Assembly/AU/ 7 (X)I Page 5 10. Higher food prices could also contribute to fiscal imbalances. Government expenditures on safety net programmes, whether food based or not, are likely to increase, either because the number of beneficiaries increases or the cost per beneficiary rises, or both. Moreover, several Governments have lowered taxes and tariffs on food to mitigate the impact. (b) Impacts at the Household Level 11. Higher food prices may jeopardize the fight against hunger, as they make it more difficult for households to access food. The population groups that are most vulnerable to higher food prices are those that buy more food than they sell (netbuyers), spend a large share of their income on food and have few coping mechanisms at their disposal. These groups include the urban poor, rural landless, pastoralists and many small-scale farmers and agro-pastoralists (either because they grow non-food crops, depend on limited livestock sales or buy more food than they sell). Pastoralists are often particularly vulnerable as they might suffer at the same time from falling livestock prices. Hence the terms of trade between cereals and livestock might fall steeply, often in a short period of time. 12. For vulnerable households, higher prices will have an immediate impact on the quantity and quality of food consumed. They will reduce the number of meals, reduce the size of meals and reduce expenditures on non-staple foods. Non-staple foods are often the main providers of fat, minerals and vitamins, which are essential for growth and maintenance of a healthy and productive life. These strategies will have significant consequences, especially for the most vulnerable groups (the sick, elderly, children and pregnant women). Households might also reduce expenditures on other basic needs, such as education and health, or sell productive assets with negative effects on their current and future livelihoods. 13. The World Bank estimates that 100 million people have been pushed into poverty as a result of high prices during the last two years. Risk analysis conducted by WFP in a number of countries suggests that the impact on household food security will be significant. It is likely that high food prices will make the fight against hunger an uphill struggle if food prices remain high and no additional actions are taken to mitigate the impact. III. PROPOSED RESPONSES TO THE HIGH FOOD PRICES 14. Although the current situation poses policy challenges on several fronts, there are effective and coherent actions that can be taken to help vulnerable people through humanitarian aid, trade, investment and social protection policies. In view of the urgency of assisting people and countries in need, the policy actions suggested here are listed in two sets: the immediate short-term actions and the longer-term actions to phase in now but whose impacts may take time. A focus on short-term crisis mitigation alone would fail to address the root problems and to bring the needed resilience into the food system. 15. This approach leads to eight major actions, all of which require immediate attention but whose impacts on the poor, on agriculture and on the economy as a whole will differ over time, ranging from immediate to future impacts. The first set of