Rising food prices taking its toll

If food prices at the supermarket continue to rise, then households, already facing diminished buying power, might eventually have to do without basic products like milk, oil, detergents as well as fruits and vegetables.

When asked whether they would continue to buy basic necessities like milk and oil, even if the prices go up, three households said they would rather do without.

Sherry Hosein, a 32-year-old mother of four, says every few months she notices the price of milk increasing and she is forced to cut back on other grocery items just to afford it.

Annette Ferdinand, however, has a different approach to dealing with the price hike.

“If the prices go up then I would not buy the item, I would buy something that is cheaper but equally nutritious,” she said.

Father of two young children, Raphael Mohammed said that on a monthly basis he finds himself forking out a lot more for food. The most significant increase he said, has been full cream milk, which is needed to supplement his children’s diet.

Chairman of the National Agricultural Management Development Company (NAMDEVCO), Dowlath Samaroo is of the view that the rising costs of imported produce as well as the increased cost of local labour has a lot to do with the jump in food prices.

He said the rise in imported produce is caused mainly by increased freight costs.

“To mitigate the effects of imported goods on food prices, the local production level needs to be increased,” he said in an interview.

However, he cited that even the local production system depends heavily on imported input such as chemicals and fertilisers. Some of these fertilisers, he explained, depend on natural gas as a raw material, which has gone up tremendously.

In addition, he highlighted that the cost of local labour has also gone up because of a construction boom.

“Farmers are finding it difficult to access labour and when they do it is of poor quality, and that is pushing up prices as well,” Samaroo pointed out.

His suggestion is for the Government to invest more on local production and to find ways for farmers to easily access labour.

“Some farmers were suggest that labour be sourced from Guyana but nonetheless, there must be a collaboration between the Government and local farmers for this issue to be solved,” he said.

HIGH FOOD PRICES

DRIVING INFLATION

According to Central Bank Governor, Ewart Williams, the 24 percent increase in food prices last year was the main driver of inflation. He said for the period 1995-2000 there was a 12 percent increase which climbed to 14 percent in 2001-2004 and to a whopping 24 percent last year.

He attributed the wide price swings to the structural decline in domestic agricultural production as well as the severe floods in 2004 and 2005.

Recent data released by the Central Statistical Office indicated strong increase in inflation in the domestic economy in May. The report stated that headline inflation climbed to 7.97 percent on a year-on-year basis from 6.9 percent at the end of the previous month (April).

“The increase in food prices, which measured 19.4 percent in April, accelerated to 22.8 percent at the end of May and continued to drive headline inflation,” the survey stated.

Main contributors to the jump in food prices, the data said, were the 71.6 percent increase in the price of vegetables, the 21.5 percent increase in fruit, the 20.6 percent rise in the cost of fish and the 110.6 percent rise in the cost of root crops.