Asia fears lost decade, unrest from food price shock

By Andrew Hay

MADRID (Reuters) - Soaring food prices may throw millions of Asians back into poverty, undo a decade of gains and stoke civil unrest, regional leaders said on Sunday as they urged a boost to agricultural production to meet rising demand.

Asia -- home to two thirds of the world's poor -- risks rising social tension as a doubling of wheat and rice prices in the last year has slammed people who spend more than half their income on food, Japanese Finance Minister Fukushiro Nukaga said during the Asian Development Bank's annual meeting.

If food prices rise 20 percent, 100 million poor people across Asia could be forced back into extreme poverty, warned Indian Finance Secretary D. Subba Rao.

"In many countries that will mean the undoing of gains in poverty reduction achieved in the past decade of growth," Rao told the ADB's meeting in Madrid.

The ADB estimates that about 20 percent of people in Asia are presently living on less than $1 a day -- the international definition of extreme poverty -- compared to more than 60 percent who did so in the mid-1960s.

A 43 percent rise in global food prices in the year to March sparked violent protests in Cameroon and Burkina Faso as well as rallies in Indonesia following reports of starvation deaths.

Many governments have introduced food subsidies or export restrictions to counter rising costs, but they have only exacerbated price rises on global markets, Nukaga said.

"Those hardest hit are the poorest segments of the population, especially the urban poor," Nukaga told delegates.