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Food prices 'will continue to go up'
Wed, Dec 05, 2007 The Straits Times
BEIJING - CONSUMERS worried about rising food prices have more reasons to fret - a new report shows that the worldwide trend is likely to continue for some time. The reasons: Climate change, falling crop yields and growing demand from rapidly developing countries such as India and China. The report by the Washington-based International Food Policy Research Institute was released yesterday at an international conference here aimed at addressing a global rise in food demand. People should get used to paying more for their food for the foreseeable future, the report noted.

But he told reporters yesterday: 'The days of falling food prices may be over. The last time the world experienced such food price increases was in 1973 to 1974...but today, the situation is completely different.

'For one, the climate risk and climate change situation has increased, the climate vulnerability has increased.'

The institute also said in its report - The World Food Situation - that hunger and malnutrition could rise as poor agricultural communities most sensitive to the environment are hurt.

And it predicted that the world's agricultural production will decrease by 16 per cent by 2020 because of global warming, with land used for certain crops shrinking.

'With the increased risk of droughts and floods due to rising temperatures, crop-yield losses are imminent,' it said.

Prof von Braun said that global cereal stocks, a key buffer used to fight famines around the world, have already sunk to their lowest level since the 1980s.

'The world eats more than it produces currently, and over the past five or six years, that is reflected in the decline in stocks and storage levels,' he said.

'That cannot go on, and exhaustion of stocks will be reached soon.'

And while hundreds of millions of people have emerged from poverty through better agricultural techniques, rising standards of living mean that more grain is being used to produce high-value food such as meat and dairy products, the report said.

This, in turn, causes grain prices to rise as demand grows, making it harder for poorer people in the developing world to fulfil their daily food needs.

The rising cost of oil is also contributing to the problem, as using crops to produce bio-fuels will further reduce the amount of available food and increase prices, the report said.

Bio-fuel expansion alone could push maize prices up by more than two-thirds by 2020, and increase oilseed costs by nearly half, with subsidies for the industry effectively constituting a tax on the poor, it said.

And it warned that, overall: 'The impact on developing countries will be much more severe than on industrialised nations.

'Africa is particularly vulnerable to climate change because of its high proportion of low-input, rain-fed agriculture.'

Among the solutions proposed by the institute are more investment in agricultural technology and a stronger social welfare net, with particular support for children, and reduced production of bio-fuels.

It also proposed an end to trade barriers on food, especially in developing countries, so small-time farmers can earn more money.

'A world facing increased food scarcity needs to trade more, not less,' it said.

ASSOCIATED PRESS, AGENCE FRANCE-PRESSE, REUTERS