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World Food Prices Likely To Remain Volatile And High, Says UN

By NICOLE WINFIELD   10/10/11 06:50 AM ET   AP

ROME -- Prices for rice, wheat and other key foods are expected to remain volatile and possibly increase – and poor farmers and consumers particularly in Africa will be hurt most, the U.N. food agencies said Monday.

In an annual report on the state of food insecurity around the world, the U.N.'s three food agencies urged governments to make good on pledges to share information about farm forecasts and food stock levels to avoid the price swings that resulted in food riots in 2006-2008 and an eight percent increase in the number of undernourished people in Africa.

They also urged greater long-term investment in the agriculture sectors of poor countries so farmers can bolster production to meet increasing demand and cope better when food crises hit.

Failure to do so, the agencies warned, will result in continued price fluctuations, which makes poor farmers and consumers in food-importing countries at ever greater risk for poverty in both the short and long term, it said.

"Changes in income due to price swings that lead to decreased food consumption can reduce children's intake of key nutrient during the first 1000 days of life from conception, leading to a permanent reduction of their future earning capacity and an increased likelihood of future poverty with negative effects on entire economies," the report said.

It was produced by the Rome-based U.N. Food and Agriculture Organization, the World Food Program and – for the first time – the U.N.'s International Fund for Agriculture Development.

FAO has been urging producer countries not to take drastic measures such as export bans when production plummets because of drought or other reasons. Such export restrictions have been blamed for the record high grain prices that fueled the social unrest in 2007-2008.

In June, the world's largest economies agreed to establish a transparent system to track global food supplies, set up emergency reserves and create a rapid reaction mechanism when drought or other calamity hits.

The agencies said the G20 proposal for a so-called Agricultural Market Information System would improve the reliability of food stocks estimates and forecast data and improve coordination in times of crisis.

A recent U.N. study predicted that prices will be 20 percent higher for cereals and up to 30 percent higher for meat in the coming decade compared with the past 10 years.

With the global population expected to increase from 6.9 billion to 9 billion by 2050, the problem of feeding the world has taken on urgency and was put at the top of the G-20 agenda this year under the French presidency.

In a separate report, ActionAid said Monday that 1.5 billion people across 10 countries are vulnerable to what the global anti-poverty agency calls a triple crisis of climate change, depleted natural resources and high food prices.

ActionAid urged G-20 leaders to increase investment in small farms in poor countries. It warned that millions of poor farmers will be deprived of arable land to produce food due to demand for biofuels, which take up land that could be used to grow edibles, and a rush from foreign investors to control natural resources such as minerals.

The group said it had conducted a survey of 28 poor countries and found the 10 most vulnerable were Congo, Burundi, South Africa, Haiti, Bangladesh, Zambia, India, Sierra Leone, Ethiopia and Rwanda.

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Filed by Carey Polis  |  Report Corrections