Rome — A European shopper who buys a loaf of bread for one euro in a supermarket is probably paying about 14 cents for the actual food, with the rest of the cost going to packaging, transport, advertising and overheads. If the price of wheat doubles, that bread will cost just 14 cents more – a manageable increase.
Poor people in the developing world tend not to buy loaves of bread. They buy a bag of flour. If the price of maize doubles, the price they pay for that flour also doubles. That's hardly manageable if food already accounts for most of what you spend in a month.
In fact, the poorest households in the developing world may spend as much as 60-80 percent of their incomes on food. When prices go up, they must spend even more of their meager resources on food. That means they have less for their other needs, such as clothes, shelter, medicines, school books for the children. And little by little, non-essentials get cut.
Tough choices
To begin with, people start reducing the quality of the food they eat. That means less fresh fruit and vegetables, less meat. They will concentrate on staples, usually grain such as wheat, maize or rice. This impacts their intake of vitamins and protein, which can be harmful, especially when children are under two.
After that, families might start cutting the number of times they eat a day, from three to two and then even to one. Naturally, as things get tough, families start to look for other ways to make savings. If someone in the family needs costly medicine, that may be cut.
If a family has a couple of goats or a few chickens, for example, they may sell those. This brings in more money but it's disastrous for the future because it means they no longer benefit from the goat's milk and the chicken's eggs. Losing assets in this way pushes a family much closer to destitution.
Education also starts to seem non-essential. Parents may pull their kids out of school, setting them to work growing food or selling things on the streets for a few coins. Education is not as tangible a loss as a chicken or a goat, but the long-term consequences can be severe. Children may never go back to school. If that happens, their chances of pulling themselves and their families out of poverty are reduced – possibly forever.
WFP today joined its sister UN agencies FAO and IFAD in a call for "swift, coordinated international action" to prevent this scenario playing out again as it did in many countries in 2008.
Safety nets
"We need to act urgently to make sure these price shocks do not turn into a catastrophe, hurting tens of millions over the coming months," said the heads of WFP, the Food and Agriculture Organization and the International Fund for Agricultural Development. Read statement
One of the best ways of helping the poor avoid the worst effects of food price hikes is through so-called 'safety nets' – reliable systems providing food to the most vulnerable when times are hard. These include school meals programmes , assistance to smallholder farmers and nutritional support for mothers and children.
Working with local governments, WFP has already established many such programmes in poor countries around the world. In coming months, if prices continue rising, they could become vital lifelines for millions of vulnerable families.
United Nations World Food Programme (Rome)