Food security in South Asia worsening

Increasing food prices is pushing more of the population in South Asia to poverty, according to Food Price Watch.

Global food prices increased by 10 per cent between June and July with prices of staple diets like wheat increasing by 25 per cent, it said, adding that households — in South Asia — who previously were living not far above the poverty line are likely to have fallen into poverty as the result of higher food prices.

The crisis continues to have effects on food and nutrition security across South Asia. "Bad weather, trade curbs, oil prices and bio-fuel diversions have all led to higher food prices, which destabilises the incomes and food security of millions across the region," it added.

While rising food prices risk higher core inflation in developing countries, the volatility proportionally squeezes the poor with considerably detrimental effects for their nutrition outcomes.

"Food prices increased sharply in July," said senior economist at the World Bank José Cuesta, adding that the effects on poverty can reach up to 20 per cent and the impact on the performance of children in school, their development and growth are not only transitory but can last a lifetime.

Studies in the last few years in Afghanistan and elsewhere have confirmed that rises in the cost of food have led to a switch in consumption from nutrient rich foods, like vegetables, meats and other proteins, to nutrient-poor staples, like rice and wheat.

There is also evidence of children’s food intake being protected, typically at the cost of women’s consumption. When the effects of the crisis are more severe, households may also sell productive assets, take children out of school, and reduce expenses on health.

"The poverty and nutritional impact of food price spikes on the poor is significant since they spend a larger fraction of their income on food than relatively better off individuals," said chief economist of the South Asia region of the World Bank Kalpana Kochhar.

While these are not preferred outcomes, they are sadly a reality for the many poor households that face rapidly fluctuating prices. An earlier study Global Food Price Inflation and Developing Asia by Asian Development Bank showed that a 10 per cent increase in food prices will increase some 3.8 million, 0.01 million, 22.8 million, 6.7 million, 0.6 million, 3.5 million, and 0.2million people in Bangladesh, Bhutan, rural India, urban India, Nepal, Pakistan, and Sri Lanka, respectively living below $1.25-a-day.
Bangladesh has the highest weight of food on CPI. The weight of food on CPI is 42 percent in Nepal.

Another South Asia report, 'Food Price Increases in South Asia: National Responses and Regional Dimensions' found that households who previously were living not far above the poverty line are likely to have fallen into poverty as a result of higher food prices.

To continuously monitor such fluctuations, the World Bank’s Poverty Reduction and Equity Group produces its quarterly Food Price Watch which is complementary to the Food and Agriculture Organisation's GIEWS Country Briefs on Food Security at the country level.

The World Bank said that concerted efforts should be made at the national level to mitigate the nutritional effects of such shocks, for instance, rice fortification can be a cost-effective means to stabilising the nutritional impact on these poorest households.

Cuestas recommended a balanced set of policies; ones oriented to compensate for the negative impacts of high prices especially through safety nets, as well as medium to long-term investments in agriculture; especially on productivity and climate-smart agriculture policies

As a response, the World Bank has created several financial instruments to help mitigate the impacts of climate change on food price instability. India has begun making insurance markets for farmers, although there is much scope to scale this up beyond the current pilot programme.

The IMF, which also tracks food price commodity prices, is working to provide policy support and financial assistance to low-income countries facing such food shocks through a funding programme called the Exogenous Shocks Facility.

Programmes and policies to help mitigate food price hikes include safety nets to ensure poor families can afford basic staples, sustained investments in agriculture, the introduction of drought-resistant crop varieties — which provide large yields and production gains — and keeping international trade open to the export and import of food.

To combat such trends in South Asia, resources have been made available throughout 2012 for the bank’s Global Food Price Crisis Response Programme (GFRP) in order to mitigate the worst of these shocks.

In Nepal, for instance, a GFRP project has provided food to approximately 940,000 people through food and cash for work programmes. Some 94 per cent of beneficiaries reported an increase in food security and an average of 5.5 months of self-sufficiency; 52 per cent of respondents reported eating more meals each day; 45 per cent reported an increase in the variety of food consumed; and 30 per cent reported eating larger meals.

The World Bank is engaged in South Asia in addressing agriculture production and food safety net problems. The bank's Agriculture and Rural Development, with a portfolio of $5.8 billion, constitutes the largest share of South Asia’s lending programme.