FAO: Food Price Volatility Threatens Rise in Hunger

Food prices may ease slightly in 2012 as the global economy slows, but are unlikely to decline significantly from 2011 levels, the United Nations’ Food and Agriculture Organization said on Tuesday.

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Jose Graziano da Silva, the FAO’s new head, said today that volatility in food markets is likely to continue, placing more people at risk of hunger due to economic instability.

“Prices will not be going up as in the sense of the last two to three years, but will also not drop down. There may be some reductions, but not drastic,” Graziano da Silva told a news conference in Rome.

As measured by the FAO, global food prices reached a peak in February, but have been falling since June as crops improved and concerns about the global economy have reined in demand. But high food prices have already helped fuel inflation, and contributed to civil unrest and the Arab Spring earlier this year.

While Graziano da Silva doesn’t expect the economic slowdown in Europe to negatively impact funding for FAO projects, as most countries donate only a negligible fraction of gross domestic product they would be unlikely to cut, he said the slowdown does increase the number of people at risk of hunger in the world.

“We will have more work to do, with more people hungry, more people unemployed, and we will need new ways to assist them,” he said as he took the reins from Jacques Diouf to begin a term of three and a half years as head of the FAO.

A Brazilian agronomist, Graziano da Silva is the first Latin American to head the U.N. agency, and says he will focus efforts on poor countries that are most in need of outside help, focusing particularly on northern Africa.

Graziano da Silva will need to bridge a divide between donor countries and developing countries to foster unity between the two disparate groups. He plans to cut bureaucracy and reduce perks for top management, as well as decentralize operations and give more authority to local outposts.

An assessment of the FAO funded by its members in 2007 said the group risked “terminal decline” due to its weak governance and lack of transparency and accountability, spurring the adoption of reforms, but last year Britain threatened to pull out of the organization unless it improved its performance. Other donors, including the U.S., have initiated agricultural development projects of their own.

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