Living on a spike – how are high food prices actually experienced by people living in poverty?

lobby efforts on biofuels (in food prices June 2011many cases, a bad thing, diverting food to fuel and not even helping reduce carbon emissions) and food reserves (a neglected way to smooth the spikes in prices). The FT curtain raiser says the ministers are divided and set to duck the big challenges on biofuels and export bans, but also covers their efforts to improve data on food stocks – a potentially useful way to reduce price volatility. Oxfam (or at least some of our research partners) has also done something rather radical. When a shock hits, all the development wonks rush for their models and start calculating the impact on ‘the poor’, based on how many millions slip into poverty when prices rise by X or GDP falls by Y. What’s extraordinary is how seldom researchers think to go and talk to poor people themselves. When you do so, you get answers full of depth and surprise, as we found out in ‘Living on a Spike’, a new report on the impact of the 2011 food price crisis, published today by Oxfam and the Institute of Development Studies. Naomi Hossain and I had a piece in the Guardian yesterday summarizing the findings. The researchers returned in March 2011 to eight community ‘listening posts’ in Bangladesh, Indonesia, Kenya, and Zambia, that were previously visited in 2009 and 2010, building up an increasingly valuable time series of how food prices and their impact have varied over time. Using focus groups and other participatory techniques, they asked: What has happened to prices and wages since last year? How are people adjusting to these changes? What do people think causes food price volatility, and what do they think should be done about it? The overall impact of the 2011 food price spike has been to ratchet up inequality, producing a pattern of ‘weak losers and strong winners’. The losers – those already struggling in low-paid, informal sector occupations such as petty trading, street vending, casual construction work, sex work, laundry, portering, and transport – are doing worse. Many have seen stagnant or only slightly raised rates of pay, which have been swallowed up by higher food prices, combined with more erratic access to work or customers. Small-scale farmers and small market and food traders have not generally done well, despite the high price of food. High input costs and the squeeze on people’s purchasing power has meant that profits from growing and selling food remain low for those with least scope to diversify and spread their risk. These people are clearly worse off than last year. They strongly believe that the government is not on their side in their efforts to eke out a living. Regulations on where people can run their businesses or provide their services, police harassment, and unfavourable new laws mean that making a living has got harder, not easier, for many in this group over the past year. But some groups – usually those who were already relatively better off – have done better than last year. Commodity producers and export sector workers have largely benefited from the global recovery, as have some people in other occupations linked to these groups. People are adjusting to high food prices in complex ways. While some people are eating less and going hungry, the more usual pattern is for people to shift to lower quality, more boring food and less diverse diets. The effects differ greatly by gender: women come under more pressure to provide good meals with less food, and feel the stresses of coping with their children’s hunger most directly. Often women go without. As one labourer from Bangladesh explained, ‘The women make the ultimate sacrifice. They take their food after everyone is done. We have completely forgotten the taste of beef.’ These stresses push women into poorly paid informal sector work, competing among themselves for increasingly inadequate earnings. Men also feel the effects: the food price rises severely undercut their ability to provide for their families, leading to arguments in the household and fuelling alcohol abuse and domestic violence. As one Kenyan woman complained, ‘They come home drunk and even feed on the leftovers for our children.’ In the worst instances, couples split up or look for better-off partners to cope with the tough times. FoodRiots227102010Talking to people living in poverty reveals just how multi-faceted the impacts of the food price spike are, touching on almost every aspect of life. People are spending less on personal items like clothes and cosmetics, and scaling down their social lives. A rickshaw driver from Bangladesh graphically explained:  ‘With my income, I don’t have any money after buying food, so how can I have the luxury of buying more underwear?’… People can see my ass. And the thing is, as I wear the same underwear for the whole week, people get a bad smell from me. What can I do?’ Government has provided some support, but this has generally failed to protect people from the effects of rising prices. The result of these adjustments is not generally starvation, but an overall increased level of discontent and stress. Poor people are having an even more difficult time getting by.   The extent of people’s discontent with the situation becomes clearer when asked about their opinions on the causes of food price rises, and what should be done about them. Few people think international food prices are an important cause; some even dismiss such factors as merely convenient excuses made by their ineffective governments. Governments are held responsible for protecting their people from price spikes, but are generally seen as having failed to do so. There is a belief that governments can act to keep prices low if they want to. In Zambia, for instance, some people credited the imminent elections with putting political pressure on the government to keep staple prices low. Poor people’s explanations of why governments have generally failed to act on food price rises revolve around two key perceptions: that governments do not care about poor people’s concerns; and that corruption at different levels of the system ensures that prices cannot be controlled – either because market inspectors can be bought off, national politicians owe big businessmen favours for help with election expenses, or cartels are permitted to operate. Young urban men appear particularly angry about governments’ failure to act. According to one group in Kenya, ‘It is high time Kenya went the way of Egypt way. We need a leadership change!’ With revolutions in the Middle East and other protests against governments in Europe, the stress and discontent fuelled by high food prices merits close attention by the G20 agriculture ministers. Hope they’re listening.  With three years of visits under the researchers’ belts, we’re keen to keep going back to the communities in the next few years, maybe adding on a few other countries and introducing some quantitative methods to complement the qualitative. I’d be interested in links and references to similar research efforts at this kind of  qualitative longitudinal work on particular issues.]]>

