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New ADB Paper Outlines Possible Responses to Rising Food Prices
ADB Review [ May 2008 ]

MANILA—ADB has outlined the nature of the food price crisis, its underlying causes, expected impacts and possible responses in a paper titled Soaring Food Prices: Some Possible Responses.

Along with record-high energy prices, the paper says that soaring food prices have seriously eroded the purchasing power of over-a-billion poor in Asia, thus increasing their food deprivation and threatening to undermine the global fight against poverty. These have also stoked inflation and squeezed the fiscal space in many countries, increasing the risks of higher interest rates and a slowdown in economic growth across the Asia and Pacific region. The downside risks to macroeconomic stability have increased in a region otherwise characterized by prudent macroeconomic management for nearly a decade.

"The food crisis calls for immediate response of governments and the international community. ADB is closely monitoring the situation. It is working closely with its development partners to do what it can to respond to the crisis," the paper says.

At a news briefing on the eve of ADB's 41st Annual Meeting, ADB President Haruhiko Kuroda said that, in the short run, ADB will work closely with the affected governments in the region to strengthen safety net programs for food-stressed populations and emergency food security reserves systems.

ADB is also supporting the International Rice Research Institute and the International Food Policy Research Institute to boost research and provision of inputs to farmers to help overcome key constraints.

In the medium to long run, governments need to step up investment, boost rural infrastructure, and strengthen institutions to sustain higher farm output.

"We are working closely with our development partners to respond to the crisis in line with our comparative advantages and resource availability," says Mr. Kuroda.

• enhance productivity growth;
• promote biosecurity;
• improve market access and income diversification;
• improve access to information and communication technology;
• continue dialogue to deepen and widen policy reform; and
• strengthen institutions, enhance capacity and skills.

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