Armenian households with high incomes consume five times more food than the poorest ones: EDRC study

YEREVAN, October 9. / ARKA /. Armenian households with high income consume five times more food than the poorest households, according to a study conducted by the Economic Development and Research Center (EDRC), which were unveiled today by an EDRC expert Yelena Manukyan.

She said this gap is more evident when it comes to consumption of fruit, meat and butter. The study, called "Prices and Vulnerability", was carried out together with the Armenian branch of the British organization Oxfam.

According to Ms. Manukyan, the study has revealed that the level of per capita meat consumption by the poorest segment of the population is 2 kg lower below the health ministry-established minimum ceiling.

According to another finding of the study, which was part of the worldwide Oxfam’s "GROW" campaign, prices were dropping in four of the six months of the first half of the year. As a result prices in June if compared to December last year were down by 0.4% and the average inflation rate in the first half was 2.2% against 9.9% in December 2011.

"The deflation was due to seasonal drop in prices of food; however, non-food goods and services became more expensive. Thus, the behavior of inflation in Armenia is largely conditioned on price developments in the food market ", said Manukyan.

She said according to official methodology used in Armenia, food products account for 53.5% of total inflation, services are responsible for 30.8%, while industrial goods account for 15.7% of the inflation.

According to the study, food prices began to rise sharply in October-November 2010 and continued until the summer of 2011. Another hike began in 2011 autumn which lasted until January 2012.

Ms. Manukyan said prices began to fall beginning from February 2012, but the inflation in the previous years reached such high proportions that the small decline in prices in 2012 had no much effect on the food basket. She added that prices in the first half of 2012 declined mainly due to the fall in prices of vegetables and potatoes.

Thus, the study has found that prices of vegetables and potatoes in June slashed by more than 26 percent from 2011 December, the price of eggs fell by 5.4%, the prices of dairy products dropped by 4.8%, that of sugar decreased by 3.7%, the prices of vegetable and animal fat dropped by 1.5%. However, bakery products and fruit in the same period grew by 2.3% and 7.7% respectively, the prices of confectionery by 2.2%, those of coffee, tea and cocoa by 3% each.

"Depending on the consumption patterns of certain social groups, the increase in food prices is likely to result in different consequences and changes in consumer behavior, ‘ said Ms. Manukyan.

She emphasized that the increase in food prices is a burden for the families of all backgrounds.

"Some families manage to maintain the same level of consumption by increasing their expenses. Other families replace relatively expensive products for cheaper and low quality ones. And the poorest without having an alternative simply reduce consumption, which already does not meet minimum standards of consumption basket, as a result many families are malnourished," she added.

Manukyan also informed that the overall level of consumption in affluent families is eight times higher than in the poorest social groups. 

Gagik Torosian, a coordinator of EDRS’s food prices monitoring program, said price hikes affect in the first place vulnerable families. “Today we have a serious problem of food security, " he said. Torosian said that the global financial and economic crisis has left a big impact in Armenia.

"At the initial stage the Armenian government was able to maintain financial stability. However, the overall macroeconomic stability, which the government boasted of, was finally broken, ’he stressed. Director of the Armenian office of Oxfam, Margarita Hakobyan, said the rise in food prices has a huge social impact.

"If we fail to understand the causes of rising prices and stop it, the consequences will be very serious," she warned.

Oxfam is an independent international charity organization founded in the UK (Oxford) in 1942. It is active in over 70 countries worldwide. -0-