Sunday, 29 May 2011

POVERTY: FOOD: Prices and perceptions

LONDON, 25 May 2011 (IRIN)

 Photo: Siegfried Modola/IRIN

 Banu Bibi's shopping basket is becoming emptier. When she goes shopping in Dhaka, Bangladesh, she spends more than a year ago, but that money buys less. In 2010, for 134 taka (US$1.80), she could afford lentils and laundry soap, and the family's favourite fish. This year she has to spend 185 taka ($2.50) just for the basics: more rice to make up for the lack of other food, and cheaper vegetables.
Banu Bibi lives in one of eight communities picked by a research team from the Institute of Development Studies in the UK to track the effects of rising food and fuel prices. For three years, with the help of partner organizations in Bangladesh, Indonesia, Zambia and Kenya, they have been talking to people in selected rural and urban communities about how rising prices affect their lives.
Banu Bibi's experience is fairly typical. Her family is not starving; they still have food, but it is not the food they like and is not as nutritious as it could be. They certainly ate more and ate better before the food price shock and financial crisis of 2008. And across the world, homemakers are having to work harder, spending more time shopping or looking for food, and planning more carefully to stretch their budgets to feed their families.
A woman in Lango Baya, Kenya, spoke for many when she told the researchers: "You go to a shop to buy something with the same amount as you paid the previous day, only to be told that prices have risen."
Although food and fuel prices did fall after the initial spike in 2008, they never went back to their previous levels, and this year they have jumped again. Only one of the four countries studied has experienced some respite this year - Zambia, where the price of maize, the staple food, has not increased.

Local locus
While the two previous studies concentrated on the mechanisms people used to cope with the rising prices, this time the researchers decided to ask some more political questions - why did people think prices were so high? Who was to blame? And what should be done about it?
"It was an interesting time, with the Arab Spring and unrest around the world, and we wanted to ask how people felt about the food and fuel price rises," the research team leader, Naomi Hossain, told an audience at the University of Sussex, recently.
Her presentation coincided with the publication of a report into the global causes of rising prices by the British charity, Christian Aid. It analyzed recent movements on commodity markets, and concluded that much-vilified hedge funds were not the real culprits, instead singling out pension funds. They have very large pots of money, and have been pulling out of volatile stocks and shares and investing in funds linked to a basket of commodity prices, forcing fund managers to protect their positions by buying commodity futures on such a scale that they move the market.
But although commodity price rises are now an international phenomenon, extensively reported in the media, the people Hossain and her colleagues spoke to only looked for causes within their own country, citing hoarding and speculation, changing climate and environmental problems in their own area, and - overwhelmingly - their governments' failure to care about the poor.
One interviewee in Bangladesh told them, "I don't believe in this global market story at all. It is just an excuse for the government not to do anything."
Hossain describes "a real failure of global civil society to get people to see how their livelihoods are connected to the global economy. I am not surprised people prefer local causes. It gives people a sense of agency; if it's a global problem, then what can they do?"

Moral focus
But she has a certain sympathy for governments. There are more social protection schemes in place, for instance, than at the time of the first survey, despite governments having their budgets squeezed, but even so they get little credit.
Those who believe the government should "do something", suggest banning exports, controlling prices, punishing hoarders and subsidizing basic foodstuffs. The researchers found a sense that it was the moral duty of a government to provide for its people, sometimes linked to notions of democracy. A woman in Kenya told them, "In the new constitution, we have the right to be provided [with] food by the government."
The moral sense also extended to the business community. A rural doctor in Bangladesh said, "The businessmen should get some moral teaching. If they were afraid of Allah and conducted business honestly, the situation would improve."
All in all, says Hossain, "There is a popular consensus about what is legitimate, about social norms and obligations. People set moral limits to the freedom of the markets."
High food prices are not bad news for everyone. Another IDS research fellow, Xavier Cirera, pointed out that the rises followed a long period of low food prices, which had been very hard on farmers. "We always have to ask the question, what is the real price of food? And how can governments ensure better safety nets for the poor while ensuring that traders pass the benefits of price increases back to the producers? The evidence is that farmers are getting some benefit and are responding. But they are not realizing the full benefit of higher prices."

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