“Support for Inclusion of Food Security Objectives, Policies, Programmes and Monitoring Mechanisms in the PRSP/Interim Plan of Nepal”

Y B Thapa

Soaring Food Prices

FAO Mandate Causes Implications Remedies

FAO Mandate

to raise the level of nutrition and standard of living to improve agriculture

productivity to better the lives of rural population to contribute to the growth of the world economy

IMF_Food Prices

Food Price Index Base Year 2005 = 100 March 2008: 170

Rise in prices has been for staple foods in the first quarter of 2008 compared to previous year Wheat 107% Rice 71% , Maize 29%

This on top of substantial jumps in 2007

Price of staple food (paddy, wheat and maize) is on the rice.

Monthly retail price rise for Coarse Rise

y = 0.9909x + 21.691

y = 0.042x + 22.308

20.00

22.00

24.00

26.00

28.00

30.00

32.00

34.00

36.00

Month

Rs/

Kg

2006/07 2007/08 Linear (2007/08) Linear (2006/07)

Source: MOAC

Food prices First quarter of 2008 (December 2007 – April 2008)

Prices vary in the country depending on accessibility, local supply and stock

Source: government figures

Wheat flour

Coarse rice

Lentil

Soybean

2 % 5 % 18 % 24 %

Commodities _WFP-1

Cooking Oil prices Mustard oil

Vegetable ghee

Soybean oil

16 % 26 % 28 %

Commodities_ WFP-2

Factors behind the Food Crises

Rise in demand for meat has put pressure on meat supplies (grain to meat conversion 7:1);

Rapid increase in prices of oil (Fossil fuel to food energy conversion 10:1);

Run of unusual weather in many parts of the world;

George W Bush (2006): Aggressive push for bio-fuels. 20 %of US are dedicated to corn for ethanol; A gallon of corn ethanol uses up most of the

energy that the gallon itself ultimately contains

Implications of Higher Food PricesIncome spent of Foods

Effect of Price Rise in Poverty Incidence

5 % group

PC consumpti

on

Poverty line Rs

Base case Price 25% up

1 3647 7696 -4049 -59732 4723 7696 -2973 -48973 5370 7696 -2326 -42504 5925 7696 -1771 -36955 6492 7696 -1204 -31286 7078 7696 -618 -25427 7653 7696 -43 -19678 8270 7696 574 -13509 8895 7696 1199 -725

10 9565 7696 1869 -5511 10421 7696 2725 80112 11403 7696 3707 178313 12566 7696 4870 294614 13786 7696 6090 416615 15237 7696 7541 561716 17045 7696 9349 742517 19767 7696 12071 1014718 25210 7696 17514 1559019 35988 7696 28292 2636820 88230 7696 80534 78610

Average 15848

Remedies_ general

Enact the Food Sovereignty Law, and implement it

Fully implement the Interim Plan targets on food security

Boost up invest for rural people, and on agriculture, forest and fishery

Take benefits from India’s policy Improve relations along China TAR

border

Remedies_ Operational programmes

Safety nets – having enough to eat Stocks – ready for response Utilizations – end hidden hugger Availability – producing enough to eat

Endowments of excluded people /regions to produce

Value- chain management – diets diversify, standards and safety

Surveillance – reaching communities, and able to forecast

Interim Plan Targets-1

Access: Decrease incidence of hunger from 35 to 31%, increase public food distribution amount from 20 to 39 thou. MT, and contribute 12 thou. MT to SAARC reserve;

Rapid response: NFC to distribute 29 thousand MT in remote districts, and maintain 42 thousand MT as national food security buffer;

Interim Plan Targets-2 Utilization: decrease under-weight

children from 39 to 35% of the population;

Availability: increase availability of food grains from 280 to 289 kg/capita; and

Implementation: NFSSC to have its own permanent Secretariat, Food Security Division, & devolution FNS related to DDCs/VDCs/municipalities.

UN_ Contact Group

Thanks