This paper looks at the impacts of the food price crisis on developing countries and examines the direct and indirect effects on consumers and producers. It analyses the implications of these impacts on children’s wellbeing. The distinct features of childhood poverty and vulnerability mean that children are likely to be affected by the food price crisis in different ways at both the household and intra-household level.

There are two major effects of higher food prices on developing countries and their populations.

• One is direct: as the higher international prices of food push up local prices, food becomes less affordable for consumers but provides an incentive for local farmers to increase their production of foodstuffs. In both cases real incomes and welfare of the population, including the poor, are affected.
• The second is indirect: as the higher cost of imported food leads to trade deficits that depress the level of activity in the economy leading to unemployment and lower government revenues that might depress spending on public services.