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Food Price Escalation in South Asia – A Serious and Growing Concern

A spike in the cost of food staples like rice and wheat could push tens of millions more people into extreme poverty in South Asia but food subsidies targeted at the very poorest in the region would help them cope with still-high prices, says a new report by the Asian Development Bank (ADB).

South Asia’s high population growth rates and the high number of people already living on or close to the extreme poverty line of $1.25 a day mean it is one of the most vulnerable regions in the world to food price shocks.  Spending on food already accounts for half the total budget of low-income households.

The study says that a 10 per cent rise in prices could push almost 30 million more Indians and nearly 4 million more Bangladeshis into extreme poverty. Pakistan is also at risk, with the same price leap causing an additional 3.5 million more people to drop to or below the $1.25-a-day income mark.

Nepal and Sri Lanka would be less affected, although a further surge in wheat prices would be especially painful for Sri Lanka, which is completely dependent on imports of the staple and has already seen prices hit historical highs in recent years.

The report – Food Price Escalation in South Asia – A Serious and Growing Concern - notes that after peaks in 2008 and 2011, prices of key food commodities have eased somewhat, although the rate of decline has been slower in South Asia than the international average. In addition, the region suffers from higher overall food inflation rates than the rest of developing Asia, with food making up a bigger share of items measured by the consumer price index.

Download: Food Price Escalation in South Asia – A Serious and Growing Concern

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