London: Developing nations would soon face social unrest if they failed to arrest soaring food prices, United Nations’ Food and Agriculture Organisation (FAO) has said.
“Food represents 10-20% of consumer spending in industrialized countries, but up to 65% in developing nations.
“If we continue to see an increase in their (food) prices and in their import bill for food, there is a serious potential situation,” the Financial Times reported on 7 September, quoting FAO Director General Jacques Diouf as saying.
The warning came as wheat prices are at a high, forcing developing countries such as India and Egypt to pay record prices for their recent food imports — described by global cereal traders as “panic buying” to beef up reserves.
Diouf said surging prices for basic food imports such as wheat, corn and milk had the “potential for social tension, leading to social reactions and eventually even political problems”.
According to him, food prices would continue to increase because of a mix of strong demand from developing countries; a rising global population, more frequent floods and droughts caused by climate change; and the bio-fuel industry’s appetite for grains.
“That combination of factors would most likely lead to increases in food prices,” he was quoted as saying.
Though the bio-fuel industry directly increased the consumption of only a handful of agricultural commodities, such as corn and rapeseed, the DG said its effect spread to other food products because less acreage was devoted to non-bio-fuel crops and the cost of feeding livestock with grain was pushed up.