Food prices may become more volatile in next decade

According to the latest report released by the Organisation for Economic Co-operation and Development (OECD) and the United Nations’ Food and Agriculture Organisation (FAO), the present food crisis has a larger impact on prices of food especially agricultural product which will remain high at least for a decade.

Prices of cereals and other food stuffs have seen a stiff rise of 35 to 60 per cent on an average compared to the past 10 years. The present food crisis in the developing countries has hit the poor, and hence the study suggests increase of agricultural production and productivity for a sustainable solution.

The Outlook report points out the need to open up agricultural market to enhance the productive capacity of the market bringing agriculture to the main development agenda to improve and ensure world food security.

OECD Secretary-General Angel Gurría at the Outlook’s launch in Paris said: “Governments can also do more to foster growth and development in poor countries, so as to improve the purchasing power of the most vulnerable food buyers.”

The report cites that at present some 862 million people are suffering from hunger and malnourishment and 22 countries are highly vulnerable to food security. So it is the utmost necessity to increase local food production with focus on agricultural investment.

The study says that though high price is profitable for farmers both in developed and developing countries, but small farmers have less access to market as a result they are unlikely to get advantage from this.

According to the study, the consumption of food will grow at a very high rate with population and furthermore the increasing demand of biofuel will keep the future food cost high. Comparing the last decade food price the report says that the price of rice will increase by 10 percent, wheat by 20 percent, around 30 percent for butter coarse grains and oilseeds while prices of vegetables will rise upto 50 percent.

The price of wheat, corn, rice and soybeans have increased at large in this year, and the price level may become more unstable due to lower stock level; in addition climatic change might be an extra force on price level by affecting crop production. Factors such as economic growth, high oil prices, changing diets, urbanisation, and increasing populations are also directly proportional to higher price.