Feed the world

Soaring food prices have sparked food riots, and set to get worse, a joint report from the United Nations and the Organisation for Economic Co-operation and Development predicts

Global food prices have risen by 40% over the past year and more food price shocks are on the way, according to the United Nations (UN) and the Organisation for Economic Co-operation and Development (OECD).

The joint UN Food and Agriculture Organisation (FAO) and OECD report predicts that the cost of cereals over the next decade will, on average, be 20% higher than the previous decade, and this will feed through to higher meat prices.  The report suggests that the price of poultry over the next 10 years will be 30% higher than in the decade just gone.

The figures strip out the effects of inflation, so the actual strain on household finances will be even higher.

“People are going be forced, either to literally eat less, or find other sources of income," said Angel Gurría, the head of OECD.

The prospect of huge swathes of increasingly aspirational segments of fast growing countries such as China, India, Russia and Brazil cutting back on food is a slim one.

If anything, people in these countries are going to be demanding more meat and dairy products in their diet, and less of the old staples such as rice and root vegetables, and this can only place upward pressure on food prices.

Meanwhile, in recent memory, there have been food riots in the streets of numerous countries in recent years while dissatisfaction with raging inflation was said to be one of the galvanising elements behind the wave of civil protests across the Arab world earlier in 2011.

Farmers are striving to meet demand, but the high cost of oil and the limited supplies of water and land are just more factors fuelling inflation.

On top of that, the well-intentioned decision by numerous countries to encourage the use of grain to produce biofuel, so as to lessen reliance on imported oil, has led to grain prices becoming artificially high, prompting the OECD and the FAO to call for an end to biofuel subsidies.

On the bright side, the report suggests that global agricultural output is set to grow faster than the global population.

"This is very important," stressed Gurria, though whether the world will be any better at getting the right amount of food to the right places than it has been over the last 100 years or so is another matter.

Global agricultural production is expected to grow at an annual rate of 1.7% over the next decade. That's less than the 2.6% annual increase achieved over the previous decade.

With the global population set to rise from 6.9bn to 9.2bn by 2050, the race is on to feed the world. According to the FAO, agricultural production between now and 2050 would have to increase by 70% to keep pace with population growth.