Rising Food Prices in Bangladesh: Causes, Poverty Impacts, and Policy Actions

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  • Topic: Food, 2007–2008 world food price crisis, Poverty
  • Pages : 3 (768 words )
  • Download(s) : 107
  • Published : May 24, 2011
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Rising food prices in Bangladesh: Causes, poverty impacts and policy actions FOOD prices in both domestic and international markets have reached all-time high in recent times. The surge in the prices of food grains, especially that of rice, has become a matter of serious concern not only in Bangladesh, but also in Asia as well as around the globe. There has been considerable erosion of purchasing power of the poor who spend more than 60 per cent of income on food. This has obviously put them at greater risk of hunger and malnutrition, which has threatened to undermine the gains in poverty reduction that Bangladesh has achieved in recent years. In fact, this may even reverse the trend of poverty reduction unless effective and coherent actions to assist the vulnerable population to cope with the drastic hikes in their food bills are implemented by the government on an urgent footing.

The combination of new and ongoing forces is driving the world food situation and the prices of food products. One emerging factor contributing to rising food prices is the high and rising price of energy. Energy and agricultural prices have become increasingly intertwined. With oil prices at an all-time high approaching $150/barrel, the U.S. government is subsidizing farmers to grow crops for energy. The U.S. farmers have massively shifted their cultivation towards bio-fuel feed stocks. High energy prices have also made agricultural production more expensive by raising cost of mechanical cultivation and fertilizers, as well as marketing including cost of transportation. At the same time, the growing world population is demanding more and different kinds of food.

Rapid economic growth in many developing countries, especially China and India has pushed up consumers' purchasing power, generating increased demand for food. This has shifted food demand away from traditional staples and toward higher-value foods like meat and milk.

This dietary shift is leading to increased...
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