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, SPAIN - 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 on 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 a meeting of the Asian Development Bank.
'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 US$1,000 (S$1,364) 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.
Mr 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.
'Export restrictions will no only distort the proper functioning of markets in price formation but further exacerbate the price hikes in international markets,' he said.
'Subsidies that are intended to keep food prices under control have the risk of becoming a significant burden to budgets and are not sustainable over time,' he added.
Food subsidies in Bangladesh, one of the poorest nations in Asia, are estimated to double in the current fiscal year and reach over US$1.5 billion in the current fiscal year.
The ADB announced on 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 US$2 billion 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. -- AFP
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