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As prices fall internationally, developing countries still face high food costs

James I Davison's picture

A little more than a month ago, the UN's Food and Agriculture Organization (FAO) introduced a database tool and a press release highlighting a rather disconcerting trend. As the global economic crisis worsened, food prices have fallen at an international level. But, surprisingly, the cost of food has not dropped at the same rate, or at all, in poor developing countries, according the FAO.

The new online tool allows for anyone to easily keep track of food prices in 55 developing countries, comparing the data on both domestic and international levels and tracking change over time. In East Asia, the tool includes data from China, Mongolia, Philippines, Thailand and Vietnam.

I am struck that the release of this data seems to be the first time I’ve heard of this trend. And apparently, even the experts aren't sure what is causing food prices to stay high for those who can least afford it. On his blog, Oxfam’s Duncan Green quoted FAO's Henri Josserand:

"The reasons for this 'stickiness' are not fully understood at this time. We hypothesize that there are several factors, possibly interacting in complex way. So far, we have not found any set of explanatory variables that apply to the whole sample. Actually, we are pretty sure that understanding the reasons will require in-depth analysis at the national or regional levels."

FAO says it hopes the database will provide information for "policy and decision-makers in agricultural production and trade, development and also humanitarian work." Hopefully, this database will help bring attention to high prices and food shortages in the places that can least afford them.

 

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