UN official urges G8 countries to focus financial aid on food crisis

JAPAN AND other G8 countries should shift a greater proportion of their overseas development assistance to agriculture to tackle the current food crisis, the most senior United Nations agriculture official said yesterday.

Jacques Diouf, director general of the UN's Food and Agriculture Organisation, said as G8 chair, Japan should take the initiative in reversing the fall in the proportion of assistance allocated to agriculture. Mr Diouf's comments came as rice prices fell for a fifth day, as the prospect of exports from Pakistan and Japan eased concerns of a deepening global food shortage.

Prices have fallen 14 per cent this week and yesterday Pakistan, the fifth-biggest exporter, said it would permit shipments of one million metric tons because local needs have been met.

Tokyo has placed the global food crisis on the agenda of the G8 summit in July, making it the first time in nearly 30 years that the richest countries discuss food shortages and high prices.

Mr Diouf said overall overseas had been declining, but "more seriously, the share of agriculture [aid] in overseas assistance has gone from 17 per cent in 1980 to 3 per cent in 2005". In particular, efforts were needed to support agriculture in Africa, he said.

"Japan, in consultation with the other heads [of the G8], can ensure that . . . at a time when we have 862 million people who do not have adequate access to food, agriculture will now be given the right priority," he said.

With just 4 per cent of arable land in sub-Saharan Africa irrigated, against 38 per cent in Asia, there is a need to invest in irrigation in Africa to solve the problem of food, he added.

Africa also needs urgent investment in roads and food storage, as up to 60 per cent of food production is lost due to a lack of storage facilities. Global agriculture production has been affected by natural disasters such as cyclones, droughts and floods at a time when cereal stocks were at their lowest in 30 years, Mr Diouf said.

The staple for half the world reached a record last month as exporters including Vietnam and India cut sales to guarantee local supplies. The advance in prices for food, including rice and wheat, has caused riots from Haiti to Egypt.

"The wheels are in motion for lower food prices," John Reeve, associate director for agricultural commodities at UBS AG, said.

The price reached a record $25.07 on April 24th and still is up 82 per cent from a year ago. Wheat has gained 56 per cent in a year, corn has advanced 59 per cent, and both reached record highs in 2008. - (Financial Times service/Bloomberg)