Soaring prices for food staples, especially for rice which have tripled over the past year, could lead to social unrest in Asia, Japanese Finance Minister Fukushiro Nukaga warned Sunday in Spain. “The recent hike in the price of rice will hit Asian countries particularly hard. The ones who are most affected are the poorest segment of the population including the urban poor,” he said at the annual meeting of the Asian Development Bank in Madrid. “It will have a negative impact on the living standards and also affect their nutrition. Such a situation may lead to social untrust and unrest and therefore safety nets addressing the immediate needs of the poorest are needed,” he added. Prices for the benchmark Thai variety of rice, a food stable across much of Asia, are at about 1,000 dollars a tonne, up threefold from the last ADB annual meeting held in Japan one year ago. Global food prices have nearly doubled in three years, sparking riots last month in Egypt and Haiti, protests in other countries and restrictions on food exports in Brazil, Vietnam, India and Egypt. Nukaga warned that export restrictions lead to higher prices while food subsidies to help the poor deal with surging prices could place a tremendous burden on state budgets. Food subsidies in Bangladesh, one of the poorest nations in Asia, are estimated to double in the current fiscal year and reach over 1.5 billion dollars in the current fiscal year. The ADB announced Saturday on the opening day of its four-day annual meeting that it will provide soft loans to help Asian countries subsidise the price of food staples for the poor. It will also provide two billion dollars in 2008 and 2009 in loans to finance agriculture infrastructure projects such as irrigation systems and rural roads aimed at boosting farm output in the region. Rising use of biofuels, trade restrictions, increased demand from Asia to serve changing diets, poor harvests and increasing transport costs have all been blamed for the price rise. Nukaga also said Asian nations are in talks over the creation of a multinational 80-billion-dollar (52-billion-euro) foreign exchange pool to be used in case of another regional financial crisis. “We are negotiating in that direction,” he told reporters when asked about the amount of funds which are reportedly going to be set aside for the currency swap scheme. Meanwhile, Indonesian Trade Minister Mari Pangestu said on Sunday, efforts by Southeast Asian nations to safeguard rice exports, while boosting output over the longer term, would help stablize soaring global prices. Trade ministers of the 10-member Association of Southeast Asian Nations (ASEAN) agreed a day earlier to cooperate over the rice market, but stopped short of concrete measures to deal with rocketing prices of the region's staple in most meals.
