FAO: food inflation hits 7.4%

The inflation for food items in Latin America and the Caribbean reached 7.4 percent in May this year, the United Nations Food and Agriculture Organization said Friday. The sharp rise in the regional prices in May was attributed to an even sharper increase in food prices which on a world wide basis rose 37 percent in May compared to world food prices in May 2010, the FAO said in a report from its regional headquarters in Chile. The May figures are consistent with the upward trend in food prices in the last three months across many countries in the regions, including Chile, Ecuador, El Salvador, Honduras, Mexico, Nicaragua, Panama and Uruguay. But some countries like Argentina, Bolivia, Brazil and the Dominican Republic showed little change while food inflation in countries like Costa Rica and Venezuela went down. "The behavior of the food inflation have varied a lot from one country to another but all the governments in the region are aware of the need to confront the volatility and the rising prices," said FAO delegate Fernando Soto Baquero. The governments of most countries in the region have therefore established a "political dialogue" with the FAO, the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), and the Inter-American Institute for Agricultural Cooperation (IICA), said Soto. Governments in Central America, the Caribbean and South America all share a common goal of trying to establish a forum in which they can collaborate on how to face the situation of food inflation, which has hit the poorest and most socially vulnerable groups in all the countries the hardest. "The (high) food prices should serve as a principal incentive to agricultural producers in order for them to try to increase their production as part of the instruments to bring the food inflation under control," said Soto. He also said there was a need to intensify the inter-regional food trade, to support the traditional family-based subsistent agriculture, strengthen the development banks' possibility for offering financing and improve the social protection systems.