Food security woes: Hunger strife

When he took office in 1985, Peruvian President Alan Garcia ordered controls on the price of rice, sugar and other goods to try to keep staple food within reach of his country’s poor.

When shortages and a black market arose, Peruvians were forced to stand in line for hours for basic foodstuffs, and five years later, his presidency dissolved in a spiral of hyperinflation.

As Peru again faces rising food prices – this time along with the rest of the world – a re-elected Alan Garcia has drawn on past experience and rejected price controls.

Spiralling Crisis

Other nations would do well to follow Peru’s example, according to the World Bank, the International Monetary Fund and other international agencies.

From Argentina and Venezuela to Russia, China and Thailand, governments are meeting the challenge of rising food prices by imposing price controls – fixing prices below market level – hoping to ease the burden on their populations and avoid social unrest.

But evidence from past crises shows that such measures don’t reverse price trends and can end up having the opposite effect, say international economists, who advocate aid for the poor instead.

Although food prices have been on the rise since 2001, the situation collided last year with sharply higher oil prices, leaving many governments grappling for quick fixes and turning to old devices.

Many have found that the quickest, easiest and most popular way is price control.

Tough Measures

In China, authorities introduced controls on a range of goods from instant noodles to milk, calling it a temporary intervention to battle surging inflation. It was the first time in over a decade that Beijing waded into the food market.

In Thailand, the government is taking similar steps on instant noodles and cooking oil, and in Russia authorities are trying to cap prices of bread, eggs and milk.

Others include Russia, Venezuela, Mongolia, Kazak-hstan, Cameroon, Yemen, Jamaica, Egypt, Tunisia, Maldives, Pakistan and Panama, according to the World Bank, which lists 21 countries that have controls on strategic staples.

Countries with food-related unrest

• Argentina
• Bolivia
• Peru
• Nicaragua
• Mexico
• Venezuela
• Dominican Republic
• Haiti
• Mauritania
• Senegal
• Guinea
• Sierra Leone
• Liberia
• Burkina Faso
• Central African Republic
• Cameroon
• Congo
• Algeria
• Chad
• DR Congo
• Sudan
• Eritrea
• Iraq
• Bulgaria
• Moldova
• Afghanistan
• Nepal
• India
• Bangladesh
• Philippines
• Pakistan
• Sri Lanka
• Somalia
• Ethiopia
• Mozambique
• Zimbabwe
• Swaziland
• Lesotho
• Indonesia
• East Timor
• Australia

Source: UN FAO