Low income food insecurity
RESIDENTS of Dhaka city, and others across the country, see daily lines of hundreds of people in fixed price shops in various neighbourhoods. Being lucky enough to still be insulated from food inflation, I ventured into one of the shops to obtain first hand information.
Each outlet has 1,000 kgs of rice, the product most in demand, which are sold in a maximum of 5 kg parcels. The official claimed that there are almost 2,000 such shops in the country with an additional 2,000 more to be opened.
Given 200 families per day having access to 4,000 shops, the project gives rations to 800,000 families at fixed prices. The shops are open three days a week, which may allow these families to actually obtain their substantial basic food rations from these shops.
With the average family size being 6 members, 3.2 million are being assisted daily. Being open three days a week, may actually double or triple this number given the portion of rice consumed in the daily calorie intake. This is indeed an amazing achievement and should be lauded.
According to the WFP, Bangladesh remains a low-income, food-deficit country with annual average food grain imports of 2 million metric tons. Approximately half of the population (63 million people) live below the food poverty line, and spend 70 percent of their household income on food.
Among these, 28 million people, representing 20 percent of the total population are considered "ultra poor." Given the above figure of 6.4-9.6 million people being fed daily, this implies means that about 20 million of the ultra poor population do not actually have access to the fixed price shops.
They people have no assets, consume around 1,800 Kcal per day in comparison to the recommended daily allowance of 2,100 Kcal per day, and suffer from chronic food insecurity and severe malnutrition. Nearly half of all children less than five years are underweight and nearly half of non-pregnant women are malnourished. Dietary intakes of both children and adults are severely deficient in vitamins and minerals in particular iron, vitamin A and zinc, according to the WFP.
Beyond that, there are another 35 million people who are considered living below the poverty line in urban slums and rural villages, who are not considered ultra poor. In this age of globalisation and push to obtain English language education and logical thinking, the food inflation has trapped almost 35 million people in an age of not having access to food at available prices.
According to different articles and reports, several factors have contributed to the rise in the price of grains and other food products. After a relatively stable period of nominal food prices on the world markets during the years 1974-2005 and a gradual decline in their real price by an astounding 75%, a combination of several factors since 2005 brought a sharp increase in food and feed prices at accelerating rates that reached crisis proportion in mid-2007.
The demand side of the boom concentrated in particular in the emerging economies, most notably in China, India, Brazil, and the Middle East, and their unprecedented growth and vigorous industrialisation increased also their demand for oil and raw materials as an effect of the rise in the number and use of vehicles, their more capital intensive production methods, their urbanisation and higher incomes that increased also their use of electricity and their consumption of high-valued products.
The demand side was further exacerbated with the fiercely controversial rise in demand for bio-fuel. In the US, bio-fuel is produced primarily from corn and it set a target of producing 7.5 billion gallons of renewable fuel use in gasoline by 2012. In the EU total bio-fuel production is smaller and 80% is bio-diesel produced from rapeseed, soy, and increasingly also from palm oil imported from East Asia.
Production of bio-fuel is driven by generous incentives given to farmers that grow corn for ethanol in the US and soy and rapeseeds for bio-diesel in the EU. Both the US and the EU set high targets for the production of bio-fuels in the next decade, but the worsening food shortages and the heated controversy about their environmental impact force policy makers to take another look at these goals.
As a result of all these developments, the dollar price of staple foods rose, in 2006 and 2007, by over 40 percent. The main rise was in grain prices and some of them, particularly the prices of wheat and rice, nearly tripled in the last year alone, and the prices of corn and soybeans nearly doubled. Along with all major emerging economies, these global factors have led to the 20 million still waiting for their food rations all around us.
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