No benefits for rural poor from food price hikes - study

Rural poor people in developing countries like the Philippines have not benefitted from the increase in the prices of food commodities even if they make their living from agriculture, according to a report of international development organization Oxfam.

This is mainly because of “flawed trade and agricultural policies” that in the case of the Philippines, has caused rice farming to become a “losing business proposition.”

As a result, sharp increases in food prices are “hurting poor producers and consumers alike, threatening to reverse recent progress on poverty reduction in many countries,” according to the 46-page report titled “Doubled-Edged Prices.”

The report noted that prices of staple foods have seen increases from 30 percent to 150 percent in 2007 and 2008.

In the case of the Philippines, the price of rice has increased by 50 percent from January 2007 to April 2008.

“Contrary to initial assumptions that poor people in rural areas were benefiting while those in urban areas were suffering, Oxfam research shows that only in a few countries are small producers benefitting from higher prices,” the report stated.

The Oxfam cited a number of reasons, including rising input prices and other constraints to farming like limited access to financial assets and services, declining or low rainfall patterns, lack of infrastructure like irrigation.

Lan Mercado, Oxfam country director, said that in the Philippine setting, the government “does not have a coherent rice trade policy.”

 “The fallback is always importation that leads to the vicious cycle of dependence on foreign supply,” she said during the launch of the report on Thursday.

Mercado noted that two government programs supposed to help the agriculture sector– the Comprehensive Agrarian Reform Program and the Agriculture and Fisheries Modernization Act – have insufficient funding.

 “Long-term investment in agriculture, particularly in the sectors that produce the country’s food supplies, is the only way to protect Filipinos from price shocks. A clear national rice trace policy is necessary as well as social protection programs that reach poor women and men,” she said.

Ed Santoalla, Oxfam economic justice program manager, said this problem “provides disincentive to farming” making farming a “losing business proposition.”

 “(It) drives away people who should be doing rice farming... The lure of urban jobs is what’s taking away the youth from tending the Banaue rice terraces,” he noted.