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Food prices to stay high on 'grain drain' fuel
Updated: 2008-05-29 20:33

PARIS - Food prices will remain high over the next decade even if they fall from current records, meaning millions more risk further hardship or hunger, the OECD and the UN's FAO food agency said in a report published on Thursday.

A farmer works on a rice field in Vietnam's northern Ha Tay province, 40 km (25 miles), outside Hanoi May 26, 2008. [Agencies] 

Beyond stating the immediate need for humanitarian aid, the international bodies suggested wider deployment of genetically modified crops and a rethink of biofuel programs that guzzle grain which could otherwise feed people and livestock.

The report, issued ahead of a world food summit in Rome next week, said food commodity prices were likely to recede from the peaks hit recently, but that they would remain higher in the decade ahead than the one gone by.

Beef and pork prices would probably stay around 20 percent higher than in the last 10 years, while wheat, corn and skimmed milk powder would likely command 40-60 percent more in the 10 years ahead, in nominal terms, it said.

The price of rice, an Asian staple expected to become more important also in Africa in the years ahead, would likely average 30 percent more expensive in nominal terms in the coming decade than over the 1998-2007 period.

"In many low-income countries, food expenditures average over 50 percent of income and the higher prices contained in this outlook (report) will push more people into undernourishment," the report said.

Millions of people's purchasing power across the globe would be hit, said the report, co-produced by the Food and Agriculture Organization, the UN food agency in Rome, and the Organization for Economic Co-operation and Development in Paris.

The cost of many food commodities has doubled over the last couple of years, sparking widespread protests and even riots in some of the worst affected spots, such as Haiti.

Many factors, including drought in big commodity-producing regions such as Australia, explained some of the acceleration in prices, as did growing demand from fast-developing countries, the report said.

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