Asia fears lost decade from food price shock1 min read . Updated: 04 May 2008, 09:11 PM IST
Asia fears lost decade from food price shock
Madrid: Soaring food prices may throw millions of people back into poverty in Asia and undo a decade of gains, regional leaders said on Sunday while calling for increased agricultural production to meet rising demand.
Asia -- home to two thirds of the world’s poor -- risks rising social unrest as a doubling of wheat and rice prices in the last year has slammed people spending more than half their income on food, Japanese Finance Minister Fukushiro Nukaga said during the Asian Development Bank’s annual meeting.
If food prices rise 20%, 100 million poor people across Asia could be forced back into extreme poverty, warned Indian Finance Secretary D. Subba Rao.
“In many countries that will mean the undoing of gains in poverty reduction achieved in the past decade of growth," Rao told the ADB’s meeting in Madrid.
A 43% rise in global food prices in the year to March sparked violent protests in Cameroon and Burkina Faso as well as rallies in Indonesia following reports of starvation deaths.
Many governments have introduced food subsidies or export restrictions to counter rising costs, but they have only exacerbated price rises on global markets, Nukaga said.
“Those hardest hit are the poorest segments of the population, especially the urban poor," Nukaga told delegates.
“It will have a negative impact on their living standards and their nutrition, a situation that may lead to social unrest and distrust," he added.
The ADB estimates the very poorest people in the Asia Pacific region spend 60% of their income on food and a further 15 percent on fuel -- the key basic commodities of life which have seen their prices rise relentlessly in the last year.