Efforts to improve lives deterred by food prices
Posted Tuesday, May 8 2012 at 19:28
Soaring international food prices have watered down efforts to improve living standards and alleviate poverty in developing countries, a report by the World Bank has said.
According to the World Bank study on millennium development goals (MDGs), the most affected are health targets such as reduction in maternal and child mortality, and poverty eradication.
Economists at the bank are now calling for prioritisation of policies to deal with the volatility in food prices.
“High and volatile food prices do not bode well for attainment of many MDGs as they erode consumer purchasing power and prevent millions of people from escaping poverty and hunger, besides having long-term impacts on health and education,” said Justin Yifu, World Bank’s chief economist and senior vice president for development economics.
The Global Monitoring Report 2012 released on Tuesday notes that the most affected are developing countries specifically in the Sub Saharan Africa region, with urban population, female-headed and non-farmer households topping the list.
In Kenya for example, the hike in food prices experienced early last year resulted into accelerated inflation which saw the country shift from single digit inflation in 2010 to the highest overall inflation of 19.72 per cent recorded in November last year.
Analysts attribute the increase in food prices to among other factors a surge in international prices of fuel.
Fuel is a huge component of Kenya’s imports and a surge in prices has a direct impact on local food prices.
“Food prices have been following energy prices. Agriculture has become more energy intensive because inputs such as fertiliser are linked to energy prices,” said Jos Verbeek, manager Global Monitoring Report.
With the latest discovery of oil in Turkana County Kenya is likely to be among oil producing countries, signalling an ease on fuel prices and the overall prices of food. However, this is dependent on the commerciality of the country’s oil deposits.
With the findings by the World Bank, it has called for a review of policies governing food supply calling for more investment in irrigation activities and redesigning of trade policies to encourage stabilisation of food prices and consequently boost returns to farmers.
“The policies we are implementing are forcing us to pay higher prices for food than our international counterparts,” said economist John Randa.