Prolonged high food prices predicted

2011-06-17 14:43

High food prices are likely to rise even further over the next decade, putting the poor at an increasing risk of malnutrition and hunger, a world food report warned today.

The joint report of the United Nations Food and Agriculture Organisation and the Paris-based Organisation for Economic Cooperation and Development said the risk of price volatility that has hurt farmers across the world remains high.

The leader of the Paris-based organisation came out to back France’s demand for increased transparency and more regulation and public information in the farm commodities markets as a key measure to stabilise prices.

Angel Gurria said: “Information is absolutely of the essence.

“The one market that we don’t know and where we have a lot of blind spots is precisely the agricultural market”, where such critical information like the size of stocks remains largely hidden.

The two organisations warned that harvests, currently threatened by drought in several key regions, will be critical.

“It still remains to be seen to what extent the dry conditions in much of Europe affect world markets this year,” said Gurria.

The report predicts that prices will be 20% higher for cereals and up to 30% higher for meat in the coming decade compared to the past 10 years.

“People are going be forced, either to literally eat less, or find other sources of income,” he said.

An extreme food price hike in 2008 spurred riots in almost two dozen nations over three continents, and did much to bring the potential of political instability because of food prices to the fore.

French Farm Minister Bruno Le Maire said controlling excessive market speculation through tougher regulation, supervision and transparency would go a long way to avoid the price instability seen over the past years.

He said he realises, however, that finding agreement among the G20 nations poses many challenges. 

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