Rising global food prices squeeze the world's poor
Weather, inflation, and biofuels pushed the United Nations food price index to an all-time high in December, sparking concern over the poor being left with empty plates.
Amid the stalls of neatly stacked vegetables at this city's Sarojini Market, Manju shops with her young granddaughter. Her bags have become lighter in recent months, as she's cutting back on the basics. Food prices have risen sharply over the past year and Manju is even going with fewer onions, the ubiquitous ingredient that fills just about every Indian gravy dish.Skip to next paragraph
"The kids have stopped eating properly," she says. "They have lost the taste for food and are complaining."
The United Nations Food and Agricultural Organization (FAO) food price index hit an all-time high in December. This sparked concern that high prices just prior to the global recession could reflect longer-term structural changes in supply and demand that will imperil the poor's ability to eat.
Before the latest rise, Gallup surveys from 2009 painted a picture of 1 billion people worldwide who struggle to afford food. It's too early to tell if higher costs will dramatically add to those ranks of the world's hungry. But it's clear that all around the world – where food is growing more expensive due to weather shocks, export bans, inflation, high oil prices and biofuels, speculation, and slowing growth in farm yields – many are going with less.
Cutting corners in China
As a retiree eking out his pension with a part-time job, Zhao Zongya is used to being frugal. But with food prices continuing to rise in China, he says he has to cut more corners to feed himself, his wife, and his mother.
“When prices go up, the only solution is to buy less or to stop buying unnecessary things,” says Mr. Zhao, who lives in the port city of Tianjin.
Eggs have nearly doubled in price recently, “so we buy fewer eggs,” Zhao says regretfully, and apples have soared beyond his price range. “We’ve just stopped eating apples.”
Zhao has also adopted a tactic used around the world by poor people: He goes to the market just before it closes, so as to get a better price on food that the stall-holders want to unload. Or he visits his local supermarket as soon as it opens, when he can still find overnight vegetables that are sold more cheaply.
Until a few months ago, Zhao recalls, he spent about 800 RMB ($120) a month to feed his three-person household. Now he needs another 300 RMB ($45). Even though the government raised his pension this month, “it’s not enough to cover the price rises,” says Zhao.
Starvation is a thing of the past in China. Only 10 percent of the population was hungry in 2007, down from 18 percent in the early 1990s, according to the FAO. Many Chinese have seen incomes rise, offsetting higher food bills to some degree. In 2008, a year with high food prices before the global economic crisis, the Gallup percentages of Chinese, Indians, Vietnamese, and Indonesians who said they had trouble affording food went down, not up, points out Derek Headey, an economist with the International Food Policy Research Institute.
"This is partly because these countries insulated their domestic markets from international price rises, and partly because they were all experiencing rapid economic growth," says Dr. Headey.