Demand, Supply, Sustainability and Security
Edited by Raghbendra Jha, Raghav Gaiha and Anil B. Deolalikar
Recent episodes of sharp spikes in global food prices and their increasing volatility have raised concerns worldwide about inflation, growth, hunger and poverty. By adding to inflationary pressures, food price increases hinder economic growth and enhance macroeconomic vulnerability. Low-income households, the most vulnerable to food price increases, are forced to adjust their consumption and switch to cheaper and less nutritious foods. The resulting undernourishment has grave implications, especially for children, affecting their health, cognitive abilities and lifetime earnings. By eroding real household incomes, elevated prices entail a major setback for the progress toward the Millennium Development Goals (MDGs) linked to food and nutrition. At the same time, high prices increase the cost of food-based safety net programs to protect the poor. By adding to the subsidy burdens of governments the prices impact on the country's fiscal position, which might fuel inflation even more. Moreover, global price shocks cause fluctuations in international terms of trade. Developing Asia is particularly impacted by food price inflation. Although it remains the fastest-growing region in the world, its growth has slowed significantly since the occurrence of global food, fuel and financial crises. Yet it has to feed two-thirds of the world's hungry people who live in the region and whose numbers are on the rise. High food prices pushed millions of people in developing Asia into poverty (ADB, 2011a).
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