Food Prices to Stay High

Underinvestment and climate change are responsible for global food prices remaining high.

July 26, 2011

NEW YORK - According to the United Nations?? International Fund for Agricultural Development (IFAD), global food prices are expected to remain high as demand continues to outpace supply, Bloomberg reports.

"We are just depleting our stocks and now we have this high population growth," explained Kanayo Nwanze, president of IFAD. "Prices won??t come down overnight. They are going to stay high for some time to come."

Global food costs increased last month for the 10th time in the past year. Prices for rice, sugar, and dairy remain near record highs, while meat reached an all-time high. At the same time, assistance to agriculture has dropped significantly, from 18 percent of total assistance in 1979 to just 4.3 percent in 2008, according to IFAD data.

"Food price crisis, food price hikes or food price volatility is not just a simple consequence of shortage of food because of weather conditions and climate change, Nwanze said. "A primary cause is we??ve disinvested in agriculture over decades."

Over the past year, the price of rice has spiked 65 percent on the Chicago Board of Trade, while corn has jumped 78 percent.

The UN has said that by 2050, food production must increase 70 percent to feed a world population expected to reach 9 billion people, up from almost 7 billion this year.

For more on rising food costs, see "Raw Deal" in the July NACS Magazine.

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