The children died after eating a school meal of rice and potato curry contaminated with monocrotophos, a pesticide considered highly hazardous by the FAO and the World Health Organization.
Experience in many developing countries shows the distribution and use of such highly toxic products very often poses a serious risk to human health and the environment, the FAO said in a statement.
Monocrotophos is banned in many countries but a panel of government experts was persuaded by manufacturers that the product was cheaper than alternatives and more effective in controlling pests that decimate crop output.
Although the government argues the benefits of strong pesticides outweigh the hazards if properly managed, the food poisoning tragedy underlined the criticism that such controls are virtually ignored on the ground.
The FAO said many countries lacked the resources to properly manage the storage, distribution, handling and disposal of pesticides and to reduce their risks.
Highly hazardous products should not be available to small-scale farmers who lack knowledge and the proper sprayers, protective gear and storage facilities to manage such products appropriately, the FAO added.
Monocrotophos is currently prohibited in Australia, China, the European Union and the US, and in many countries in Africa, Asia and Latin America, the FAO said.