The international community will be facing higher food prices and volatility in commodity markets for some time, according to a new report by the United Nations Food and Agriculture Organization (FAO) and the Organization for Economic Cooperation and Development (OECD) that calls for greater investment in agriculture.
The OECD-FAO Agricultural Outlook 2011-2020 says that a good harvest in the coming months should push commodity prices down from the extreme levels seen earlier this year.
Over the coming decade, however, real prices for cereals could average as much as 20 per cent higher and those for meats as much as 30 per cent higher, compared to 2001-10, FAO states in a news release, adding that these projections are well below the peak price levels experienced in 2007-08 and again this year.
“In the current market context, price volatility could remain a feature of agricultural markets, and coherent policies are required to both reduce volatility and limit its negative impacts,” said FAO Director General Jacques Diouf.
“The key solution to the problem will be boosting investment in agriculture and reinforcing rural development in developing countries, where 98 per cent of the hungry people live today and where population is expected to increase by 47 per cent over the next decades.”
He added that efforts should focus in particular on smallholders in low-income food-deficit countries.
The latest publication follows the release of FAO’s biannual Food Outlook earlier this month which said that global food prices are likely to remain high for the rest of this year and into 2012 due to dwindling stocks and only small production increases for the majority of crops.
The OECD-FAO report sees global agricultural production growing more slowly over the next decade than in the past 10 years, with farm output expected to rise by 1.7 per cent annually, compared to the 2.6 per cent growth rate of the past decade.
In addition, it states that per capita food consumption will expand most rapidly in Eastern Europe, Asia and Latin America, with demand increasing the highest for meat, dairy products, vegetable oils and sugar.
Global production in the fisheries sector, which is covered by the report for the first time, is projected to increase by 1.3 per cent annually to 2020.