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ECLA proposes measures against impact from food price hikes

(Xinhua)
Updated: 2008-09-01 12:28

SANTIAGO -- The UN Economic Commission for Latin America (ECLA) Sunday recommended administrative measures and fiscal policies to tackle rising food and fuel prices in the region.

In its "Economic study 2007-2008," ECLA said that a 15-percent hike in the value of these products means a 3-percent rise in poverty rate, or 15 million more people.

"There is a rising call for the government to contain the growing prices at the domestic market, which have caused deterioration in the income levels of people with less resources," ECLA said.

Focalized programs, with lower fiscal costs, are more efficient in the long run, although it may be somewhat difficult to implement in the short term, said ECLA.

The report shows countries in the region have applied different alternatives to lighten the impact, including administrative measures and fiscal or commercial policy tools.

Compensation measures such as tax cuts and price control, limits on food exports and reduction or elimination of import restrictions were frequently used in countries in the region.

ECLA encouraged more bilateral agreements on food or grain imports, additional food subsidies, government purchase on world market for sales at lower prices at home and favorable policies for fertilizer and other farming materials.