April 23, 2008	Wednesday	Rabi-us-Sani 16, 1429

RAWALPINDI, April 22: Households in Pakistan are devoting a larger proportion of resources to food and cutting back on consumption, with the number of food insecure people increasing from 60 million to 77 million in 2007-08, resulting in increased levels of malnutrition.

The International Fund for Agricultural Development (IFAD) has issued a short paper with the objective of improving the understanding of what soaring food prices at the global level mean for poor rural people across the developing world.

The paper reveals that the prices of basic food commodities have increased rapidly over the past three years. In only the first quarter of 2008, wheat and maize prices increased by 130 per cent and 30 per cent respectively. The paper is based on a questionnaire sent to IFAD country offices and responses were received from over 40 countries, including Pakistan.

Rice prices, which increased moderately in 2006 and in 2007, rose 10 per cent in February, 2008, and a further 10 per cent in March. The threat to food security in developing countries is on the rise, the paper says.It is clear from the responses received that in almost all developing countries food prices have increased during 2007 and early 2008. In some cases, prices have more than doubled, and in some countries there have been absolute scarcities of food in local markets. Yet it is not immediately apparent that poor rural people face a single and uniform crisis of food prices.

On the contrary, the situation varies considerably from one country to another and in the urban and rural areas of each country. Not only does the extent of the price hikes differ enormously but also the factors shaping these prices vary profoundly. Feedback from many countries suggests that increasing fuel prices are a major driving force behind rising food prices. This has affected both input prices and transport costs. But in the final analysis, food prices are ultimately determined – today as they have always been – in large part by production levels and in a number of countries rising prices reflect, above all else, unfavourable agro-climatic conditions, the paper says.

In the most countries, IFAD’s target group – poor rural people – are both sellers of food commodities and buyers of foodstuff, at different times of year. Typically, they sell immediately after harvest to meet their immediate cash requirements and buy food in the months prior to the next harvest.

In all regions, and in most countries, prices paid to food producers have increased over the past year. The extent to which they have increased varies considerably country by country and crop by crop.