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Cuba: Food Price Hike Could Plunge over 10 Million People into Abject Poverty
The persistent increase of food prices at the world market is punishing the poorest sectors in Latin America and the Caribbean with a regressive distribution impact, according to the Executive Secretary of the ECLAC, Jose Luis Machinea.

Poverty levels will increase if no urgent actions are taken to minimize the effect of the food price hike, said Machinea in recent statements published by the regional organization. He particularly mentioned the increase in the price of corn, wheat, rice and oil-bearing beans which, in some cases, have surpassed 100 percent.

Since early 2006, and particularly since 2007, food prices have increased in most countries of the region, reporting an annual pace between 6 and 20 percent in different countries, with an average growth close to 15 percent, the ECLAC official explained.

According to ECLAC studies on abject poverty for 2007, the 15 percent increase in food prices triggers abject poverty to nearly three points, to 15,9 percent up from 12,7 percent. The price hike would plunge another 15,7 million Latin Americans into abject poverty, while poverty levels would increase similarly since the same amount of people would become poor.

The ECLAC General Secretary said that if a 5 percent income increase is considered for households, which is similar to the regional average inflation level, some 10 million people would go into abject poverty as a consequence of the food price hike. A similar amount of persons would become poor disregarding the deterioration of the living conditions of those who were already poor prior to that situation.

"This would translate into a dramatic situation for a huge amount of people," said the ECLAC executive.

Machinea stressed the need to implement policies aimed at minimizing the effects of the price hike depending on each country's realities. He looked at actions that lower price increases in domestic markets and that increase the income of the population, particularly of low-income sectors, like an increase of subsidies already in force or the setting up of new subsidies to specific sectors.

He also addressed the need for an additional contribution from food- exporting developed countries to international programs and organizations, like the World Food Program, which can provide emergency aid to populations in risk.

The ECLAC General Secretary also suggested to maintain specific policies aimed at low-income sectors of the population and to boost mid and long- term proposals to help increase the food offer and productivity in a sustainable way.


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