Report: World food prices set to fall
PARIS (AP) - May 29, 2008 The world's poorest nations are most vulnerable - particularly
the urban poor in food-importing countries - and will require
increased humanitarian aid to stave off hunger and
undernourishment, according to a joint agricultural report by the
Organization for Economic Cooperation and Development and the U.N.
Food and Agriculture Organization said.
"Rising prices now translate, unfortunately, as an increase in
hunger and civil strife. Uncertainty rules and our people are
worried," FAO chief Jacques Diouf told a Paris news conference.
OECD Secretary-General Angel Gurria, at his side, added: "The
end of cheap food in a world where half the population lives with
less than two dollars a day is a source of grave concern."
High oil prices, changing diets, urbanization, expanding
populations, flawed trade policies, extreme weather, growth in
biofuel production and speculation have sent food prices soaring
worldwide, trigging protests from Africa to Asia and raising fears
that millions more will suffer malnutrition.
The report was based on a forecast of the cereals, oilseeds,
sugar, meats, milk and dairy products markets for the period 2008
to 2017. It reflects agriculture and trade policies in place in
early 2008 and includes an assessment of the biofuels markets for
bioethanol and biodiesel.
Despite the prices hikes, general price levels have remained
"remarkably stable," suggesting that inflation in the coming
decade will "remain low," the report says.
"We do not expect the current price levels to last. But the
average of most agricultural commodity prices over the next 10
years will still exceed the average of the previous decade by 10 to
50 percent, depending on the commodity," Gurria said.
Compared with the previous decade, the report said average
prices from 2008-2017 for beef and pork will rise 20 percent; sugar
around 30 percent; wheat, maize and skim milk powder 40 to 60
percent; butter and oilseeds more than 60 percent; and vegetable
oils over 80 percent.
Besides investing in agriculture, the report recommends helping
poorer countries diversify their economies and improve governance
and administrative systems.
The two international bodies also urged governments to rethink
trade-restricting policies such as protecting domestic producers
through high price support, export taxes and trade embargoes.
World Bank President Robert Zoellick also called for governments
of developed nations to not impose export restrictions or tariffs
on food that could be funneled to relief agencies or countries
facing severe food shortages.
Zoellick, speaking on the sidelines of an African development
conference being held this week in Japan, said taxes and bans were
"exacerbating the problem."
Such controls make it harder for organizations like the World
Food Program to distribute emergency food aid.
The FAO-OECD report also says demand for biofuels has boosted
demand for grains, oilseed products and sugar at a time when stocks
are lower and urged for "alternative approaches."
Internationally, overall food prices have risen 83 percent in
three years, according to the World Bank. Part of the increase is
the result of adverse weather in major grain-producing regions,
with spillover effects on crops and livestock competing for the
same land.
Developing countries such as India and China will dominate
production and consumption of most commodities by 2017, the report
said.
The report assumes a strengthening of the U.S. dollar against
most other currencies, which it said will increase incentives to
boost domestic production in some countries.
The report also recommends examining the link between climate
change and water availability and the effect on production and
yield shortfalls, and developing genetically modified organisms
"offers potential that could be further exploited," the report
says.
Rising food prices, in the absence of adequate regional markets,
are increasing food insecurity in Africa, said Ndiogou Fall,
president of ROPPA, a network representing farmers from 10 West
African nations.
"Agriculture in our countries has been turned into a mine of
raw materials for the European food industry," Fall said in a
statement from Rome, where he was attending talks led by Italian
farmers' group Coldiretti. "Until this logic changes, we won't be
able to step out of the crisis."
U.S. congressional investigators, meanwhile, say international
food aid to Africa has declined in recent years and is unlikely to
meet a goal set by the world's wealthiest countries of cutting
hunger on the continent in half by 2015.
---
Associated Press writers Marta Falconi in Rome and Tomoko A.
Hosaka in Yokohama, Japan, contributed to this report.
---
On the Net:
www.oecd.org
www.fao.org
