Rising food prices and inflation in the Asia-Pacific region: causes, impact and policy response

High food prices have put increasing inflationary pressures across the Asia-Pacific region and are seen as a key downside risk to sustaining recovery in 2011. Bad weather in important food-producing countries, increasing use of crops in biofuels and speculation in commodity markets have added to a long-term decline in agriculture investment and affected global food supplies. In 2010, high food prices kept 19.4 million people in poverty in the region, who otherwise would be out of poverty. Estimates considering different scenarios for the year ahead suggest that high food and oil prices may slow down poverty reduction even further affecting from 10 to 42 million additional people and postponing the achievement of the MDG on poverty reduction by half a decade in many countries, including Bangladesh, India, Lao Peoples Democratic Republic and Nepal. This policy brief outlines short-, medium- and long-term policy responses and interventions that governments and central banks in the region can make to counter the adverse impact of food inflation in the Asia-Pacific region for such an effort in the context of the Fourth United Nations Conference on the Least Developed Countries (LDC-IV).