About 50 million more hungry people in 2007 due to high food prices

Food and Agricultural Organization

(Rome/Brussels July 3, 2008) The number of hungry people increased by about 50 million in 2007 as a result of high food prices, FAO Director-General Jacques Diouf said today addressing a conference at the European Parliament in Brussels.

“Poor countries are feeling the serious impact of soaring food and energy prices,” Dr Diouf said. “We urgently need new and stronger partnerships to address the growing food security problems in poor countries. No single institution or country will be able to resolve this crisis. Donor countries, international institutions, governments of developing countries, civil society and the private sector have an important role to play in the global fight against hunger.”

Dr Diouf said that the present crisis is a combination of rising demand for agricultural products, due to population growth and economic development in emerging countries; the rapid expansion of biofuels; and insufficient supply as production is negatively affected by climate change, in particular drought and floods, at a time when cereal stocks, at 409 million tonnes, are at their lowest levels in 30 years. These trends are exacerbated by restrictive measures taken by some exporting countries to protect their consumers and the speculation of hedge, index and other funds on the futures markets.

High prices of agricultural inputs are a major obstacle for developing countries to increase agricultural production. From January 2007 to April 2008, fertilizer prices in particular shot up at a much faster rate than food prices.

Future challenges

In order to reduce the number of undernourished in the world and meet growing demands, global food production needs to double by 2050. Production increase must occur mainly in developing countries where the poor and hungry live, and where more than 95 percent of the projected population increase will occur. Their farmers will need access to modern inputs, storage facilities and rural infrastructure.

World agriculture will also have to address major challenges, like water control and climate change. More than 1.2 billion people today live in river basins with absolute water scarcity and the trend of increasing water shortages is worrisome, but sub-Saharan Africa is using only four percent of its renewable water resources. The world is losing 5-10 million hectares of agricultural land every year due to severe degradation, but in Africa, Latin America and Central Asia there is a great potential for expanding land under cultivation.

“Governments and farmers will also have to cope with the burden of climate change on agriculture. If temperatures rise by more than three degrees, yields of major crops like maize may fall by 20-40 percent in parts of Africa, Asia and Latin America”, Dr Diouf said. In addition, droughts and floods are likely to intensify and could cause greater crop and livestock losses.

Investing in agriculture

“The present situation is a result of the international community’s neglect of agriculture in developing countries for a long time,” Dr Diouf noted. “The share of agriculture in official development assistance has declined from 17 percent in 1980 to only three percent in 2006. Investment in agricultural research in developing countries is less than 0.6 percent of their Gross Domestic Product, compared to more than five percent in the OECD-countries.”

Increasing agricultural production in developing countries will only be achievable by additional public and private investment. “FAO estimates incremental public investment needs at about US$24 billion every year – this includes increased resources for water management, rural roads, storage facilities, as well as research and extension,” Dr Diouf said.

“The donor pledges made at the recent FAO food summit amounting to around US$20 billion strongly indicate that the international community is committed to take action in support of farming communities in poor countries,” he added.

Supporting farmers in developing countries, through the supply of seeds and fertilizers, should be a priority in order to increase agricultural production in the poorest countries. Cereal production by Low-Income Food-Deficit Countries (LIFDCs), excluding China and India, declined by 2.2 percent in 2007, particularly in Africa, and may fall further in 2008 as poor farmers are unable to pay for adequate inputs at ever increasing prices.

Providing balance of payments and budgetary support to food deficit countries should also be given priority, Dr Diouf said. LIFDCs food import bill has increased by about 37 percent in 2007 and may increase by another 56 percent in 2008. It is now four times higher than its level in 2000.

The  Food and Agriculture Organization is the United Nations organization concerned with worldwide agriculture and food issues.  The original of this article may be viewed at http://www.fao.org/newsroom/en/news/2008/1000866/index.html.