If Food Prices Keep Surging, These Economies Will Be The Next To Crumble

bangladesh food inflation

Photo: AP

Global food prices jumped 30% year-on-year in February. Food inflation has been pushed by a drop in global food reserves, brought on by severe weather conditions in Russia, China and Australia.If prices continue to rise by 30% this year, another 193 million people will be forced into poverty, according to a new report from the Asian Development Bank.

We’ve compiled a list of countries that would be hit the hardest by a 30% rise in food prices and the measures they have taken to ease the burden. Some of these countries with deeper structural problems have a harder road ahead of them.

Nepal

A 30% rise in food prices would cause a 6.1% increase in the percentage of the population living under $1.25 a day and 1.65 million more poor people.

Backed by the UN World Food Programme Nepal has planned to increase its rice imports by 100,000 tons and will release 30,000 tons of the grain in mid and far-western areas of the country that face a major food deficit. It has also subsidized food at fair price shops.

Data provided by Asian Development Bank

China

A 30% rise in food prices would cause a 6.5% increase in the percentage of the population living under $1.25 a day and 49.42 million more poor people.

China has put in place export quotas for wheat, rice flour, and corn since 2008. Its current grain reserves stand at about 200 million tons and retail prices of agricultural products have been capped by the government. China has also provided cash incentives and subsidies too boost production supplies and has set aside $12 billion for irrigation investments.

The poverty rate would be 0.7% and it would put 3.93 million people below the poverty line in urban China.

Data provided by Asian Development Bank

Pakistan

A 30% rise in food prices would cause a 6.7% increase in the percentage of the population living under $1.25 a day and 10.4 million more poor people.

To combat rising food prices, Pakistan has allowed duty free import of sugar, boosted its wheat reserves after a good harvest. The country also allowed food aid and subsidized food sold through state-owned stores.

Data provided by Asian Development Bank

Timor-Leste

A 30% rise in food prices would cause a 6.7% increase in the percentage of the population living under $1.25 a day and 70,000 more poor people.

With the help of the UN World Food Programme, East-Timor set-up its first food processing plant in 2010 that is customised to serve the nutritional needs of its population. The government heavily subsidizes grains like rice and is working to boost domestic production.

Data provided by Asian Development Bank

Uzbekistan

A 30% rise in food prices would cause a 6.8% increase in the percentage of the population living under $1.25 a day and 1.78 million more poor people.

The Uzbek government has subsidized bread and introduced price controls on vegetable oil and sugar. Child and maternity malnutrition programs have been put in place and food benefits have been created for old people and singles. The government has created subsidies to stimulate wheat production.

Data provided by Asian Development Bank

Cambodia

A 30% rise in food prices would cause a 6.8% increase in the percentage of the population living under $1.25 a day and 940,000 more poor people.

For the moment Cambodia has a small state-owned food reserve but plans to build a new food reserve with the help of the Asian Development Bank. In February 2010, it set aside $310 million to develop rice irrigation systems over a two year period.

Data provided by Asian Development Bank

Indonesia

A 30% rise in food prices would cause a 7.2% increase in the percentage of the population living under $1.25 a day and 8.27 million more poor people.

The world's 4th largest rice importer, Indonesia has suspended import duties for 57 key commodities. The government is creating rice rations for 17.5 million poor households. In a bid to boost agricultural output, the government has also provided cash incentives for wheat production and

The poverty rate would be 4.8% and put about 5.1 million people below the poverty line in urban Indonesia.

Data provided by Asian Development Bank

Bangladesh

A 30% rise in food prices would cause a 7.5% increase in the percentage of the population living under $1.25 a day and 11.48 million more poor people.

Bangladesh has reduced VAT on edible oils, banned sugar and rice exports, and it imported 120,000 tons of rice in Q1 2011 to boost its food reserves, it plans to import 1 million tons of rice. The government has subsidized credit for food imports and set-up subsidies for food production.

Data provided by Asian Development Bank

Lao People's Democratic Republic

A 30% rise in food prices would cause a 7.6% increase in the percentage of the population living under $1.25 a day and 430,000 more poor people.

The government's internal trade department monitors the prices of rice, meat, and poultry and has introduced controls for 15 goods including rice. Tariff reductions have been implemented for fertilizers and Laos has offered farmers tax cuts and subsidized credit to boost agricultural production. New incentives have been put in place for investments in irrigation, small and medium enterprises etc. Laos however continues to face unfavorable prospects for its current crop season.

Data provided by Asian Development Bank

India

A 30% rise in food prices would cause a 8.8% increase in the percentage of the population living under $1.25 a day and 68.45 million more poor people.

India continues to ban exports of rice and wheat and boost its reserves of both. The country also has a quota for sugar exports. The government has subsidized the price of 24 crops at fair price shops and established subsidies for agricultural production. School feeding programs and ration cards have been made available to the public.

The poverty rate would be 6.4% and put about 20 million people below the poverty line in urban India.

Data provided by Asian Development Bank

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