Consumer Affairs Minister concerned about impact of cost of living on working poor

Dr Timothy Harris

ZIZ News…Feb 22 2011 – Dr the Hon Timothy Harris, Senior Minister and Minister of Consumer Affairs says that upward price movement continues to be a concern not only for the general public but his Ministry as well. We note from recent communiqué of G20 Finance Ministers and observations from the World Bank and Food and Agriculture Organization that this is a major concern world wide.

I am certainly concerned for the vast number constituting the working poor, who live from pay cheque to pay cheque and are finding it difficult to maintain a decent standard of living. The truth is our inflation is largely imported. Although we must accept that fiscal measures like VAT have impacted on some prices, prices have escalated also largely on account of price movements for many of our imports”.

Dr Harris said the prices of dairy, grain, sugar, edible oil have moved upwards. The World Bank reports that the global food price index rose 15% between October 2010 and January 2011. Corn prices surged 86% in the past year, the price of wheat went up 69% in part due to droughts and flood damages in Russia and Argentina.

A World Bank assessment of commodity spike reveals that since February 2009, international food prices have risen by more than 30% and agricultural raw material prices by more that 6%. During the same period (2009 to present) oil and metal prices have increased by 100%.

Dr Harris said the matter of the cost of living is a serious one. Rising prices create real stress for working people, and undermine the quality of life of our pensioners and other persons on fixed income. For the working poor about 50% of their income is estimated to be spent on food. So I am concerned that if prices continue this trend, the lot of the poor people will worsen.

Rising food and energy prices are now a major international concern. Price Movement has attracted the attention of the G20 Finance Ministers Meeting in Paris, February 18-19, 2011. The G20 strongly recommends greater investment in agriculture. I know that the World Bank and IMF are concerned. The Food and Agriculture Organization has expressed concern. Rising inflation is not only a threat to poverty reduction but to global growth as efforts to curb inflation like increase interest rates may constrain growth. France’s Finance Minister, Christine Lagarde said “we clearly need to keep inflation at bay. Too much inflation is not going to be conducive to growth”.

Dr Harris said medium term response to food price movements will be to increase supply and improve the efficiencies of production and distribution. At home we have to conserve on energy. Consumers should be more careful and frugal in our use of electricity, transportation, etc. Energy prices are trending upwards. We have to put more resources in agriculture and agri-processing thereby reducing our exposure to imports and associated volatile prices.

Consumers must also do more comparative price analyses rather than buying out of habit. We should not religiously buy from the same supplier when their prices are going up relative to other suppliers. Consumers must actively seek the best buy for their money, Dr Harris urged. Senior Minister said that the backyard gardening is also important as individuals and households seek to control their expenditure on fruit and vegetables.