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6 Responses to “Living on a spike – how are high food prices actually experienced by people living in poverty?”
  1. Hi Duncan
    The Fairtrade Foundation launched a report (and follow up debate) back in early 2009 looking at the impact of the 2008 food price spike on a specific group of smallholders in developing countries – those trading into global supply chains (yes we did go and speak directly to those farmers). A summary is available here:
    Overall the findings support in part those that you report above eg increasing inequality. But some smallholders were able to do well, and I believe that understanding how to increase the capacity of smallholders to capture greater value from supply chains that they are engaged in will be a critical area of policy and advocacy in a world that looks likely to feature long term upwards trends in price of food and other commodities.
    Unsurprisingly we found that a critical factor in whether people benefit or lose out from rising cost of food and inputs was whether farmers were net buyers or sellers of agricultral products. I would also suggest that being part of a strong organised group is a factor although high food prices do persent their own problems for smallhoilder cooperatives.
    We are planning to build on this work in the future so always interested in these discussions.

  2. Louise Moreira Daniels

    Dear Duncan,
    Not on this particular topic, but of interest since it is a qualitative, longitudinal study on the impact of the current crisis on people’s lives, is the latest Inclusive Cities research on the impact of the Global Economic Crisis on informal workers. The report is called “Coping with Crises: Lingering Recession, Rising Inflation, and the Informal Workforce” and can be found here:
    This study provides a unique perspective on how workers have coped with the longer-term effects of the economic crisis.
    According to the study coordinators, in spite of some positive developments, there has been a lag in recovery for informal workers. Persistent unemployment and underemployment in the formal economy continues to drive new entrants into informal employment, creating more competition for those already dependent on it. Some study respondents did report demand for their goods and services had recovered over the previous year, but many continue to face low levels of sales or orders. While incomes have risen modestly for some (in absolute terms to mid-2009 levels), they have not risen to pre-crisis levels and have not kept pace with rising living costs. Persistently high inflation – affecting food and fuel prices in particular – have intensified pressure on family budgets. Households continue to restrict their diets, while the withdrawal of children from schools appears to be on the rise.
    Of course the work of Young Lives also comes to mind (longitudinal study on childhood poverty in 4 countries):

  3. Shupiwe

    Hi Duncan, Great article and great research. I couldn’t help having a “what’s new” feeling throughout reading this though. Spikes in food prices seem to be as old as selling food itself and it seems that the poor will always be affected the most by this. What is different about food price spikes now? And is it realistic to say that the poor can be better protected from these spikes?
    Duncan: good questions Shupiwe. I think what’s different is that they are faster and more furious (i.e. bigger), and that means they are likely to strike poor communities before they have had time to recover from the previous one. But we need to do longitudinal research to test that. Is it realistic to say poor people can be protected? Yes, I think so, through a combination of understanding and supporting community responses, and outside intervention (social protection, finding ways to smooth out prices, not doing dumb stuff like export bans and biofueld subsidies).

  4. Shupiwe

    Thanks for the response Duncan. I was also wondering, if we can protect the poor does it become a never ending activity? Or is there a way to develop protection measures that are long lasting? With climate change, peak oil and fossil fuels around the corner I am guessing the problems with spikes are just beginning and that this is just the tip of the iceberg? (I haven reading a lot of Richard Weinberg (the end of growth) recently.) Ps any chance on that mobile friendly version?
    Duncan: Thanks Shupiwe, will talk to blogmaster re mobile friendly version – planning a redesign for the autumn, so will put it into that

  5. Shupiwe

    Me again….
    Just another question.
    Why does your blog have a section on biofuel? It seems a narrow concentration on the peak energy debate. I had a recent discussion with a manager of a palm oil company in the Netherlands (who supply most of the confectionary companies in Europe) and he pointed out that at any one point there is the same amount of palm oil on the ocean as there is crude oil. For island states (where most of the worlds palm oil is grown) this raises interesting questions not just about biofuels but also about sustainability and the energy crisis (the list is longer obviously).
    So yes perhaps your blog should have a wider discussion.
    Oh and any chance of a mobile friendly version?
    Cheers, Shupiwe
    Ps as always great blog!
    Duncan: we’re including the mobile friendly version in a revamp in the autumn, Shupiwe. As for biofuel (and some other anomalies in the categories), it’s just too much work to change the headings and then go back through hundreds of posts and reclassify!