Amid the food and financial crises, many poor families in Central America reduce their spending by buying less food and choosing less nutritious food. In El Salvador, for example, WFP estimates 87% of poor households have reduced the quantity and quality of food consumed as a result of the increase in food prices.
The reduction in the quality of food is causing a major health risk for children, according to a WFP study entitled “Rises in Prices, Markets and Food and Nutritional Insecurity in Central America” (October 2008). The study highlights the risks that the urban poor, food producers, poor labourers and the rural poor face as a result of the current food crisis. Those especially at risk are children under the age of five, pregnant women, and breast feeding mothers, the study says.
Costs began to rise
Midway through 2007, the cost of the household basket began to rise, triggering economic vulnerability and food insecurity among the population affected by poverty. According to the President of the World Bank, Robert Zoellick, this is a drawback in the fight against poverty, possibly “seven years lost” in the on-going fight.
Despite the fact that in the last months the food and oil prices have fallen considerably, they still remain substantially higher than when the crisis began. A reduction in prices in the international market does not necessarily result in an immediate reduction of prices in the local markets.
In El Salvador, the cost of the household basket has increased by 20% in urban areas and 27% in rural areas between January 2007 and August 2008. According to the Statistics and Census Bureau (DIGESTYC, January 2009) the cost of the household basket in 2009 was 18% higher in urban areas and 22% higher in rural areas when compared to prices in January 2007.
In addition to the food crisis, the economic crisis in the United States is affecting El Salvador by reducing the flow of remittances sent by more than one million Salvadoran immigrants living in the US.
Remittances make up 18% of El Salvador’s GDP, a net worth equivalent to 80% of the value of its exports. Not only does this reduction of remittances reduce the purchasing power of Salvadoran families but it also jeopardizes the families’ investment in the future education of their children.
WFP has requested additional support from the donor community for its humanitarian programmes as well as for the local social protection programmes, such as the school feeding programme, which are essential tools in the fight against hunger and undernutrition.
Safety nets critical
Pedro Medrano, the WFP Regional Director for Latin America and the Caribbean, says the region, much like the rest of the world, is at a critical crossroads as far as the most vulnerable populations are concerned. “It would be a serious mistake if the current financial crisis were to translate into fewer funds (for social protection and safety net programmes) to face the already critical situation”, he said.