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Central America squeezes budgets in food crisis

Friday, February 4, 2011

Central American governments faced with rising global food prices are cutting import tariffs, freezing prices and subsidizing food to try to stave off a devastating hunger crisis.

Already struggling to keep fiscal accounts in check after a sharp economic downturn, the region's small countries risk higher budget deficits and distortions in local markets as they take measures to protect the poorest families.

World food prices hit a record in January, even higher than the levels seen in 2008, when a food crisis sparked violent protests in some countries around the world.

Original source: Reuters