(NEW DELHI): As the world braces itself for another round of high food prices
riding on the back of an impending recovery in world economies, the United
Nations Food and Agriculture Organisation (FAO) has warned nations to
strengthen the international trading systems to prevent a recurrence of 2008
events.
In 2008, as food prices soared the world over, countries across the
globe shut doors to international trade, which aggravated the supply
situation.
“International trading systems need to be strengthened to prevent measures
implemented to protect domestic populations from destabilising international
markets and penalising other countries,” FAO said.
The recently released FAO report on State of Food and Agriculture 2009 broadly highlights four measures which countries should adopt to bring agriculture out of its
current low trajectory.
The report said in the present situation of severe hardship and future risks and uncertainties, efforts are required in at least four directions.
“It is necessary to address the immediate impact of the crisis by appropriate safety nets and social programmes to protect the poor and food-insecure, stepping up investment in agriculture with the dual purpose of stimulating sustainable productivity and exploiting the potential of agriculture to contribute to economic development,” the report said.
The fact that hunger was increasing even before the food and economic crises suggests that technical solutions are insufficient, the report added. To lift themselves out of hunger, the food insecure need control over resources, access to opportunities and improved governance at the local, national and international levels based on right-to-food principles.
Finally, the report talked about strengthening international trading systems. On trend in food, FAO said although food prices now are significantly lower than there June 2008 peaks, but there is strong possibility of prices breaking the 2007-08 levels.
“Prospects that real agricultural commodity prices may remain at these  higher levels over the medium term are largely contingent on three important factors. First, biofuel consumption mandates in several countries-which specify market shares for ethanol and biodiesel in proportion to total fuel consumption, irrespective of market conditions – as well as various subsidies and tax incentives appear likely to perpetuate the influence of
biofuel production on farm prices,” FAO said.
Second, while crude oil prices are at levels that would not induce further increases in biofuel production in the short term, they still remain high in real terms by historical standards. Finally, agricultural productivity growth appears to be slowing, implying that, at the margin, increased production will require higher real costs per unit.