 10 percent rise in prices could push almost 30 million more Indians and nearly 4 million more Bangladeshis into extreme poverty. Pakistan is also at risk, with the same price leap causing an additional 3.5 million people to drop to or below the $1.25-a-day income mark.
However, Nepal and Sri Lanka would be less affected, although a further surge in wheat prices would be especially painful for Sri Lanka, reads the report.
After peaks in 2008 and 2011, prices of key food commodities have dropped somewhat, however, the rate of decline has been slower in South Asia than the international average, says the report. In addition, the region suffers from higher overall food inflation rates than the rest of developing Asia.
The report attributes rapid population growth, changing food consumption patterns linked to higher incomes, and stagnating agricultural output for rising food demand and inflation.
Although governments in the region have taken steps to counter higher prices, some of the measures may not be helpful to neighboring countries, states the report. It says India´s temporary food export restrictions could have had adverse impact on prices in neighboring countries, as India is the world´s second largest rice producer.
For the long term, the report suggests the governments to step up support for agricultural research to spark another ´green revolution´ to lift output and help develop crops more resistant to weather extremes. “More investment in infrastructure, such as irrigation systems and farm-to-market roads to improve distribution and reduce post harvest losses is also essential,” it adds.
Strengthening initiatives such as the food bank established in 2008 by the South Asian Association for Regional Cooperation may also help smooth out price volatility and improve food security in the region during times of shortage, the report says.
Related story
Eating junk food is bad for health!
