India Worst Affected As Food Prices Forcing 19m to Stay Poor: UN Study by Prabha Jagannathan

Climbing food prices across Asia, especially India, Bangladesh, Nepal and Laos, might slow down by at least five years the region’s efforts to eradicate extreme poverty and hunger under the Millennium Development Goals (MDG), a UN ESCAP (Economic and Social Commission for Asia and the Pacific) report has cautioned. The report says India is among the mostaffected countries. According to the report, the rising food prices prevented more than 19 million people in the region, a good chunk of them Indian, from pulling themselves out of poverty last year.

That should sound a warning call to the government which is battling rising food prices somewhat lackadaisically thus far.

Worse, the end March 2011 report, authored by the UN ESCAP Macroeconomic Policy and Development Division (MPDD), warns that there is every possibility that India, along with select Asian countries, may have to contend with an additional number of people — between 10 million and 42 million — being affected by high food prices over the next year.

This could mean that policymakers will have to urgently review and improve efficiency and expand the scope and implementation of key national scale social welfare and poverty alleviation programmes, such as the public distribution system (PDS) and the NREGA.

According to the UN report: "Estimates considering different scenarios for the year ahead suggest that high food and oil prices may slow down poverty reduction even further, affecting from 10 to 42 million additional people and postponing the achievement of the MDG on poverty reduction by half a decade in many countries including India, Bangladesh, Lao Peoples’ Democratic Republic and Nepal."

This comes at a time when top RBI officials acknowledged, for the first time, that high inflation and food prices over the last several weeks may have impacted development.

“Rising food prices are adding to inflationary pressures across the Asia-Pacific region. They are seen as a key downside risk to sustaining recovery in 2011. More startlingly, high food prices in 2010 have kept 19.4 million people in poverty in the region, people who otherwise would have been out of poverty today,” the MPDD policy brief has said. "South Asian countries are the hardest-hit in this regard with inflation rates either close to, or above, double digits for 2010 and likely to go up further, if food pries are taken as an early warning signal," the report says. Agri economist Surabhi Mittal (Cimmyt, International Maize and Wheat Improvement Centre) emphasises that for India to be ranked with some of the poorest nations in respect to the impact of inflation and high food prices and postponement of MDG poverty alleviation deadlines is a grave development. “Soaring food prices and inflation have brought down the real income of people below the poverty line and may have neutralised the positive impact of targeted programmes such as the NREGA.”