Increase in the prices of food and fuel

During the first half of 2008, the world experienced a dramatic increase in food and fuel prices. According to the Food and Agriculture Organization (FAO 2008), international nominal prices of all major food commodities reached their highest levels in nearly 50 years, while prices in real terms were highest in nearly 30 years. Compared to the same period in the previous year, the FAO food price index1 increased by 53 percent for the first quarter of 2008.

The agricultural market was also characterized by the increase in international prices of nearly all major food and feed commodities. Leading the list of commodities is vegetable oil, which increased by more than 97.0 percent, and followed by grains, which hiked by about 87.0 percent.The price hike was expected to have adverse effects on poverty and worrisome precisely because it was expected to affect the poor the most.

A group of PEP experts in community-based monitoring systems (CBMS) conducted a series of studies to assess the impact of the price hike on poverty in three different countries: Cambodia, Ghana and the Philippines. Find out about their findings through the following links.

Impact of hiked prices of food and basic commodities on poverty in Cambodia:
Empirical evidence from five CBMS villages

Cambodia and other CBMS sites experienced higher prices when there were changes in the demand for, and prices of, petrol, food, and other consumer goods in the international market in 2008. All consumer goods in rural areas increased at an alarming rate-86 percent higher than the national rate (34%) of inflation within the most recent three-year period...

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Effects of rising food and oil prices on rural households in Ghana:
A case study of selected communities in the Dangme West District using the CBMS approach

Over the past five years, there have been steady increases in the price of fuel on the global market and because of the importance of fuel in the production, marketing, and transportation/ haulage of food products and the desire of every producer/farmer to cover their costs, inflation and higher prices result.

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Analysis of the impact of changes in the price of rice and fuel on poverty in the Philippines

The study aims to assess the impact of rising prices of rice and fuel on poverty in the Philippines. In particular, the variations in the potential effects among different group of households were analyzed using household level data. Results of the study confirm that the impact of increasing prices of rice and fuel vary across different groups of households depending on the sector of employment, level of urbanity, income group and geographical location...

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