Driven in part by higher fuel costs connected to events in the Middle East and North Africa, global food prices are 36% above their levels a year ago and remain volatile, pushing people deeper into poverty, according to new World Bank Group numbers released Thursday.
“More poor people are suffering and more people could become poor because of high and volatile food prices,” said World Bank Group President Robert B. Zoellick at his press conference ahead of the WB and IMF Spring Meetings. “We have to put food first and protect the poor and vulnerable who spend most of their money on food.”
According to the latest edition of the World Bank’s Food Price Watch, a further 10% increase in global prices could drive an additional 10 million people below the 1.25 US dollar extreme poverty line. A 30% price hike could lead to 34 million more poor. This is in addition to the 44 million people who have been driven into poverty since last June as a result of the spikes. The World Bank estimates there are about 1.2 billion people living below the poverty line of US$1.25 a day.
The World Bank’s food price index, which measures global prices, is 36% above its level a year earlier and remains close to its 2008 peak. Key increases compared to a year ago include maize (74%), wheat (69%), soybeans (36%) and sugar (21%), although rice prices have been stable. In many countries, vegetables, meats, fruits and cooking oil continued to rise with potentially adverse nutritional consequences for the poor.
Food prices have soared due to severe weather events in key grain exporting countries, export restrictions, the increasing use for bio-fuel production, and low global stocks. The food price hike is also linked to surging fuel prices -- crude oil increased 21% in the first quarter of 2011as a result of unrest in the Middle East and North Africa.
Measures to reduce the impact of high food prices on the poor include targeting social assistance and nutritional programs to the poorest, removing grain export restrictions, and relaxing bio-fuel mandates when food prices exceed threshold levels. Improving country capacity to manage volatility through financial market instruments, better weather forecasting, more investments in agriculture, the adoption of new technologies, such as rice fortification to make it more nutritious, and efforts to address climate change are also needed.