Food Prices May Help Contribute to Food Crisis

Mar 17, 2011, 08:30

Food prices, combined with some food production issues are fueling market speculation of a possible food crisis. The United Nations has evaluated where things stand today - and agree - warning their members that something must be done.

The U.N. Food and Agriculture Organization estimates there needs to be a 70 percent increase in global food production to meet the expected growth in the global population.

Meanwhile, developing countries are setting 5 percent of the national budgets aside for the agricultural sector despite economic gains from farming.

In terms of energy, the global community diverts more than 100 million tons of cereal from the food chain to biofuels, the FAO said.

Jacques Diouf, the FAO director general who was in Abu Dhabi to deliver a date palm award, said the world could be headed for a global food disaster.

"If we add the impact of droughts, floods, hurricanes and other events exacerbated by climate change and the speculation on agricultural commodity futures markets, it becomes clear that the current situation is the chronicle of a disaster foretold," he said.

Some experts question the extent to which rising food prices are behind the uprisings in Tunisia and Egypt, although, like World Bank President Robert Zoellick, they acknowledge they were "an aggravating factor."

Source: UPI