FAO Initiative on Soaring Food Prices
 

Asia and the Pacific

Though impressive economic growth has helped pull many of the Asia and Pacific region’s people out of the worst poverty, the recent sharp increases in food prices could hinder further progress and perhaps reverse some of what has already been achieved. People are faced with increasing hunger and poverty.

Asia region particularly hard-hit

Rising prices have plunged an additional 75 million people below the hunger threshold, of which  more than half, or 41 million, live in the Asia-Pacific.

The Asia-Pacific region accounts for 90 percent of global rice production and consumption, as well as more than 80 percent of global rice exports. It produces half of all the world’s cereals together.

Prices lower, but still at historic highs

Prices of internationally traded Thai B-grade white rice, a benchmark, more than tripled between May 2007 and May 2008. Prices have since dipped from those record highs, but still high prices are sustained for rice as well as other staple foods.

The price of rice in the Sri Lankan capital, Colombo, were 77 percent higher in August compared with August 2007. Wheat prices in Kabul, Afghanistan, were 130 percent higher for the same period.

Trade restrictions fuel high prices

FAO supported 14 countries through its own Technical Cooperation Programme and with extra budgetary resources for a total amount of US$21.744 million.

India, Cambodia and Vietnam also temporarily banned rice exports due to fears of a lack of supply. Though complete bans have mostly been lifted, other trade restrictions remain in place. India continues to forbid rice exports except for high-end basmati rice.

Prices of fertilizers have tripled

The livelihoods of about 50 percent of the region’s people are rooted in farming.

Impoverished farmers are net producers and sellers of food straight after their harvests, due to the lack of processing and storage facilities. So they sell when prices are at their lowest, only to become net buyers of food later in the year, when prices are high.

The cost of fuel, seeds, fertilizers, pesticides and general inflation pose a challenge to boosting agricultural productivity.

FAO assistance focuses on food and fuel importers

FAO supported 12 governments and a number of small island states in an effort to deliver the agricultural inputs that farmers need and, in doing so, help increase local farm production as soon as possible.

National assessments of the TCP projects have been conducted and synthesis reports for Asia as well as the Pacific Islands have been compiled.

Food price monitoring

The FAO's Regional Office has also put in place a monitoring system that funnels national market data back to FAO and other international agencies. Data on prices, production, trade policy measures, food stocks, and policy decisions are relayed to FAO on a regular basis, with support from WFP, UNDP and the European Commission.

FAO is working in partnership with the South Asia Association for Regional Cooperation (SAARC) and the Association of Southeast Asian Nations (ASEAN) in efforts to address high food prices. A primary focus is developing food bank structures and augmenting the region’s food reserve systems.

India, Cambodia and Vietnam also temporarily banned rice exports for fears of a lack of supply. Though complete bans for the most part have been lifted, other trade restrictions remain in place. India continues to forbid rice exports except for high-end basmati rice.

 

Asia leads by far in rice production and consumption
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