Food prices to stay high, grain drain fuel blamed

Paris, May 30 | Updated: May 31 2008, 06:37am hrs
Food prices will remain high over the next decade even if they fall from current records, meaning millions of more risk further hardship or hunger, the OECD and the UNs FAO food agency said in a report published on Thursday.

Beyond stating the immediate need for humanitarian aid, the international bodies suggested wider deployment of genetically modified crops and a rethink of biofuel programmes that guzzle grain which could otherwise feed people and livestock.

The report, issued ahead of a world food summit in Rome next week, said food commodity prices were likely to recede from the peaks hit recently, but that they would remain higher in the decade ahead than the one gone by.

Its time for action, Jacques Diouf, head of the United Nations Food and Agriculture Organisation told a news conference in Paris, saying he expected 40 leaders in Rome for a summit on what should be done immediately or in the future.

Theres an immediate need for humanitarian aid to avoid poor people going hungry, added Angel Gurria, head of the Organisation for Economic Co-operation and Development.

Beef and pork prices would probably stay around 20% higher than in the last 10 years, while wheat, corn and skimmed milk powder would likely command 40-60% more in the 10 years ahead, in nominal terms, the joint FAO/OECD report said.

The price of rice, an Asian staple expected to become more important also in Africa in the years ahead, would likely average 30% more expensive in nominal terms in the coming decade than over the 1998-2007 period.

In many low-income countries, food expenditures average over 50% of income and the higher prices contained in this outlook (report) will push more people into undernourishment, the report said.

Millions of peoples purchasing power across the globe would be hit, said the report. The cost of many food commodities has doubled over the last couple of years, sparking widespread protests and even riots in some of the worst affected spots, such as Haiti.

Many factors, including drought in big commodity-producing regions such as Australia, explained some of the acceleration in prices, as did growing demand from fast-developing countries such as China and India, the report said.

Reuters