Latin American and Caribbean countries should strengthen social programs to alleviate the impact of higher food prices among 71 million poor people in the region, newly-released numbers on the potential impact of food prices by Inter-American Development Bank show. More than 26 million people in Latin America and the Caribbean could fall into extreme poverty if food prices remain high, according to the IDB.
Low-income families may be pushed deeper into poverty if high prices for commodities such as wheat, rice and soybeans remain persistently high and countries fail to boost agricultural output and income to the poor, according to IDB data, which estimated the impact of the crisis in 19 countries in the region.
Poor households spend the majority of their income on food and have insufficient assets and savings to cope with the rising cost of basic staples, the IDB data shows. Rising prices may force households to cut down on food intake if other options are not available.
“Recent advances in nutrition and education could be in jeopardy if food prices remain high” said Suzanne Duryea, one of the IDB researchers who conducted the Bank study. “Countries will need to expand investment in social protection programs in order to ease the impact of the crisis.”
Central America and Caribbean countries that import large quantities of food face the greatest risk of deepening poverty. For instance, Haiti would need to transfer 12 percent of its gross domestic product to the poor so they may maintain their pre-crisis levels of consumption; Peru would need to transfer 4.4 percent of its GDP and Nicaragua 3.7 percent, the IDB numbers show.
