Lower food prices key to poverty reduction

Thu, 08 Dec 2016 07:15:43 +0000

By Sandra Machima

REDUCING the price of food by 10 percent can lift nearly half a million people out of poverty in Kenya, South Africa, and Zambia alone, saving consumers more than $700 million per year, this is according to the United Nations Conference Trade and Development director of division on International Trade in Goods, Services and Commodities Guillermo Valles.

Mr Valles said for trade to deliver the maximum benefits to the most people, there was need to better competition policies and stronger, more independent authorities.

He said better competition policy protected consumers and the poor, saying now more than ever, competition matters for effective trade policy.

More and healthier competition, on the other hand, could help achieve the Sustainable Development Goals, for example, by facilitating access to food.

History had shown that market abuse was more likely when too few companies become too powerful, and that the consumer, especially the poorest and most vulnerable, ended up paying for the lack of competition.

“Healthy competition ensures that the private sector makes better products at lower prices available to more people, and this will be important in achieving the Sustainable Development Goals,” Mr Valles said.

He said restrictive business practices could have a serious impact on prices, and therefore, on social and economic development.

Mr Valles said cartels decreased production by an average of 15 percent and overcharge by 20 percent.

Since 2000, UNCTAD has been helping governments to adopt and implement better competition policy, and its inter-governmental group of experts convenes global experts and policy makers to ensure that competition laws and policies are effectively regulating new markets, such as the “Uber” economy.

The world economy has recently seen a growing concentration of market power in fewer hands, but today, some 10 percent of public companies generate 80 percent of all profits, firms with over $1 billion in annual revenues account for 60 percent of total global revenues, and the rate of mergers and acquisitions was more than twice what it was in the 1990s, according to a report.