New Delhi: Much to the discomfort of consumers, food articles will be costlier by up to 27% by 2020 if the global slowdown continues and investment in agriculture falls, says a US think-tank.
“The prices of major cereals will increase significantly if economic growth is reduced by two to three per cent and agricultural investment and productivity also decline, in line with the reduced economic growth,” the International Food Policy Research Institute (IFPRI) said in its report ‘Food and Financial Crisis: Implications for Agriculture and the Poor´ released today in Mozambique.
By 2020, rice prices would rise by 13%, wheat by 15% and maize by 27%, it said, adding that in the past few months, the prices of major cereals have fallen by about 30 - 40% as a result of the economic slowdown and favourable weather conditions, but they remain high compared to the rates three years ago.
Many developing regions have experienced high economic growth in recent years. Between 2005-2007, developing countries in Asia grew at an annual average rate of 9%, while African economies grew at 6%. In 2008, however, with the onset of the food and financial crises, that robust growth has tapered off, the report said.
“When economic growth declines, investment in agriculture is typically cut back and that hurts production in the long-run,” said Mark Rosegrant, director of Environment and Production Technology at IFPRI.
However, if developing countries and investors can maintain agricultural productivity and investments under a recession, these dire consequences can be avoided, he said, adding “we need more public spending in research and development, irrigation, and productive services in developing countries.”