MANILA, PHILIPPINES - At least 100,000 of the poorest households in Mongolia reeling from soaring food prices will benefit from a food stamp program to be funded by the Asian Development Bank (ADB).
The Food and Nutrition Social Welfare Program and Project will receive a $9 million grant for the design and implementation of the proposed food stamp program.
Another $3 million grant will improve the capability of the government to implement the food stamp program, strengthen social welfare systems, and establish a mechanism that will ensure the early detection of and rapid response to another food crisis and similar emergencies.
Mongolia will set aside $330,000 to complete the funding requirement.
"The grants will protect at least 100,000 poor and vulnerable households from the risk of malnutrition and prevent them from sliding deeper into poverty," said Claude Bodart, Health Specialist of ADB's East Asia Department. "The assistance will also improve the performance of the government in the area of social welfare."
"Rising inflation has strong negative implications on macroeconomic stability, poverty incidence, and inequality. There is ample reason for the government to intervene in the short-term by establishing a targeted subsidy program to alleviate the impact of inflation on the poor," said Wendy Walker, Social Development Specialist at East Asia Department.
The program will pilot test a mechanism that will identify the neediest households and deliver to each of them a monthly cash equivalent of $14 as food stamps. The amount of each food stamp is equivalent to the estimated monthly expenditure on food by the poorest households.
The results of the pilot test will be used to finalize the overall design for an expanded coverage until its completion in 2011.
Despite rising living standards, Mongolia is still considered one of the poorest countries in Asia, with an overall poverty rate of 32.6% in 2006. Out of those living in poverty, 800,000 face food insecurity based on findings from a 2006 joint mission of the Government of Mongolia and a United Nations Food Security Assessment team.
The spike in food and oil prices earlier in the year has threatened to push a large number of people back below the poverty line in Mongolia. The inflation rate reached 32.2% year-on-year in September, which is much higher than in most other Asian countries.
