INDIA:Nations will move to increase food supplies but the world is living through a structural shift towards higher food prices that will be hard to reverse, the chief of a United Nations agency fighting rural poverty has said.
A combination of high oil prices, rising demand for food in a wealthier Asia, the use of farmland and crops for biofuels, bad weather and speculation have pushed up food prices, prompting violent protests in a handful of poor states.
"Most experts do think higher prices are here for a longer term," Lennart Bage, president of the UN's International Fund for Agricultural Development, told Reuters in an interview yesterday.
"We will see a supply response, so hopefully the prices will come down somewhat," he said before adding a word of caution. "According to experts in the field, prices will remain higher than in the past and what we see is most likely a structural shift to higher prices."
Global food prices based on UN records rose 35 per cent in the year to the end of January, accelerating an upturn that began in 2002. Since 2002, prices have risen 65 per cent. In 2007 alone dairy prices rose nearly 80 per cent and grain 42 per cent.
Mr Bage said the rapid increases had provided a strong signal that production must rise, and already there were signs of more planting taking place around the globe.
"There will be a supply response. On that there is no doubt. How far the supply response will go in pushing prices down, that is the question that we don't have an answer to right now," Mr Bage said.
The international community must take immediate measures to feed people facing hunger and focus on a long-term solution by investing much more in agriculture, said Mr Bage.
"We have seen government interest in funding agriculture wane over the last 10-15 years in many countries. We have seen international development assistance aid to agriculture go down from 20 per cent in the early 1980s to less than 3 per cent now," he said.
Global institutions were starting to craft a response to deal with high food prices, Mr Bage said. India and Africa have called on the West to rethink some policies, such as diverting huge food stocks for biofuels, which has created shortages and driven up prices in poorer countries.
The FAO warns that high prices and shortages would continue in the short-term, making some poorer countries vulnerable to food riots.